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Commerce Act change will allow SOE/CRI cooperation

14 May 2008 Media Statement

Commerce Act change will allow SOE/CRI cooperation

State Owned Enterprises Minister Trevor Mallard and Commerce Minister Lianne Dalziel today announced a proposal to allow State Owned Enterprises (SOEs) and Crown Research Institutes (CRIs) to cooperate without breaching the Commerce Act.

"The government recognises the general benefits of competition. However, this proposal is targeted at areas where collaboration rather than competition would be in the public interest," Lianne Dalziel said.

The proposed changes will be included in a Bill to amend the Commerce Act. The amendments will apply when the SOEs and CRIs are acting under ministerial direction in the public interest.

"Currently, it is difficult for the government to act as a supportive owner and ensure these entities can cooperate where it is for the common good. The amendments will provide limited exemptions to specific actions," Trevor Mallard said. "For example, it may be in the public interest that MetService and NIWA collaborate to provide New Zealanders with better weather forecasting."

At present, the Commerce Act explicitly exempts interconnected private sector bodies from the competition provisions of the Act. Many companies derive their strength from being subsidiaries of larger conglomerates and from having committed and supportive owners who will ensure that competition between subsidiaries of the same group is avoided and cooperation maximised.

The proposed Commerce Act amendment would apply to all SOEs and CRIs except for interrelations between the three electricity generators Meridian Energy, Mighty River Power and Genesis Energy.

ENDS

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