The NSW government's allegedly anti-competitive conditions over its privatisation of three major NSW ports will remain after an appeal by the ACCC challenging these terms was dismissed.
The competition watchdog sued over two 50-year agreements between the state government and NSW Ports Operations relating to the privatisation of the firm's subsidiaries in Port Botany and Port Kembla in May 2013 and a third 50-year agreement over the privatisation of the Port of Newcastle in May 2014.
The agreements contained allegedly anti-competitive terms requiring the government to compensate NSW Ports if container traffic at Newcastle exceeded a certain amount.
The Port of Newcastle would then have had to reimburse the government for these amounts, doubling the cost of moving shipping containers through the port, the Australian Competition and Consumer Watchdog claimed.
The regulator's lawsuit against NSW Ports was dismissed in June 2021 after Federal Court Justice Jayne Jagot found the firm had "derivative crown immunity" and that the terms of the three deeds did not act to lessen competition.
The judge found the ACCC based its case on "mere speculative hopes" that there would be a container terminal at Newcastle that were "far-fetched and fanciful".
An appeal of this decision was dismissed by the Full Court on Thursday.
ACCC commissioner Liza Carver said the regulator filed the lawsuit because of concerns that NSW Ports would have an "effective monopoly" over container port services in the state for 50 years.
"We appealed this case because we considered that the compensation provisions created a significant barrier to entry. The threat of new entry is an important part of the competitive process, and imposes a competitive discipline on existing businesses, including monopolies."
No judgment is publicly available at this stage with the ACCC and NSW Ports given one week to examine the decision and redact any confidential information.
NSW Ports CEO Marika Calfas welcomed the decision, calling it a "win for economic certainty and prosperity" for people and businesses across the state.
"Maintaining the right ports and freight strategy to cater for NSW's growing trade needs is crucial to the state's economic future," she said.
"Port Botany and Port Kembla are key economic drivers for NSW and the nation, contributing more than $13 billion a year to the state's economy and supporting 65,000 jobs."
She said the Full Court's judgment matched the NSW government's goals of prioritising the terminal at Botany for shipments first, and then using a new container terminal at Port Kembla.
Since the appeal hearing, state legislation extinguishing the requirement for Port of Newcastle to reimburse the compensation paid by the NSW government has passed. It came into effect on November 25, 2022.
"The passage of the legislation should facilitate competition between ports in NSW for the provision of container port services," the ACCC said.
