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How the son of business royalty allegedly tried to be a cartel king

During Jerry Ellis’ time at BHP the company which is now BlueScope had been a major part of what was then BHP’s steel division.

What the politicians nor the media knew back in 2015 was that Ellis and small team of others inside BlueScope had in the previous year been engaged in their own attempt to distort the price of steel, according to allegations made by the ACCC.

More particularly the ACCC is alleging that BlueScope and Jason Ellis attempted to induce agreements with BlueScope’s competitors, to fix and/or raise the level of pricing for flat steel products supplied in Australia between 2013 and 2014.

For the regulator the civil action it announced on Friday was a desperate attempt to get the matter before the courts before it hit the six-year limitation on civil matters. BlueScope said it planned to defend the case and had conducted an internal investigation into the allegations.
Jason Ellis has not formally responded to the allegations.

But the ACCC is also in discussions with the Commonwealth Director of Public Prosecutions about pursuing criminal charges.

The wording of the statement from ACCC suggests that Jason Ellis attempted to draw competitors into a cartel but was unsuccessful.

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It follows that the actions were brought to light by a whistleblower from one of the steelmakers that Jason Ellis or BlueScope approached.

The BlueScope board was only made aware of the allegations in 2017 when it was served with notices by the ACCC and immediately conducted its own internal and legal investigation and concluded that “we do not believe that BlueScope or any current or former employees have engaged in cartel conduct”.

However, the statement from the company says that it has not seen all the evidence that the ACCC has relied upon.

Jason Ellis left BlueScope in 2017 and the company maintains his departure was not related to the cartel accusations.

Without access to the details of the ACCC’s evidence it is difficult to evaluate the strength of its case.

From BlueScope’s perspective the taint of cartel would be highly embarrassing. Its staff are supposed to operate under what it refers to as a behavioural ‘bond” and states in its annual report that rigorous systems are in place to report and investigate any cases of misconduct.

The ACCC investigation was referred to in both its 2017 and 2018 annual reports.

Traditionally big cartel actions are the Rolls Royce of actions for the ACCC. They are often high profile and traverse large companies. The freight cartel and the concrete cartel are notable examples.

Based on the allegations made by the regulator, this one is no exception.

“BlueScope is the major manufacturer of flat steel products in Australia. Flat steel products are an essential material in a number of important sectors of the Australian economy, including the construction, building, manufacturing, automotive and transport industries,” ACCC chairman Rod Sims said.

If you make yourself known to be an ethically-based company in Asia, a company that will not engage in any bribery and corruption, people will leave you alone.

Jason Ellis talking to Company Director magazine in 2013.

Having a former BHP chairman’s son in the mix further magnifies the headline appeal.

In June 2013, just months before he was alleged to have engaged in price fixing, Jason Ellis was interviewed for the Company Director magazine – published by the august Australian Institute of Company Directors.

During the interview Ellis was questioned on ethics and transparency in Asia.

“Ethics or transparency is still a huge problem in all ASEAN countries despite what the in-country press may say about improvements. Directors must maintain a rigorous stewardship approach, but more importantly, they should employ people they trust implicitly.

“Giving into demands in the fear of losing business is just pure laziness.

“If you make yourself known to be an ethically-based company in Asia, a company that will not engage in any bribery and corruption, people will leave you alone. But you do have to make it very transparent and so obvious so that people will not bother asking.”

Only time will tell whether these words will come back to haunt Jason Ellis.

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