Submission regarding City of Sydney Draft Convenience Store Development Control Plan, August 2003

10 ^th September 2003

General Manager
City of Sydney
GPO Box 1591
Sydney NSW 2001.

Dear Sir,

Submission regarding City of Sydney Draft Convenience Store Development Control Plan, August 2003

I take this opportunity to thank Mr Giovanni Cirrillo, for returning my calls and taking the time to discuss with me the Draft Convenience Store Development Control Plan (the DCP ).

I am a manager of Benuga Pty Ltd, who are the owner of 191 Clarence Street, Sydney.

There are essentially three issues I will canvass in my submission:

1.    Why it is undesirable for the City of Sydney to regulate the so called “unrestricted proliferation of convenience stores in the City of Sydney” [1]

2.    Why clauses 60 and 61 of the Central Sydney LEP 1996 do not give legal authority for clause 4.2 of the DCP; and

3.    Why the anti-competitive effects of clause 4.2 of the DCP are contrary to the Competition Principles Agreement and should not be adopted by the City of Sydney. [2]

1. Why is it undesirable for the City of Sydney to regulate the so called “unrestricted proliferation of convenience stores in the City of Sydney”?

I think most people would agree that convenience stores do not present well in the streetscape in terms of their lighting levels and their unregulated advertising. I very much support clause 4.1 in its entirety, furthermore, I have no issue with clauses 4.3 and 4.4.

Having said that, it is my view that the City of Sydney should not attempt to regulate the concentration of convenience stores within the City’s municipal boundaries and I object to clause 4.2 of the DCP. I do not believe it is a Council’s role to determine the appropriate concentration of convenience stores in any area, or for that matter to determine the appropriate concentration of any particular type of commercial activity within a locality where a ‘commercial use’ is permitted.

It is very much my view that the concentration and number of convenience stores in an area should be market driven based on the principles of supply and demand. Once the City of Sydney determines that a ‘commercial use’ is appropriate at a certain location, I think the market is in a far superior position to determine precisely which particular commercial use that location should be put to, whether it be a convenience store, a corner store, a fruit shop or a restaurant for that matter. If indeed, as the DCP presupposes that there may be an “excess concentration of convenience stores in any area” [3] then presumably as a matter of commercial reality, some, one or all of these convenience stores will go out of business due to market forces, thus solving the very problem the City of Sydney is attempting to solve with clause 4.2 of the DCP.

I think it should not be forgotten that Convenience Stores are a major employer of low-skilled workers and that any regulation that purports to limit the concentration or number of convenience stores will result in lost job opportunities for low-skilled workers.

2. Do clauses 60 and 61 of the Central Sydney LEP 1996 give legal authority for clause 4.2 of the DCP?

Clauses 60 and 61 of the Central Sydney LEP seek “to minimise the impact of certain uses which may degrade the amenity of Central Sydney, such as amusement arcades, brothels, restricted premises, late opening pubs and the like…”

Clearly, the authority for clause 4.2 of the DCP rests on the meaning of the phrase “and the like” in the Central Sydney LEP. [4] I think there is an argument (though weak) that clause 60 and 61 do simply regulate “intrusive land uses” [5] however, I fail to see how a convenience store which hypothetically were to comply with clauses 4.1, 4.3 and 4.4 of the DCP could in any meaningful way be considered “intrusive.”

I think there is a logical disconnect in the DCP, essentially once you strip down a convenience store so that it no longer has overly intensive lighting, no longer has flashing signs, unsympathetic architectural design issues are resolved and operational issues are appropriately dealt with, how a convenience store is different to the humble ‘corner store’? Perhaps it is an unintended consequence of the definition of a ‘convenience store’ in clause 3.2 of the DCP in that it equally applies to the humble and most would say harmless ‘corner store’. [6]

I think the better view is that convenience stores are not like amusement arcades, brothels, restricted premises and late opening pubs. They are a type of grocery store and do not serve any entertainment function nor do they present an anti-social element. I do not comprehend why the City of Sydney considers convenience stores similar to these other uses which have traditionally had an anti-social element associated with them.

Clause 61(c) of the Central Sydney LEP requires the consent authority to be satisfied that ‘the proposal would not be detrimental to other uses considered to be more consistent with the objectives of the zone’. I do not believe it is evident there is a conflict of interest between a convenience store and other commercial uses. Further, there is no proof that a proposed convenience store would be detrimental to other uses considered to be more consistent with the objectives of the zone.

The Central Sydney LEP does not separately define convenience stores, while there are separate definitions for amusement parlours, brothels, restricted premises and late opening pubs. [7] The Central Sydney LEP does however define grocery or convenience retailing to mean:

“ Grocery or convenience retailing means the sale or provision of goods or services through outlets such as beauty salons, chemists, delicatessens, dry cleaners, electrical repairers, fruiterers, hairdressers, hardware shops, health food shops, newsagents, shoe repairers, supermarkets, video shops and the like but not take away food establishments”. [8]

The DCP begs the question as to whether all these uses will also be restricted in terms of anti-clustering provisions.

Surely, as a matter of Law, a DCP cannot separately define the same term, as it occurs in the governing LEP?

It is my view that the convenience store problem the City of Sydney is properly attempting to address is a design and amenity issue, not an issue as to the appropriate concentration of a particular type of legitimate business activity.

Why is clause 4.2 of the DCP contrary to the Competition Principles Agreement?

Clause 5(1) of the Competition Principles Agreement [9] states

“The guiding principle is that legislation (including Acts…Ordinances or regulations) should not restrict competition unless it can be demonstrated that:

(a)  the benefits of the restriction to the community as a whole outweigh the costs; and

(b)  the objectives of the legislation can only be achieved by restricting competition.”

It is my submission that clause 4.2 of the DCP is anti-competitive because it raises the barriers to entry for future convenience stores within the geographical area of the City of Sydney.

It is open to argument whether or not clause 4.2 of the DCP accords with clause 5(1)(a) of the Competition Principles Agreement. However, I think clause 4.2 arguably contravenes sub-section (b).

The objectives of the relevant regulation occur in clause 12(a),(c), (e), (i) and (o) of the Central Sydney LEP 1996.  Not only is it open to debate whether or not clause 60 and 61 of the Central Sydney LEP contravene clause 5(1)(b) of the Competition Principles Agreement, it is strongly arguable that the objectives of the Central Sydney LEP can be achieved solely through the adoption of the DCP as drafted, excepting clause 4.2.

Clauses 4.1, 4.3, 4.4 and 5 of the DCP achieve the amenity, design and social objectives as envisioned by clause 12 of the Central Sydney LEP. The addition of clause 4.2 in the DCP goes further than what is required to achieve the objectives of the Central Sydney LEP and therefore contravenes clause 5(1)(b) of the Competition Principles Agreement.

As a matter of legal interest, it is my view that a Development Control Plan fits within the meaning of an “Ordinance” and therefore clause 5 of the Competition Principles agreement is applicable. Further clause 5(5) requires that “new legislation that restricts competition to be accompanied by evidence that legislation is consistent with the principle set out in subclause(1).” [10] To the best of my knowledge, this is a requirement that the City of Sydney have not complied with. Further, clause 7(1) of the Competition Principles Agreement clearly states that “The principles set out in this Agreement will apply to local government, even though local governments are not Parties to this Agreement…” [11]

I would strongly recommend on the basis of this argument alone, the City of Sydney should rethink clause 4.2 of the DCP and remove it from any future version of the DCP.

Yours truly,

Lesli Berger

Manager

[2] For a full copy of the Competition Principles Agreement please refer to

www.ncc.gov.au/pdf/PIAg-001.pdf , I accessed this document on 1 ^st September 2003.

[3] Clause 4.2 of the DCP

[4] Please note the requirement for a DCP to “provide more detailed provisions that are contained in a local environmental plan”: s72(1)(a) of the Environmental Planning and Assessment Act 1979.

[5] As worded in the preamble to clause 4 of the DCP .

[6] I for one do not find much comfort in the proviso at the bottom of clause 3.2 of the DCP which states “In all cases, the discretion as to what development is considered to be a ‘convenience store’…shall be solely that of the consent authority…”

[7] Schedule 1, Central Sydney LEP 1996

[8] Ibid.

[9] Please refer to page 19 of the pdf document: www.ncc.gov.au/pdf/PIAg-001.pdf accessed on 1 September 2003.

[10] Ibid at footnote 7, refer to page 20 of the pdf document.

[11] Ibid, refer to page 24 of the pdf document.