AUSTRALIA | The ACCC has released its final guide on sustainability collaborations and Australian competition law.
The guide has been designed to help businesses understand where competition law risks are unlikely to arise when collaborating to improve sustainability outcomes. It also provides information on what exemptions are available for business collaborations.
As Australia has transformed into a more sustainable economy, the ACCC recognised that there may be instances where businesses seek to work together to address sustainability issues more effectively and rapidly.
“Businesses are becoming increasingly conscious of their environmental impacts as Australia transitions to a more sustainable economy,” said ACCC Deputy Chair Catriona Lowe.
“While there are a wide range of sustainability collaborations that do not breach competition laws, where there is risk of a potential breach, ACCC authorisation can provide legal protection to businesses who wish to work together to achieve better environmental outcomes.”
The ACCC has already authorised a wide range of conduct, leading to sustainability-related public benefits. This included industry stewardship schemes, joint buying of renewable energy, a voluntary code to address working conditions in supply chains, and collaboration to manage disruptions to recycling systems.
In 2024, around one-third of the authorisation applications on which the ACCC made decisions included environmental public benefit claims. This guide clarified that competition law need not be a barrier for those considering public-benefit sustainability collaborations.
“Generally speaking, the ACCC may grant an authorisation in situations where the likely public benefit resulting from the proposed conduct outweighs any public detriment,” said ACCC Commissioner Liza Carver.
“These guidelines do not change the law but are intended to provide greater clarity to businesses on the laws relating to collaborations. They also explain what the existing competition authorisation regime offers ”.
The ACCC recognised that sustainability was not limited to environmental issues and included social issues such as antislavery and governance initiatives. The ACCC can consider various sustainability-related public benefits when undertaking authorisation assessments. The public benefits from collaboration can include anything of value to society.
In addition to incorporating more examples of sustainability collaborations, further information has also been provided regarding the range of exemptions available to small businesses, including the class exemption and notification processes for collective bargaining. Generally, these exemption processes are simpler and quicker than the authorisation process.
The final guide was accompanied by a ‘quick guide’ and a five-step checklist to help businesses quickly assess their competition law risk and exemption options. The new quick guide also provided practical examples of low-risk sustainability collaborations, such as joint research and development, information sharing, and joint supply chain activities.
“There are many sustainability arrangements that are unlikely to breach competition law. When a collaboration does raise competition concerns, an exemption may be available. If you are considering applying for an exemption, we encourage you to contact the ACCC at an early stage.”
The ACCC recognised that sustainability initiatives have continually evolved and may seek to review the guidance in future to ensure that it is fit for purpose.
The ACCC’s enforcement and compliance priorities for 2024-25 include consumer, product safety, fair trading, and competition concerns about environmental claims and sustainability. It has encouraged businesses seeking an exemption from competition law to come forward for preliminary discussions.
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