The notsogreat Caltex raid

The Caltex oil case is what is termed in media circles a photo opportunity. Viewers of the ABC’s Media Watch on Monday nights would immediately recognise the scenario.

A whistleblower alleges that the oil companies are colluding on prices. She gives the information to the ACCC which starts investigating. She also gives a letter detailing her complaints to the Sydney Daily Telegraph. Reporters phone the ACCC to confirm the story and to obtain comment. The Telegraph tells the ACCC it is going to publish the letter. The ACCC, fearful of giving the companies advance warning, asks the Telegraph to hold off. A deal is brokered to inform the Telegraph before anyone else when the ACCC takes action. The ACCC conducts the raid and later that same day the Telegraph is informed. So far everyone has played the game according to the rules. At this point things go wrong. The problem for the newspaper is that this is a good story but it doesn't have a good picture. Phone calls are made to the ACCC to arrange this. The headline the next morning is all about the ACCC's raid on Caltex complete with a picture showing ACCC staff walking away carrying boxes. For the average punter the implication is clear, the ACCC has gathered boxes full of evidence. The caption says this is the case.

The problem is the boxes were empty and the whole thing was set up as a photo opportunity. So what are the issues? Should the ACCC have told the newspaper to publish and be damned and possibly compromised an investigation? Does a letter from a whistleblower in a publication such as The Daily Telegraph carry the same import as say the Financial Review and would this be sufficient for oil executives to head for the shredder, if indeed there was actual evidence of price fixing? If evidence was indeed found that collusion has taken place why not issue a statement as soon as possible that this will go to court. If the evidence gathered at the site is unsubstantial and further investigation is needed then why not say so publicly? In other words the presumption of innocence prevails until such time that hard evidence is produced. All these niceties became confused in the media frenzy that followed the raid on Caltex. Whether there is a court case or not, the Telegraph story has fed public prejudice against oil companies (an easy thing to do), aided and abetted by the ACCC.

This is not to suggest that oil companies are innocent of faults. But it is no different to scenarios watched by viewers of American TV dramas. Fels of course defends his actions. "The ACCC does not publicise the fact that it is investigating anything. We currently have 200 investigations under way. When the media calls up we do not tell them we are investigating anyone," he says. "We asked The Telegraph not to jeopardise the investigation and they agreed. After we started the raid we told them the embargo was lifted. We did not have any media presence during the raid. During the day The Telegraph asked whether they could have a photo. We told them that we had people coming back from the raids and they could take photos of them. What's wrong with that? Are we responsible for The Daily Telegraph wanting to give us a lot of publicity? "It is a tiny detail whether the boxes had Caltex material or not. The issue is whether we should have confirmed to the Telegraph that we were going to raid but since they had the letter we had to tell them at some stage that the raid had been done.

"What were we meant to do?" Asked if in retrospect he would have changed any of the events of the Caltex raid and the Telegraph involvement, Fels falls back on the rationale that the raid would have become public in any event. He does not address the issue of the ACCC managing the media in a more circumspect manner. Instead he is affronted by the subsequent reaction from the business community.

"I think the whole thing has been beaten up," he says. "A whole lot of it is a concerted attempt by big business to distract attention from the core issues. It is clearly aimed at the Dawson Inquiry because the inquiry is about whether there should be criminal sanctions for hardcore collusion." According to Fels the major cause of the publicity is the oil companies' own reputation with the public so that any action taken by anyone to investigate them triggers huge public interest. But if Fels is the Elliott Ness of anti-competitive behaviour then shouldn't the ACCC be required to get a court order or warrant before raiding premises? "I don't think it is necessary because they can subsequently challenge us in court," says Fels. "It wouldn't worry me because our investigations are all justified. Our investigations have been challenged in the past and I think we have won every one. "On the day of the raid at 9am we telephoned and faxed the top legal people in the oil companies that we going to raid, based on the document we had. We had a QC ready and we expected a challenge. We didn't receive one.

"Two months later we are still negotiating with the oil companies to allow us access to their computer records." To the delight of the media that thrives on controversy, the battle between Fels and big business is played out on the pages of the daily newspapers and television bulletins. There is a lot of sound and fury from both sides but it signifies nothing. To date the Government has been kept out of the battle. Of course the Government could take up Cheryl Kernot suggestion she made in her book Speaking for myself again. Kernot blames the media for much of her troubles and she says that the best way forward in Australia "is to have a terrier like Allan Fels from the ACCC oversee a new body, like the one in the US called Fairness and Accuracy in Reporting". Now that's something to think about.

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