ACAPMA Public Policies 2016

ACAPMAThe Voice of Downstream Petroleum

ACAPMA2016 Public Policies

ADVOCACY

Contents

About Us 4

About This Document 5

1. National Fuel Supply 71.1. Diversity of National Fuel Supply 81.2. Fuel Affordability 101.3. Equity of Access 12

2. Safe Industry Operation 152.1. Safe Transportation 162.2. Safe Workplace Practices 182.3. Accredited Industry Contractors 20

3. Industry Social Responsibility 223.1. Management of Fuel Theft 223.2. Environmental Responsibility 243.3. Responsible Employment of a Diverse Flexible Workforce 263.4. Public Health 283.5. Local Community Engagement 30

4. The Costs Of Doing Business 334.1. Bank Transaction Costs 344.2. Payroll Tax 364.3. Workforce Productivity 384.4. Regulation as a Last Resort 40

5. Alternative Fuels 435.1. Market Facilitation 445.2. Legislative Mandates of Alternative Fuel Use 46

2 0 1 6 A C A P M A P U B L I C P O L I C I E S | 4

About Us

Our AspirationWe aspire to be the Association most trusted at delivering knowledge, service and value to industry, government and the community on behalf of the downstream petroleum industry.

Our RoleWe work to advance the growth of petrol convenience retailing and petroleum distribution to the advantage of all Australians by:

a) Advocating the importance of the industry to the Australian Community

b) Supporting the adoption of best practice operations within the industry

We Value » Safe industry operation

» Full compliance with the law

» Excellence in business and industry performance

» Socially responsible management practices and industry actions

» Simplicity of approach

» Creativity and innovation


About This DocumentThis document outlines the public policies that underpin ACAPMA’s industry advocacy activities.

These policies have been developed with a view to supporting the practical achievement of the association’s core Charter via the pursuit of two strategic actions, namely:

a) Industry protection - informing advocacy positions that seek to defend the industry against current and future public policies that unduly erode industry value or the value of businesses participating in the market

b) Opportunity conversion - informing advocacy positions that seek to convert opportunities to enhance the value of the industry and the businesses participating in same.

The public statement of these policies is intended to promote a greater understanding of the Charter of our Association amongst all stakeholders so that they can readily understand our industry’s stake in current and future public policy issues and legislative debates.


1. National Fuel SupplyACAPMA works with government and other relevant stake-holders to ensure that the future outlook for the Australian economy is underpinned by a reliable and affordable fuel supply.

To this end, ACAPMA’s advocacy efforts are focused on supporting national policies that;

(a) increase the diversity of national supply,

(b) provide sustained fuel affordability, and

(c) promote ready access to competitively priced fuel for all Australian households.


1.1. Diversity of National Fuel SupplyThe closure of a number of refineries in Australia over the past decade has made Australia more dependent on the importation of fuel.

As a consequence, the future security of Australia’s transport fuel supply is wholly dependent on the reliability of these supply channels.

Within this context, an increase in the number of fuel importers (i.e. wholesalers) reduces Australia’s exposure to the adverse economic and social consequences of fuel supply failures.


ACAPMA believes that national policy settings should seek to encourage diversification of fuel supply via the

creation of near term opportunities for access to national fuel storage and port receiving facilities - particularly

along the Eastern seaboard of Australia.

Such policy, however, should have due regard to business interests of

investments already made by existing market participants.

2 0 1 6 A C A P M A P U B L I C P O L I C I E S | 1 0

1.2. Fuel AffordabilityThe sustained affordability of transport fuel depends on the maintenance of healthy levels of competition across all three elements of the downstream fuel supply chain (i.e. terminalisation / storage / wholesale, distribution and retail).

While much of the current debate about fuel prices focuses on the level of competition in the retail sector, the maintenance of affordable fuel prices into the future is largely dependent on effective competition across all three elements of the downstream fuel supply chain.


ACAPMA believes that the future affordability of transport fuels is best achieved by the adoption of national policy settings that seek to promote fair and effective competition across

the total downstream petroleum supply chain (i.e. wholesale,

distribution and retail) - as opposed to focusing solely on the retail element.


1.3. Equity of AccessWhile much of the debate about fuel supply rightly centres on pricing and affordability, it should be noted that the downstream petroleum industry actually provides a community service by ensuring that all Australian households have convenient access to transport fuels - regardless of whether they live in the city or the country.

In servicing lower population centres (i.e. regional and rural Australia), fuel volumes are lower but the costs for petrol convenience businesses are largely similar to, and often higher than, that of similar sized businesses operating in densely populated metropolitan areas.

Accordingly, there is a risk that unbridled competition within the sector could ultimately result in regional and rural households having to travel further to source transport fuel as the density of small petrol convenience businesses decreases.


ACAPMA believes that competition policy in the downstream petroleum

industry should seek to accommodate a mix of large and small sized petrol

convenience businesses so that households in regional and rural

communities have equitable access to transport fuels when compared

with the levels of access afforded to households in Australia’s

capital cities.


2. Safe Industry OperationThe safe operation of the downstream petroleum industry is of vital importance to both the industry itself and the community at large.

Poor safety practices of individual market participants are not tolerated given their potential for human harm and property damage, as well as the potential for reputable damage to the industry as a whole.

As a consequence, ACAPMA is committed to working effectively with all industry participants to promote safe working practices with the ultimate aim of minimising harm to the workforce, petrol convenience customers, the environment and the community at large.

Our commitment extends to;

(a) the development of industry training programmes designed to increase safety awareness, and

(b) working with government and other industry stake-holders to support the industry in the maintaining safe work practices.


2.1. Safe TransportationThe safe transportation of liquid and gaseous fuels is a core priority of industry given that much of this task must be performed on public roads.

It is therefore of vital importance that these fuels are transported in vehicles that are well maintained and driven by drivers who are appropriately trained and skilled in the transportation of dangerous goods.


ACAPMA is committed to working cooperatively with all stakeholders to ensure that high standards are

maintained within the industry with respect to the safe transportation of

liquid and gaseous fuels on Australia’s road network.

This commitment extends to the development of training courses for industry that are designed to supplement Dangerous Goods

licence training.


2.2. Safe Workplace Practices The safe operation of fuel outlets and fuel storage facilities is vital to the maintenance of public and environmental safety in and around such facilities.

Accordingly, ACAPMA believes that these facilities should only be operated by personnel who are appropriately trained in safe fuel handling and fuel storage procedures.


ACAPMA is committed to the safe operation of fuel outlets and fuel

storage facilities.

This commitment extends to the delivery of industry training courses

designed to maximise industry compliance with safety legislation and

contemporary safety procedures.


2.3. Accredited Industry ContractorsThe safe installation, commissioning and maintenance of fuel supply infrastructure (i.e. fuel transport vehicles, fuel outlets and fuel storage facilities) is vital to the achievement of public safety and environmental protection in the downstream petroleum industry facilities.

Accordingly, ACAPMA believes that these assets should only be constructed and serviced by personnel who are appropriately trained (and accredited) in safe fuel handling, fuel storage and maintenance procedures.


ACAPMA is committed to the safe installation, commissioning and maintenance of fuel supply

infrastructure (i.e. fuel transportation vehicles, fuel outlets and fuel storage

facilities).

This commitment extends to the delivery of industry training courses

designed to maximise industry compliance with safety legislation,

environmental legislation and contemporary safety procedures.


3. Industry Social Responsibility

3.1. Management of Fuel TheftThe increasing incidence of fuel theft within our industry (i.e. drive-offs) ultimately increases the costs of operation for petrol convenience businesses which is then passed through to consumers in the form of higher fuel prices.

As a consequence, our industry has a social responsibility to work with the police and other stakeholders to reduce the incidence of fuel theft.


ACAPMA recognises that our industry has a role to play in working with the

police and other government agencies to reduce the incidence of fuel theft, with the ultimate aim of keeping fuel prices affordable for all Australians.

We believe, however, that the role of enforcement and prosecution will

always remain a role of the Police and related government agencies.


3.2. Environmental ResponsibilityThe downstream petroleum industry has a clear responsibility to minimise the risk of environmental harm from its operations, including: fuel storage, fuel transportation, and fuel retailing.

This responsibility extends beyond mere compliance with environmental legislation to include proper management of assets (e.g. integrity of in-ground storage tanks) and proactive maintenance practices.


ACAPMA will work effectively with the entire industry to develop appropriate environmental guidance and training

programmes to support businesses in meeting their responsibility to minimise

the risk of environmental harm.


3.3. Responsible Employment of a Diverse Flexible Workforce

The downstream petroleum industry workforce comprises a diverse mix of workers, all of them skilled and required to possess an understanding of dangerous goods environments and to discharge safety and compliance responsibilities.

These workers range from professional drivers, warehouse personnel, administrators, cooks, baristas and retail sales and console operation staff.

As a group these workers represent a broad social profile from career professionals to students, return-to-work parents, recent immigrants transitioning to other professions, retirees and apprentices.

Accordingly, the safe and productive employment of this workforce requires that petrol convenience businesses adopt formal and transparent orientation processes to ensure that all employees are aware of the inherent business risks to themselves, their customers and the wider community.


ACAPMA will work effectively with the entire industry to develop appropriate

industrial relations guidance and training programmes to support

businesses in meeting their duty of care with respect to the employment of a diverse and flexible workforce.


3.4. Public HealthACAPMA does not believe that the petrol convenience industry should influence national debates about the public health aspirations of the Australian community.

Rather, we believe that we have a role to play in ensuring that any regulations governing the sale of such products are practical and minimise the costs of compliance to petrol convenience businesses.


ACAPMA will work cooperatively with government and regulators to ensure

that current and future regulations relating to the sale of goods that are the subject of public health

initiatives, take fair consideration of the practicalities and costs of operating

petrol convenience businesses.


3.5. Local Community EngagementThere are more than 6000 service station sites across Australia. This network is a valuable asset that offers potential for the petrol convenience industry to work with the government and other stakeholders to develop and deliver innovative initiatives that contribute to the cohesion and general well-being of local communities throughout the country.

ACAPMA believes that the genuine engagement with local communities by petrol convenience businesses provides an opportunity to enhance goodwill, delivering public-good benefits to the community and commercial benefits to the business.


ACAPMA will actively work with government and other stakeholders to develop bona-fide initiatives that strengthen the relationship of petrol convenience businesses with their

local communities.


4. The Costs of Doing BusinessACAPMA recognises that the nature of our industry is such that member businesses must expect a degree of regulation and compliance to meet the Australian community’s expectation of safe industry operation.

On the other hand, compliance with regulations imposes costs on petrol convenience businesses that must be funded from the sale of fuel and convenience products.

Therefore, poorly considered regulations that impose unnecessary costs on business have a direct bearing on consumer fuel prices.


4.1. Bank Transaction CostsGiven that petrol convenience businesses operate on a volume basis with tight margins, bank transaction (and related merchant account fees) are becoming an increasingly significant cost of operation - much of which has to be passed through to consumers.

ACAPMA believes that these costs have reached such significance as to warrant review by the government.


ACAPMA will work with financial institutions and relevant

government agencies to reduce the business and consumer cost of bank transaction fees for the purchase of

fuel and convenience products.


4.2. Payroll TaxACAPMA believes that payroll tax is a tax on the employment of people and, as such, is a perverse tax that runs contrary to Australia’s aspirations of full employment.


ACAPMA will work in partnership with other industry associations to seek the abolition of payroll tax on small to medium-sized businesses - or at

the very least a tripling of the current payroll threshold for the payment of

payroll tax.


4.3 Workforce ProductivityThe downstream petroleum industry in Australia has undergone significant change in the recent past with many traditional petrol retailers opting to expand their businesses beyond mere petrol retail to include sale of convenience products and provision of hospitality services (e.g. food and coffee).

Unfortunately, the relevant awards that apply in downstream petroleum industry do not take account of these changes in the workforce.

Increasingly, the inability of the relevant industry award structures to keep pace with changes in the workforce has meant that businesses are required to adopt petrol industry remuneration regimes for convenience and hospitality staff that actually constrain business productivity.


ACAPMA will work in partnership with government and relevant stakeholders to ensure that current wage structures and relevant awards take full account

of the diversity of the workforce employed in the downstream

petroleum industry, with a view to enhancing productivity of the industry

as a whole.


4.4. Regulation as a Last ResortNew compliance regulations impose costs on business that ultimately flow through to fuel prices. Moreover, regulation rarely delivers safety outcomes that are superior to voluntary industry adoption of new practices.

Accordingly, ACAPMA believes that any new regulation should only be considered after the industry has been given a chance to introduce training and/or industry practices as an alternative to regulation.


ACAPMA will work in partnership with all stakeholders to proactively identify

emerging issues and constantly develop training programmes and

industry practices that support the safe and profitable operation of the petrol

convenience sector in Australia.


5. Alternative FuelsACAPMA recognises that changes in vehicle technology and global energy supply will gradually change the national transport fuel mix (i.e. liquid fuels, biofuels, gaseous and electricity).

While it is not the role of petrol convenience businesses (e.g. service stations) to determine the future composition of the national transport fuel mix, our industry has the capacity to support the market entry of these products given the existence of a network of more than 6000 retail sites - as demonstrated by the availability of LPG in retail sites since the early 1980’s.

ACAPMA is, however, opposed to the introduction of legislative mandates of the use of any alternative fuel in Australia.


5.1. Market FacilitationWith more than 6000 sites across the country, the petrol convenience industry is positively positioned to support the market entry of alternative transport fuels such as LPG, natural gas (CNG and LNG), biofuels and electricity.


ACAPMA will work cooperatively with government and industry stakeholders

to support the sale of alternative transport fuels (including electricity)

in line with movements in market demand.


5.2. Legislative Mandates of Alternative Fuel UseThe mandated use of any alternative fuel is, by its very nature, a manipulation of market demand that constitutes a significant risk to petrol convenience business and consumers at large.

Such mandates typically result in requirements for capital investment well ahead of market demand, producing sub-optimal investment returns and ultimately reducing business profitability.

If businesses are to survive in these circumstances, they are often obliged to increase the cost of traditional products which effectively results in the cost of compliance with the mandate being borne by consumers.

ACAPMA is opposed to the introduction of legislative mandates for the use of any alternative fuel and will work with industry and like-minded stakeholders to oppose any such initiatives in the future.

ACAPMASuite 1206, 56 Berry St, North Sydney, NSW, 2060, Australia [email protected] | acapma.com.au

ACAPMA Public Policies 2016

Documents

Transcript of ACAPMA Public Policies 2016