AUSTRALIA: Mackay to force cane growers to pay A$2 levy despite court ruling

Published: 04/17/2018, 9:50:23 AM

Cane growers who successfully challenged Mackay Sugar's A$2 a tonne levy are reeling after learning the miller intends to make them pay despite a Queensland Supreme Court ruling in their favour, according to Australia's Daily Mercury newspaper.

Independent Bargaining Representative Group members claim Mackay Sugar proposes deducting payments in respect of the 2017 crushing season in equal proportions from each of the four remaining mill pay rounds for the season.

The first of the four A$0.50 a tonne repayments is to be taken out of the mill pay due to growers on Thursday. Based on a 10,000 tonne crop, each repayment would total A$5000.

The A$2 a tonne levy was proposed by Mackay Sugar as part of a plan to pay down its multi-million-dollar debt and fund mill maintenance.

The group of almost 40 farmers established a fighting fund to challenge the levy and paid more than A$150,000 in legal fees to take their case to court, where Justice David Jackson ruled in their favour in October 2017. Mackay Sugar did not appeal his decision.

IBR group spokesman Rod Watt said at the crux of the dispute was the miller's interpretation of a clause of Mackay Sugar's Cane Supply and Process Agreement (CSPA).

He said MSL had sought consultation with the group, despite not detailing the issues to be discussed, based on their belief that once they had had dialogue with any grower or bargaining representative, MSL had "absolute power" to amend the CSPA, even if agreement wasn't reached.

The group sees this as an unfair contract clause under Australian Consumer Law and is concerned new owners will have excessive and unfair powers to make changes to the CSPA by consulting only with the growers and not by agreement.

Under the current CSPA, they believe it's unlikely the required 75% of growers will support any capital raising proposal.

"They (MSL) can extend the levy, increase the levy, with this clause in play they can do what they want," Watt said.

"The only protection the growers will have in a new entity Mackay Sugar is to have a changed CSPA. We will have no say in what a new owner wants to do (under the current one)."

Responding to the claims, Mackay Sugar said it was continually in discussions with all bargaining representatives on a range of items, listening to their views and reaching outcomes.

"Recently we have sought to consult as to the A$2 per tonne grower contribution.

"Currently growers supplying 95% of our cane supply are making the grower contribution, which has made a significant positive difference to the scope of essential work to be completed to prepare the mills for the 2018 season for all of our growers' cane.

"In order to treat all growers fairly and consistently we have now taken steps so that the remaining growers are now also subject to the grower contribution.

"We have an agreed CSPA that governs how the operations and commercial arrangements work between the parties. We all have to work by this agreement.

"The agreed CSPA has elements where there is consultation and agreement, and other areas where elements can be exercised at either party's discretion.

"We continue to work co-operatively with bargaining representatives and growers and we understand that we will not always have the same view on every element of the CSPA that each of our individual growers may have," the Mackay Sugar spokesperson said.

Watt said the group's only option now was to go back to court, but that was unlikely given the cost of the initial action.

Mackay Sugar's handling of the levy, and claims of failure to provide its growers with legislative rights to market their economic interest sugar, are currently the subject of an ACCC investigation.

A recommendation from the investigating team will be passed to ACCC commissioners at the end of April for review.