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Waste giant fined $30 million for cartel scandal

Criminal sentences have been imposed on two waste management companies and their former CEOs for a skip bin and waste processing cartel.

On Friday (February 23), the Federal Court convicted and sentenced Bingo Industries, and Aussie Skips Bin Services and Aussie Skips Recycling (together Aussie Skips) for criminal cartel offences under sections 45AF and 45AG of the Competition and Consumer Act relating to a price fixing arrangement for demolition waste services in Sydney.

Bingo’s former managing director and CEO Daniel Tartak, and Aussie Skips’ former CEO Emmanuel Roussakis, were also convicted and sentenced.

These prosecutions were brought by the Commonwealth Director of Public Prosecutions (CDPP), following an investigation and referral by the Australian Competition and Consumer Commission (ACCC).

Bingo was fined $30 million and Aussie Skips was fined $3.5 million after each company pleaded guilty to having fixed and increased prices with the other for the supply of skip bins and the provision of waste processing services for building and demolition waste in Sydney.

Bingo’s fine of $30 million is the second largest fine imposed for criminal cartel offences under the Competition and Consumer Act.

The ACCC defines a cartel as existing when businesses agree to act together instead of competing with each other. Conduct can include fixing prices, sharing markets, rigging bids, or controlling the output or limiting the amount of goods or services.

Tartak was sentenced for two criminal cartel offences to two terms of imprisonment of 18 months each, to be served concurrently over two years as an intensive correction order, including 400 hours of community service. Tartak was also fined $100,000 and banned from managing corporations for a period of five years.

Roussakis was sentenced to 18 months’ imprisonment for one criminal cartel offence, to be served as an intensive correction order, including 300 hours of community service. Roussakis was also fined $75,000 and banned from managing corporations for a period of five years.

In imposing these sentences, the Court took into account the early guilty pleas of each of the offenders.

Bingo and Tartak were charged with criminal cartel offences on August 16, 2022, with Bingo pleading guilty on the same day. On October 20, 2022, Tartak pleaded guilty to the charges against him.

Aussie Skips and Roussakis were each charged with a criminal cartel offence on December 14, 2022. Aussie Skips and Roussakis pleaded guilty to their respective charges on February 27, 2023.

In delivering judgment, Justice Wigney said, “Cartels are widely condemned as the most egregious forms of anti-competitive behaviour. At its heart a cartel is an agreement between competitors not to compete.

“Cartel conduct harms consumers, businesses, and the economy, and is likely to increase prices, reduce choice and distort innovation processes.”

Justice Wigney also observed that the price-fixing arrangements between Bingo and Aussie Skips “had the effect of suppressing and distorting price competition in respect of collections services and processing services in the Sydney metropolitan region or a significant part thereof.

“The markets for collections services and processing services in that region were large and lucrative. The effect of the cartel conduct was that some consumers of collections services and processing services in that region were likely to have paid more for those services than they otherwise would have.”

The cartel operated between May 2019 and August 2019, with Bingo and Aussie Skips agreeing to fix prices for their waste collection services and waste processing services in Sydney from July 1, 2019.

The ACCC’s investigation began in June 2019 after it received complaints concerning price increases which came into effect from July 1, 2019 after the introduction of a government levy.

In responding to the court outcome, Bingo Industries released a statement.

Bingo chief executive officer, Chris Jeffrey, said that the company has learned from the experience and they’re glad to put the matter behind them.

“We’ve got a new owner, a new board, a new chair and a new executive team,” he said.

“Since the matter occurred close to five years ago, we’ve significantly improved our focus on governance and compliance.”

Jeffrey added that Bingo had undertaken a comprehensive review of internal processes and implemented enhanced compliance training programs to ensure the situation is never repeated. This includes:

  • Improved protocols for dealing with competitors (who can also be customers of the business)
  • Improved protocols for issuing price change communications
  • Regular competition law training for all sales staff
  • Internal quality assurance reviews

ACCC chair Gina Cass-Gottlieb said, “The sentences handed down today should serve as a strong reminder that criminal cartel conduct is a serious offence attracting serious consequences, including criminal convictions, significant fines, banning orders, and potential imprisonment for individuals.

“Cartel conduct is illegal because it increases the prices consumers and businesses have to pay, and restricts healthy competition and economic growth.

“We will continue to investigate cartel conduct and refer appropriate matters to the Commonwealth Director of Public Prosecutions for consideration of criminal prosecution.

”Cass-Gottlieb continued, “We encourage anyone who observes anti-competitive conduct in their industry or workplace to contact the ACCC confidentially. We will review their concerns and take action if warranted.

“We have special arrangements for anyone who wants to anonymously report cartel conduct, via a secure third party platform that protects their identity and by anonymously calling our dedicated hotline.”

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