On Wednesday 8 December 2021 the High Court of Australia released its judgement in relation to the long-running dispute between Port of Newcastle and Glencore under the National Access Regime.
The decision, the fourth determination of an Arbitrator our Court since 2018 in this matter, determined that the Australian Competition Tribunal was correct when it set the navigation service charge in October 2019.
Port of Newcastle CEO Craig Carmody shares his response to the High Court Decision and what it means for Port of Newcastle:
Port of Newcastle welcomed the 8 December 2021 decision of the High Court of Australia in relation to the long-running dispute between Port of Newcastle and Glencore under the National Access Regime in the Competition and Consumer Act 2010. This decision is the fourth determination of an arbitrator or Court since 2018 in this matter and affirms the earlier conclusions of the Australian Competition Tribunal in October 2019 which we have consistently maintained were correct and according to law.
The High Court has clarified that the Tribunal’s re-arbitration was correct in its 2019 determination of the navigation service charge payable by vessel operators at Port of Newcastle.
We have been vindicated in the action the Port has taken, and moving forward, we will charge under the fair long-term voluntary commercial commitments we have made with our customers. The High Court agreed with Port of Newcastle that the Australian Competition Tribunal was correct when it set the navigation service charge in October 2019 of $1.0058 per gross tonne in 2018 dollars.
The High Court has supported a decision we know to be in the best interests of the Port, our customers, our local economy and our planned opportunities to diversify for the future.
Port of Newcastle decided to provide a substantial discount to that price for its customers, which has applied since 1 January 2020. These long-term arrangements that the Port has committed to with customers see the Port charge $0.81 per gross tonne, indexed over 10 years. The High Court decision in effect confirms that Port charges up to the Australian Competition Tribunal levels it determined in October 2019 are reasonable and economically justified.
Port of Newcastle will now continue to improve productivity and efficiency, working with customers who use our services and with whom we have long-term relationships with.
With both the decision of the High Court, and the recent affirmation by the Tribunal of the Treasurer’s decision not to re-declare the service, Port of Newcastle looks forward to continuing to work with our stakeholders, including vessel operators and Hunter Valley coal producers, to ensure productive commercial relationships, the continued efficient operation of the Port and prosperity of the Hunter region.
We know that it is in Port of Newcastle’s best interest to ensure our pricing remains competitive to encourage the growth of all trades through the Port, and support our diversification plans for the future.
This decision is proof that Port of Newcastle’s access prices for port users are commercially fair, and competitive compared to other Australian and international ports.
Port charges at the Port of Newcastle represent less than 1% of the delivered cost of Hunter Valley thermal coal, and coal producers do not pay the navigation service charge in question, vessel operators do.