Trade Practices Act

Any claims or representations made by a business must be accurate and truthful. If a business has been dishonest, exaggerated the truth, or created a misleading impression, then there is a very broad provision in the Trade Practices Act to prohibit such conduct by a corporation.

For example, the ACCC webpage on misleading and deceptive conduct gives an example of a business predicting the health benefits of a therapeutic device or health product but having no proof that such benefits can be attained. Note that there is no need to show that the product has no benefit in fact, rather it is misleading to make a claim when there is no proof. In general:

If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind then the conduct is likely to breach the law.

Drought Exceptional Circumstance report (DECR)

How do the claims in the Drought Exceptional Circumstance report (DECR) stack up?

The summary of the DECR reports the results on temperatures:

The analysis shows that the areal extent and frequency of exceptionally hot years have been increasing rapidly over recent decades and this trend is expected to continue. Further, over the past 40 years (1968-2007), exceptionally hot years are typically occurring over 10-12% of the area in each region, i.e. about twice the expected long term average of 5%. By 2010-2040, the mean area is likely to increase to 60-80%, with a low scenario of 40-60%, and a high scenario of 80-95%. On average, exceptionally high temperatures are likely to occur every 1-2 years.

On low rainfall:

Observed trends in exceptionally low rainfall years are highly dependent on the period of analysis due to large variability between decades. If rainfall were the sole trigger for EC declarations, then the mean projections for 2010-2040 indicate that more declarations would be likely, and over larger areas, in the SW, SWWA and Vic&Tas regions, with little detectable change in the other regions. Under the high scenario, EC declarations would likely be triggered about twice as often and over twice the area in all regions. In SWWA the frequency and areas covered would likely be even greater.

And on low soil mositure:

Projected increases in the areal extent and frequency of exceptionally low soil moisture years are slightly clearer than those for rainfall. If soil moisture were the sole criterion for EC declarations, then the mean projections indicate that more declarations would be likely by 2030, particularly in the SW, SW WA and Vic&Tas regions. Under the high scenario, EC declarations would be triggered almost twice as often in most regions and almost four times as often in SWWA.

These results were sufficiently alarming to produce the following interpretations:
ABC: A new report is predicting a dramatic loss of soil moisture, increased evaporation and reduced ground water levels across much of Australia’s farming regions, as temperatures begin to rise exponentially.

DAFF: Australia could experience drought twice as often and the events will be twice as severe within 20 to 30 years, according to a new Bureau of Meteorology and CSIRO report.

It was described by the Agriculture Minister Tony Burke as like “a disaster novel”.

The DECR created an overall impression, particularly within the rural community of considerable increase in intensity and severity of droughts. Three quasi-legal questions that occur to me (disclaimer: I am not a lawyer) are: Were people misled? Were claims made without proof? Did people suffer financially as a result?

As readers of this blog know, I have failed to find proof of the claims that lower rainfall is likely, despite my own analysis and a number of requests, both to the lead author and to the organizations that produced the reports, the CSIRO Flagship for Climate Adaptation and the Bureau of Meteorology (BoM). Similar to the example of a medical product promoted without proof, this alone may be sufficient to constitute misleading conduct.

The CSIROpod interview

Contrast the difference between the summary in the report above and an excerpt from an interview on the CSIROpod website a week later, after the furore surrounding the release of the report.

‘An assessment of the impact of climate change on the nature and frequency of exceptional climatic events’ was prepared by CSIRO and the Bureau of Meteorology for the Australian Government’s National Review of Drought Policy.

The analysis shows that the real extent and frequency of exceptionally hot years have been increasing rapidly over recent decades, and that trend is expected to continue.

The researchers also found that only some parts of the country will be affected by more frequent dry, hot periods, and that climate change through human induced greenhouse gas emissions is not always the culprit.

(1:20m) … there has not been a clear indication of changes in exceptional low rainfall years.
(1:40m) … but in terms of a long term trend its not very clear in terms of exceptional low rainfall years.

A few points about the CSIROpod argue the DECR was misleading:

1. Notice how qualified the statements are a week later, relative to the text of the report. This sugests the authors have had second thoughts about the quality of the original claims.

2. There is no reference to lower rainfall in the CSIROpod text, despite strong claims that lower rainfall is likely in the DECR.

3. The text on the web site states the researchers also found … “that climate change through human induced greenhouse gas emissions is not always the culprit”.

On point 3, I could find no evidence that researchers looked at the role of AGW relative to other factors in the report. Is this another misleading statement that has been presented without proof in order to create an effect?

Other Experts

Last week, Professor Stewart Franks, a hydroclimatologist at the University of Newcastle School of Engineering wrote in a major newspaper, that the Murray Darling Basin drought was caused by an entirely natural phenomenon, the 2002 El Nino event, and there is no evidence that CO2 has had any significant role. While he does not mention the DECR directly, the following statement appears to refer to the DECR, and would also support the contention that the report was misleading:

However, the most literally fantastic claim on climate change must go to Kevin Rudd, who has guaranteed that rainfall will decline over coming decades; one can only assume he’s based his view on deficient climate models and bad advice.

The DECR was also prominent in an article by Ian Castles, former Australian Statistician describes the reactions to the report, and reflects on the absence of proof:

It is truly unfortunate that the CSIRO and the Bureau of Meteorology did not undertake a prior evaluation of the models used in the first study of its kind in Australia in order to ensure that those models were able to reproduce the past situations that were relevant to the study.

These experts seem to believe the DECR is was misleading, and fails to satisfy basic standards of proof for its claims.

What can be done?

There are a number of actions to take against businesses making misleading statements. The Australian Competition and Consumer Commission (ACCC) can take action in court against corporations and related individuals involved in misleading conduct, and may apply to the court for an injunction and other orders, particularly if it has been carried out through a medium that reaches a wide audience, such as over the internet, on national television, or through a nation-wide print advertising campaign. The DECR would surely qualify as a widespread distribution.

Individuals can also take private action if they have suffered a loss as a result of a business’ misleading or deceptive conduct or misrepresentation. For example, if a rural business suffered loss, such as the sale of a property falling through, as a result of misleading representations about increasing frequency of droughts or EC declarations in the DECR, courts can order damages, injunctions and other orders. Alternatively, depending on the amount of money involved, a claim may be lodged in the local small claims tribunal.

Update: A few hours after posting this I received an email from Andrew Ash, Director of the Climate Adaptation Flagship indicating that Kevin Hennessy will be responding to my report on basic validation tests of drought models.

Advertisements

0 thoughts on “Trade Practices Act

  1. I actually did post a complaint with ACCC regarding the false and misleading statements in DECR providing the evidence that you prepared. I am not currently able to access their e:mail response, but in essence it said that the ACCC’s role is to supervise corporations, and that it has no remit over government statements. They suggested that I take up my concerns with CSIRO and/or my member of parliament.

  2. I actually did post a complaint with ACCC regarding the false and misleading statements in DECR providing the evidence that you prepared. I am not currently able to access their e:mail response, but in essence it said that the ACCC’s role is to supervise corporations, and that it has no remit over government statements. They suggested that I take up my concerns with CSIRO and/or my member of parliament.

  3. Mondo, I think that it would be useful if you were able to post ACCC’s response when you’re able to get access to it (I assume that it’s not very long?)

    As far as I can see, there is no disclaimer from CSIRO on this report, unlike the one that appears on their consultancy reports generally. I can see that CSIRO can’t be held responsible for what the Govt says if they ‘sex it up’, but I would have thought that CSIRO’s statutory status does place them in a corporation-like position in relation to some activities.

  4. Mondo, I think that it would be useful if you were able to post ACCC’s response when you’re able to get access to it (I assume that it’s not very long?)

    As far as I can see, there is no disclaimer from CSIRO on this report, unlike the one that appears on their consultancy reports generally. I can see that CSIRO can’t be held responsible for what the Govt says if they ‘sex it up’, but I would have thought that CSIRO’s statutory status does place them in a corporation-like position in relation to some activities.

  5. Up until now I have been only interested in the statistical sufficiency of the models, and not spent time on the ‘false and misleading’ approach, given it is more legalistic. I have been spending a bit of time on this, and its giving results. It’s an interesting perspective to treat the report as a prospectus, and evaluate it against that kind of standard.

    There is a standard CSIRO disclaimer at the end.

  6. Up until now I have been only interested in the statistical sufficiency of the models, and not spent time on the ‘false and misleading’ approach, given it is more legalistic. I have been spending a bit of time on this, and its giving results. It’s an interesting perspective to treat the report as a prospectus, and evaluate it against that kind of standard.

    There is a standard CSIRO disclaimer at the end.

  7. Thanks Mondo. I’m interested in the exact terms of ACCC’s response, partly because I don’t agree that a consultancy report by CSIRO is necessarily a ‘government statement’. In this case the client was the Bureau of Rural Sciences, but that doesn’t give CSIRO any more right to make false and misleading statements than if the client was the Brisbane City Council, the National Farmers Federation or the World Wildlife Fund.

    What if the BoM had come to quite different conclusions and had incorporated them in a report for the Department of Climate Change? Obviously one of the reports must include statement that are ‘false and misleading’: would the ACCC argue that it can’t investigate either of the documents because they’re government statements?

    My apologies for having suggested that there was no disclaimer in the DECR. But it can’t be the case that a corporation can escape liability for making false and misleading statements by the simplie device of publishing a disclaimer.

  8. Thanks Mondo. I’m interested in the exact terms of ACCC’s response, partly because I don’t agree that a consultancy report by CSIRO is necessarily a ‘government statement’. In this case the client was the Bureau of Rural Sciences, but that doesn’t give CSIRO any more right to make false and misleading statements than if the client was the Brisbane City Council, the National Farmers Federation or the World Wildlife Fund.

    What if the BoM had come to quite different conclusions and had incorporated them in a report for the Department of Climate Change? Obviously one of the reports must include statement that are ‘false and misleading’: would the ACCC argue that it can’t investigate either of the documents because they’re government statements?

    My apologies for having suggested that there was no disclaimer in the DECR. But it can’t be the case that a corporation can escape liability for making false and misleading statements by the simplie device of publishing a disclaimer.

  9. Gentlemen (and ladies). I am now back at my ‘puter, and can copy my correspondence with ASIC re this matter. For reasons I am sure you all understand, I have disguised my identity, although this is clearly known to ACCC.

    Note that the immediately succeeding message is the response from ACCC to my e:mail which is copied further below:

    “Dear Mr X (every reference to my name has been changed to X),

    Thank you for your email complaint of 5 August 2008. In your complaint you raise concerns regarding the current report of the CSIRO in relation to Drought exceptional services. In particular, you consider the report to be misleading.

    As you are aware, the ACCC is charged with the responsibility of ensuring compliance with the fair trading and competition provisions of the Trade Practices Act 1974. Generally speaking, the fair trading provisions of the Act only apply to entities when engaged in trade or commerce.

    The actions of a department in carrying out the functions of government such as communication of government policy are unlikely to be considered in trade or commerce and are therefore unlikely to be exposed to the fair trading provisions of the Act.

    While the provisions of the Act are unlikely to apply, you may wish to raise your concerns directly with the relevant department, the responsible Minister or your member of Federal Parliament.

    Thank you for contacting the ACCC with your concerns. I hope this information is of use.

    Yours sincerely

    Tania
    ACCC Infocentre
    1300 302 502

    ——————————————————————————–
    From: xxxxxxx@bigpond.net.au [mailto:xxxxxxx@bigpond.net.au]
    Sent: Tuesday, 5 August 2008 4:03 PM
    To: Infocentre
    Subject: Complaint form submission [SEC=UNCLASSIFIED]

    Mr xxx xxxxx, 55-64, Male
    xx xxxxxxxx Crescent
    Xxxxxxx
    NSW Australia 2xxx
    02 xxxx xxxx

    xxxxxxxx@bigpond.net.au
    5th August 2008
    Drought Exceptional Circumstances Report
    CSIRO

    On 6 July, CSIRO published a report “Drought Exceptional Circumstances Report”. The Sydney Morning Herald account of the report on 7th July stated “AUSTRALIA will experience severe heat waves almost every year and droughts more often and over wider stretches of the country during the next three decades – with serious implications for how taxpayers help affected farmers, a group of scientists says.”

    The report blames Anthropogenic Global Warming for this. Andrew Bolt has today posted (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/dud_studies_behind_rudds_freakish_claims/) a report by David Stockwell that examines the underlying working by CSIRO. His conclusion is that the results of his investigation show that the results actually show no significant increase in drought due to greenhouse warming in almost all areas of Australia, contrary to CSIRO claims.

    If substantiated (and I acknowledge that CSIRO should be given opportunity to rebut David Stockwell’s analysis), it would appear that this is another example of CSIRO engaging in the publication of misleading information. Whether or not they do so knowingly, David Stockwell presents a compelling case that they are in fact misleading us. CSIRO should be held accountable for ensuring that its public statements meet the same standards of truthful disclosure that companies are required to meet in Australia.

  10. Gentlemen (and ladies). I am now back at my ‘puter, and can copy my correspondence with ASIC re this matter. For reasons I am sure you all understand, I have disguised my identity, although this is clearly known to ACCC.

    Note that the immediately succeeding message is the response from ACCC to my e:mail which is copied further below:

    “Dear Mr X (every reference to my name has been changed to X),

    Thank you for your email complaint of 5 August 2008. In your complaint you raise concerns regarding the current report of the CSIRO in relation to Drought exceptional services. In particular, you consider the report to be misleading.

    As you are aware, the ACCC is charged with the responsibility of ensuring compliance with the fair trading and competition provisions of the Trade Practices Act 1974. Generally speaking, the fair trading provisions of the Act only apply to entities when engaged in trade or commerce.

    The actions of a department in carrying out the functions of government such as communication of government policy are unlikely to be considered in trade or commerce and are therefore unlikely to be exposed to the fair trading provisions of the Act.

    While the provisions of the Act are unlikely to apply, you may wish to raise your concerns directly with the relevant department, the responsible Minister or your member of Federal Parliament.

    Thank you for contacting the ACCC with your concerns. I hope this information is of use.

    Yours sincerely

    Tania
    ACCC Infocentre
    1300 302 502

    ——————————————————————————–
    From: xxxxxxx@bigpond.net.au [mailto:xxxxxxx@bigpond.net.au]
    Sent: Tuesday, 5 August 2008 4:03 PM
    To: Infocentre
    Subject: Complaint form submission [SEC=UNCLASSIFIED]

    Mr xxx xxxxx, 55-64, Male
    xx xxxxxxxx Crescent
    Xxxxxxx
    NSW Australia 2xxx
    02 xxxx xxxx

    xxxxxxxx@bigpond.net.au
    5th August 2008
    Drought Exceptional Circumstances Report
    CSIRO

    On 6 July, CSIRO published a report “Drought Exceptional Circumstances Report”. The Sydney Morning Herald account of the report on 7th July stated “AUSTRALIA will experience severe heat waves almost every year and droughts more often and over wider stretches of the country during the next three decades – with serious implications for how taxpayers help affected farmers, a group of scientists says.”

    The report blames Anthropogenic Global Warming for this. Andrew Bolt has today posted (http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/dud_studies_behind_rudds_freakish_claims/) a report by David Stockwell that examines the underlying working by CSIRO. His conclusion is that the results of his investigation show that the results actually show no significant increase in drought due to greenhouse warming in almost all areas of Australia, contrary to CSIRO claims.

    If substantiated (and I acknowledge that CSIRO should be given opportunity to rebut David Stockwell’s analysis), it would appear that this is another example of CSIRO engaging in the publication of misleading information. Whether or not they do so knowingly, David Stockwell presents a compelling case that they are in fact misleading us. CSIRO should be held accountable for ensuring that its public statements meet the same standards of truthful disclosure that companies are required to meet in Australia.

  11. CSIRO is not a ‘department’. It is a statutory body, created by an Act of the Parliament of the Commonwealth with functions specified therein. I have not examined these, but would be very surprised if ‘the communication of government policy’ is among them.

    The question of whether or not CSIRO is engaged in trade or commerce is one of fact – obviously the Act permits the Organization to sell its consultancy services to other bodies, including agencies of Federal, State and local governments, NGOs, etc. Conversely, it is open to those bodies (including, for example, the Bureau of Rural Sciences) to buy a report on the future frequency of exceptional circumstances from consultants in the private sector, who would certainly then be engaged in trade or commerce. It’s not clear why CSIRO should be immune from ACCC scrutiny if it is alleged to have made misleading or deceptive statements.

  12. CSIRO is not a ‘department’. It is a statutory body, created by an Act of the Parliament of the Commonwealth with functions specified therein. I have not examined these, but would be very surprised if ‘the communication of government policy’ is among them.

    The question of whether or not CSIRO is engaged in trade or commerce is one of fact – obviously the Act permits the Organization to sell its consultancy services to other bodies, including agencies of Federal, State and local governments, NGOs, etc. Conversely, it is open to those bodies (including, for example, the Bureau of Rural Sciences) to buy a report on the future frequency of exceptional circumstances from consultants in the private sector, who would certainly then be engaged in trade or commerce. It’s not clear why CSIRO should be immune from ACCC scrutiny if it is alleged to have made misleading or deceptive statements.

  13. Thanks mondo,
    Food for thought there, by characterizing the DECR as govt policy. Interesting defense, wonder how it would hold up? They would argue that it was published by DAFF. I wonder how the DAFF is regulated?

  14. Thanks mondo,
    Food for thought there, by characterizing the DECR as govt policy. Interesting defense, wonder how it would hold up? They would argue that it was published by DAFF. I wonder how the DAFF is regulated?

  15. For the sake of argument, let’s assume that the DECR was published solely by DAFF (in fact, it carries the logos of CSIRO and BoM also, and this could well mean that the three agencies jointly published the report). It doesn’t follow that in doing so DAFF was carrying out its function of ‘communicating government policy’, Tania of the ACCC’s Infocentre to the contrary notwithstanding. The last sentence of the DECR’s Terms of Reference (ToR, p. 22) says that “BoM and CSIRO’s report will be released by the Government.” It surely can’t be argued that whatever these independent bodies concluded, those conclusions became, ipso facto, government policy. What if CSIRO had reached one conclusion and BoM a different one?

    More generally, it is far from clear who is taking the responsibility for saying what. The ToR states (fourth para., second sentence) that ‘Climate change is expected to increase the frequency, severity and length of drought periods in future’ – but then says three paras. later that the BoM and CSIRO ‘will examine the effects of climate change on the likely nature and frequency of exceptional climatic events.’ Presumably DAFF or its Minister had decided before the assessment began that the DIRECTION of change in drought would be towards greater frequency, severity and length, and just wanted the two independent agencies from different portfolios to put numbers on the changes.

    This raises further questions. How were the 11 authors from the two agencies selected? Were they obliged to agree with the declaration in the ToR as a condition of being a member of the author team? Did BoM and CSIRO conduct their own assessment of the validity of the conclusions reached by the 11 authors? Did DAFF undertake its own assessment of the findings? What was the involvement (if any) of DAFF’s own scientific bureau (the BRS)?

    Then there are the Ministers for Agriculture in the States and Territories. According to Minister Burke’s news release of 19 September on the Primary Industries Mineral Forum held on that day (DAFF08/123B), “Ministers today again recognised that the frequency and severity of droughts will likely increase.” “Again recognised …”, but what led them to conclude this in the first place? Surely the whole point of the passage I quoted from Graham Farquhar’s statement to the Australian Science Media Centre was that there was no sound basis for such a conclusion? Why would State and Territory Ministers know what is ‘likely’ to happen to the frequency and severity of droughts in 50 years time, when Professor Farquhar says he doesn’t know?

    Finally, how is the report to be cited? CSIRO and BoM have an apparent aversion to describing it as the “Drought Exceptional Circumstances Report”. Steve McIntyre made great play of the requirement imposed on anyone wanting to access the detailed data to acknowledge the source as “Hennessy et al. (2008): “An assessment of the impact of climate change on the nature and frequency of exceptional climatic events”. A consultancy report by CSIRO and the Australian Bureau of Meteorology for the Australian Bureau of Rural Sciences, 33pp.” But in citing the publication on his home page on the CSIRO website, Kevin Hennessy does not acknowledged either the BoM or the BRS, and implies that the publication is CSIRO’s own:

    Hennessy, K. J., Fawcett, R., Kirono, D. G. C., Mpelasoka, F. S., Jones, D., Bathols, J. M., Whetton, P. H., Stamford Smith, M., Howden, M., Mitchell, C. D., and Plummer, N. (2008). An assessment of the impact of climate change on the nature and frequency of exceptional climatic events. Aspendale : CSIRO Marine and Atmospheric Research. 33 p.

  16. For the sake of argument, let’s assume that the DECR was published solely by DAFF (in fact, it carries the logos of CSIRO and BoM also, and this could well mean that the three agencies jointly published the report). It doesn’t follow that in doing so DAFF was carrying out its function of ‘communicating government policy’, Tania of the ACCC’s Infocentre to the contrary notwithstanding. The last sentence of the DECR’s Terms of Reference (ToR, p. 22) says that “BoM and CSIRO’s report will be released by the Government.” It surely can’t be argued that whatever these independent bodies concluded, those conclusions became, ipso facto, government policy. What if CSIRO had reached one conclusion and BoM a different one?

    More generally, it is far from clear who is taking the responsibility for saying what. The ToR states (fourth para., second sentence) that ‘Climate change is expected to increase the frequency, severity and length of drought periods in future’ – but then says three paras. later that the BoM and CSIRO ‘will examine the effects of climate change on the likely nature and frequency of exceptional climatic events.’ Presumably DAFF or its Minister had decided before the assessment began that the DIRECTION of change in drought would be towards greater frequency, severity and length, and just wanted the two independent agencies from different portfolios to put numbers on the changes.

    This raises further questions. How were the 11 authors from the two agencies selected? Were they obliged to agree with the declaration in the ToR as a condition of being a member of the author team? Did BoM and CSIRO conduct their own assessment of the validity of the conclusions reached by the 11 authors? Did DAFF undertake its own assessment of the findings? What was the involvement (if any) of DAFF’s own scientific bureau (the BRS)?

    Then there are the Ministers for Agriculture in the States and Territories. According to Minister Burke’s news release of 19 September on the Primary Industries Mineral Forum held on that day (DAFF08/123B), “Ministers today again recognised that the frequency and severity of droughts will likely increase.” “Again recognised …”, but what led them to conclude this in the first place? Surely the whole point of the passage I quoted from Graham Farquhar’s statement to the Australian Science Media Centre was that there was no sound basis for such a conclusion? Why would State and Territory Ministers know what is ‘likely’ to happen to the frequency and severity of droughts in 50 years time, when Professor Farquhar says he doesn’t know?

    Finally, how is the report to be cited? CSIRO and BoM have an apparent aversion to describing it as the “Drought Exceptional Circumstances Report”. Steve McIntyre made great play of the requirement imposed on anyone wanting to access the detailed data to acknowledge the source as “Hennessy et al. (2008): “An assessment of the impact of climate change on the nature and frequency of exceptional climatic events”. A consultancy report by CSIRO and the Australian Bureau of Meteorology for the Australian Bureau of Rural Sciences, 33pp.” But in citing the publication on his home page on the CSIRO website, Kevin Hennessy does not acknowledged either the BoM or the BRS, and implies that the publication is CSIRO’s own:

    Hennessy, K. J., Fawcett, R., Kirono, D. G. C., Mpelasoka, F. S., Jones, D., Bathols, J. M., Whetton, P. H., Stamford Smith, M., Howden, M., Mitchell, C. D., and Plummer, N. (2008). An assessment of the impact of climate change on the nature and frequency of exceptional climatic events. Aspendale : CSIRO Marine and Atmospheric Research. 33 p.

  17. Pingback: baterie do laptopów

  18. Pingback: pokazy kulinarne

  19. Pingback: zobacz oferte

  20. Pingback: polecam link

  21. Pingback: cialko

  22. Pingback: oferta

  23. Pingback: sklep internetowy

  24. Pingback: kliknij

  25. Pingback: strona

  26. Pingback: tutaj

  27. Pingback: pity2015program.pl

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s