Pilkington (Australia) Ltd v Minister for Justice and Customs [2002] FCA 770 | Case summary

Legislation in outline 2 Part XVB of the Act contains a scheme for investigating complaints of dumping of goods in Australia and determining measures to be taken in relation to prior dumping and to prevent the dumping of goods in the future. The following analysis of the legislative scheme focuses principally on the mechanism for considering and resolving an application of the type presently under consideration. That is, a complaint by an Australian manufacturer about the dumping of goods exported from another country. 3 An investigation can be initiated either by a person who believes that there are, or may be, reasonable grounds for the publication of a dumping duty notice or a countervailing duty notice: see s 269TB(1)(c), or by the Minister: see s 269TAG. After the investigation has been set in train it is necessary for the Chief Executive Officer of Customs to examine the application: see s 269TC. This examination must occur within 20 days after Customs receives the application. The Chief Executive Officer has regard to matters contained in the application and any other information he or she thinks is relevant. The Chief Executive Officer then will decide, relevantly, whether there appears to be reasonable grounds for the publication of a dumping duty notice or a countervailing duty notice in respect of the goods the subject of the application. If the Chief Executive Officer is not satisfied there are reasonable grounds, the application must be rejected: see s 269TC(1). If, however, the application is not rejected then the Chief Executive Officer is obliged to give public notice under s 269TC(4) of the decision not to reject the application ("the notice"). 4 Various matters must be addressed in the notice. They are set out in paras (a) to (h) of s 269TC(4). One matter to be set out in the notice is the date of the initiation of the investigation which should be the date or estimated date of the publication of the notice. That is dealt with by s 269TC(4)(bc) which provides that notice must be given: "(bc) setting a date, which should be the date or estimated date of publication of the notice, as the date of initiation of the investigation". The notice must also address the "investigation period" which is defined in s 269T in the following way: "investigation period, in relation to an application for a dumping duty notice or a countervailing duty notice in respect of goods, means a period specified by the CEO in a notice under subsection 269TC(4) to be the investigation period in relation to the application." 5 The way in which the investigation period must be addressed in the notice is specified in s 269TC(4)(bf) which provides that the Chief Executive Officer must give notice: "(bf) indicating that a report will be made to the Minister: (i) within 155 days after the date of initiation of the investigation; or (ii) if the 110 days referred to in paragraph (e) is extended by the Minister - within the period of 155 days as similarly so extended; on the basis of the examination of exportations to Australia of goods the subject of the application during a period specified in the notice as the investigation period in relation to the application". [Emphasis added] In addition, s 269TC(4)(e) and (f) provide that notice must be given: "(e) stating that: (i) within 110 days after the date of initiation of the investigation; or (ii) such longer period as the Minister allows under section 269ZHI; the CEO, in accordance with section 269TDAA, will place on the public record a statement of the essential facts on which the CEO proposes to base a recommendation to the Minister; and (f) inviting interested parties to lodge with the CEO, within 20 days of that statement being placed on the public record, submissions in response to that statement". 6 After the investigation has been initiated, the Chief Executive Officer can terminate investigations under s 269TDA on the basis that in an investigation of an exporter to Australia of goods the subject of the application, the Chief Executive Officer is satisfied there has been no dumping or the dumping margin was less than 2% calculated in a way specified in the section. At least 60 days after the initiation of the investigation, the Chief Executive Officer can make a preliminary affirmative determination under s 269TD, which may result in an undertaking being given under s 269TEB or securities taken under s 42. Unless the investigation has been terminated, the Chief Executive Officer is obliged to prepare, ordinarily within 110 days of the initiation of the investigation, a statement of essential facts: see s 269TDAA. That period can be extended by the Minister under s 269ZHI. The statement is of the facts on which the Chief Executive Officer proposes to base a recommendation to the Minister in relation to the application. Ordinarily the Chief Executive Officer is to have regard, inter alia, to any submissions concerning publication of the notice (under s 269TC(4)) made within 40 days after the initiation of the enquiry: see s 269TDAA(2)(a)(ii). The Chief Executive Officer may have regard to submissions received after that time but is not obliged to if having regard to the submission would prevent the timely placement of the statement of essential facts on the public record: see s 269TDAA(3). The relevant provisions are: "(2) Subject to subsection (3), in formulating the statement of essential facts, the CEO: (a) must have regard to: (i) the application concerned; and (ii) any submissions concerning publication of the notice that are received by Customs within 40 days after the date of initiation of the investigation; and (b) may have regard to any other matters that the CEO considers relevant. (3) The CEO is not obliged to have regard to a submission received by Customs after the end of the period referred to in subparagraph (2)(a)(ii) if to do so would, in the CEO's opinion, prevent the timely placement of the statement of essential facts on the public record." 7 After the statement of essential facts has been published, submissions may be made within 20 days to the Chief Executive Officer: see s 269TC(4)(f) and s 269TEA(3)(a)(iv). Following the publication of the statement of essential facts the Chief Executive Officer is obliged to report to the Minister under s 269TEA. That section relevantly provides that: (1) If: (a) application has been made under section 269TB for publication of a dumping duty notice or a countervailing duty notice; and (b) the CEO has initiated an investigation in respect of the application under section 269TC; the CEO must, after holding such an investigation and before the end of the period for reporting to the Minister that is referred to in paragraph 269TC(4)(bf), give the Minister a report in respect of the goods the subject of the application that: (c) recommends whether any such notice should be published and the extent of any duties that are, or should be, payable under the Dumping Duty Act because of that notice; and (d) recommends, in particular, whether the Minister ought to be satisfied as to the matters in respect of which the Minister is required to be satisfied before such a notice can be published; and (e) recommends, where applicable, whether the Minister ought to give notice to the exporter under subsection 269TG(3D) or to the government of the country of export or to the exporter under subsection 269TJ(2A). (2) The CEO's report must, to the extent that it is practicable to do so, also extend to any like goods not covered by the application but imported into Australia during the period starting on the date of initiation of the investigation and ending 20 days after the statement of essential facts in respect of the investigation is placed on the public record. (3) Subject to subsection (4), in deciding on the recommendations to be made to the Minister in the CEO's report in relation to an application under section 269TB for publication of a dumping duty notice or a countervailing duty notice, the CEO: (a) must have regard to: (i) the application; and (ii) any submission concerning the publication of that notice to which the CEO has had regard for the purpose of formulating the statement of essential facts; and (iii) the statement of essential facts; and (iv) any submission made in response to that statement that is received by Customs within 20 days after the placing of that statement on the public record; and (b) may have regard to any other matters that the CEO considers to be relevant. (4) The CEO is not obliged to have regard to any submission made in response to the statement of essential facts that is received by Customs after the end of the period referred to in subparagraph (3)(a)(iv) if to do so would, in the CEO's opinion, prevent the timely preparation of the report to the Minister. (5) The report to the Minister must include a statement of the CEO's reasons for any recommendation contained in the report that: (a) sets out the material findings of fact on which that recommendation is based; and (b) provides particulars of the evidence relied on to support those findings." 8 At this point the stage is set for a decision to be made by the Minister, relevantly, under s 269TG which provides: "(1) Subject to section 269TN, where the Minister is satisfied, as to any goods that have been exported to Australia, that: (a) the amount of the export price of the goods is less than the amount of the normal value of those goods; and (b) because of that: (i) material injury to an Australian industry producing like goods has been or is being caused or is threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered; or (ii) in a case where security has been taken under section 42 in respect of any interim duty that may become payable on the goods under section 8 of the Dumping Duty Act - material injury to an Australian industry producing like goods would or might have been caused if the security had not been taken; the Minister may, by public notice, declare that section 8 of that Act applies: (c) to the goods in respect of which the Minister is so satisfied; and (d) to like goods that were exported to Australia after the CEO made a preliminary affirmative determination under section 269TD in respect of the goods referred to in paragraph (c) but before the publication of that notice. (2) Where the Minister is satisfied, as to goods of any kind, that: (a) the amount of the export price of like goods that have already been exported to Australia is less than the amount of the normal value of those goods, and the amount of the export price of like goods that may be exported to Australia in the future may be less than the normal value of the goods; and (b) because of that, material injury to an Australian industry producing like goods has been or is being caused or is threatened, or the establishment of an Australian industry producing like goods has been or may be materially hindered; the Minister may, by public notice (whether or not he or she has made, or proposes to make, a declaration under subsection (1) in respect of like goods that have been exported to Australia), declare that section 8 of the Dumping Duty Act applies to like good that are exported to Australia after the date of publication of the notice or such later date as is specified in the notice." It can be seen that the Minister must address the relationship between export price and normal value in order to determine whether dumping has occurred or may occur. One means of determining whether there has been dumping is found in s 269TACB. One issue in these proceedings is whether this provision identifies the means of considering whether dumping has occurred and whether it might occur, as that question arises in s 269TG(2) both as an historical fact and a future event. Section 269TACB provides: "(1) If: (a) application is made for a dumping duty notice; and (b) export prices in respect of goods the subject of the application exported to Australia during the investigation period have been established in accordance with section 269TAB; and (c) corresponding normal values in respect of like goods during that period have been established in accordance with section 269TAC; the Minister must determine, by comparison of those export prices with those normal values, whether dumping has occurred. (2) In order to compare those export prices with those normal values, the Minister may, subject to subsection (3): (a) compare the weighted average of export prices over the whole of the investigation period with the weighted average of corresponding normal values over the whole of that period; or (aa) use the method of comparison referred to in paragraph (a) in respect of parts of the investigation period as if each of these parts were the whole of the investigation period; or (b) compare the export prices determined in respect of individual transactions over the whole of the investigation period with the corresponding normal values determined over the whole of that period; or (c) use: (i) the method of comparison referred to in paragraph (a) in respect of a part or parts of the investigation period as if the part or each of these parts were the whole of the investigation period; and (iii) the method of comparison referred to in paragraph (b) in respect of another part or other parts of the investigation period as if that other part or each of these other parts were the whole of the investigation period. (2A) If paragraph (2)(aa) or (c) applies: (a) each part of the investigation period referred to in the paragraph must not be less than 2 months; and (b) the parts of the investigation period as referred to in paragraph (2)(aa), or as referred to in subparagraphs (2)(c)(i) and (ii), must together comprise the whole of the investigation period. (3) If the Minister is satisfied: (a) that the export prices differ significantly among different purchasers, regions or periods; and (b) that those differences make the methods referred to in subsection (2) inappropriate for use in respect of a period constituting the whole or a part of the investigation period; the Minister may, for that period, compare the respective export prices determined in relation to individual transactions during that period with the weighted average of corresponding normal values over that period." 9 Reference should be made to certain provisions concerning the review of a Ministerial decision made under s 269TG. Section 269ZZ provides: "(1) If the Review Officer is required, in conducting a review under Subdivision B or C, to determine any matter ordinarily required to be determined by the Minister under this Act or the Dumping Duty Act, the Review Officer must determine the matter: (a) in like manner as if he or she were the Minister; and (b) having regard to the consideration to which the Minister would be required to have regard if the Minister were determining the matter. (2) Subsection (1) applies in respect of goods that have not been imported into Australia at the time of the Review Officer's determination in a matter in respect of those goods as if: (a) the Review Officer's determination of the matter were being made after an importation of those goods into Australia; and (b) the importation occurred at the time of the anticipated importation of those goods into Australia." 10 A review of a Ministerial decision is undertaken under Subdivision B. Such a review can result in a recommendation that the Minister affirm the decision or that the Minister direct the Chief Executive Officer to reinvestigate the matter (by reinvestigating a finding or findings). The following subsections of s 269ZZK regulate the making of either type of recommendation: "(4) In making the recommendation, the Review Officer: (a) must not have regard to any information other than the relevant information; and (b) subject to section (5), must only have regard to the relevant information and any conclusions based on the relevant information that are contained in the application for the review or in any submissions received from interested parties within 30 days as mentioned in section 269ZZJ. (5) The Review Officer must not have regard to a submission under section (4) if: (a) the person giving the submission claims that information included in it is confidential or is information whose publication would adversely affect a person's business or commercial interest; and (b) the person fails to give a summary of that information to the Review Officer in accordance with section 269ZZY. (6) In this section: relevant information means: (a) if the reviewable decision was made pursuant to an application under section 269TB - the information to which the CEO had had regard or was, under paragraph 269TEA(3)(a), required to have regard, when making the findings set out in the report under section 269TEA to the Minister in relation to the making of the reviewable decision; and (b) if the reviewable decision was made pursuant to an investigation initiated by the Minister as mentioned in section 269TAG - the information: (i) that was collected for the purposes of that investigation in accordance with the Minister's requirements; and (ii) that was before the Minister when the Minister made the reviewable decision." I turn now to consider the circumstances leading to the Minister's decision. Background 11 The following account of the background is drawn substantially from the written submissions of the Minister though it is generally uncontentious. On 17 November 1999, Pilkington lodged with the Australian Customs Service ("Customs") the application alleging dumping of glass exported from Indonesia. I will not, in this section of the judgment, generally differentiate between Customs and the Chief Executive Officer. The application requested that the Minister declare that s 8 of the Customs Tariff (Anti-Dumping) Act 1975 (Cth) ("the Dumping Duty Act") apply to the glass in the nominal thickness range of 3-12mm exported to Australia from Indonesia. When the application was made, Senator Amanda Vanstone was the Minister. 12 On 7 December 1999, Customs initiated an investigation into the application and gave public notice under s 269TC(4) of the Act. That notice specified the investigation period as 1 October 1998 to 30 September 1999. The notice included the following: "Customs will examine exports of [the glass] to Australia during that period to determine whether dumping has occurred. For injury analysis, Customs will examine details of the Australian market from 1 April 1997. Section 269TEA recognises that situations exist where regular importing patterns change after the initiation notice has been issued and provides that importations up to 20 days after the statement of essential facts must be taken in account." [Emphasis added] 13 On 15 March 2000, Customs placed on the public record a report of its investigation of allegations of dumping by Asahimas. The report concluded that Asahimas had not dumped the glass. On 23 March 2000, Customs requested that the Minister make a direction and determinations that would allow the Chief Executive Officer to terminate the investigation as far as it related to exports by Asahimas. One part of the request was that the Minister determine under s 269TACB(1) that glass had not been dumped by Asahimas. This was apparently viewed as a precondition to the exercise of the power of the Chief Executive Officer under s 269TDA to terminate the investigation as it related to Asahimas. Why this view was taken is not clear. The power to terminate is conferred on the Chief Executive Officer and s 269TDA does not condition the exercise of the power. It appears to me that it is, at this point, for the Chief Executive Officer to decide to terminate because the goods had not been dumped. Section 269TDA, in terms, depends on the opinion of the Chief Executive Officer and not the opinion or a determination of the Minister. The directions and determinations recommended by Customs were still under consideration by the Minister on 10 May 2000. 14 On 27 March 2000 Customs, as required by s 269TDAA(1), placed on the public record a statement of essential facts on which it proposed to base its recommendations to the Minister. This was 110 days after the date of the initiation of the inquiry, namely 7 December 1999. Interested parties were given 20 days to respond to that statement. Customs received a number of responses, which were considered in compiling the report and recommendations. 15 On 19 April 2000, the Australian Financial Review contained a notice that Customs had made a preliminary affirmative decision that there were reasonable grounds to publish a dumping duty notice in respect of exports of 3mm glass by Muliaglass. On 27 April 2000, Customs wrote to Muliaglass indicating that it would be prepared to recommend that the Minister accept an undertaking by Muliaglass to export 3mm glass at a price not less than the non-injurious price calculated by Customs. 16 On 5 May 2000, Muliaglass wrote to the Minister offering a price undertaking in the terms proposed by Customs on 27 April 2000, though the offer contained certain conditions. On 10 May 2000, Customs completed its Report No. 21 presenting to the Minister the results of its investigation into the alleged dumping of glass exported to Australia from Indonesia. This was a report for the purposes of s 269TEA. The report said that Customs had found that Asahimas had not dumped the goods and recommended that the Minister decide not to impose anti-dumping duty in respect of that exporter, and publish a notice to that effect. But Customs indicated it had found dumping of a single nominal thickness of glass (3mm) by Muliaglass and was satisfied that dumped exports of 3mm glass from Indonesia had caused material injury to the Australian industry and that exports in the future from Indonesia may be at dumped prices. Customs recommended that the Minister accept the price undertaking offered by Muliaglass. Customs noted that if the undertaking were accepted, the Minister may defer her consideration of whether or not to publish a dumping duty notice. 17 In the report, Customs referred to the question raised by s 269TEA(2). The report said: Like goods not covered by the application Subsection 269TEA(2) states that this report must, to the extent that it is practicable to do so, also extend to any like goods not covered by the application but imported into Australia between initiation of the investigation and 20 days after the SEF [statement of essential facts] is placed on the public record. Customs has examined TRACE data in respect of imports of CFG up until 15 April 2000 (20 days after the SEF was placed on the public record). Customs found that the pattern of imports had not notably changed from before the time that the investigation was initiated. During the March quarter of 2000 imports of CFG from Indonesia represented approximately 62 percent of all imports of that product. TRACE showed that Muliaglass had the lowest average unit prices in most statistical code categories of any supplier over that period. [Emphasis added] 18 On 2 June 2000, a Mr Day wrote on behalf of Pilkington to a Mr Kirk, the Principal Adviser to the Minister, concerning the outcome of the recent dumping enquiry into Indonesian exports of glass contending that the level of dumping by Muliaglass had been understated. Mr Day also sought feedback on certain aspects of its submissions to Customs' enquiry. Mr Day was the managing director of a firm called ITC (Australia) which was described in its letterhead as management and government relations consultants. On 29 June 2000 Mr Day wrote to Mr Kirk enclosing material which he contended showed that the normal values and nil dumping finding for Asahimas was no longer appropriate as indicated by the escalating losses achieved by Asahimas on its sales. Mr Day wrote that domestic sales by Asahimas could no longer be regarded as "in the ordinary course of trade" and were sales at a loss. 19 On 4 September 2000, Mr Kirk responded to the issues raised in Mr Day's letter of 2 June 2000. On 8 September 2000, Mr Day again wrote to Mr Kirk. In this letter, Mr Day contended that the domestic selling prices of Asahimas had been profitable because of emergency funding and that its current operations were unprofitable. Mr Day also said that it was not appropriate to determine normal values based on 1999 data for an economy which has been in continuing crisis as this data "is simply no longer relevant in terms of its accuracy or currency". Mr Day argued that Customs should be directed to carry out a further normal value enquiry. 20 On 13 September 2000, Mr Day wrote again to Mr Kirk making the same points and contending that "not only is PT Muliaglass selling at a loss but so is PT Asahimas". On 20 November 2000, Mr Kirk wrote to Mr Day and indicated that a reply to the technical issues raised in his letter of 8 September 2000 would be made by Customs. 21 On 10 January 2001, Ms Pitman, National Manager of the Trade Measures Branch of Customs, responded to Mr Day in the following terms: "I am writing in response to your letter of 8 September 2000 to Mr A Kirk, Principal Adviser in the Office of the Minister for Justice and Customs. Mr Kirk has referred the letter to me as it raises a number of technical issues in relation to the most recent anti-dumping investigation of clear float glass from Indonesia and the review of anti-dumping measures on that product from a number of countries including China. In your letter you state that 'the requirement to impose measures less than the full margin is only justified where a lesser amount would remove the injury …' Customs disagree with this sentiment. It is the policy of the government to impose less than the full margin of dumping if that lesser amount is sufficient to remove injury caused by dumping. For this reason, it is not unusual for Customs to recommend that non-injurious prices be ascertained by reference to the price of the lowest undumped imports. In this respect, you have expressed concerns about the Customs finding that certain exports of clear float glass from Indonesia (on which Chinese non-injurious prices are based) are not dumped. You have remarked on some recent developments in respect of PT Asahimas that you believe would have some bearing on the PT Asahimas normal values, and thereby the outcome of the case. While Customs accepts that the circumstances of the exporter may have changed since the normal values were established, this would not, I understand, affect the established normal values. Invariably, in anti-dumping investigations, normal values are determined for a defined investigation period, and Customs compares these to export prices determined over the same period in order to make a finding as to whether the goods were dumped. In order to test that the exporter is now dumping would require normal values to be established with respect to a different investigation period. This could only be done in the context of another inquiry. Of course, Customs would assess any application for a further inquiry or review on the merits of the information supporting it. You have also asked that Customs advise Pilkington of the format used by Indonesian producers to record their costs. I suggest that it may be more appropriate for a Customs operations group to provide this information in respect of relevant exporters when or if a further investigation or review is conducted of clear float glass normal values in Indonesia." (Emphasis added.) 22 It can be seen that Customs acknowledged changes may have occurred in the circumstances of Asahimas but suggested, in effect, that another application would need to be made under s 269TB. 23 On 31 January 2001, Senator Chris Ellison became the Minister. On 9 March 2001 Customs submitted Report No. 21 (in a revised form) to the new Minister for consideration and determination. The submission indicated that Pilkington had made representations which sought to cast doubt on Customs' findings. On 15 March 2001 Customs provided the Minister with a further submission addressing the central issues raised in the correspondence from Mr Day to Mr Kirk. The submission indicated that "Customs does not believe that there are any grounds to alter its recommendations on the basis of Mr Day's representations." The submissions also dealt with the media reports relied upon by Mr Day in his letters and gave reasons for why, even if the reports were correct, "it would not influence the outcome of the normal value investigations". 24 On 3 May 2001 Mr Day wrote to the Minister on behalf of Pilkington. The letter was received on 7 May 2001 and enclosed a copy of the published annual report of Muliaglass which Mr Day said indicated it had been operating at a loss during the period of Customs' investigation, but this finding of fact was not reported or established by Customs' normal value enquiry. Mr Day said that the serious implication of this fact was that domestic sales by Muliaglass were not in the ordinary course of trade covering an extended period of time and should not form the basis of any normal value determination. Mr Day continued that the information indicated the likelihood that domestic sales were at a loss and exports had been made at dumped prices. Further, Mr Day said: "Since domestic prices at this level resulted in 'sales at a loss' for Muliaglass, it could be reasonably expected that domestic sales by PT Asahimas would also be sales at a loss and not suitable for normal value purposes. These observations have previously been brought to the attention of Customs and your predecessor. I have attached information which supports this view confirming the operating losses incurred by Asahimas Glass during the relevant period of this inquiry." 25 The published annual report of Muliaglass forwarded by Mr Day included the financial statements for a period ending on 21 December for both 1998 and 1999. The media reports relating to Asahimas forwarded by Mr Day indicated that that company made a loss in the 2000 calendar year after having made a profit the previous year which covered much of the investigation period. 26 On 23 May 2001, a minute was sent to the Minister by officers of the Trade Measures Branch. It read as follows: "Proposed action That you accept the recommendations made in Trade Measures report no. 21. Reasons for proposed action Background 1. On 17 November 1999, Pilkington (Australia) Limited (Pilkington) lodged an application for anti-dumping measures in respect of clear float glass (CFG) exported to Australia from Indonesia. 2. The report was resubmitted for your consideration in March 2001. 3. Customs found that CFG with a nominal thickness of 3 mm was exported at dumped prices by one of the two main exporters from Indonesia, PT Muliaglass. Customs considered that the dumping of this product caused injury to the Australian industry producing like goods. 4. Other thicknesses of CFG (4 to 12 mm) were found not to have been dumped. 5. Customs recommended that you accept a price undertaking offered by PT Muliaglass to preclude future injury to the Australian industry producing like goods. 6. You met with Trade Measures staff in April 2001 to discuss the findings in this case. You asked Customs to advise you on the relevance of the undertaking price, given that it was submitted more than 12 months ago. It was noted that PT Muliaglass is currently exporting CFG to Australia above the undertaking price. You also asked about any options for addressing this issue. Identification of the issues 7. The undertaking price was calculated by reference to the current (at the time the report was submitted to Senator Vanstone) export price and the margin of dumping. It was similar to the non-injurious price (NIP). 8. The NIP was calculated from an unsuppressed selling price (USP) for 3 mm CFG that was determined by reference to the price of undumped imports in mid 1997 (the calculation of this NIP is detailed in the attachment). The absence of dumping and 1997 prices were verified during a previous investigation. Customs considered it would be inappropriate to determine the USP using selling prices in Australia after that time because the market was affected by dumping. 9. Costs deducted from the USP to calculate the NIP may have changed since the report was submitted to Senator Vanstone. A recalculated NIP may be lower than the NIP determined during the investigation because the largest cost is overseas freight. Freight costs are expressed in US dollars and when converted to Australian dollars may have increased as the exchange rate originally used was 0.5877. Under these circumstances, it may then be appropriate to negotiate a lower undertaking price. 10. You asked us to explore options for determining a more current undertaking price. 11. Anti-dumping measures are determined by reference to variable factors: NIP (based on the USP), export price and normal value. While it may be possible to identify a more recent USP in a market unaffected by dumping it would not be appropriate to change one of the variable factors without re-examining the other variable factors to ensure that the outcome is properly assessed and able to withstand scrutiny, if challenged. 12. Ordinarily the legislation allows 155 days for the formal review of these variable factors. It may be possible to undertake such a review within a shorter timeframe, but the legislation states that interested parties are to be invited to lodge submissions within 40 days of the notice publicising the review. Customs would then need to verify and analyse the information in those submissions. 13. Article 5.10 of the WTO dumping agreement states that "Investigations shall, except in special circumstances, be concluded within one year, and in no case more than 18 months, after their initiation". The breach in this case would occur on 7 June 2001 and may expose Australia to WTO action by affected members. 14. With the WTO deadline approaching it would be preferable to conclude the current investigation. The recommended outcome would provide the Australian industry with relief (via a minimum export price for one of the largest selling thicknesses of CFG exported by PT Muliaglass) pending a formal review of the price undertaking. 15. The Australian industry can seek a review of anti-dumping measures 12 months after the publication of a notice of the acceptance of an undertaking or the publication of a notice declaring the outcome of the last review of the dumping duty notice. Alternatively, the Minister can at any time after publication of a notice request that Customs initiate a review. 16. If you consider it appropriate to undertake a review of the variable factors because one or more of the variable factors may have changed, Customs will provide the necessary instrument." 27 On 28 May 2001, the Minister accepted, under s 269TG(4), the undertaking given by Muliaglass in relation to 3mm glass subject to certain specified conditions. Also on 28 May 2001, the Minister decided not to declare to be goods to which s 8 of the Dumping Duty Act applied, goods exported by all exporters other than Muliaglass. The Minister reached the same decision in respect of goods exported by Muliaglass with nominal thicknesses between 4mm and 12mm. 28 On 30 May 2001, Customs made a submission to the Minister that he should direct the Chief Executive Officer to initiate a review of anti-dumping measures applying to 3 mm glass exported to Australia from Indonesia as well as 3mm to 12mm glass exported to Australia from China, the Philippines and Thailand. The submission relevantly said: "Proposed action That you request Customs initiate a review of the anti-dumping measures applying to certain clear float glass (CFG) exported to Australia from Indonesia, China the Philippines and Thailand. Reasons for proposed action Background … 7. The information used to determine the anti-dumping measures currently applying to CFG from Indonesia, China, the Philippines and Thailand is now considerably dated (most recent data was collected and verified in early 2000). 8. Given the circumstances, Customs considers it would be appropriate for the review to encompass all the anti-dumping measures applying to CFG from Indonesia, China, the Philippines and Thailand. Specifically, this means a review of all variable factors (normal values, export prices and non-injurious prices) applying to 3mm CFG exported to Australia from Indonesia and 3mm to 12mm CFG exported to Australia from China, the Philippines and Thailand. 9. This approach will provide all interested parties an opportunity to present their case, and to update the data used for determining the level of the measures. It will also provide Customs an opportunity to determine non-injurious prices that are congruous, irrespective of the origin of the exports. Resource Implications Nil." [Emphasis added] The Minister approved this submission. 29 On 4 June 2001, Customs sent to the Minister a draft response to Mr Day's letter of 3 May 2001. The Minister sent that letter on 14 August 2001, which included: "I note the information you provided indicating operating losses for PT Asahimas Flat Glass of Indonesia in respect of the year ending 31 December 2000. The same documents indicate that entity was profitable in the previous year. The investigation period in this case was the year ending 30 September 1999. Customs found dumping from Indonesia in the case of Muliaglass exports of 3mm clear float glass to Australia. It found no dumping of the other thicknesses. For this reason, Customs concluded it would be inappropriate to base NIFOBs [non-injurious free-on-board prices] on current selling prices in Australia, in the case of 3mm glass. Rather, Customs recommended a NIFOB based on selling prices in Australia of the Indonesian 3mm product, at a time prior to dumping. I am advised that these prices were verified in the previous investigation. In relation to the sizes other than 3mm, Customs recommended that the current Australian selling prices of the Indonesian products be used as the basis for calculating the NIFOBs." In the same letter, the Minister said he had also recently accepted the recommendations in Report No. 21. In relation to the request that the Minister reconsider his decision, he said that, given the price undertaking had necessarily been based on a figure dating to 1997, and given the time that has elapsed since Customs completed its reports, he believed it appropriate to review all of the relevant factors. He had therefore requested the Chief Executive Officer to initiate a review of the anti-dumping measures applying to, amongst other goods, 3mm glass exported to Australia from Indonesia. 30 On or about 27 June 2001, Customs published publicly the Report No. 21 dated 10 May 2000. 31 The gravamen of the complaint of Pilkington in these proceedings was that these facts reveal the decision of the Minister to take no action against Asahimas and limited action against Muliaglass arose from the Minister's failure to take into account up to date material. Up to date material was raised with the Minister and the material bore upon the question of whether Asahimas had been dumping glass and might dump glass in the future and whether Muliaglass had dumped and might dump glass more extensively than had been identified in the investigation undertaken during the investigation period. The judgment of the Full Court in Deggussa AG 32 The case advanced by Pilkington was substantially based on the decision of the Full Court in Anti-Dumping Authority v Deggussa AG (1994) 52 FCR 414. In that matter the first respondent ("the German supplier") supplied sodium cyanide to the Australian importer. In 1990, three Australian producers of sodium cyanide applied for the publication of dumping duty notices on the basis that the German supplier had been dumping sodium cyanide in the Australian market. Customs investigated the matter and a "normal value report" was produced based on the price the German supplier had sold 10,000 tonnes of sodium cyanide in Germany on 4 April 1990. A further sale between the same parties occurred in Germany on 27 January 1991 at a new and reduced price. An Australian representative of the German supplier informed Customs of the second transaction and the lower price. Two further sales took place in June 1991 in Germany between the same parties at the lower price. 33 At this time both Customs and the Anti Dumping Authority ("ADA") had a role under the Act in dealing with allegations of dumping. The decisions under challenge in those proceedings were decisions of the ADA and the Minister. The ADA had recommended to the Minister to impose anti-dumping measures in relation to sodium cyanide exported to Australia from Germany and the Minister decided to impose those measures. Both Customs and the ADA played a role in that matter though it is sufficient for the purposes of the present analysis to treat the relevant conduct of the investigating officers as the conduct of Customs. An issue arose between the Australian representative of the German supplier and the investigating officers whether the more recent sales at the lower price should be ignored in ascertaining the normal value of the goods. 34 Ultimately both ADA and the Minister acted on the basis that sales on and after 19 January 1991 would be excluded from consideration notwithstanding they were conceded to be "relevant" in the sense that they were made "in the ordinary course of trade for home consumption" and were "arm's length transactions". These familiar concepts were then embodied in s 296TAC of the Act which identified the means of determining "normal value" and read: "(1) Subject to this section, for the purposes of this Part, the normal value of any goods exported to Australia is the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export in sales that are arms length transactions by the exporter or, if like goods are not so sold by the exporter, by other sellers of like goods. (2) Subject to this section, where the Minister: (a) is satisfied that: (i) by reason of the absence of sales that would be relevant for the purpose of determining a price under subsection (1); or (ii) by reason that the situation in the relevant market is such that sales in that market that would otherwise be relevant for the purpose of determining a price under subsection (1) are not suitable for use in determining such a price; the normal value of goods exported to Australia cannot be ascertained under subsection (1); or (b) is satisfied, in a case where like goods are not sold in the ordinary course of trade for home consumption in the country of export in sales that are arms length transactions by the exporter, that it is not practicable to obtain, within a reasonable time, information in relation to sales by other sellers of like goods that would be relevant for the purpose of determining a price under subsection (1); the normal value of the goods for the purposes of this Part is: (c) except where paragraph (d) applies, the sum of: (i) such amount as the Minister determines to be the cost of production or manufacture of the goods in the country of export; and (ii) on the assumption that the goods, instead of being exported, had been sold for home consumption in the ordinary course of trade in the country of export: (A) such amounts as the Minister determines would be the delivery charges and other costs necessarily incurred in that sale; and (B) subject to subsection (13), an amount calculated in accordance with such rate, if any, as the Minister determines would be the rate of profit on that sale; or (d) where the Minister so directs, the price determined by the Minister to be representative of the price paid for like goods sold in the ordinary course of trade in the country of export for export to a third country, being sales that are arms length transactions." 35 At that time s 269TG was in substantially the same terms as it presently is (set out at [8] above) and the differences are presently immaterial. 36 The leading judgment was given by Lockhart J who said (at 429): "As a matter of commonsense it is obvious that when the ADA conducts investigations under s 269TAC(1), it must have regard to domestic sales within some defined period. Section 269TAC(1) is the mechanism which the Act provides for determining 'the normal value' of goods exported to Australia for the purposes of Pt XVB of the Customs Act. The section which is particularly relevant in this connection is s 269TG. Subsection (1) of s 269TG, relates to goods 'that have been exported to Australia'. It provides for the criteria which must be met before the Minister may declare that s 8 of the Anti-Dumping Act applies to the goods. Subsection (2) of s 269TG is directed to 'goods of any kind' where the amount of the export price of 'like goods' that have already been exported to Australia, is less than the amount of the normal value of those goods and certain other matters. Subsection (2) is directed to, amongst other classes of goods, goods that have not yet been exported to Australia. In my opinion, as subs (1) applies to goods that in fact have been exported to Australia, the exercise of ascertaining the normal value of those goods, calls for the quantification of the normal value of domestic sales of the goods by reference to prices for domestic sales reasonably proximate in time to the sales of the very goods that have been exported. The primary judge adopted basically that approach and I agree with him. Under subs (1) of s 269TG, the comparison must be between the export price of the goods that have actually been exported to Australia and the normal value of those goods. The problem with the course of conduct followed by the appellants here is that although aware of the German domestic sales that occurred after January 1991, they were in fact deliberately not taken into account for the reason previously given. But subs (1) of s 269TAC provides as the formula for 'determining the normal value' of goods exported to Australia as the price paid for like goods 'sold in the ordinary course of trade for home consumption in the country of export in sales that are at arm's length transactions by the exporter', and it was conceded in this case that the sales made on and after 19 January 1991 answered that description. In other words, the sales which the appellants regarded as unreliable because they may have been influenced by the existence of the Anti-Dumping Inquiry nevertheless were sales of goods that occurred in the ordinary course of trade for home consumption in Germany and the sales were arm's length transactions by the exporter. Hence, in my view, a view shared by the primary judge, application of subs (1) of s 269TAC would necessarily prevent the sales made on and after 19 January 1991 from being excluded. In the result, an error of law was committed by the decision-makers and it must vitiate the decisions that are based upon this fundamental misconception of subs (1) of s 269TAC. Hence, the relevant decisions which were made pursuant to s 269TG(1) are bad in law. I agree also with the primary judge that a different approach is required with respect to the application of subs (2) of s 269TG, namely to goods that may be exported here in the future. This seems to me to require that the ADA have regard to the relevant domestic sales which have taken place at the time when the ADA forms its opinion as to the export price of like goods to be exported to Australia in the future. The relevant time must be the time at which the judgment is formed. The comparison for the purposes of subs (2) of s 269TG is a little more sophisticated than it is under subs (1). Subsection (2) deals with the prospective exports of goods. Nevertheless, the comparison is between the export price of like goods that have already been exported to Australia and the amount of the normal value of those goods, if the former is less than the latter. The second part of the exercise required by s 269TG(2)(a) is to determine if the export price of like goods that may be exported to Australia in the future may be less than the normal value of the goods. This latter exercise is necessarily prospective in the sense that it must necessarily follow the export of the goods to Australia that are the basis of the measure of comparison. The very notion of determining the normal value of goods that may be exported to Australia in the future requires, to a degree, a hypothetical exercise which can only sensibly be determined by reference to relevant domestic sales, made at or about the time when the determination is made as to the export price of like goods that may be exported in the future." 37 His Honour went on to say: "Plainly, the ADA confined its examination of normal values to the period before the initiation of the inquiry by the ACS. This constituted an error by the ADA, and therefore by the Minister in adopting the relevant recommendations, which vitiated the relevant recommendations and decisions. The relevant findings about future threat of material injury to the Australian industry are based upon sales information which was over 12 months old and did not represent the true position at the time the findings were made. The ADA thus ascertained a single normal value of the product without having regard to domestic sales available at or about the time when the judgment was formed as to the export price of like goods that may be exported in the future." 38 Sheppard and Olney JJ agreed with the reasons of Lockhart J. However Sheppard J made some further observations which included a passage at 435 in which his Honour made some of the points earlier made by Lockhart J. It should be noted, however, that ADA was aware of the sales on and after 19 January 1991 and the prices involved before it reported the Minister. But it did not consider them when formulating the recommendations to the Minister on which the Minister acted. As is apparent from the first paragraph of the second quoted passage of the reasons of Lockhart J, it was this failure by the ADA to consider sales on and after 19 January 1991, which vitiated the decision of the Minister. There is, in this respect, a difference between the factual circumstances of that case and this matter. In this matter the later information (said by Pilkington to be up to date information) had not been provided to the Chief Executive Officer before the report was given to the Minister under s 269TEA and the later information was provided directly to the Minister after the Minister had been given the report. 39 If the provisions of the Act considered by the Full Court were still in force, then Pilkington would probably have a comparatively firm basis for arguing that, at least in principle, the failure of the Minister in the present matter to take into account up to date material involved error. I am, for the moment, putting to one side submissions made by counsel for the Minister that first, the material relied on by Pilkington both at the time and now in these proceedings, was not of a character that would have required its consideration by the Minister even if up to date material had to be considered and secondly, there was no general obligation on Customs or the Minister to make inquiries to secure up to date material. However, the issue raised in these proceedings is whether the particular requirement in the legislative scheme revealed in Anti-Dumping Authority v Deggussa AG for at least the investigating and recommending body to consider up to date material, has survived amendments to the scheme and, in particular, the introduction of s 269TACB. I turn now to consider these matters.

Pilkington (Australia) Ltd v Minister for Justice and Customs

At a glance

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Judgment (10 paragraphs)

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Legislation Cited (5)

Cases Cited (8)

Cited By (2)