More than a year ago, Saskatchewan Wheat Pool and James Richardson International announced plans for a joint venture company to operate their two terminals at the port of Vancouver.
A year from now they should get the word on whether they can go ahead with the project.
The federal competition tribunal has set April 16, 2007, as the date for public hearings to begin into whether the joint venture should be approved.
Apparently, it’s not expecting an easy decision, having set aside seven weeks to hear evidence and testimony on the proposal, with a wrap-up date of June 15.
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Two years may seem a long time but apparently that’s not the case in lawyer years.
“If you compare it to ordinary litigation in courts, for example, it’s quite a quick timeline,” said Jean Marc Rouest, assistant vice-president for legal affairs for JRI.
He described the case as complex, noting that pre-trial discovery in terms of preparation of documents and examination of witnesses will be time consuming.
“Two years is not out of the ordinary,” he said.
The two grain companies announced the proposed joint venture in July 2005, saying the plan would create operating efficiencies and savings that would benefit everyone from farmers to railways to end-use customers.
However, the federal competition bureau disagreed, and in November 2005 it filed an application to block the transaction with the competition tribunal, an independent federal agency that acts like a court.
The bureau said the joint venture would mean less competition for grain handling services at the port.
“If (SWP and JRI) are permitted to enter the proposed joint venture, this will substantially lessen the competitive options available to non-integrated grain companies and to the Canadian Wheat Board, thus negatively affecting Canadian grain farmers,” the bureau said in a brief submitted to the tribunal in March.
A number of other grain industry players have intervened in the case, with the two national railways and the Vancouver Port Authority supporting the grain companies’ proposal and the CWB opposing it.
The two companies have been operating the joint venture on a limited basis since last summer, under the name Pacific Gateway Terminal Ltd. Their terminals are located beside each other on the north shore of Burrard Inlet.
Under a “hold separate agreement” with the competition bureau, terminal operations are being managed jointly, but the two companies are not allowed to share pricing information or market terminal services.
In setting the hearing dates, the tribunal said the schedule could be amended depending on developments in the fate of the Agricore United terminal, which is also for sale under orders of the competition bureau.
There is a chance the case may never reach the hearing stage. Most cases that end up before the competition tribunal are settled before hearings are held.
“It’s always a possibility,” Rouest said, adding that it’s preferable to negotiate a reasonable settlement rather than go before a court or tribunal and risk losing.
He expressed confidence that if it goes to a hearing, the joint venture will be approved.
