After delivering a stinging 66-page rebuke of Visy and Richard Pratt’s conduct, it’s unlikely that Federal Court Judge Peter Heerey, nor the man responsible for bringing the action, ACCC boss, Graeme Samuel, will be invited to Raheen any time soon. While Heerey decided against imposing a greater penalty upon Visy and Richard Pratt than the $38 million recommended by the ACCC, the damage to Pratt’s reputation was far greater than any fine that Heerey could have imposed.

Heerey made it abundantly clear that the blame lies fairly on the back of Australia’s third richest man, noting that:

While Mr Pratt’s conduct, as revealed in the statement of agreed facts, was limited to the one meeting with the Amcor CEO at the All Nations Hotel, that was of major importance to the operation of the cartel. It would not be expected that somebody in his position would get involved in the day to day running of the cartel, like Mr Debney or, to a greater extent, Mr Carroll. Yet he gave his personal sanction to this obviously unlawful arrangement and an assurance of its continued operation. It would not have continued without his approval.

The Federal Court judge also destroyed Visy’s claim that it wasn’t aware of the “complex” Trade Practices laws, noting that:

There is nothing complex about the law that prohibits price fixing and market sharing. [Visy executives] Mr Debney and Mr Carroll certainly knew about this law. That is why they met with their competitor in parks and suburban hotels and used pre-paid mobile phones. There cannot be any doubt that Mr Pratt also knew that the cartel, to which he gave his approval, and in which he has admitted to being knowingly concerned, was seriously unlawful.

Heerey also made what could be deemed a veiled criticism of Peter Costello’s reticence to enact the much promised criminal sanctions for cartel behavior, stating:

Many countries with free market economies have recognised this reality by enacting laws which make cartel conduct by individuals subject to criminal sanctions, including imprisonment. In the United States this happened as long ago as 1890 with the Sherman Act 15 U.S.C. More recently, as shown by the Organisation for Economic Co-operation and Development report Hard Core Cartels – Third Report on the Implementation of the 1988 Recommendation , Paris, 2006, the following countries have laws providing for terms of imprisonment for cartel conduct: Canada, France, Germany, Ireland, Israel, Japan, South Korea, Mexico, Norway, Slovak Republic and the United Kingdom.

Graeme Samuel, writing in the Smage , was even more explicit, noting:

While a tax agent who fudged returns for 17 of his clients sits in jail, not to be released until 2011 at the earliest, those who steal hundreds of millions from consumers every year can rest easy. They know that under the current laws, they will never face a similar fate.

It is time Australia redressed this imbalance and sent cartel leaders to jail.

What Heerey and Samuel were effectively saying was that Pratt’s conduct (as the ultimate responsible person at chief beneficiary of the illegal conduct) should have been met with criminal sanctions rather than a mere fine. In other words, Dick Pratt and former Visy CEO, Harry Debney, should be behind bars but aren’t, not due to their actions or defence, but because of Australia’s lax trade practices laws.

Justice Heerey found that “the cartel was to operate for Mr Pratt’s personal benefit, via his ownership, or part ownership, of Visy. This was not the case of an employee acting out of some misguided sense of corporate loyalty.”

Courtesy of Heerey’s judgment and Samuel’s investigation, arguably Australia’s largest donor will now be remembered as the guy who should have gone to jail for price fixing.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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