Businesses are being warned to be prepared for a visit from the cartel busters.
Organisations convicted under the new legislation could face a financial penalty of at least $10 million. Photo: 123rf
Organising or being part of a cartel , a group aiming to rig, dominate or manipulate a particular business market, has been a criminal offence since early April.
So far there has been no action but law firm MinterEllisonRuddWatts said it was only a matter of time before the Commerce Commission made a move.
A cartel is a grouping or arrangement that facilitates price fixing, the restricting output, or market allocation.
The law firm said criminalisation was a 'game changer', and should be an important part of an organisation's risk management strategy, particularly as it was not necessary for parties involved to know they were undertaking a criminal act.
MinterEllisonRuddWatts partner Aaron Lloyd said firms needed to be prepared.
"It is essential not only to try and avoid misconduct occurring at the outset, but also as part of a forward looking defence should misconduct occur," he said.
"It is an important plank in being able to show that the organisation itself, and senior leaders (including directors), did not encourage, acquiesce, or aid misconduct committed by potential rogue employees."
Individuals who are convicted could face a seven-year jail sentence or a fine of up to $500,000.
For organisations, the potential fine was up to $10m, three times the commercial gain from the illegal activity, or up to 10 percent of the turnover of the organisation involved, whichever was greater.
Defendants might be able to argue they held an honest and reasonable belief that their actions were necessary for collaboration, vertical supply contracts, or joint buying and promotion agreements.
Lloyd said training was critical, particularly covering conduct during industry forums, commercial meetings and so on.
"In a small market like New Zealand, general catch-ups and interactions will inevitably occur, driving the need for clear protocols alongside training and policies."
Lloyd said it was important to have a ready-to-go response plan in place, if allegations of cartel misconduct arose in the business.
New Zealand law is now in line with international standards and those of our major trading partners Australia, England and the United States.