Commerce Commission initiates legal action against alleged cartel

The Commerce Commission has filed civil proceedings in the Auckland High Court today against four New Zealand companies and seven executives for alleged cartel behaviour in the timber preservatives industry.

The companies are Koppers Arch Wood Protection (NZ) Ltd, Osmose (NZ) Ltd, TPL Ltd and Nufarm Limited (the latter two trading as Fernz Timber Protection until 2001).

The Commission said they will not reveal the names of the seven executives until they are legally represented. The Commission report that they have also initiated proceedings in Auckland against the related Australian based companies.

The Commission's allegations centre on sharing prices, price fixing, collusion, and bid-rigging by the four companies during a four year period from 1998. The allegations relate to the supply of various wood preservatives, chemicals and assorted services, including CCA (Copper Chromium Arsenic), light organic solvent preservatives and boron.

These products are widely used by the timber and associated industries "which are important contributors to the New Zealand economy", the Commission said.

The Commission has already filed criminal charges back in February in the Manukau District Court against Koppers Arch and its general manager, Roy Parish.

The charges related to alleged non-compliance with statutory notices that compulsorily require the production of information and documents to the Commission.

These proceedings are continuing.


The maximum penalty for a breach is a fine of up to $30,000 for a company and up to $10,000 for an individual.


In March, Australian officials ruled that treated pine timber would be phased out for use in play equipment, outside seating and domestic decking by next year and New Zealand's Timber Industry Federation said the decision of Australian regulators to crack down on arsenic residues in treated timber could cost the forestry sector here $50 million.


Timber treated with CCA, a chemical that prevents rotting, has been linked to bladder and lung cancer in some overseas research. Britain, Canada and the United States have banned its use in recreational items such as play equipment.


- NZPA