SHIPPING CONFERENCES EXEMPTION ACT, 1987

• SHORT TITLE
• INTERPRETATION
• Definitions
• Filing of documents
• ADMINISTRATION
• Agency is responsible
• NON-APPLICATION OF COMPETITION ACT
• Competition Act not to apply to certain contracts
• Exception re filing
• Exception re independent action
• Exception re service contracts
• Exception re predatory practices
• Limitation
• Further limitation
• FILING OF DOCUMENTS
• Documents to be filed
• Contents of tariff
• Time for filing of documents
• Certification of documents
• GIVING OF NOTICES
• Notice of increase in rate
• Notice of amendment to loyalty contract or tariff
• DISCLOSURE OF SERVICE CONTRACTS
• Communication of information
• Exception
• INVESTIGATION OF COMPLAINTS
• Filing of complaints
• Agency may make order
• Agency may consider service contracts
• Agency may hold public hearings
• Operation of Competition Act
• Agency shall notify Director
• Director may have access to documents
• Agency must render decision within 120 days
• INVESTIGATION OF CONFERENCE
• Inquiry by Director
• Deemed inquiry under Competition Act
• Use of evidence
• INSPECTION AND DESTRUCTION OF DOCUMENTS
• Inspection of documents
• Destruction of documents
• OFFICES
• Office in Canada
• INSPECTION OF DOCUMENTS
• Availability of certain documents
• Inspection of tariffs
• MEETINGS
• DESIGNATED SHIPPER GROUPS
• Minister of Transport may designate
• REGULATIONS
• Confidentiality
• Regulations
• Publication of proposed regulations
• Exception
• SECURITY
• General security
• Payment out of money or security
• Return or cancellation of security
• OFFENCE AND PUNISHMENT
• Non-compliance with Act or regulations
• Continuing offence
• Limitation period
• TRANSITIONAL
• CONSEQUENTIAL AND RELATED AMENDMENTS
• REPEAL
• COMING INTO FORCE
• Established by:
• List of Amendments

An Act to exempt certain shipping conference practices from the provisions of the Competition Act, to repeal the Shipping Conferences Exemption Act and to amend other Acts in consequence thereof

SHORT TITLE

Short title

1. This Act may be cited as the Shipping Conferences Exemption Act, 1987.

INTERPRETATION

Definitions

2. (1) In this Act,

"Agency"

« Office »

"Agency" means the Canadian Transportation Agency;

"Commission" [Repealed, 1992, c. 1, s. 123]

"Commissioner"

«commissaire»

"Commissioner" means the Commissioner of Competition appointed under the Competition Act;

"conference"

«conférence»

"conference" means an association of ocean carriers that has the purpose or effect of regulating rates and conditions for the transportation by those ocean carriers of goods by water;

"conference agreement"

«accord intra-conférence»

"conference agreement" means any contract, agreement or arrangement among the members of a conference and includes any amendment thereto;

"contract rate"

«taux de fret contractuel»

"contract rate" means the rate to be charged for the transportation of goods shipped by a shipper pursuant to a loyalty contract;

"designated shipper group"

«groupe d'expéditeurs désigné»

"designated shipper group" means any organization or association of shippers designated by the Minister of Transport pursuant to section 21;

"Director" [Repealed  1999 c. 2 s. 50(1)]

"dual rate system"

«double régime de taux de fret»

"dual rate system" means an arrangement of the rates to be charged for the transportation of goods into contract rates and non-contract rates and in which the contract rate for the transportation of specific goods described therein is lower than the non-contract rate for those goods;

"independent action"

«mesure distincte»

"independent action", by a member of a conference, means the provision by the member of a service in a manner or at a rate that is different from that provided for in any tariff established by the members of that conference or the provision by the member of a service for which no provision is made in any such tariff;

"interconference agreement"

«accord mixte»

"interconference agreement" means any contract, agreement or arrangement between the members of a conference and the members of another conference and includes any amendment thereto;

"loyalty contract"

«contrat d'exclusivité»

"loyalty contract" means a contract between a shipper of goods and the members of a conference whereby the shipper agrees, in return for certain advantages, to offer to those members for transportation by them all goods, all goods of certain classes or a portion only of all goods or of all goods of certain classes shipped by that shipper;

"non-contract rate"

«taux de fret non contractuel»

"non-contract rate" means a rate, other than a rate established in a service contract, to be charged for the transportation of goods shipped by a shipper who has not entered into a loyalty contract;

"ocean carrier"

«transporteur maritime»

"ocean carrier" means an owner, lessee or charterer of a vessel who is engaged in the business of the transportation of goods by water;

"service contract"

«contrat d'exclusivité limitée»

"service contract" means a contract between a shipper of goods and one or more members of a conference whereby the shipper agrees to provide to those members for transportation by them over a fixed period of time a specified minimum quantity of goods and, in return, those members agree to carry the goods at a specified rate or in accordance with a specified rate schedule and agree to provide a specified level of service and includes any amendment thereto but does not include a loyalty contract;

"tariff"

«tarif»

"tariff" means a tariff of rates established by the members of a conference for  the transportation of goods by vessel alone or by vessel and by any other means of transportation, and includes any rules or regulations that determine the calculation of such rates or prescribe terms or conditions for the transportation of goods by vessel;

"transportation of goods"

«transport de marchandises»

"transportation of goods" means the transportation of goods from any place in  Canada to any place outside Canada or from any place outside Canada to any place in Canada.

Filing of documents

(2) For the purposes of this Act, a document may be filed with or given to the Agency in paper form or electronic form, and is deemed not to have been filed with or given to the Agency until it has actually been received by the Agency.

ADMINISTRATION

Agency is responsible

3. The Agency is responsible for the administration of this Act.

NON-APPLICATION OF COMPETITION ACT

Competition Act not to apply to certain contracts

4. (1) Subject to subsections (2) to (4) and section 5, the Competition Act does not apply in respect of any conference agreement or interconference agreement to the extent that

(a) the conference agreement or interconference agreement requires a member of a conference to use a tariff;

(b) the conference agreement or interconference agreement requires a member of a conference to carry out a loyalty contract if that loyalty contract

(i) provides that it may be terminated by either party at any time after ninety days from the day notice in writing of intention to terminate is given to the other party,

(ii) provides for the application to goods shipped by the shipper of tariffs that incorporate a dual rate system in which no contract rate for any goods is less than eighty-five per cent of the non-contract rate for those goods,

(iii) makes no provision for the payment by any member of a conference of a rebate of any rate charged for the transportation of any goods shipped by the shipper, and

(iv) contains no term or condition in a standard form approved by the members of a conference requiring a shipper of goods to offer to those members for transportation by them all goods shipped by that shipper;

(c) the conference agreement establishes terms and conditions respecting the use of service contracts by members of a conference;

(d) the conference agreement or interconference agreement provides for the allocation among members of a conference of the ports in Canada or elsewhere to which or from which they may transport goods;

(e) the conference agreement or interconference agreement regulates the time of sailing of vessels of members of a conference and the kinds of service members
of a conference may provide for the transportation of goods;

(f) the conference agreement or interconference agreement provides for the sharing by members of a conference of the transportation of goods offered for shipment by shippers or of earnings and losses of those members arising out of the transportation of goods; or

(g) the conference agreement or interconference agreement regulates the admission of ocean carriers to membership in a conference and the expulsion of members from a conference.

Exception re filing

(2) Subsection (1) does not apply in respect of a conference agreement or interconference agreement until a copy or description of the agreement is filed with the Agency in accordance with subsection 6(1).

Exception re independent action

(3) Subsection (1) does not apply in respect of a conference agreement unless the conference agreement

(a) provides that any member of the conference may, after giving to the other members of the conference five days written notice, or such lesser number of days written notice as may be specified in the conference agreement, of the member's intention to do so, take independent action;

(b) provides that, when a member of the conference gives notice as described in paragraph (a), any other member of the conference may, after giving to the other members of the conference notice in writing of the member's intention to do so, take the same independent action as soon as the first independent action becomes effective; and

(c) provides that, when a member of the conference gives notice as described in paragraph (a), the members of the conference shall publish or cause to be published the new rate or service item in a tariff not later than five days after the day on which the notice is received by the members of the conference.

Exception re service contracts

(3.1) The terms and conditions established by a conference agreement under paragraph (1)(c) shall not have the effect of preventing a member of the conference from negotiating or entering into a service contract on terms and conditions that the member considers appropriate and without having to give notice to the other members or having to divulge the terms and conditions of the contract.

Exception re predatory practices

(4) Subsection (1) does not have the effect of exempting from the application of the Competition Act any member of a conference who engages in or who conspires, combines, agrees or arranges with another person to engage in a policy described in paragraph 50(1)(c) of that Act.

Limitation

5. (1) Subsection 4(1) does not apply in respect of a conference agreement or interconference agreement if any party to the agreement conspires, combines, agrees or arranges with any other party to the agreement

(a) to use a vessel for the purpose of preventing or lessening, unduly,   competition in the transportation of goods by an ocean carrier that is not a party to that agreement;

(b) to refuse to transport goods for a shipper because that shipper has used for the transportation of goods a vessel of an ocean carrier that is not a party to that agreement; or

(c) to prevent or limit the use by an ocean carrier in Canada or elsewhere of port or other facilities or services relating to the transportation of goods because that ocean carrier is not a party to that agreement.

Further limitation

(2) Subsection 4(1) does not apply in respect of a conference agreement if the parties to the agreement enter jointly into any contract, agreement or arrangement with any carrier in Canada for the purpose of establishing the amount to be paid by any party to the agreement to any such carrier for the inland transportation of goods for which that party has charged a through rate for the transportation of those goods.

FILING OF DOCUMENTS

Documents to be filed

6. (1) Every member of a conference shall, within the time prescribed in section 7, file or cause to be filed with the Agency

(a) a copy of every conference agreement and interconference agreement to which the member is a party or, in the case of an oral agreement, a description of the agreement in such form as the Agency may require;

(b) a copy of every service contract to which the member is a party, except a service contract referred to in subsection 4(3.1);

(c) notice of any change in the membership of the conference; and

(d) a copy of each standard form of loyalty contract approved by the members of the conference, and of every amendment to such a standard form of loyalty contract;

Contents of tariff

(2) [Repealed 2001, c. 26, s. 327(3) ]

Time for filing of documents

7. Every document required to be filed pursuant to

(a) paragraph 6(1)(a) shall be filed with the Agency not later than the day on which the conference agreement or interconference agreement becomes effective;

(b) paragraph 6(1)(b) shall be filed with the Agency not later than thirty days after the day on which the service contract becomes effective;

(c) paragraph 6(1)(c) shall be filed with the Agency not later than thirty days after a change in the membership of the conference; and

(d) paragraph 6(1)(d) shall be filed with the Agency not later than the day on which the standard form of loyalty contract becomes effective or, in the case of an amendment to that standard form, not later than thirty days after the day on which the amendment becomes effective.

Certification of documents

8. Every document filed with the Agency pursuant to section 6 shall be certified as being a true copy by a person designated for that purpose by the member of the conference filing it or causing it to be filed.

GIVING OF NOTICES

Notice of increase in rate

9. (1) Where the members of a conference propose to increase any rate in a tariff, every member of the conference shall give or cause to be given to the Agency and to any designated shipper group, the members of which will be directly affected by the proposed increase, notice in writing thereof at least thirty days before the date on which the proposed increase is to become effective. Notice of surcharge or increase in surcharge

(2) Where the members of a conference propose to impose a surcharge or increase a surcharge, every member of the conference shall give or cause to be given to the Agency and to any designated shipper group, the members of which will be directly affected by the proposed surcharge or increase, notice in writing thereof at least fourteen days before the date on which the proposed surcharge or increase is to become effective.

Notice of amendment to loyalty contract or tariff

10. Where the members of a conference propose to amend any standard form of loyalty contract or propose to amend any tariff other than by increasing any rate therein, every member of the conference shall give or cause to be given to the Agency notice in writing thereof not later than the date on which the proposed amendment is to become effective.

DISCLOSURE OF SERVICE CONTRACTS

Communication of information

11. Except as authorized under section 12 and subsection 14(2), no person engaged in the administration of this Act shall

(a) knowingly communicate or knowingly allow to be communicated to any person any information contained in any copy of a service contract that has been filed with the Agency pursuant to section 6; or

(b) knowingly allow any person to inspect or have access to any such copy.

Exception

12. A person engaged in the administration of this Act may communicate or allow to be communicated information contained in a copy of a service contract that has been filed with the Agency pursuant to section 6 or may allow inspection of or access to any such copy to or by

(a) any other person engaged in the administration of this Act; or

(b) any person authorized in writing by the parties to the service contract.

INVESTIGATION OF COMPLAINTS

Filing of complaints

13. (1) Subject to subsection (5), where any person, including the Director, has reason to believe that

(a) any conference agreement or interconference agreement, a copy or description of which is required to be filed with the Agency by a member of a conference pursuant to section 6, or

(b) any practice of a conference or of any member thereof,

has, or is likely to have, by a reduction in competition, the effect of producing an unreasonable reduction in transportation service or an unreasonable increase in transportation costs, that person may file a complaint with the Agency and the Agency may make such investigation of the complaint as in its opinion is warranted.

Agency may make order

(2) If, after completing an investigation commenced pursuant to subsection (1), the Agency finds that the conference agreement, interconference agreement or practice has, or is likely to have, by a reduction in competition, the effect of producing an unreasonable reduction in transportation service or an unreasonable increase in transportation costs, the Agency may make an order requiring the parties to the agreement or the members of the conference engaging in the practice to remove the offending feature of the agreement or to stop the practice or may make any other order as in the circumstances the Agency considers necessary.

Agency may consider service contracts

(3) In conducting an investigation under subsection (1), the Agency may take into consideration the contents of any service contract.

Agency may hold public hearings

(4) In conducting an investigation under subsection (1), the Agency may hold public hearings or may decide the matter on the basis of documents filed with the Agency.

(5) [Repealed, 1996, c. 10, s. 271]

Operation of Competition Act

(6) Nothing in this section affects the operation of the Competition Act in respect of its application to

(a) any conference agreement or interconference agreement that is not exempt from the application of that Act by virtue of section 4; or

(b) any practice of a conference or of any member thereof.

Agency shall notify Director

14. (1) The Agency shall give notice to the Director of every complaint filed under subsection 13(1) by any person other than the Director.

Director may have access to documents

(2) Where the Director intends to make representations to or call evidence before the Agency pursuant to section 125 of the Competition Act in respect of a complaint filed under subsection 13(1) by a person other than the Director and gives notice thereof to the Agency, the Agency shall make available to the Director for examination all relevant documents filed with the Agency including copies of any service contracts.

Agency must render decision within 120 days

15. The Agency shall render a decision on a complaint filed under subsection 13(1) not later than one hundred and twenty days after the filing of the complaint unless the parties thereto agree to an extension.

INVESTIGATION OF CONFERENCE

Inquiry by Director

16. (1) Notwithstanding section 3, the Director on his own initiative may, and on direction from the Minister of Industry shall, carry out an inquiry concerning the operations of any conference and the effect that practices of the conference have in limiting facilities for the transportation of any goods, preventing or lessening competition in the transportation of any goods or restraining or injuring trade or commerce in relation to any goods.

Deemed inquiry under Competition Act

(2) Any inquiry carried out by the Director pursuant to subsection (1) shall be deemed to be an inquiry under section 10 of the Competition Act.

Use of evidence

(3) The Director may bring to the Agency any evidence or material obtained in the course of an inquiry under this section that in the opinion of the Director is relevant to any complaint filed with the Agency under subsection 13(1) and, for greater certainty, may take any other action authorized to be taken by the Director under the Competition Act in relation to that evidence or material.

INSPECTION AND DESTRUCTION OF DOCUMENTS

Inspection of documents

17. (1) Subject to subsection (2), every document filed pursuant to section 6, other than a copy of a service contract, and every notice given pursuant to section 9 or 10 shall, on application, be made available for inspection by any person during the regular business hours of the Agency.

Destruction of documents

(2) The Agency may, five years after the date they are no longer in effect, destroy those documents filed with or given to the Agency or the Canadian Transport Commission pursuant to this Act, the Shipping Conferences Exemption Act, chapter 39 of the Revised Statutes of Canada, 1970 (1st Supp.), or the Shipping Conferences Exemption Act that, in its opinion, are no longer necessary for the administration of this Act.

OFFICES

Office in Canada

18. Members of a conference shall maintain jointly an office in that region of Canada where they operate.

INSPECTION OF DOCUMENTS

Availability of certain documents

19. (1) Members of a conference shall collectively make available to the public, in electronic form at all times, and at the conference's offices during regular business hours, for inspection or for purchase at a reasonable price, copies of

(a) all documents in force, other than service contracts, that have been filed pursuant to section 6;

(b) all tariffs in force; and

(c) all notices in force that have been given pursuant to section 9 or 10.

Inspection at member's office

(2) Every member of a conference shall make available to the public for inspection, at all the member's principal offices in Canada during regular business hours, copies of all tariffs in force and all notices that have been given pursuant to section 10 relating to an amendment to such a tariff.

Contents of tariff

(3) Each tariff shall set out

(a) the rates that may be assessed by a member of a conference who uses the tariff in connection with the transportation of goods other than the rates that may be assessed by that member under any service contract; 

(b) the places from and to which every rate referred to in paragraph (a) applies;

(c) every rule and regulation that in any way determines the calculation of any rate set out in the tariff or affects or alters any term or condition for the transportation of goods; and

(d) the address of the office maintained pursuant to section 18 to which communications respecting the tariff or negotiation of rates with the members of the conference may be directed.

MEETINGS

Meetings

20. Members of a conference engaged in the transportation of goods from any place in Canada to any place outside Canada shall, when reasonably requested in writing by any designated shipper group to do so, meet with the designated shipper group and shall provide the designated shipper group with information sufficient for the satisfactory conduct of the meeting.

DESIGNATED SHIPPER GROUPS

Minister of Transport may designate

21. The Minister of Transport may designate any organization or association of   shippers as representing, in the opinion of the Minister of Transport, for the purposes of this Act, the interests of those shippers.

REGULATIONS

Regulations

22. (1) The Governor in Council may make regulations requiring the production by members of a conference at such time or times and in such form and manner as are specified in the regulations, of such information of a type specified in the regulations as is in their possession or is reasonably available to them and as may reasonably be regarded as necessary to enable the Agency to effectively supervise the activities of members of the conference relating to the conference and concerning Canada.

Confidentiality

(2) Where information that is in its nature confidential and that relates to the business of a member of a conference is produced pursuant to any regulations made pursuant to subsection (1), the information shall not be made public in such a manner as to be available for the use of any business competitor of the persons to whom the information relates.

Regulations

(3) The Governor in Council may make regulations respecting access, through an electronic network, to documents filed with the Agency in accordance with section 6 and the fees to be paid for the use of this service.

Publication of proposed regulations

(4) Subject to subsection (5), a copy of each regulation that the Governor in Council proposes to make pursuant to subsection (1) or (3) shall be published in the Canada Gazette at least sixty days before the proposed effective date thereof and a reasonable opportunity shall be afforded to interested persons to make representations with respect thereto.

Exception

(5) No proposed regulation need be published more than once under subsection (4) whether or not it is amended after such publication as a result of representations made by interested persons as provided in that subsection.

SECURITY

General security

23. (1) The Agency may direct any member of a conference to deposit with the Agency such sum of money or other security as it deems necessary, not exceeding in amount or value ten thousand dollars, as a guarantee that the member will comply with this Act, and in the event of a failure to comply with a direction of the Agency under this subsection, the Agency may authorize the seizure and detention of any vessel of the member until such time as such sum of money or other security has been so deposited.

Payment out of money or security

(2) Where a member of a conference is convicted of an offence under this Act or   the Competition Act and fails to pay any fine imposed on it, the Agency may pay that fine out of any money, or from the proceeds of the sale of any security, deposited by that member pursuant to subsection (1).

Return or cancellation of security

(3) Any money or other security deposited with the Agency by a member of a conference under this section may be returned to that member or cancelled, as the case may be, where, in the opinion of the Agency, that security is no longer required.

OFFENCE AND PUNISHMENT

Non-compliance with Act or regulations

24. (1) If a member of a conference fails to comply with an obligation imposed on the member by this Act or the regulations, that member is guilty of an offence punishable on summary conviction and liable to a fine not exceeding $10,000 for each offence.

Continuing offence

(2) Where an offence under subsection (1) is committed on more than one day or is continued on more than one day, it shall be deemed to be a separate offence for each day on which the offence is committed or continued.

Limitation period

(3) Proceedings by way of summary conviction in respect of an offence under   subsection (1) may be instituted at any time within but not later than three years after the time when the subject-matter of the proceedings arose.

TRANSITIONAL

Transitional

25. Where, on the coming into force of section 6, a member of a conference has already filed or caused to be filed pursuant to section 7 of the Shipping Conferences Exemption Act, a document required to be filed by it pursuant to section 6, and where no modification has been made to that document since the coming into force of that section, that member may, in lieu of filing that document pursuant to section 6, file or cause to be filed within sixty days after the coming into force of that section a certificate signed by a person designated for that purpose by the member, describing that document, and the filing of such a certificate shall be deemed to constitute compliance with that section in respect of that document.

CONSEQUENTIAL AND RELATED AMENDMENTS

26. and 27. [Amendments]

REPEAL

28. [Repeal]

COMING INTO FORCE

Coming into force

*29. This Act or any provision thereof shall come into force on a day or days to be fixed by proclamation.

*[Note: Act, except subsection 4(3), in force December 17, 1987; subsection 4(3) in force February 17, 1988, see SI/88-9.]

Established by:

R.S., 1985, c. 17 (3rd Supp.)

List of Amendments