The Commerce Commission has reached a settlement with ERS New Zealand Limited (ERS NZ), a waste oil company, following an investigation into an attempt to fix prices, illegal under the Commerce Act.The commission investigated after a whistleblower provide
The Commerce Commission has reached a settlement with ERS New Zealand Limited (ERS NZ), a waste oil company, following an investigation into an attempt to fix prices, illegal under the Commerce Act.
The commission investigated after a whistleblower provided a secret tape-recording of a meeting in which a director of ERS NZ, a subsidiary of waste management giant TransPacific, discussed future price increases with a competitor.
In June 2009 proceedings under the Commerce Act were taken against ERS NZ and one unnamed director of the company.
Those proceedings have now been withdrawn.
The commission said ERS NZ has agreed to pay “a significant sum” to the commission towards the costs of the investigation, and has agreed to ensure its directors and senior executives undertake competition law compliance training.
NBR understands the settlement was a six figure sum. However, the full terms of the settlement are confidential.
The Commerce Commission's statement was released shortly after NBR made enquiries into the case this morning.
Penalties for breaching the Commerce Act can be up to $10 million for companies and up to $500,000 for individuals. Only the Courts can decide if the Act has been breached and impose penalties.
The two companies in the case were involved in the collection and disposal of waste oil, such as waste lubricant oil used in motor vehicles and fuel, which is collected from the slop tanks of ocean going vessels.
“Price fixing harms the competitive process, potentially resulting in customers paying higher prices. Under the legislation, it doesn’t matter whether an attempt to fix prices was successful, the conversation in itself may breach the Commerce Act,” Commerce Commission general manager of enforcement Kate Morrison said in a statement.
“In this case we have taken into account that the company recognises the imprudence of the alleged price-fixing attempt, has undertaken to improve compliance training, and has made payment towards our investigation costs. The commission believes this provides satisfactory resolution without the need for court proceedings,” Ms Morrison said.
Whistleblowers can be granted immunity from prosecution.
