NEW ZEALAND STEEL LIMITED v MINISTER OF COMMERCE AND CONSUMER AFFAIRS [2018] NZHC 2454

NEW ZEALAND STEEL LIMITED v MINISTER OF COMMERCE AND CONSUMER AFFAIRS [2018]NZHC 2454 [18 September 2018]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV 2017-485-714[2018] NZHC 2454UNDER the Judicial Review Procedure Act 2016 andthe Dumping and Countervailing Duties Act1988BETWEEN NEW ZEALAND STEEL LIMITEDApplicantAND MINISTER OF COMMERCE ANDCONSUMER AFFAIRSRespondentHearing: 7-11 May 2018 (further memorandum on 11 July 2018)Appearances: J E Hodder QC, D R Kalderimis and K E Yesberg for ApplicantJ D Every-Palmer QC and N T Butler for RespondentJudgment: 18 September 2018JUDGMENT OF MALLON JTable of contentsIntroduction [1]The international framework [7]The domestic framework [23]Amendments [37]The application [43]Background [43]Application [47]Investigation [52]Final Report [71]Determination [74]Overseas investigations [76]Timeline [76]Comparison with overseas investigations [78]Public body test [82]Issue: the proper test [82]The ADRP 2013 (Gal) test [86]Subsequent decisions [95]The Final Report's approach [110]Was the error of law material to the conclusions MBIE reached [122]Non-cooperation and overseas investigations [125]The issue [125]The law [128]The framework for making determinations when there is non-cooperation [131]Advice to the Minister about non-cooperation in MBIE's investigation [140]Advice to Minister about overseas investigations [146]Policy loans [151](i) The Final Report's assessment of policy loans [151](ii) Information from overseas investigations on SOCBs [163](iii) Particular relevance of EC 2017 (HRS) to policy loans issue [174](iv) MBIE's consideration of EC 2017 (HRS) [182]Inputs to LTAR [188](i) MBIE's advice on input materials [188](ii) Were the overseas investigations relevant [192]Land use rights [203]Other programs [219]Other secondary sources [226]Like goods [234]The issue [234]The DCD Act [237]The Final Report view [240]NZ Steel's challenge to this view [243]My assessment [250]Relief [253]Result [260]Annexure 1Annexure 2Introduction[1] NZ Steel considers galvanised steel coil (the subject goods) manufactured inChina and exported to this country is subsidised by the Government of China (theGOC). It applied under the Dumping and Countervailing Duties Act 1988 (the DCDAct) for an investigation into whether the subject goods were subsidised and werecausing material injury to the domestic steel industry.1 Following an investigation bythe Ministry of Business, Innovation and Employment (MBIE), the Minister ofCommerce and Consumer Affairs determined the subject goods were being subsidisedto de minimis levels only, which meant it was not causing material injury to thedomestic industry and therefore no countervailing duties should be imposed on thegoods (the Minister's Decision). NZ Steel applies for judicial review of the Minister'sDecision.[2] The application for review covers a number of grounds: unlawfulness byapplying the wrong test and standard of proof; failure to take into account relevant andavailable evidence; error of law; absence of adequate reasoning; material errors of factand law; incoherent and inconsistent treatment of evidence; and unreasonableness.However the key errors alleged by NZ Steel concern:(a) an error of law as to the test for determining whether an entity is a"public body" (a question relevant to whether subject goods receivesubsidies in the exporting country);(b) whether MBIE's advice to the Minister properly informed her about theconclusions reached by overseas investigations and their relevance toMBIE's investigation in light of the limited and unverified informationMBIE had obtained from the GOC or the Chinese producers of thesubject goods;1 DCD Act, s 10. This Act is now called the Trade (Anti-dumping and Countervailing Duties) Act1988.(c) whether MBIE was required to do more by way of investigation in lightof the limited and unverified information from the GOC and theChinese producers of the subject goods; and(d) an error in what goods constituted "like goods" for the purposes ofdetermining whether subsidised goods were causing material injury tothe domestic industry.[3] The Minister says no such errors were made. She says it was a matter for heradvisers (MBIE personnel reporting to the Chief Executive2) how the investigationshould be conducted. She says she applied the correct test and came to a conclusionthat was reasonably open to her on the available evidence from that investigation. Shesays NZ Steel's case amounts to a merits challenge which is not available on judicialreview.[4] I have found the advice to the Minister on which her decision was madecontained material errors which meant the Minister's decision was unlawful (in ajudicial review sense). First, the advice to the Minister on whether an entity was a"public body" relied, in particular, on an Australian authority which had misinterpretedan aspect of that test.[5] Secondly, the conclusions reached in the advice differed in material respectsfrom the findings in overseas investigations involving steel products exported fromChina. The advice to the Minister explained these investigations had used adverseinference reasoning and that this made their findings unreliable. This advice wasincorrect in that some of the relevant overseas findings had been made followingcooperation from Chinese producers and verification visits to their premises.Additionally, in many instances. the overseas investigating authorities had made theirfindings on secondary sources which provided a valid evidential basis for theirfindings. In fact, the findings in overseas investigations, which cast doubt on thereliability of some of the information MBIE had received and on which it relied,provided a legitimate source of information in MBIE's investigation because of the2 Also referred to as the Secretary.limited cooperation it had received from the GOC and the Chinese producers of thesubject goods.[6] This judgment contains a number of abbreviations. A table with theseabbreviations is included with this judgment as Annexure 1. The judgment alsomakes reference to a number of overseas investigations. These are identified in thejudgment in abbreviated form. A table with these abbreviations can be found atAnnexure 2.The international framework[7] The DCD Act is the legislation which gives effect to New Zealand'sinternational obligations under the Subsidies and Countervailing Measures Agreement(SCM Agreement) and the Anti-Dumping Agreement. These two agreements are partof, and are annexed to, the World Trade Organisation (WTO) Agreement.[8] The WTO Agreement is premised on the desirability of free trade. It was theresult of international negotiations formally signed in 1994.3 The WTO Agreementbuilt upon the General Agreement on Tariffs and Trade (GATT 1947). GATT 1947arose out of the conclusion of the Second World War and the recognition thatprotectionist trade policies needed to be overhauled with a new system premised onfree trade to ensure the efficient use of each nation's and the world's resources.[9] The WTO Agreement does not prohibit tariffs. They are permitted as the mostacceptable form of protection on the ground they are objective and open to scrutiny.4The aim is to reduce tariffs progressively through negotiations. The WTO Agreementalso permits duties as part of creating a trading system that is transparent and fair. TheAnti-Dumping and SCM Agreements form a crucial part of this. They allow Memberstates to impose measures to offset the distorted and unfair competition created in theirdomestic markets by the dumping or specific subsidisation of goods by other Membersand foreign firms.3 The Uruguay Round of negotiations formally signed at Marrakesh, Morocco on 15 April 1994.The WTO Agreement came into force on 1 January 1995.4 G D Triggs International Law: Contemporary Principles and Practices (LexisNexis Butterworths,Australia, 2006) at 719.[10] The SCM Agreement concerns subsidies. Unlike dumping activities, subsidiesinherently involve the participation of Member states. A Member state concernedabout subsidised goods entering its domestic markets can use the WTO disputesettlement procedures to seek withdrawal of the subsidy or it can act unilaterally toremove its adverse effects in accordance with the procedural and substantiverequirements in the SCM Agreement.5[11] In order to impose countervailing measures there must first be a "subsidy".Article 1 of the SCM Agreement defines "subsidy" as follows:Article 1Definition of a Subsidy1.1 For the purpose of this Agreement, a subsidy shall be deemed to existif:(a)(1) there is a financial contribution by a government or any publicbody within the territory of a Member (referred to in this Agreementas "government"), i.e. where:(i) a government practice involves a direct transfer offunds (e.g. grants, loans, and equity infusion),potential direct transfers of funds or liabilities (e.g.loan guarantees);(ii) government revenue that is otherwise due is foregoneor not collected (e.g. fiscal incentives such as taxcredits);(iii) a government provides goods or services other thangeneral infrastructure, or purchases goods;(iv) a government makes payments to a fundingmechanism, or entrusts or directs a private body tocarry out one or more of the type of functionsillustrated in (i) to (iii) above which would normallybe vested in the government and the practice, in noreal sense, differs from practices normally followedby governments;and(b) a benefit is thereby conferred.5 Article 10 provides that Member states are to impose countervailing measures in accordance withthe SCM Agreement. It further provides that investigations are to be initiated and conducted inaccordance with the SCM Agreement.[12] To impose countervailing measures, a subsidy must also be specific to anenterprise, industry, or group of enterprises or industries within the jurisdiction of theauthority granting the subsidy. Article 2 provides certain principles by whichspecificity is to be determined. It also requires that specificity be determined on thebasis of positive evidence.[13] Some subsidies are automatically prohibited.6 Other subsidies are actionableif they cause "adverse effects" to the interests of a Member state. Adverse effects aredefined as including where the subsidy causes "injury to the domestic industry ofanother Member".7 Article 7 provides a process for consultation when a Member statebelieves a subsidy has been granted or maintained by another Member state. It alsoprovides for a Member to refer the matter to a WTO panel for review. A WTO panelreport on the matter can in turn be appealed to the Appellate Body.[14] Article 11 sets out the requirements for initiating and conducting aninvestigation. An investigation is initiated by a written application from or on behalfof a domestic industry.8 The application is to include sufficient evidence of: theexistence of a subsidy (including, if possible, its amount); injury; and a causal linkbetween the subsidised imports and the alleged injury.9 The relevant authority mustreview the accuracy and adequacy of the evidence provided in the application todetermine whether the evidence is sufficient to justify initiating an investigation.10 Anapplication only proceeds if there is sufficient evidence of either subsidisation or ofinjury to justify proceeding.11 An investigation must be terminated if the amount of asubsidy is de minimis or if the volume of subsidised imports (actual or potential) orthe injury is negligible.12 The de minimis level for developed countries is less thanone per cent.13 For developing countries an investigation must be terminated if theoverall subsidy does not exceed two per cent.14 Except in special circumstances, an6 The SCM Agreement, art 3.7 Article 5. A footnote to art 5 provides that the term "injury to the domestic industry" is used inthe same sense as it is used in Part V under which countervailing measures can be imposed.8 Article 11.1.9 Article 11.2.10 Article 11.3.11 Article 11.9.12 Article 11.9.13 Article 11.9.14 Article 27.10. MBIE says this applies to China. NZ Steel says this may not be correct but thisdoes not matter for present purposes.investigation must be concluded within one year, and in no case more than 18 months,after its initiation.15[15] Article 12 concerns the evidence on which the investigating authority can makeits determination. Interested Members and interested parties must be given notice ofinformation the authority requires and an opportunity to present evidence.16 Aninterested party includes an exporter or foreign producer or the importer of a productsubject to investigation.17 An investigating authority is required to be satisfied aboutthe accuracy of the information supplied and there are provisions for how the authoritymay do that and what is to occur if there is non-cooperation by a Member state orinterested party. These provisions are as follows:12.5 Except in circumstances provided for in paragraph 7, the authoritiesshall during the course of an investigation satisfy themselves as to theaccuracy of the information supplied by interested Members or interestedparties upon which their findings are based.12.6 The investigating authorities may carry out investigations in theterritory of other Members as required, provided that they have notified ingood time the Member in question and unless that Member objects to theinvestigation. Further, the investigating authorities may carry outinvestigations on the premises of a firm and may examine the records of a firmif (a) the firm so agrees and (b) the Member in question is notified and doesnot object. The procedures set forth in Annex VI shall apply to investigationson the premises of a firm. Subject to the requirement to protect confidentialinformation, the authorities shall make the results of any such investigationsavailable, or shall provide disclosure thereof pursuant to paragraph 8, to thefirms to which they pertain and may make such results available to theapplicants.12.7 In cases in which any interested Member or interested party refusesaccess to, or otherwise does not provide, necessary information within areasonable period or significantly impedes the investigation, preliminary andfinal determinations, affirmative or negative, may be made on the basis of thefacts available.12.8 The authorities shall, before a final determination is made, inform allinterested Members and interested parties of the essential facts underconsideration which form the basis for the decision whether to apply definitivemeasures. Such disclosure should take place in sufficient time for the partiesto defend their interests.15 Article 11.11.16 Article 12.1.17 Article 12.9.[16] Article 13 provides for the investigated Member state to be invited forconsultation to arrive at a mutually agreed solution.[17] Article 14 requires Members to specify, in their national legislation orregulations, the method that will be used for calculating the benefit conferred by asubsidy. That method must be consistent with certain guidelines. Relevantly, forpresent purposes, they include the following guidelines:(b) a loan by a government shall not be considered as conferring a benefit,unless there is a difference between the amount that the firm receivingthe loan pays on the government loan and the amount the firm wouldpay on a comparable commercial loan which the firm could actuallyobtain on the market. (d) the provision of goods or services or purchase of goods by agovernment shall not be considered as conferring a benefit unless theprovision is made for less than adequate remuneration, or the purchaseis made for more than adequate remuneration. The adequacy ofremuneration shall be determined in relation to prevailing marketconditions for the good or service in question in the country ofprovision or purchase (including price, quality, availability,marketability, transportation and other conditions of purchase or sale).[18] Article 15 concerns determining injury to domestic industry. It provides:1815.1 A determination of injury for purposes of Article VI of GATT 1994shall be based on positive evidence and involve an objective examination ofboth (a) the volume of the subsidized imports and the effect of the subsidizedimports on prices in the domestic market for like products and (b) theconsequent impact of these imports on the domestic producers of suchproducts.[19] Article 17 provides for provisional measures to be imposed pending thecompletion of the investigation. These are subject to time limits concerning when theycan be imposed and for how long.18 A footnote to art 15 further provides: "Under this Agreement the term "injury" shall, unlessotherwise specified, be taken to mean material injury to a domestic industry, threat of materialinjury to a domestic industry or material retardation of the establishment of such an industry andshall be interpreted in accordance with the provisions of this Article".[20] Article 19 concerns imposing a countervailing duty. It includes the followingprovision:19.2 The decision whether or not to impose a countervailing duty in caseswhere all requirements for the imposition have been fulfilled, and the decisionwhether the amount of the countervailing duty to be imposed shall be the fullamount of the subsidy or less, are decisions to be made by the authorities ofthe importing Member. It is desirable that the imposition should be permissivein the territory of all Members, that the duty should be less than the totalamount of the subsidy if such lesser duty would be adequate to remove theinjury to the domestic industry, and that procedures should be establishedwhich would allow the authorities concerned to take due account ofrepresentations made by domestic interested parties whose interests might beadversely affected by the imposition of a countervailing duty.[21] Article 22 provides for public notice of the initiation and conclusion orsuspension of an investigation. When a duty is imposed the notice, or a separate report,must contain "all relevant information on the matters of fact and law and reasonswhich have led to the imposition of final measures". This must include "the reasonsfor the acceptance or rejection of relevant arguments or claims made by interestedMembers and by the exporters and importers".19 This also applies if the decision is toaccept an undertaking, but there is otherwise no such requirement if the decision is notto impose measures.[22] Article 23 provides for Members to have national legislation providing forjudicial review of an investigatory authority's final determination. All interestedparties who participated in the investigation and who are directly affected are to haveaccess to that review.The domestic framework[23] The DCD Act was subject to a number of amendments brought in by the Trade(Anti-dumping and Countervailing Duties) Amendment Act 2017. These amendmentsdid not apply to the investigation in this case because that investigation was initiatedbefore the new provisions came into force.2019 Article 22.5.20 Schedule 1.[24] At the time relevant to this investigation the DCD Act did not contain a purposeprovision. The long title stated the DCD Act was "[a]n act to provide for theimposition of dumping and countervailing duties". It applied to investigationsinitiated under section 10 of the Act.21[25] Section 3 of the DCD Act contained a number of definitions that applied unlessthe context otherwise required. These included:foreign Government means—(a) the Government of a foreign country:(b) a provincial, State, municipal, local, or regional Government orauthority of a foreign country:(c) a body that exercises authority for an association of foreign countries:(d) a person, agency, or institution acting for, or on behalf of, aGovernment or body referred to in paragraph (a) or paragraph (b) orparagraph (c)specific subsidy means a subsidy that is specific to an enterprise or industry,or a group of enterprises or industries, within the jurisdiction of a foreignGovernmentsubsidised goods means goods in respect of the production, manufacture,growth, processing, purchase, distribution, transportation, sale, export, orimport of which a specific subsidy has been or will be paid, granted,authorised, or otherwise provided, directly or indirectly, by a foreignGovernmentsubsidy includes any financial or other commercial benefit that has accruedor will accrue, directly or indirectly, to persons engaged in the production,manufacture, growth, processing, purchase, distribution, transportation, sale,export, or import of goods, as a result of any scheme, programme, practice, orthing done, provided, or implemented by a foreign Government; but does notinclude the amount of any duty or internal tax imposed on goods by theGovernment of the country of origin or country of export from which thegoods, because of their exportation from the country of export or country oforigin, have been exempted or have been or will be relieved by means ofrefund or drawback[26] Section 7 defined the amount of the subsidy as follows:21 Section 2. The Long title has been repealed. A new purpose provision has been inserted.7 Amount of subsidy(1) In this Act, the expression amount of the subsidy, in relation to anysubsidised goods, means the amount determined by the Secretary asbeing the benefit conferred on the recipient of the subsidy.(2) For the purposes of subsection (1),—(b) the provision of a loan by a foreign Government shall not beconsidered as conferring a benefit, unless the amount that therecipient of the loans pays under the loan is less than theamount the recipient would pay under a comparablecommercial loan that the recipient could obtain on the market.(d) the provision of goods or services, or the purchase of goods,by a foreign Government shall not be regarded as conferringa benefit, unless the goods or services are provided for lessthan adequate remuneration within the meaning of subsection(4), or the goods are purchased for more than adequateremuneration, as the case may be.(4) For the purposes of subsection (2)(d), adequate remuneration shall bedetermined in relation to prevailing market conditions in the countryconcerned for the goods or services, taking into account price, quality,availability, marketability, transportation, and other conditions of theprovision or purchase.(5) Where the Secretary is satisfied that sufficient information has notbeen furnished or is not available to enable the amount of the subsidyto be ascertained for the purposes of this Act, the amount of thesubsidy shall be such amount as is determined by the Secretary havingregard to all available information that the Secretary considers to bereliable.[27] In determining whether any material injury has been caused to an industry, s 8required the Secretary to examine:22(a) the volume of imports of the subsidised goods; and(b) the effect of the subsidised goods on prices in New Zealandfor like goods; and(c) the consequent impact of the subsidised goods on therelevant New Zealand industry.22 References to the Secretary in the DCD Act were references to the Secretary of the Ministry ofEconomic Development. It is the equivalent of the Chief Executive of MBIE.(3) For the purposes of this section, the Secretary may disregard anyinformation that the Secretary considers to be unreliable.[28] Section 8 provided various relevant considerations for this assessment. It alsoprovided that "the Secretary may disregard any information that the Secretaryconsiders to be unreliable".23[29] Section 10 has been amended but, at the relevant time, provided for aninitiation and investigation as follows:10 Initiation and subsequent investigation(1) Subject to this section, on receipt of a properly documentedapplication made by or on behalf of New Zealand producers of likegoods and on being satisfied that sufficient evidence has beenprovided that—(a) goods imported or intended to be imported into New Zealandare being dumped or subsidised; and(b) by reason thereof material injury to an industry has been or isbeing caused or is threatened or the establishment of anindustry has been or is being materially retarded,—the Secretary may initiate an investigation to determine both theexistence and the effect of any alleged dumping or subsidisation ofany goods.(5) Upon the initiation of an investigation by the Secretary pursuant tosubsection (1) and thereafter during the course of the investigation,evidence of the dumping or subsidisation and of the material injury toan industry shall be considered simultaneously.(9) Before initiating an investigation under subsection (1), the Secretaryshall—(a) notify the Government or Governments of the country orcountries of export of the goods that are the subject of theproposed investigation; and(b) in the case of an application for the investigation into thesubsidisation of any goods, give that Government or thoseGovernments a reasonable opportunity for consultations with23 Section 8(3).the aim of clarifying the situation and arriving at a mutuallyagreed solution.[30] Section 10A stated the Secretary was to provide the parties to an investigationwritten advice of the essential facts and conclusions that will likely form the basis ofany final determination. This was to be done within 150 days after initiation of theinvestigation.[31] Section 11 provided for the Minister to terminate an investigation prior to afinal determination on various grounds. This included if the Minister was satisfiedthere was insufficient evidence of subsidisation to justify proceeding. Insufficientevidence existed if the amount of the subsidy was less than one per cent of the valueof the goods being imported or if the volume of goods imported was negligible. Wherean investigation was terminated and it subsequently transpired that informationsupplied affecting the investigation was incorrect or did not disclose material facts, inthat the information was of such nature as to materially affect the decision to terminatethe investigation, the Secretary could initiate a further investigation.[32] Section 11 did not mention the two per cent threshold for developing countriesas provided in the SCM Agreement although it does give effect to the SCM Agreementimport volume threshold for such countries.24 However s 11(1)(c) provided theMinister must terminate a subsidisation investigation if satisfied the imposition of acountervailing duty would be inconsistent with New Zealand's obligations under theWTO Agreement. This would allow the Minister to give effect to the two per centthreshold for developing countries.[33] Section 13 provided:13 Final determination(1) Subject to section 11, within 180 days after the initiation of aninvestigation under section 10 (but not less than 30 days after theprovision of information in accordance with section 10A), theMinister shall make a final determination as to whether or not, inrelation to the importation or intended importation of goods into NewZealand,—24 It does, however, provide special dumping margin thresholds for Singaporean origin goods.(a) the goods are being dumped or subsidised; and(b) by reason thereof material injury to an industry has been or isbeing caused or is threatened or the establishment of anindustry has been or is being materially retarded.(2) Notice of the final determination of the Minister shall be given as soonas practicable after it is made.[34] Section 14 provided for the Minister to impose a countervailing duty asfollows:14 Anti-dumping and countervailing duties(1) At any time after the Minister makes a final determination undersection 13(1) in relation to goods, the Minister may give notice of therate or amount of duty determined under subsection (4) of this section(which notice may be given simultaneously with, or at any time after,the notice given under section 13(2)) and there shall be imposed,—(b) in respect of those goods that are subsidised, a duty to beknown as countervailing duty.(3) Notwithstanding subsection (1)(b), no countervailing duty may beimposed under this section if to do so would be inconsistent with NewZealand's obligations as a party to the WTO Agreement.(4) The countervailing duty in the case of goods to which this sectionapplies shall be a rate or amount determined by the Minister,—(b) in the case of subsidised goods, not exceeding the amount ofthe subsidy on the goods.(5) In exercising the discretion under subsection (4), the Minister shallhave regard to the desirability of ensuring that the amount of countervailing duty in respect of those goods is not greater than isnecessary to prevent the material injury or a recurrence of the materialinjury or to remove the threat of material injury to an industry or thematerial retardation to the establishment of an industry, as the casemay require.[35] Section 16 provided for the Minister to impose provisional measures if therewas reasonable cause to believe subsidised goods were causing material injury andprovisional measures were necessary to prevent material injury during the period ofthe investigation.[36] Section 17 provided that the date on and from which duty is payable can be theday after the final determination or another specified date.Amendments[37] With effect from 30 November 2017 the DCD Act, renamed as the Trade (Anti-Dumping and Countervailing Duties) Act 1988, had its long title repealed and a newpurpose section added as follows:1A PurposeThe purpose of this Act is to enable New Zealand to apply anti-dumping andcountervailing duties in accordance with its obligations as a party to the WTOAgreement. Anti-dumping and countervailing duties are intended to preventmaterial injury or the threat of material injury to an industry, or theestablishment of an industry being materially retarded, due to dumped orsubsidised goods being imported into New Zealand.[38] New application and investigation provisions were also added. These includea requirement to consider the public interest. Under the new procedure, once it hasbeen determined that goods are being subsidised and material injury to the industry isbeing caused, the Minister determines the rate of countervailing duty that will formthe basis of the second stage of the investigation. Under this second stage the ChiefExecutive must investigate whether imposing a duty at that rate is in the public interest.Section 10F(2) provides that imposing the duty is in the public interest: unless the cost to downstream industries and consumers in imposing theduty is likely to materially outweigh the benefit to the domestic industry ofimposing the duty.[39] Section 10F(3) sets out a number of factors for the Chief Executive to considerin making this assessment. These include effects on: employment; prices, availabilityand quality of the goods; and the financial performance of the domestic industry. Oncethe Chief Executive has completed this assessment the Minister must determinewhether imposing the duty is in the public interest. If it is in the public interest theMinister must impose the duty.[40] The new purpose provision clarifies what was the implicit purpose of the DCDAct. The SCM Agreement is focussed on the substantive and procedural obligationsthat WTO Member states owe each other in unilaterally imposing countervailingmeasures. The purpose of such measures is to protect domestic industries from theunfair trading practices of WTO Member states and foreign firms. In enacting theDCD Act, Parliament provided the mechanism by which that protection can beprovided consistent with New Zealand's obligations under the WTO Agreement.[41] The public interest test is new. Before its introduction, the DCD Act requiredthe Minister to make a final determination about whether goods were being subsidisedand whether that was causing material injury to an industry. The Minister was alsorequired to give a notice of this final determination.25 At or after the time of givingthis notice, the Minister "may" give notice of "the rate or amount" of thecountervailing duty. This rate or amount determined by the Minister could not exceedthe amount of the subsidy of the goods and no countervailing duty could be imposedif it would be inconsistent with New Zealand's obligations under theWTO Agreement.26[42] These provisions were consistent with art 19 of the SCM Agreement that "[i]tis desirable" that imposing measures should be permissive in the Member state'sterritory and, if imposed, should be no more than adequate to remove the materialinjury to the domestic industry.27 Although the DCD Act did not expressly say so, theMinister's discretion about whether to impose measures and at what rate couldpresumably take into account domestic interested parties adversely affected byimposing the measure. That would be consistent with art 19 of the SCM Agreement.At least to some extent, therefore, the new public interest test may have made explicitwhat was implicit under the former provisions.28 It is not necessary to consider thisfurther for present purposes. It is not directly in issue in this judicial review and I didnot receive detailed submissions about this.25 Section 13.26 Section 14.27 The SCM Agreement, art 19.2.28 But see the Explanatory Note which describes the new public interest test as "allow[ing] forbroader public interest elements, such as competition and consumer welfare" to be considered.The applicationBackground[43] NZ Steel is a wholly owned subsidiary of a publicly listed Australian company,BlueScope Steel Ltd. BlueScope has more than 100 facilities in 17 countries. NZSteel has three of those sites and employs 1500 people. At its Glenbrook site, NZSteel produces a range of steel coil products. This includes galvanised steel coil,which is the subject of this proceeding. It is the sole New Zealand producer of thisproduct.[44] Galvanised coil is made of carbon steel. It has a hot dip galvanised finish. Itis commonly used in building applications. There are two tariff classificationsapplicable: steel coil thickness of 0.3 mm to 1.6 mm (width of greater than 600 mm);and steel coil thickness of between 1.6 mm and 1.9 mm (width of greater than600 mm).29[45] Like goods are imported into New Zealand from China, Taiwan, Japan, SouthKorea and other countries. NZ Steel's application estimated that imports from Chinacomprised 22 per cent of the volume imported into the New Zealand market in 2015.NZ Steel has the main share of the market as the following graph, included in theMBIE's Final Report, shows:29 All goods imported into New Zealand have tariff classifications (Tariff Act 1988, s 9A).[46] The Chinese manufacturers supplying galvanised steel coil to New Zealand atthe relevant time were Angang Steel (Angang), Baoshan Iron and Steel Co Ltd(Baosteel), Changshu Everbright Material Tech Ltd (Changshu), Huangshi SunnyStrip Aluminium and Zinc Coated Ltd (Huangshi), Jiangyin Zong Cheng Steel Co Ltd(Zong Cheng), Shougang Jingtang United Iron and Steel Co (Shougang), and YiehPhui (China) Technomaterial Co Ltd (YPC) (the Chinese producers).Application[47] In August 2016 NZ Steel lodged an application with MBIE. It requested thatMBIE initiate an investigation into alleged subsidisation of Chinese importedgalvanised steel coil. It also requested that MBIE impose provisional countervailingmeasures.[48] The application referred to findings by overseas investigation authorities thatChinese steel producers were receiving subsidies and this had led to a significantdecline in prices in Chinese export markets. It referred to an Australian investigationfinding subsidies in relation to galvanised and zinc aluminium alloy coated steel fromChina (ACBP 193 (Gal)) and a United States decision in May 2016 finding subsidiesin relation to corrosion resistant steel products from China (USDOC 2016 (CRS)).30NZ Steel also referred to general commentary from Reuters about the Chinese steelindustry benefitting from various forms of subsidies to a material level and a reportfrom a United States firm, Wiley Rein LLP, to similar effect.[49] NZ Steel submitted the information from these Australian and United Statesinvestigations represented the credible, best and reasonably available information. NZSteel was not in a position to obtain its own information about Chinese subsidisationof steel. Nor did it know which Chinese steel companies were the source of the goodsin New Zealand. The United States information was the most recent.30 Australian Customs and Border Protection Service International Trade Remedies Report 193:Alleged Subsidisation of Zinc Coated Steel and Aluminium Zinc Coated Steel Exported from thePeople's Republic of China (28 June 2013). Referred to as ACBP 193 (Gal). United StatesDepartment of Commerce International Trade Administration's Countervailing Duty Investigationof Certain Corrosion Resistant Steel Products from the People's Republic of China (24 May 2016).Referred to as USDOC 2016 (CRS).[50] USDOC 2016 (CRS) found the amount of the subsidy was 39.05 per cent.Based on that decision NZ Steel submitted a breakdown of the relevant subsidies forChinese galvanised steel coil in this country as follows:ProgrammenumberProgramme description ProgrammetypeLevel ofallegedsubsidy1 Policy loans to the corrosion-resistantsteel industryGrants or loans 0.86%2 The provision of land use rights forLTARGoods or services 0.36%3 The provision of hot rolled steel at LTAR Goods or services 23.74%4 The provision of cold rolled steel atLTARGoods or services 2.11%5 The provision of zinc at LTAR Goods or services 0.22%6 The provision of electricity at LTAR Goods or services 0.58%7 Import tariff exemption for FIEs andcertain domestic enterprises usingimported equipment in encouragedindustriesRevenueforegone0.56%8 Export buyer's credits Grants or loans 10.54%9 Reported grants Grants or loans 0.02%Total 38.99%31[51] NZ Steel said it suffered material injury from the subsidies on Chineseimported galvanised steel coil. NZ Steel's application described the predominantimpact of subsidised Chinese imports of these goods was price undercutting. NZ Steelhad responded by reducing its prices in order to maintain sales volumes. Assummarised in MBIE's Final Report, this had resulted in a decline in NZ Steel'sprofitability, return on invested capital and ability to raise capital.Investigation[52] MBIE's summary of its investigation process is as follows:31 This excludes 0.06 per cent which it appears relates to an input that is not relevant. The applicationprovided another table explaining each of the subsidy programmes and the USDOC conclusionson them.[53] As described in this process, the first step was for MBIE to accept theapplication. It did so on 26 September 2016.[54] After that, MBIE informed the GOC that it had accepted the application andinvited the GOC to enter into consultations. Consultation took place. The GOCcontended the application was without merit and that it made allegations of subsidiesand injury without evidence. It said:(a) USDOC 2016 (CRS) was for a different product and from a jurisdictionthat routinely makes unlawful findings against Chinese exporters.(b) The Wiley Rein LLP report relied on by NZ Steel was from a law firmclosely aligned to the United States administration and wascommissioned by the United States steel industry.(c) ACBP 193 (Gal) was old and irrelevant and had been proven untrue inmore recent Australian investigations.(d) There was nothing in the application to link any alleged lack ofprofitability to Chinese imports as opposed to general marketconditions, NZ Steel's costs and higher volumes of imports from otherexport sources.(e) The GOC rejected the general assertions made and asked that MBIEreject the application.[55] On 19 December 2016 MBIE's Chief Executive decided to commence aninvestigation. This meant that the 180 day period for the Minister's final determinationcommenced on this date. The GOC was advised of this decision on the same day. Theinvestigation was to cover the period from July 2015 to June 2016.[56] On 23 December 2016 MBIE forwarded a 15 page questionnaire to the GOC.It asked for a reply by 27 January 2017. An explanation was provided with thequestionnaire. Amongst other things, this explained MBIE "may need to visit yourGovernment to verify information supplied" and "additional documentation in supportof your response may be required".[57] The questionnaire contained a comprehensive list of questions. These includedquestions about the nature and eligibility criteria of the programmes identified in NZSteel's application and any other forms of government assistance that might result inbenefits to Chinese producers. The questionnaire also listed the Chinese exporters andproducers of the goods under investigation over the relevant period. It asked for detailsabout any form of government assistance they had received. It also asked for detailsabout the extent and nature of government ownership of these exporters and producers,the extent of government control over their activities, the extent to which they operatedin pursuit of government policies or interests, and whether they were created bystatute.[58] On the same day MBIE sent a 19 page manufacturer's questionnaire to theseven Chinese producers of the subject goods. The questionnaire contained detailedquestions about each of the programmes identified in the NZ Steel application. MBIErequested a response by 27 January 2017. It said:32It is in your best interests to cooperate by responding both fully and promptlyto this questionnaire. In the absence of any response it is likely that decisionsrelating to your exports will be made on the basis of the best informationavailable, which may be that provided by the applicant industry.[59] Zong Cheng was the only Chinese producer to respond to MBIE's request. Itdid so on 27 January 2017 in accordance with the requested response timeframe. ZongCheng advised that it was a wholly foreign owned enterprise with no ownership byany level of government. It advised that it was able to produce galvanised steel coilup to 3 mm thick, which distinguished it from New Zealand produced steel which wasup to 1.9 mm thick. It said that all exports to New Zealand were sold to a tradingintermediary in Singapore and it provided details about this. It responded to each ofthe questions MBIE had asked about the alleged subsidy programmes explaining whyit was not the recipient of subsidies from any such programmes.33[60] The GOC responded on 17 February 2017. The GOC expressed its concernthat the investigation had been initiated on the basis of insufficient and unsubstantiatedinformation. It considered it would serve no purpose to respond to each of MBIE'squestions because it was not aware of any Chinese producer that was intending torespond to MBIE. Instead it provided "general comments" about the alleged subsidyprogrammes to "demonstrate" that they did not meet the subsidy definition under theSCM Agreement. It reserved the right to provide further comments. The GOC'sresponse included the following comments:(a) There is no government programme involving policy loans to the steelindustry. Loans from state-owned commercial banks (SOCBs) arecommercial in nature.32 This statement was repeated in the questionnaire.33 By way of example, it advised that all its borrowings were from Taiwanese banks as their loanrates were substantially lower than local Chinese banks. It provided details of its loans and advisedthat these had no links to the GOC or any government plans or development programmes. ZongCheng's response to each of the programmes were summarised in the Final Report. It is notsuggested this summary is inaccurate.(b) SOCBs do not possess or exercise, nor are they vested with,governmental authority.(c) There is no government program for providing goods or services to thegalvanised steel coil industry at less than adequate remuneration(LTAR).(d) China has transitioned to a market economy and state-ownedenterprises (SOEs) independently operate in the same manner as othermarket players in response to market forces as a result.(e) All input producers in China are independent businesses operating on acommercial basis without interference or influence from governmentagencies. The price of inputs are determined by market dynamics.(f) Electricity is provided to nearly all industries based on marketprinciples. Prices are made up of purchasing cost, transmission pricesand losses, and government surcharges. Purchasing costs are the mainreason for different rates in different provinces.(g) There is no land use rights programme. While obtaining land use rightsfrom the Government was prevalent, that changed in 1998 when theLand Administration Law was promulgated. Since then all land userights are granted in return for fees except land used by government andmilitary entities, municipal infrastructure and social welfare facilities,energy, transportation and irrigation facilities with government supportand other entities specifically set out by laws and regulations. TheGOC does not set or direct specific land use rights prices for anyindustry or region. The price is based on market principles and isdetermined by a range of methods including public bidding, publicauction, independent appraisal and negotiations.[61] On 2 and 3 March 2017 MBIE conducted a verification visit to NZ Steel. Atthis visit MBIE obtained further information about the production of galvanised steelcoil, NZ Steel's goods, and its marketing and sales. MBIE prepared a report on thisvisit dated 27 April 2017.[62] On 27 March, 28 March and 6 April 2017 NZ Steel made submissions to MBIEon provisional measures, the scope of like goods covered by the investigation and onmatters raised in and by the questionnaire responses (respectively). Its submission onthe goods set out reasons why it now considered that some goods with widthspecifications outside its own width specifications were like goods. Its submissionson 6 April 2017 set out why it considered the GOC had not fully cooperated in itsresponse and identified the questions the GOC could have answered regardless ofcooperation from Chinese manufacturers. It also set out reasons why Zong Cheng'sresponse required verification. This included that the Australian authorities hadassessed Zong Cheng as having received subsidies totalling 22.8 per cent.[63] On 24 April 2017 MBIE requested information from the GOC about thealleged export buyer's credit subsidy programme (item eight in NZ Steel'sapplication). The GOC's response, provided on 2 May 2017, was that to be eligiblefor this programme the contract value must exceed USD 2 million. As the quantityimported into New Zealand markets was less than this, the Chinese companies werenot eligible for this programme.[64] On 10 May 2017 MBIE issued its Provisional Measures Report recommendingthe Minister decline to impose provisional measures. This was a substantial reportwhich discussed NZ Steel's application, MBIE's verification visit to NZ Steel, theresponses from the GOC and Zong Cheng, investigations in other countries and otherinformation. MBIE said it had less information than it expected to have at the end ofthe investigation and it could reach a different view by the end of the investigation.On the basis of the information available at this stage MBIE's view was as follows:[MBIE's] analysis of the information collected at this stage indicates thatgalvanised coil is likely being subsidised at approximately 0.02 per cent.We find that New Zealand Steel is experiencing injury by reason of priceundercutting by imports from China, and consequent price depression andsuppression. However the subsidy levels are minimal, and in our view do notgive reasonable cause to believe that the subsidisation is causing materialinjury to New Zealand industry. As such [MBIE] concludes that there are notsufficient grounds for the imposition of provisional measures.[65] In accordance with this recommendation, the Minister declined to imposeprovisional measures on the same day.[66] On 26 May 2017 NZ Steel made submissions to MBIE on the decision not toimpose provisional measures. NZ Steel considered MBIE had given insufficientweight to subsidy investigations in other jurisdictions, most of which had involvedcomprehensive verification visits. It regarded MBIE as having accepted the GOC'sclaim that subsidy programmes did not exist at face value. It considered Zong Cheng'sclaims were contrary to the overseas investigations and that the other non-cooperatingChinese producers should not be given the benefit of Zong Cheng's claims. It viewedMBIE's public body analysis as incorrectly focussing on formal legal rules andstructures and the ability of the investigated Chinese SOEs to control third parties,rather than assessing a range of factors to determine whether the entity "possesses,exercises or is vested with government authority".[67] In the meantime, MBIE had been making further enquiries. On 10 May 2017,the same day as the publication of the Provisional Measures Report, MBIE sent asupplementary questionnaire to the GOC. On 16 May 2017 MBIE sent supplementaryquestionnaires to Angang and Baosteel (two of the seven Chinese producers identifiedabove). In Angang's case the supplementary questionnaire asked about any tariffexemptions it had received because "[i]nvestigations by other authorities haveindicated that some Chinese manufacturers producing galvanised steel coil exportedto New Zealand may have benefitted from this programme". It also asked Angangquestions about government grants referred to in its 2016 annual report. Similarly, thesupplementary questionnaire to Baosteel asked questions about these matters. It alsoasked for details about borrowing from the Central Bank as referred to in its 2016semi-annual Report. The questions to the GOC were on similar matters.[68] Neither Angang nor Baosteel responded to the supplementary questionnaires.The GOC responded on 19 May 2017 with the following:(a) In relation to the loan to Baosteel, the Central Bank was not the People'sBank of China (PBOC) and the PBOC had no authority or functions inloans to companies. There was no policy loan programme for theChinese galvanised steel industry. Even if the loan from the CentralBank was a subsidy, the subsidy on the interest rate would be verymarginal (it estimated 0.01 per cent). The third quarter public report ofBaosteel showed that the loan from the Central Bank had been paid offat the end of the quarter. There was no evidence that any other Chineseproducer or exporter of galvanised steel coil received any borrowingfrom the Central Bank.(b) The objective of the import tariff exemption programme was toencourage foreign investment and the introduction of foreign advancedtechnology equipment and industry technology upgrades. The VATexemption component of this was abolished in 2009. The programmewas available to certain foreign investment programmes and domesticenterprises for projects set out in a catalogue of the key industries,products and technologies encouraged by the State. Qualifyingenterprises could be exempted from paying import tariffs on purchasesof imported equipment. Zong Cheng had indicated that it did notimport inputs, technologies, machinery or equipment during theinvestigation period. The GOC did not know whether the allegedprogramme applied to galvanised steel coil producers or exporters.(c) The GOC was unable to identify any specific programme of grantsreferred to in Angang's annual report. However, if there was any grant,the benefit from any such grant would be very marginal (the GOCestimated the subsidy rate would be 0.07 per cent). Deferred incometax assets, more correctly deferred income, is a temporary carryingamount and cannot be considered as a government grant during therelevant period. There was no evidence that any other Chineseproducer or exporter of galvanised steel coil received the allegedgovernment grant.(d) The GOC was unable to identify the specific programmes referred to inBaosteel's semi-annual report. However the GOC again said that if anysuch grant existed, the benefit from it would be very marginal (the GOCestimated the subsidy rates would be 0.05 per cent and 0.07 per cent).There was no evidence that any other Chinese producer or exporter ofgalvanised steel coil received the alleged government grant.[69] On 9 June 2017 MBIE issued its Essential Facts and Conclusions report.34 Thiswas a 96 page report discussing the goods, the New Zealand industry, interested partiesand the subsidy, injury and causal link issues.[70] On 23 June 2017 NZ Steel made submissions on the Essential Facts andConclusions Report. NZ Steel was again concerned that MBIE was making findingsbased on limited, non-verified information from the GOC that was contrary tooverseas investigations. NZ Steel placed particular reliance on a recent EuropeanCommission (EC) investigation report dated 8 June 2017 concerning hot rolled steelfrom China (EC 2017 (HRS)).35 It said this concerned closely related products, anoverlapping investigation period, similar subsidy programmes and a commonmanufacturer. NZ Steel also said it disagreed with MBIE that the goods should belimited to product with a width of up to 1260 mm. Its reasons included that in mostinstances product with a width of more than 1260 mm was substitutable for productwith a width of less than that and as a consequence there was significant priceconnectivity.Final Report[71] On 3 July 2017 MBIE's Final Report was finalised.36 The Final Report is a113 page document which set out the investigation, MBIE's views on the issues raisedand the conclusions reached. It also made recommendations on the basis of itsconclusions.34 Section 10A.35 European Commission Commission Implementing EU Regulation 2017/969 (8 June 2017) OfficialJournal of the European Union L146/17. Referred to as EC 2017 (HRS).36 There is a Ministry approval process involving a sign off by Dr Peter Cabtree pursuant to adelegation from the Deputy Chief Executive and in turn the Chief Executive.[72] Its views on the subsidy programmes raised by NZ Steel are summarised asfollows:37Summary of Final Report findingsSubsidy programme Was the entity apublic bodyProviding abenefit (if so,what amount)?And was itspecific?1.PolicyLoansPolicybanksYes Any benefitextremelynegligibleYesSOCBs Not establishedthat SOCBs were'public bodies'N/A N/A2. Provision of land userights at LTARYes No No specificfinding3. Provision of inputs bySIEs at LTARNo N/A N/A4. Provision of electricityat LTARYes No No5. Import tariffexemptionsYes Too low to bemeaningfulYes6. Export buyers' credits N/A, as noshipment to NewZealandamounted to overUSD 2 millionN/A N/A7. Reported grants Yes No (Zong Cheng)0.08% (for non-cooperatingproducers)Yes8. Other subsidies Yes No (Zong Cheng)Too low to bemeaningful (fornon-cooperatingproducers)Yes[73] The Final Report was accompanied with a Briefing for the Minister. Thisrecommended that the Minister make a final determination that galvanised coil fromChina is subsidised only to de minimis levels and therefore not causing material injuryto the domestic industry.37 NZ Steel and the Minister provided tables which slightly differed from each other about whatMBIE found. This table is my view on what was found and is a combination of the tables fromNZ Steel and the Minister's submissions.Determination[74] On 5 July 2017 the Minister made her final determination:Pursuant to section 13(1) of the Dumping and Countervailing Duties Act 1988("the Act), I hereby give notice that I have made a final determination that thesubject goods described in the Schedule to this notice ("the subject goods"):(a) are subsidised only to de minimis levels(b) and that by reason thereof the subsidisation is not causing materialinjury to the domestic industry.Therefore countervailing duties will not be imposed[75] The final determination described the goods subject to the determination asfollows:Galvanised steel coil with a thickness equal to or greater than 0.3mm and lessthan or equal to 1.9mm and a width greater than 600mm but not greater than1260mm, with a hot dipped galvanised (zinc) coating.Overseas investigationsTimeline[76] Key issues in this case are whether MBIE properly interpreted the "publicbody" test as discussed in WTO decisions and overseas investigations, and whetherMBIE placed proper reliance on overseas investigations. These decisions andinvestigations are discussed as they relate to the particular errors alleged by NZ Steel.NZ Steel provided a timeline of the decisions as they relate to the timeframe of theinvestigation. This is as follows:[77] The boxes in blue below the middle line are decisions of investigatory bodiesin overseas jurisdictions. The white boxes are WTO panel and Appellate Body reportsor decisions. The orange boxes on top are key dates for MBIE's investigation.Comparison with overseas investigations[78] NZ Steel submits there is an international consensus that China subsidises itssteel. It submits that something has gone wrong with MBIE's investigation given thatall the comparable jurisdictions to New Zealand have reached contrary conclusions tothat reached by MBIE. It described this as everyone else finding a "black swan" inChina where New Zealand has found the "swan" is "white". The Minister submitsthere is no "black swan". The Minister submits that, when properly analysed, there isno international consensus as the investigations reached different conclusions to eachother on the various subsidy programmes.[79] The following table provides a summary of how the conclusions reached in theFinal Report compared with the findings in overseas investigations:Summary of Final Report compared with overseas investigation findingsSubsidy Public body? Benefit (if so, what amount)? Specificity?PolicyLoansfromSOCBsNone of the overseas authority reports distinguish between SOCBs and policy banks in the wayMBIE did. Therefore their benefit and specificity findings do not distinguish between themeither.MBIE (re policy banks):YesMBIE (re SOCBs): notestablishedMBIE (re policy banks): 0.005%(negligible)MBIE (re SOCBs): N/AMBIE (re policy banks):YesMBIE (regarding SOCBs):N/AAADC 322 (Reb): YesCBSA 2014 (Reb): Yes38CBSA 2016 (CAS): Yes39EC 2013 (OCS): YesEC 2017 (HRS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesAADC 322 (Reb): 0.26-29.61*CBSA 2014 (Reb): 0.4-14.7*CBSA 2016 (CAS): 0.38-17.32*EC 2013 (OCS): 0.25-0.97EC 2017 (HRS): 1.99-27.91USDOC 2016 (CRS): 0.86USDOC 2017 (CAS): 10.54AADC 322 (Reb): YesCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesEC 2017 (HRS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesProvisionof inputsby SIEs atLTARMBIE: No MBIE: N/A MBIE: N/AACBP 193 (Gal): Yes(reversed by ADRP (Gal))AADC 322 (Reb): YesADRP 2018 (Hol): YesCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesACBP 193 (Gal): 0-22.8*AADC 322 (Reb): 0.26-29.61*ADRP 2018 (Hol): Yes40CBSA 2014 (Reb): 0.4-14.7*CBSA 2016 (CAS): 0.38-17.32*EC 2013 (OCS): 23.02-32.44USDOC 2016 (CRS): 26.13USDOC 2017 (CAS): 23.74ACBP 193 (Gal): YesAADC 322 (Reb): YesADRP 2018 (Hol): YesCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesProvisionof land userights atLTARMBIE: Yes MBIE: No MBIE: No specific findingCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesEC 2017 (HRS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesCBSA 2014 (Reb): 0.4-14.7%*CBSA 2016 (CAS): 0.38-17.32*EC 2013 (OCS): 0.34-1.36EC 2017 (HRS): 1.20-7.63USDOC 2016 (CRS):0.36-13.36USDOC 2017 (CAS): 2.55CBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesEC 2017 (HRS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesProvisionofelectricityat LTARMBIE: Yes MBIE: No MBIE: NoAADC 237 (Sil): YesAADC 322 (Reb): YesCBSA 2014 (Reb): Yes41CBSA 2016 (CAS): YesEC 2013 (OCS): YesEC 2017 (HRS): Not statedUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesAADC 237 (Sil): 6.3-37.6*AADC 322 (Reb): n/aCBSA 2014 (Reb): 0.4-14.7*CBSA 2016 (CAS): 0.38-17.32*EC 2013 (OCS): 0.07-0.17EC 2013 (HRS): NoUSDOC 2016 (CRS): 0.58USDOC 2017 (CAS): 20.02AADC 237 (Sil): YesAADC 322 (Reb): NoCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesEC 2012 (HRS): NoUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesImporttariffexemptionsMBIE: Yes MBIE: Negligibly low MBIE: YesAADC 237 (Sil): YesCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): YesAADC 237 (Sil): 6.3-37.6*CBSA 2014 (Reb): 0.4-14.7*CBSA 2016 (CAS): 0.38-17.32*EC 2013 (OCS): 0.89USDOC 2016 (CRS): 0.56USDOC 2017 (CAS): 9.71AADC 237 (Sil): YesCBSA 2014 (Reb): YesCBSA 2016 (CAS): YesEC 2013 (OCS): YesUSDOC 2016 (CRS): YesUSDOC 2017 (CAS): Yes38 All the CBSA 2014 findings were arrived at on the basis that there was insufficient information toremove the programmes from the investigation for the purposes of its final determination.39 Unlike the 2014 report, CBSA 2016 (CAS) specifically determined the existence of preferentiallending subsidy programmes from SOCBs, inputs and land use rights at LTAR and exemption oftariff and import VAT. The remaining programmes (i.e. electricity at LTAR and export buyers'credits) were based on insufficient evidence which meant they could not be ruled out as potentiallyactionable programmes.40 The subsidy amount is not provided in the report.41 Recorded as "Utilities Provided by Government at Less than Fair Market Value".Exportbuyers'creditsMBIE: N/A, no shipment toNZ was over US$2MMBIE: N/A MBIE: N/ACBSA 2014 (Reb): YesCBSA 2016 (CAS): YesUSDOC 2016 (CRS): YesCBSA 2014 (Reb): 0.4-14.7*CBSA 2016 (CAS): 0.38-17.32*USDOC 2016 (CRS): 0.54CBSA 2014 (Reb): YesCBSA 2016 (CAS): YesUSDOC 2016 (CRS): YesReportedgrants42MBIE: Yes MBIE: 0.08% (for non-cooperating manufacturers)YesUSDOC 2016 (CRS): Yes USDOC 2016 (CRS): 0.02 USDOC 2016 (CRS): YesOthersubsidiesMBIE: Yes MBIE: Too low to be meaningful MBIE: Yes(*) indicates that the overseas investigation reports do not distinguish between the subsidisation rate found for thatalleged programme from all other programmes found to have been in place.[80] On the programmes of particular concern to NZ Steel on this judicial review,this comparison shows:(a) In contrast with the Final Report, all the overseas investigations foundtheir investigated SOCBs and state-invested enterprises (SIEs) to bepublic bodies.(b) In contrast with the Final Report, all the overseas investigations foundthat the Chinese producers of the steel goods under investigation (rebar,carbon alloy steel, organic coated steel, hot rolled steel, and corrosionresistant steel) received benefits in the form of policy loans fromSOCBs. There is considerable variation as to the amount of the benefitreceived. In some cases the amount of the benefit is unclear because aglobal amount is provided for all benefits.(c) All the overseas investigations found that the Chinese producers of thesteel goods under investigation (galvanised steel, rebar, carbon alloysteel, organic coated steel and corrosion resistant steel) receivedbenefits in the form of inputs from SIEs at LTAR. There is considerablevariation as to the amount of the benefit received. In some cases theamount of the benefit is unclear because a global amount is providedfor all benefits.42 The types of grants reported in overseas investigation reports are varied and therefore difficult tocompare to the reported grants alleged in this case. The USDOC 2016 (CRS) grants are listedbecause of comparison drawn by MBIE.(d) In contrast with the Final Report, all of the overseas investigations havefound that the Chinese producers of the steel goods under investigation(rebar, carbon alloy steel, organic coated steel, hot rolled steel andcorrosion resistant steel) received benefits in the form of land use rightsat LTAR. There is some variation in the amount of the benefit received.In some cases the amount of the benefit is unclear because a globalamount is provided for all benefits.[81] In summary, it is fair to say there is an international consensus that Chinesesteel products are subsidised by public bodies. It is also fair to say that the view aboutthe level at which they are subsidised depends on a number of factors: the kind of steelproducts; the producers of those products; and the extent to which the investigatingauthority has been able to obtain direct information about those programmes. It isagainst this background I consider whether NZ Steel has established that MBIE madea reviewable error in providing its advice to the Minister.Public body testIssue: the proper test[82] Article 1.1(a) of the SCM Agreement deems subsidies to exist where financialcontributions of certain kinds (as set out in (i) to (iv)) are made by a "government orany public body". Consistent with this, the DCD Act defines "subsidy" as includinga financial contribution provided by a "foreign Government" and, also consistently,"foreign Government" is defined as including "a person, agency, or institution actingfor, or on behalf of, a Government".43[83] The proper test to be applied for determining whether an entity is a "publicbody" is relevant to two of the alleged subsidy programmes: (1) whether Chineseproducers of the subject goods received benefits by way of policy loans from SOCBs;and (2) whether Chinese producers of the subject goods received benefits because SIEsprovided inputs to them at LTAR. MBIE's Final Report rejected these claims on thebasis it was not established that SOCBs and the SIEs were public bodies.43 DCD Act, s 3(1).[84] Whether MBIE applied the correct test in determining this issue is one of thegrounds on which NZ Steel challenges MBIE's conclusions. NZ Steel says MBIEwrongly relied on the test adopted in Australia by the Anti-Dumping Review Panel(ADRP) in its 2013 decision (ADRP 2013 (Gal)). It says this test was discredited bythe WTO Appellate Body in 2014 and it is no longer the approach taken in Australia.[85] The Minister says NZ Steel has mischaracterised MBIE's reliance on ADRP2013 (Gal). MBIE did not require evidence that a public body have the ability tocontrol third parties. Rather it correctly approached its determination by consideringthe characteristics that suggest an entity is exercising governmental authority orfunctions. This included a careful consideration of the meaningful control test. It saysNZ Steel's issue is really with MBIE's application of the test rather than the test itself.The ADRP 2013 (Gal) test[86] The first question is to determine what test was applied in ADRP 2013 (Gal).44ADRP 2013 (Gal) was a review of ACBP 193 (Gal). That investigation concerned, inpart, galvanised steel coil produced in China and exported to Australia.45 The mainraw material for galvanised steel coil is hot rolled coil. Products used in making hotrolled coil are coke, coking coal and iron ore. It was alleged the Chinese producers ofgalvanised steel coil were receiving these inputs from SIEs at LTAR. ACBP 193 (Gal)found that the SIEs supplying these inputs were public bodies. This was overturnedin ADRP 2013 (Gal).[87] In overturning ACBP 193 (Gal), the ADRP purported to apply the test forpublic body set out by the WTO Appellate Body in DS379 (the relevant WTOauthority providing guidance on this point).46 DS379 determined the test for a publicbody was whether the entity "possesses, exercises or is vested with governmentalauthority". DS379 discussed how that might be determined:44 Australian Anti-Dumping Review Panel Review of Decisions Regarding Dumping Duties andCountervailing Duties for: Zinc Coated (Galvanised) Steel and Aluminium Zinc Coated SteelExported from the People's Republic of China (November 2013) at [100]. Referred to as ADRP2013 (Gal).45 Under the Australian regime, the investigatory body (ACBP) could be reviewed by a review panelmember (ADRP).46 United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products fromChina WT/DS379/AB/R, 11 March 2011 (Report of the Appellate Body). Referred to as DS379.(a) The most straightforward way is where a statute or other legalinstrument expressly vests government authority in the entityconcerned.47(b) Alternatively, when there has not been an express vesting of authority,other evidence may show that government authority has been bestowedon a particular entity. As to this:48(i) Evidence that an entity is in fact exercising governmentalfunctions may serve as evidence that it possesses or has beenvested with governmental authority, particularly where suchevidence points to a sustained and systemic practice.(ii) Evidence that a government exercises meaningful control overan entity and its conduct may serve as evidence that the entitypossesses governmental authority and exercises such authorityin the performance of governmental functions.(iii) The existence of mere formal links between an entity andgovernment is unlikely to suffice as evidence establishing thatthe entity possesses government authority. For example, themere fact that the government is the majority shareholder of anentity "does not demonstrate that the government exercisesmeaningful control over the conduct of that entity, much lessthat the government has bestowed it with governmentalauthority".(iv) Where the evidence shows formal indicia of control, and thereis evidence that such control has been exercised in a meaningfulway, that evidence may permit an inference that the entity isexercising governmental authority.47 DS379 at [318].48 Above.(v) In all instances an evaluative assessment of all the relevantcharacteristics of the entity is required.49[88] Arising from DS379, the ADRP assessed the approach in ACBP 193 (Gal) tothe public body question against three indicia: (1) whether a statute or other legalinstrument expressly vested government authority in the entity concerned; (2)evidence that an entity is in fact exercising governmental functions may serve asevidence that it possesses or has been vested with governmental authority; and (3)evidence that a government exercises meaningful control over an entity and its conductmay serve, in certain circumstances, as evidence that the relevant entity possessesgovernmental authority and exercises such authority in the performance ofgovernmental functions.50[89] There was no issue about indicia (1). As the ACBP had found, it did not applyto SIEs supplying hot rolled coil, because there was no evidence that any statute orother legal instrument vested government authority in them.[90] The ACBP found indicia (2) established based on the following: Chinese Lawprovided that an SIE must comply with national industrial policy; Baosteel's 2010Annual Report described itself as taking an active part in the reorganisation of theindustry "in accordance with the national policies on the iron and steel industry"; theSASAC Guiding Opinion indicated that SIEs played an integral role in implementingthe GOC's policies and plans;51 and under Chinese law the SASAC was vested withcertain obligations concerning increasing the competitive power and overall quality ofthe economy.[91] ADRP 2013 (Gal) considered this was evidence that SIEs acted in accordancewith government policy but this was not to be conflated with carrying out governmentfunctions. The WTO Appellate Body had established that compliance with49 DS379 at [319].50 These indicia came from the "public body" test in DS379 as discussed in Panasia Aluminium(China) Ltd v Attorney-General (Cth) [2013] FCA 870. This case concerned Chinese exportersseeking to overturn duties imposed on them for receiving countervailable subsidisation on thebasis the benefits they had allegedly received was not from a public body.51 SASAC is the State-owned Assets Supervision and Administration Commission of the People'sRepublic of China.government policy was not itself evidence that an entity possesses, exercises or isvested with government authority. In the ADRP's view, the evidence did not establishthe SIEs were doing any more than complying with government policy.[92] As to indicia three, ACBP 193 (Gal) had relied on a range of material whichshowed the GOC's control over the iron and steel producing SIEs. This included: thecatalogue of encouraged industries; a State Council decision which prohibitedinvestments outside the encouraged industries; a State Council notice that outlinedpenalties for non-compliance with the GOC's plans for eliminating certain productioncapacities; prescribed requirements for iron and steel producers (including certainproduction size requirements); and Baosteel's Annual Reports, which showed therewas a need to comply with the GOC's policies.[93] ADRP 2013 (Gal) considered this material showed the GOC regulated the ironand steel industry and had a degree of control over the participants in the industry.However, in the ADRP's view, the evidence did not establish "meaningful control" asdiscussed in DS379. The ADRP said it was not shown "that the control the GOCexercises over SIEs in the iron and steel industry is such that those SIEs are in effectexercising government authority".52 It was not sufficient that the entity was beingregulated. There needed to be "a delegation of authority (although not in the strictsense of delegation)".53 There was no material to demonstrate there had been "adelegation of governmental authority to SIEs to impose State-mandated policies onparticipants in the iron and steel industry ".54 Meaningful control, such that the SIEsproducing hot rolled coil were instruments of the GOC, was therefore notestablished.5552 ADRP 2013 (Gal) at [100].53 At [102]. The ADRP considered this was required under DS379 as discussed in PanasiaAluminium (China) Ltd v Attorney-General, above n 50, at [68] per Nicholas J: " the ChineseGovernment, through its control of primary aluminium producers and suppliers, bestowed themwith its authority to give effect to the Chinese Government's economic, industrial and socialpolicies by providing or withholding financial support of various kinds to the domesticmanufacturers which they supplied".54 At [103].55 The ADRP considered the same conclusion applied to the SIEs producing coking coal or coke.The ACBP had been wrong to apply its conclusion on SIEs producing hot rolled coil to other rawmaterials in the steel industry. It did not follow that all SIEs producing raw materials were publicbodies.[94] In summary, the ADRP considered it was not enough that the GOC exercisedcontrol over SIEs in the iron and steel industries. SIEs needed to be vested with theauthority to impose state-mandated policies on other participants in the iron and steelindustry. On this approach the ADRP was considering whether SIEs were vested withgovernment authority with reference to the SIEs control over third parties. Subsequentdecisions, which are now discussed, show that ADRP misinterpreted DS379 and as aresult applied the wrong test.Subsequent decisions[95] The WTO Appellate Body revisited the test for determining whether an entityis a public body in two decisions which followed ADRP 2013 (Gal). The decisionsconcerned challenges by India (DS436) and China (DS437) to decisions by the UnitedStates to impose countervailing duties on a range of products.56 These two challengeswere considered by the WTO Panel, which gave decisions on both challenges on 14July 2014. These decisions included the Panel's views on the proper approach to thepublic body question. The Panel decisions were appealed to the Appellate Body. TheAppellate Body's decision on India's challenge (DS436) was given on 8 December2014.57 It is this decision that is of most relevance for present purposes.[96] DS436 concerned countervailing duties imposed by the United States on hotrolled carbon steel flat products from India. The United States investigatory body(USDOC) had determined in four decisions in various years that NMDC, a body inwhich the Indian Government was a 98 per cent shareholder, was a public bodyproviding iron ore to producers of the subject goods at LTAR. India contended thePanel had erred on its approach to whether NMDC was a public entity.[97] India submitted the key characteristic of a public body was that it exercisesauthority, which the government has vested in it, for performing governmental56 United States – Countervailing Measures on Certain Hot-rolled Carbon Steel Flat Products fromIndia WT/DS436/AB/R, 8 December 2014 (Report of the Appellate Body) (referred to as DS436)and United States – Countervailing Duty Measures on Certain Products from ChinaWT/DS437/AB/R, 18 December 2014 (Report of the Appellate Body) (referred to as DS437).57 In DS437, given on 18 December 2014, the WTO Appellate Body gave a decision on China'schallenge to a range of issues but not on the public body question. Later, on 21 March 2018, thePanel gave a decision under art 25.1 of the Dispute Settlement Understanding reviewing the US'scompliance with various matters including on the public body question.functions. It contended: (1) this meant the public body had to have the power toregulate, control, or supervise individuals or otherwise restrain their conduct; and (2)it was also necessary that the entity be able to give responsibility to, or exerciseauthority over, a private body.[98] The Appellate Body disagreed with both of these contentions. As to the first,it considered the power to regulate was not a necessary characteristic in order for anentity to be vested with government authority or to be exercising governmentauthority. The Appellate Body did not elaborate on its reasons for this. However thePanel in DS437, which had taken the same view, said:58 In our view, governments, either directly themselves or through entitiesthat are established, owned, controlled, managed, run or funded by thegovernment, commonly exercise or conduct many functions or responsibilitiesthat go beyond "the effective power to 'regulate', 'control' or 'supervise'individuals, or otherwise 'restrain' their conduct". Such entities can includeSOEs (including banks and other financial institutions) [99] As to the second, this was also not necessary. This argument concernedwhether the conduct referred to in (1)(a)(iv) of art 1.1 of the SCM Agreement (whichconcerns private bodies) prescribed government characteristics relevant todetermining the meaning of public body for the financial contributions covered under(1)(a)(i) to (iii) of art 1.1 of the SCM Agreement. In this context the Appellate Bodyrepeated its earlier views in DS379 that considerations of the object and purpose ofthe SCM Agreement did not favour either a broad or narrow interpretation of publicbody.59[100] The Appellate Body summarised the test for determining whether an entity isa public body as follows:4.29 In sum, as the Appellate Body has explained, the term "public body"in Article 1.1(a)(1) of the SCM Agreement means "an entity thatpossesses, exercises or is vested with governmental authority".Whether the conduct of an entity is that of a public body must in each58 United States – Countervailing Duty Measures on Certain Products from China WT/DS437/R, 14July 2014 (Report of the Panel) at [7.69].59 As explained in DS379, too broad an interpretation risked upsetting the "delicate balance" of theSCM Agreement, because it could dispense with an investigating authority considering whetherthere was an entrustment and direction under (1)(a)(iv) and instead find entities with anyconnection to government to be public bodies. The purpose of the SCM Agreement is to increaseand improve GATT disciplines relating to the use of both subsidies and countervailing measures.case be determined on its own merits, with due regard being had tothe core characteristics and functions of the relevant entity, itsrelationship with the government, and the legal and economicenvironment prevailing in the country in which the investigated entityoperates. For example, evidence regarding the scope and content ofgovernment policies relating to the sector in which the investigatedentity operates may inform the question of whether the conduct of anentity is that of a public body. The absence of an express statutorydelegation of governmental authority does not necessarily preclude adetermination that a particular entity is a public body. Instead, thereare different ways in which a government could be understood to vestan entity with "governmental authority", and therefore different typesof evidence may be relevant in this regard. In order properly tocharacterize an entity as a public body in a particular case, it may berelevant to consider "whether the functions or conduct [of the entity]are of a kind that are ordinarily classified as governmental in the legalorder of the relevant Member", and the classification and functions ofentities within WTO Members generally. In the same way that "notwo governments are exactly alike, the precise contours andcharacteristics of a public body are bound to differ from entity toentity, State to State, and case to case".[101] The Appellate Body went on to consider whether the Panel had erred inupholding USDOC's determination that the NMDC was a public body. The AppellateBody considered the Panel had wrongly construed public body to mean an entity thatwas meaningfully controlled by the Government of India (the GOI). The Panel hadreviewed the indicia of control (shareholding and power to appoint directors) "but didnot address the question of whether there was evidence that the NMDC wasperforming governmental functions on behalf of the GOI".60 A single aspect of anentity's relationship with a government, here the formal indicia of control, was notsufficient. The Panel was required "to evaluate whether the USDOC had properlyconsidered the relationship between the NMDC and the GOI within the legal order, orthe extent to which the GOI in fact 'exercised' meaningful control over the NMDC asan entity and over its conduct".61[102] The Appellate Body went on to find the USDOC had not properly consideredthis question. It had relied on the formal indicia of control. It had not considered thenature of NMDC's status, which was relevant to the degree of control the GOIexercised over NMDC and the degree of autonomy that NMDC exercised.60 DS436 at [4.42].61 At [4.43].[103] After DS436, ADRP 2013 (Gal) was considered by the Australian Anti-Dumping Commission (AADC) in an investigation concerning silicon metal exportedfrom China (AADC 237 (Sil)).62 One of the issues for the AADC was whether SIEelectricity providers were public bodies providing electricity at LTAR.[104] AADC 237 (Sil) referred to the Panel's view in DS437 that it was not necessarythat a public body must itself possess the authority to regulate, control, supervise orrestrain the conduct of others (the view also taken by the Appellate Body in DS436 asdiscussed above). AADC 237 (Sil) also referred to the Appellate Body's DS436decision that, to determine whether an entity has governmental authority, theinvestigating authority needed to "evaluate the core features of the entity and itsrelationship to government" and "Government control of the entity is relevant if it ismeaningful".63[105] AADC 237 (Sil) considered electricity providers were public bodies. Theprovision of electric power was subject to price regulation and supervision and theindustry was required to meet national development and society's needs. Theproviders were subject to meaningful control and this was evidence the entitypossessed government authority and was a public body.[106] The issue was considered again in AADC 322 (Reb).64 This investigationconcerned steel reinforcing bar (also known as "rebar"). One of the issues waswhether SIEs supplying inputs (billet, coke and coking coal) were public bodies andwere supplying those inputs at LTAR. AADC 322 (Reb) again referred to the Panel'sview in DS437 that it was not necessary that a public body must itself possess theauthority to regulate, control, supervise or restrain the conduct of others (the view alsotaken by the Appellate Body in DS436 as discussed above).62 Australian Anti-Dumping Commission Report 237: Alleged Dumping of Silicon Metal Exportedfrom the People's Republic of China and Alleged Subsidisation of Silicon Metal Exported fromPeople's Republic of China (7 May 2015). Referred to as AADC 237 (Sil).63 AADC 237 (Sil) at p 98.64 Australian Anti-Dumping Commission Report 322: Alleged Subsidisation of Steel Reinforcing BarExported from the People's Republic of China (19 September 2016). Referred to as AADC 322(Reb).[107] AADC 322 (Reb) also referred to the Panel's decision in DS436. Specificallyit referred to the Panel's view that government involvement in the appointment of anentity's directors was "extremely relevant" to the issue of whether the entity ismeaningful controlled by government.65 The AADC did not refer to the AppellateBody's comments on the Panel's view, namely that a public body did not mean anentity that was meaningfully controlled by government and the formal indicia ofcontrol did not establish that an entity was a public body.66[108] AADC 322 (Reb) relied on the following matters in concluding the SIEs werepublic bodies:(a) The SASAC was vested with statutory authority to establishsupervision and management systems that suited the needs of thesocialist market economy. Its main responsibilities included to "guideand push forward the reform and restructuring of State-ownedenterprises and State-owned holding enterprises"; to "dispatchsupervisory panels to the invested enterprises"; and to appoint andremove directors, evaluate their performance and grant rewards orimpose punishments based on these evaluations.67(b) The GOC had a central role in the current restructuring of the Chinesesteel industry, as it had when the industry was developing andexpanding. The GOC had materially contributed to the excess supplyof rod in coils and rebar in the domestic Chinese market and hadsignificantly influenced the domestic price. A recent Canadianinvestigation had found the GOC to have a significant role in the steelindustry.(c) The GOC had not directly responded to questions about any specialrights the GOC's representatives on the boards might have and65 AADC 322 (Reb) at p 89.66 AADC 322 (Reb) is dated 19 September 2016 and the Appellate Body DS436 decision is dated8 December 2014 so it is unclear why the AADC has not referred to it rather than the Paneldecision.67 AADC 322 (Reb) at pp 69-70.subsidies businesses received. Although the GOC had said the SASAC,SIEs and the GOC all had separate roles, a degree of autonomy was notnecessarily at odds with a finding that an SIE was a public body.[109] The proper approach to whether an SIE was a public body came back beforethe ADRP in ADRP 2018 (Hol).68 The ADRP panel member writing the report wasthe same panel member who had written ADRP 2013 (Gal). The review concernedmeasures applying to hollow structural sections exported from China and othercountries to Australia. Hot rolled coil is an input into hollow structural sections andone of the issues was whether the SIEs supplying this input were public bodies. TheAADC had found that they were. Contrary to its earlier ADRP 2013 (Gal) decision,in ADRP 2018 (Hol) the AADC decision was upheld. ADRP 2018 (Hol) relied onfindings in earlier investigations, background information about the Chinese hot rolledcoil market and the lack of response by the GOC to a questionnaire for this decision.ADRP 2018 (Hol) was published in February 2018 after MBIE's Final Report and theMinister's decision. It was therefore not considered in MBIE's Final Report.The Final Report's approach[110] I have concluded that ADRP 2013 (Gal) applied the wrong test for public bodyas the subsequent decisions show. The next question is whether MBIE likewiseapplied that wrong test because it relied on ADRP 2013 (Gal).[111] The Final Report considered the WTO jurisprudence established that todetermine whether an entity was a public body no one factor should be the focus. Thekey elements were:69(a) The context, including the scope and content of government policiesrelating to the sector.(b) The entity's core characteristics and functions.68 Australian Anti-Dumping Review Panel Report 63: Hollow Structural Sections Exported from thePeople's Republic of China, Republic of Korea, Malaysia and Taiwan (February 2018). Referredto as ADRP 2018 (Hol).69 MBIE Final Report at [174].(c) The governmental authority and functions involved.(d) The relationship between the entity and the government.(e) The nature of the entity's performance of the functions at issue.[112] MBIE set out the following as a non-exhaustive list of the evidence to beassessed when determining whether an entity is a public body:70• The statutory basis for the entity and whether there is an expressdelegation of authority or functions.• The extent to which the entity is exercising authority or functionsin a sustained and systematic practice.• Evidence that a government exercises meaningful control over anentity such that the entity possesses governmental authority andexercises such authority in the performance of governmentalfunctions.• The ownership of the entity, including the extent of governmentownership.• Whether the entity has the power to regulate.• Whether the entity has the power to entrust or direct a privatebody to undertake the functions in Article 1.1(a) of the SubsidiesAgreement.• Whether the government uses the entity's resources as its own.• The extent of government involvement in entity governance,including presence on the board of directors.• The extent of government control over activities.• The extent to which the entity operates in pursuit of governmentalpolicies or interests.[113] NZ Steel correctly makes the point that this is a list of the kinds of evidencethat may be relevant to determining whether an entity is a public body, but it does notset out what the test is. As set out above, the test is whether the entity "possesses,exercises or is vested with governmental authority". The matters in the above list maybe relevant, but refinement of some of them is necessary. For example, as per DS379,70 At [175].an entity may be vested with governmental authority without there being any expressdelegation. Further, as per DS436, it is not necessary that the entity have the power toregulate – a wider concept of government functions applies.[114] The Final Report went on to refer to the finding in DS379 that no twogovernments are exactly alike and the characteristics of a public body differ fromentity to entity, state to state and case to case (a point repeated in DS436). The FinalReport then noted that China's constitution made it clear that the State is thecontrolling body; China can be characterised as having a market economy based onprivate principles and was a leading example of state capitalism; however, the State"still dominates in strategic 'pillar' sectors such as energy production and heavyindustries".71[115] The Final Report then said:180. In this context, it is not surprising that many manufacturingenterprises in the steel sector and financial institutions in the economyas a whole are owned partly or fully by the State, and that they operatewithin an environment of broad government policies and plans for thedevelopment of the sector. However, as the WTO Appellate Body hasrecognised, ownership on its own is not sufficient to bring suchentities into the ambit of Article 1.1(a)(1) of the Subsidies Agreement,and there needs to be an examination of the extent to which the entityis, in fact, exercising governmental authority or functions in asustained and systematic practice. MBIE also notes the view of theAustralian Anti-Dumping Review Panel (ADRP) that activecompliance with governmental policies and regulations does notequate to the exercise of governmental functions or authority, andacting in accordance with a government policy and carrying outgovernment functions should not be conflated.181. In its submission of 26 May 2017, NZ Steel noted that MBIE hadcorrectly identified the range of factors to be considered indetermining whether an entity is a public body, but considered thatMBIE had failed to adequately consider or give sufficient weight tothe findings of overseas jurisdictions. NZ Steel claimed that MBIE hadgiven undue weight to the 2013 report of the ADRP, claiming that theADRP required that to be considered "public bodies" steel state-owned enterprises (SOEs) must exercise coercive power over thirdpersons, which was at odds with WTO case law and the approachtaken by other authorities which focused on assessing a range of otherfactors to determine whether an entity possesses, exercises or is vestedwith government authority.71 At [179].182. In considering the particular programmes in section 4.4 below, MBIEhas addressed the key elements and evidence described above as theyrelate to the bodies identified as providing financial contributions. Indoing so, it has taken into account the findings in other jurisdictionsand the views of WTO dispute bodies, and the information availableto it.(Emphasis added.)[116] The Final Report returned to this topic when discussing whether Chineseproducers of the subject goods had received input materials at LTAR:297. The ADRP noted the conclusions reached by the Australian authoritywith regard to the exercise of governmental functions by an entity, andsuggested that it conflated the purpose of acting in accordance withgovernment policy and carrying out government functions. TheADRP stated that compliance with government policy does not ofitself evidence that an entity possesses, exercises or is vested withgovernment authority, which was the over-riding test established bythe WTO Appellate Body. With regard to the evidence that agovernment exercises meaningful control over an entity and itsconduct, the ADRP noted that the material relied upon by theAustralian authorities did demonstrate that the GOC regulated theiron and steel industry and that there was a degree of control over theparticipants in the industry, but the material did not show that thecontrol amounted to meaningful control in the sense intended by theWTO Appellate Body. The ADRP did not consider the controlexercised by the GOC over SIEs in the iron and steel industry wassuch that those SIEs were in effect exercising government authority.The overall conclusion of the ADRP was that the decisions made bythe Attorney-General with respect to countervailing duties should berevoked.298. MBIE notes that in a subsequent Australian case (Rebar and Rod inCoils, Investigation 322) the Australian ADC noted that WTO disputesettlement findings made subsequent to the ADRP conclusions,clarified "meaningful control" to the extent that Chinese suppliers ofinputs could be considered to be "public bodies".299. However, MBIE does not agree with this interpretation of the WTOAppellate Body findings in those cases. In particular, the AppellateBody considered that in US – Carbon Steel (India) the Panel erred inits interpretation of Article 1.1(a)(1) by construing the term "publicbody" to mean any entity that is "meaningfully controlled" by agovernment, and the suggestion that a government's ability to controlan entity was determinative for purposes of establishing whether thatentity constitutes a public body.(Emphasis added.)[117] The Minister submits this discussion correctly makes the point that the test forwhether an entity is a public body is not whether it is meaningful controlled bygovernment. The Minister submits the Final Report is not saying that ADRP 2013(Gal) was correct to have found that a power to regulate over third parties was anecessary component of the public body test.[118] In my view the quoted paragraphs are not entirely clear on this point. MBIEis correct that the test for whether an entity is a public body is not whether it ismeaningfully controlled by government. The test is whether an entity possesses,exercises or is vested with government authority. In DS436 the WTO Appellate Bodyheld that formal indicia of control (the ability to appoint shareholders and directors)were not sufficient to determine if an entity possessed, exercised or was vested withgovernment functions. The WTO Appellate Body also held that the entity did not needto have the power to regulate, control, or supervise individuals or otherwise restraintheir conduct.[119] It is not clear in the above quoted paragraphs that MBIE appreciated that ADRP2013 (Gal) had concluded that the "material did not show that the control amountedto meaningful control in the sense intended by the WTO Appellate Body [in DS379]"72on an erroneous basis: namely, that there was no material to demonstrate there hadbeen "a delegation of governmental authority to SIEs to impose state-mandatedpolicies on participants in the iron and steel industry".73 The correct position, asclarified in DS436, is that SIEs could potentially possess, exercise or be vested withgovernment authority even if they did not have a power of control over third parties.[120] However, when the Final Report reached its conclusion that the SIEs supplyinginputs were not public bodies, it is more evident that MBIE was relying on thiserroneous aspect of ADRP 2013 (Gal). Here the Final Report said:304. MBIE is satisfied that the information available indicates that whilesuppliers of input materials are, in the main, state-owned enterprises,they are not "public bodies" in the context of Article 1.1(a) of theSubsidies Agreement. This view reflects, in particular, the argumentsof the ADRP, which reviewed the position in light of WTOjurisprudence to date (see section 4.3.2 above). The ADRP noted thatcompliance with government policy does not of itself evidence that anentity possesses, exercises or is vested with government authority, andthere was no evidence that SASAC had delegated its authority to SIEs72 ADRP 2013 (Gal) at [99].73 At [103].to control participants in the iron and steel industry. Thus, the ADRPwas unable to agree with the conclusion that hot-rolled coil producingSIEs possessed or had been vested with governmental authority. TheADRP noted while there was a degree of control by the GOC overparticipants in the industry, the evidence did not show that suchcontrol amounted to meaningful control in the sense intended by theAppellate Body, and did not show that SIEs in the iron and steelindustry were exercising government authority.(Emphasis added.)[121] The Minister submits the italicised words are simply a finding of fact: therewas no evidence that SIEs had the power to control participants in the iron and steelindustry. I do not agree that these words have the limited significance suggested onbehalf of the Minister. In this quoted paragraph, MBIE is relying on the conclusionreached in ADRP 2013 (Gal) that the GOC did not have meaningful control of SIEsbecause compliance with government policy was not enough, and there was noevidence that SASAC had delegated its authority to SIEs to control participants in theiron and steel industry. In my view MBIE has misunderstood the effect of DS436 onthe conclusion reached in ADRP 2013 (Gal). This misunderstanding is an error of lawas to the "public body" test.Was the error of law material to the conclusions MBIE reached[122] For its conclusion that SIEs were not public bodies, the Final Report referredto:(a) information from the GOC (that SIEs operate as any other marketplayers in response to market forces and make independent decisionson pricing);(b) information provided by Zong Chong (that it pays market prices);(c) ADRP 2013 (Gal) (that SIEs were not public bodies); and(d) USDOC 2016 (CRS) and EC 2013 (OCS) (which had determined thatthe SIEs were public bodies).[123] The information supporting MBIE's conclusion that they were not publicbodies was the information from the GOC, Zong Cheng and ADRP 2013 (Gal). AsMBIE said (in the underlined words quoted above), its view that the SIEs were notpublic bodies "reflects, in particular, the arguments of the ADRP".74 In thesecircumstances it cannot safely be said that the error of law was inconsequential to theFinal Report's conclusion that SIEs were not public bodies.[124] It is less clear that the error of law affected the Final Report's conclusion onwhether SOCBs were public bodies. ADRP 2013 (Gal) was not referred to at this partof the Final Report. Nor was there any reference to whether SOCBs can controlparticipants in the steel industry. There are, however, other issues with MBIE'sfindings on SOCBs. It is therefore not necessary that I reach a concluded view onwhether MBIE's error of law was material on this aspect of MBIE's conclusions.Non-cooperation and overseas investigationsThe issue[125] The next issue is whether the Minister was properly informed about theimplications of the limited or lack of cooperation from the GOC and the Chineseproducers with MBIE's investigation and the relevance of overseas investigations'findings as secondary sources of information.[126] NZ Steel submits the Minister was not properly informed. It says MBIEwrongly distinguished the findings of overseas jurisdictions on the basis they had usedadverse inference reasoning (referred to as Adverse Facts Available or AFA). In fact,the overseas investigation reports were the result of in depth research and were alegitimate source of information which should have been given weight following thenon-cooperation that MBIE faced. Properly understood, the findings in the overseasjurisdictions were part of the "the best available information" in the circumstances.75[127] The Minister says it is wrong to characterise MBIE's conclusions as based onlyon the limited information provided by the GOC and Zong Cheng. It carried out74 Final Report at [304].75 DCD Act, s 7(5).independent research and took into account the overseas investigations. The approachtaken was reasonably open to MBIE.The law[128] In support of this ground of review NZ Steel relies on the line of authority thatthe decision maker must have the relevant information which enables her to correctlyanswer the question for decision.76 NZ Steel relies particularly on Air Nelson Ltd vMinister of Transport.77 That case concerned judicial review of the Minister's decisionto increase airport landing charges. In deciding on the increased charges the Ministerhad a detailed report from officials. The Court of Appeal accepted this report sufferedfrom a number of crucial defects: the report did not provide the Minister with a fairand accurate picture of the matters that Air Nelson had raised in consultation; it didnot apprise the Minister of Air Nelson's continuing opposition to any increase and thereasons for that; and it did not apprise the Minister of the flaws in an earlier decisionwhich meant that earlier decision could not form the basis of the new decision.[129] The Court said:[54] The Minister needed to be apprised of these matters by his officials,at least in general terms, so that he could consider them and, if hethought necessary to do so, request further information about them.These matters were, in terms of CREEDNZ, "so obviously material"that their omission from the Minister's direct consideration meant hisdecision was flawed.[55] The particular ground of judicial review on which this finding is madeis secondary to the finding itself. We think the failure of the [report]to mention the matters to which we have referred is probably bestcharacterised as having led to the Minister's failing to take intoaccount relevant considerations.76 Secretary of State for Education v Tameside Metropolitan Borough Council [1977] AC 1014 (HL)at 1065 per Lord Diplock. Bushell v Secretary of State for the Environment [1981] AC 75 (HL) at96-97: Advice from officials on which the Minister's decision is based must be a "fair, accurateand adequate report" of the matters considered. CREEDNZ Inc v Governor-General [1981] 1NZLR 172 (CA) at 200 per Richardson J: "If relevant considerations are to be taken into accountit is obvious that the decision-maker should not be misinformed as to established and materialfacts"; Daganayasi v Minister of Immigration [1998] 2 NZLR 130 at 149 per Cooke J: "TheMinister has implied authority to delegate the function of making inquiries, but if as a result theMinister is led into a mistake and a failure to take into account the true facts, it is not right that theappellant should suffer."77 Air Nelson Ltd v Minister of Transport [2008] NZCA 26, [2008] NZAR 139 (CA).[130] I consider MBIE's advice to the Minister about the relevance of overseasinvestigations on this basis. If they were so obviously material that MBIE needed toprovide fair, accurate and adequate advice about them, a failure to provide such advicerendered the Minister's decision flawed. In traditional judicial review terms it wouldmean the decision failed to take into account relevant considerations.The framework for making determinations when there is non-cooperation[131] The international and domestic regimes for imposing countervailing dutiesanticipate that the investigating authority in one country will need to seek informationfrom another country or from enterprises within that country. The investigatingauthority cannot compel the country or enterprises to supply that information. Theregime works on cooperation and anticipates the possibility that it may not occur.[132] Article 12 provides the framework by which investigating authorities can reachproper conclusions on the basis of accurate information fairly obtained. It providesfor the foreign Government and interested parties to have timely opportunity to see allrelevant and non-confidential information and to make submissions. Under art 12.5,the investigating authority is, in the course of an investigation, to satisfy itself as tothe accuracy of the information supplied by interested Members or interested partiesupon which their findings are based. They may carry out an investigation in theforeign territory provided they have given notice and there is no objection. Faced withnon-cooperation, art 12.7 provides that a determination "may be made on the basis ofthe facts available".[133] The DCD Act gives effect to the art 12 requirements for notice to the foreignGovernment and interested parties and the opportunity to make submissions. It doesnot expressly provide for the investigating authority to satisfy itself of the accuracy ofinformation supplied, nor to conduct investigations in the foreign territory. It requiresthe investigating authority to initiate an investigation only if there is "sufficientevidence" the subject goods are subsidised and that is causing or threatening materialinjury to an industry and to terminate an investigation if it is satisfied there isinsufficient evidence of these things.[134] The DCD Act anticipates non-cooperation may lead to insufficient informationas to the amount of any subsidy. Section 7(5) provides:Where the Secretary is satisfied that sufficient information has not beenfurnished or is not available to enable the amount of the subsidy to beascertained for the purposes of this Act, the amount of the subsidy shall besuch amount as is determined by the Secretary having regard to all availableinformation that the Secretary considers to be reliable.[135] This appears to relate only to the amount of the subsidy once it has beendetermined that a subsidy exists. However the decision could be that the Secretary isnot satisfied on the reliable available information that there is a subsidy and thereforethe amount of the subsidy is zero. Read in its context and consistently with theinternational regime, s 7(5) allows the Secretary to decide whether there is a subsidyand if so the amount of the subsidy "having regard to all available information that theSecretary considers to be reliable". Similarly, when determining whether subsidisedgoods are causing or threatening material injury, under s 8(3), the Secretary "maydisregard any information that the Secretary considers to be unreliable". Theseprovisions are the domestic versions of arts 12.5 and 12.7.[136] There is no domestic case law on s 7(5). There is WTO guidance on art 12.7.In DS299 the EC had imposed countervailing measures on products exported fromKorea. Korea requested the WTO Panel to examine whether the EC had actedinconsistently with the SCM Agreement.78 One of Korea's challenges concerned theEC's use of "facts available". This was in circumstances where the EC concludedKorea had not cooperated with the provision of information and the EC relied onsecondary sources such as press releases, the presence of a government official at animportant meeting with the Korean producer of the goods, and letters concerningmeetings of Economic Ministers. Korea's challenge to this was rejected.[137] The Panel said that art 12.7 allowed an authority to continue with aninvestigation and make determinations based on the "facts" that are "available" to theinvestigating authority when an interested party or Member has not provided78 European Communities – Countervailing Measures on Dynamic Random Access Memory Chipsfrom Korea WT/DS299, 17 June 2005 (Report of the Panel). Referred to as DS299.necessary information or has significantly impeded the investigation.79 The Panel alsoconsidered that adverse inferences could be drawn from non-cooperation, saying:80In our view, it is not unreasonable of an investigating authority to read theinformation which was withheld from it in light of such non-cooperation. Inother words, in case the information is such that it could be read in more thanone way, we can accept that the failure to cooperate with the authority is animportant element in tilting the balance towards a reading of this informationwhich is less favourable to the interested party that was withholding theinformation. At the same time, we hasten to add that we are of the viewthat facts available should not be used as a punishment, and that non-cooperation does not allow an investigating authority to simply use theinformation available which leads to the worst possible result for the interestedparty that failed to provide such information. Ultimately, the determinationstill has to be based on the facts that are available, not on mere inferences.[138] This approach has been confirmed by the WTO Appellate Body.81 Forexample, in DS436 the Appellate Body confirmed that art 12.7 was not to be used topunish non-cooperating parties by choosing adverse facts for that purpose.82Determinations under art 12.7 must be based on available "facts".83 The AppellateBody also said that "all substantiated facts must be taken into account".84 The factsavailable are those that are reasonable replacements for the missing information. Inevaluating this:85 an investigating authority may be called upon to draw inferences from theevidence before it in order to reach a conclusion the drawing of an inferenceto reach a conclusion on the veracity of the evidence, including from therefusal to provide information, is "an ordinary aspect of the task of all panelsto determine the relevant facts of any dispute involving any coveredagreement".[139] The WTO approach to art 12.7 is consistent with the requirement of DCD Acts 7(5) that where information has not been provided, the investigating authority is tohave regard to "all available information the Secretary considers to be reliable". MBIEis to replace the missing information with other facts that are available if they arereasonable replacements for that information. This involves evaluating the reliability79 At [7.245].80 At [7.80].81 See also Mexico – Definitive Anti-Dumping Measures on Beet and Rice – Complaint with Respectto Rice WT/DS295/AB/R; 29 November 2005 (Report of the Appellate Body) (referred to asDS295) and DS437.82 DS436 at [4.419].83 At [4.417].84 At [4.419].85 At [4.420].of the facts that are available. It is a legitimate part of that evaluative exercise to useinferential reasoning when information which could have, but has not, beenprovided.86Advice to the Minister about non-cooperation in MBIE's investigation[140] As noted earlier, the Final Report was accompanied by a Briefing for theMinister. That Briefing summarised NZ Steel's concerns with MBIE's analysis. Indoing so MBIE informed the Minister it had received a questionnaire response fromone cooperating exporter but not from the remaining exporters. MBIE also informedthe Minister the response from the GOC "was of a general nature only".[141] The Briefing went on to discuss that:The New Zealand legislation requires MBIE to consider all informationavailable to it that it considers is reliable. ...MBIE's approach is to consider the reliability of each piece of informationindividually and make recommendations based on the totality of theinformation before it. MBIE is able to look at circumstantial evidence and todraw inferences from.MBIE has based its assessments on formation from a variety of sources, andits conclusions reflect a careful evaluation of the reliability that can beattached to them, as they relate to the circumstances of the case before it.[142] The Final Report also discussed this issue as follows:(a) The GOC's response provided "general comments" and it had"claimed" it could not provide specific responses due to the expectedlack of cooperation by Chinese producers with the investigation.87(b) A detailed response had been received from Zong Cheng includingspecific comments on the alleged subsidy programmes. MBIE had not86 Inferential reasoning, in particular the drawing of adverse inferences where a party fails to callevidence that they would be expected to call, is an accepted principle of evidence in this countryas explained in Ithaca (Custodians) Ltd v Perry Corporation [2004] 1 NZLR 731 at [153]-[154]per Glazebrook J (with Gault P, Blanchard and Anderson JJ agreeing).87 The Final Report did not comment on whether it accepted the GOC could only provide generalcomments, nor whether it regarded the GOC as having cooperated with the investigation.conducted a verification visit of Zong Cheng but such a visit was notmandatory under the DCD Act nor the SCM Agreement.(c) The extent to which the information from Zong Cheng could beconsidered reliable was to be assessed in the context of the informationavailable.(d) The absence of responses from any other Chinese producer "mayreflect the comparative insignificance of exports to New Zealand in thecontext of a manufacturer's total business".88(e) The lack of responses "materially affect[ed] MBIE's ability to sourceinformation and to draw appropriate conclusions relating to the level ofsubsidy that might be applicable".89(f) It was necessary to make "a judgment on the reliability of theinformation before it, and use the best information that is available to itin order to reach a conclusion".90[143] There can be no issue with MBIE's description of the limited information ithad received. Nor is there any issue with MBIE's advice that it was necessary to forma judgment on the reliability of the information it had and to use the best informationavailable to it. Missing from its advice was whether any inference might be drawnfrom the GOC's limited responses and the non-responses from all of the Chineseproducers except Zong Cheng. MBIE suggested a reason for why the Chineseproducers may not have responded. It did not suggest the alternative possibility thatfull responses would have disclosed subsidies.[144] It was open to MBIE to take the view that the comparative insignificance ofthe New Zealand market was a plausible explanation for why they received suchlimited responses to its questionnaires. Because of that plausible possibility, it did notnecessarily follow that full responses from the GOC and the other Chinese producers88 MBIE Final Report at [180].89 Above.90 Above.would have disclosed subsidies. However it was also possible that non-cooperationwas because cooperation would have disclosed subsidies. Without cooperation MBIEhad a limited basis on which to assess the reliability of the information from the GOCand Zong Cheng and, outside of their responses, limited directly relevant informationfrom its investigation.[145] This raises the question of whether the Minister was properly informed aboutthe overseas investigations as a potentially important secondary source of informationby MBIE, and whether this meant the Minister was not properly informed about them.Advice to Minister about overseas investigations[146] The Briefing to the Minister commented on the findings of other jurisdictionsas follows:15. This finding differs from the findings made in similar investigations,including by the authorities of the United States and Australia. Theseauthorities have previously determined that the Government of Chinais subsidising galvanised coil, and have subsequently imposedcountervailing duties.16. Many of these findings from overseas jurisdictions were based on"adverse facts available". The authorities inferred from the lack ofcooperation of Chinese exporters that subsidisation was occurring.17. The Final Report contains extensive analysis of the findings fromother jurisdictions as they relate to each alleged subsidy at section fourof the Final Report.[147] The Briefing identified that one of NZ Steel's key concerns was "MBIE'sdeviation from findings in other jurisdictions, which made use of 'adverse factsavailable'". The Briefing commented that:Other jurisdictions often take the stance to assume the worst when faced withincomplete information, and use adverse inferences when analysing theinformation available.[148] The Briefing made it clear that MBIE was not taking that approach. It said:With regard to the information relating to Australian and US investigationsinto similar products, MBIE notes that widely differing subsidy rates werefound for the same Chinese manufacturers, e.g. Australia determined that thesubsidy margin for Angang was negligible, while the US determined it to be240.07 per cent, and for YPC the respective rates were 5.2 per cent and39.05 per cent. While these differences may reflect the particular situationsof each investigation, they do illustrate the need for caution in assessing thereliability of the information derived from those sources.[149] The Briefing referred the Minister to the Final Report for "further commentabout MBIE's use of information available to it, see paragraphs 166-172". In thoseparagraphs the Final Report said:91 care needed to be taken in assessing the use of information frominvestigations and findings of counterpart authorities. While MBIEconsidered this information provided a sufficient basis for initiating aninvestigation into the existence of subsidisation, it should be noted that manyof the findings of counterpart authorities were based on use of AFA [adversefacts available] arising from the alleged failure of Chinese parties to provideinformation to the investigating authorities.With regard to the information relating to Australian and US investigationsinto similar products, MBIE notes that widely differing subsidy rates werefound for the same Chinese manufacturers, e.g. Australia determined that thesubsidy margin for Angang was negligible, while the US determined it to be240.07 per cent, and for YPC the respective rates were 5.2 per cent and 39.05per cent. While these differences may reflect the particular situations of eachinvestigation, they do illustrate the need for caution in assessing the reliabilityof the information derived from those sources.In considering the reliability of the information available to it, MBIErecognises the need for care in that non-cooperation from interested partiesshould not be rewarded or encouraged. MBIE notes that in DS436 the Paneland the Appellate Body found (for different reasons) that the US rules on theuse of adverse inferences in the case of non-cooperation were not inconsistent'as such' with the Subsidies Agreement. However, the Panel found that in asignificant number of instances the application of the rules was not consistentwith the Subsidies Agreement. This suggests that there can be issues aboutthe reliability of findings which rely on AFA in situations where it is claimedthat parties are not cooperating.Accordingly, MBIE has based its assessments on information from a varietyof sources, and its conclusions reflect a careful evaluation of the reliabilitythat can be attached to them, as they relate to the circumstances of the casebefore it.[150] In summary MBIE's advice to the Minister was that overseas investigationsrelied on AFA reasoning and this affected the reliability of the subsidies they hadfound. I now consider how this advice influenced MBIE's conclusions on the subsidyprogrammes being investigated. This is in order to assess NZ Steel's claim theMinister made her decision without regard to relevant considerations.91 At [169]-[172].Policy loans(i) The Final Report's assessment of policy loans[151] The Final Report considered whether Chinese producers of the subject goodsreceived benefits by way of policy loans from the GOC or other public bodies. Itaccepted the Chinese producers obtained bank loans to finance their operations. Theissues were whether the banks providing loans were public bodies and if so whetherthere was any specific benefit to the Chinese producers from these loans.[152] In considering these issues the Final Report referred to information from thefollowing sources: NZ Steel's application; the information provided by the GOC;information provided by Zong Cheng; information from publicly available websites;information in Baosteel's 2015 annual report; and the findings of Australian, EC andUnited States investigations.[153] The Final Report discussed various legal instruments issued by the GOC whichidentified areas of the economy supported by the State. These instruments providedthe following information:(a) The Steel Plan issued by the NDRC in 2005 identified the steel industryas an important basic industry and set out policies for its development.Financial institutions were to grant loans to support investment projectsthat were in the "encouraged" category in line with credit grantingprinciples, and such projects were also to be supported by preferentialtaxation policies.(b) The 12th Five-Year Plan covering 2011-2015 mentioned relocation,mergers and reorganisation relating to the steel industry and some steelactivities as being key fields of development.(c) The 13th Five-Year Plan covering 2016-2020 referred to steel only inrelation to the need to address over-capacity, environmental objectivesand international cooperation.(d) The 2013 Guidance Catalogue identifies sectors in the economy thatare "encouraged", "restricted" or "permitted". Corrosion resistant steelis an encouraged activity.[154] MBIE considered galvanised steel coil was a subset of corrosion resistant steel.It was therefore likely to benefit from credit support (as well as exemptions from tariffson imported equipment or other benefits that derive from "encouraged" status).[155] Principally, it seems, from the publicly available sources, the Final Reportdiscussed information about the Chinese banks. It distinguished between the People'sBank of China (PBOC), SOCBs and "policy banks". It was satisfied the PBOC was apublic body but that it was not supplying any loans to the Chinese producers. It wasnot satisfied the SOCBs were public bodies and it therefore did not consider thesubsequent question of benefit or specificity. It was satisfied that the policy bankswere public bodies but that the specific benefit to the Chinese producers was"extremely negligible".[156] In deciding whether the SOCBs were public bodies, the Final Report discussedthat four very large SOCBs were established in the 1980s to grant credit to key sectors:the Agricultural Bank of China (ABC), the Bank of China (BoC), the ChinaConstruction Bank (CCB) and the Industrial and Commercial Bank of China (ICBC).Since the establishment of policy banks in 1994, all four banks have been commercialbanks that concentrate on corporate lending. There was information about reducedlending to the steel industry about two of these banks: in ABC's case this was due toits "green" credit goals set in 2016; in CCB's case, its 2016 annual report referred tocontinuing to reduce credit to steel and other industries with excess capacity. All ofthem had been listed on the Shanghai and Hong Kong stock exchanges between 2006and 2010.[157] The Final Report discussed that Central Huijin Investment Limited (Huijin), agovernment entity, is a major shareholder in each of these banks. Baosteel's 2016annual report described Huijin as exercising its rights and fulfilling its obligations asan investor on behalf of the state. It also stated that Huijin did not intervene in thedaily operation of these institutions. Information from the websites and financialreports referred to SOCBs support of government policies.[158] The Final Report referred to some of the overseas investigations. In discussingthem it noted that in the absence of information from the GOC those investigatingauthorities "relied on best information available to determine the existence and extentof any subsidisation".92 It also noted:(a) ACBP 193 (Gal) was "based on best information available".93(b) EC 2013 (OCS), an investigation into organic-coated steel from China,had found the exporting producers were receiving concessional loansbased on "the totality of the facts available" in view of a lack ofcooperation from the GOC and exporting producers.94(c) In DS379 the WTO Appellate Body had upheld the USDOC's findingthat SOCBs were public bodies. This concerned USDOC'sinvestigations in 2007-2008 and in MBIE's view this did notnecessarily mean Chinese SOCBs will always be treated as publicbodies.95(d) In USDOC 2016 (CRS), an investigation into corrosion-resistant steelfrom China, the USDOC was not satisfied that the substantial changesto China's banking laws had in fact resulted in changes.[159] The Final Report noted that SOCBs were not public bodies simply becausethey were owned by the State or because directors and senior management positionswere often members of the Communist Party of China (CPC). Nor was it sufficientthat the large SOCBs' activities were consistent with general government policies.There was no evidence providing positive confirmation that SOCBs exercisedgovernmental authority or functions, or were subject to meaningful control by the92 At [219].93 At [237]. Although the Final Report referred to this decision when discussing SOCBs, ACBP 193(Gal) was not about SOCBs.94 At [230].95 This investigation relates to goods that are not relevant to the present case.government, rather than acting in accordance with government policy. Nor was therepositive evidence linking any particular commercial bank with concessional loansprovided to any of the manufacturers of galvanised steel coil exported to New Zealand.It was therefore not established that SOCBs were public bodies.[160] As noted, the Final Report formed a different view about the policy banks. Thepolicy banks discussed in the Final Report were the Agricultural Development Bankof China (ADBC), the Export-Import Bank of China (EXIM), and the ChinaDevelopment Bank (CDB). MBIE described these banks as having taken over projectsfor development purposes. The websites of these banks provided the followinginformation:(a) The EXIM was a state bank solely owned by the GOC and under thedirect leadership of the state council. Its main mandates did not relateto the production of galvanised steel coil exported to New Zealand.96(b) The CDB is under the direct leadership of the state council. The majorshareholders are the Ministry of Finance, Huijin, and another companyowned by the State Administration of Foreign Exchange. It providesfinancing facilities "that serve China's major long-term economic andsocial development strategies". It allocates its financing resources tosupport basic and pillar industries (amongst other things).(c) The ADBC took over the policy lending function from the ABC. It isa state-owned agricultural policy bank under the direct administrationof the state council. It is funded mainly from borrowing from theCentral Bank and operates primarily, but not exclusively, in theagricultural sector.96 Its main mandates are to facilitate the export and import of Chinese mechanical and electronicproducts, complete sets of equipment and new and high-tech products, assist Chinese companieswith comparative advantages in their offshore project contracting and outbound investment, andpromote international economic cooperation and trade. It also grants government concessionalloans to support other developing countries with concessional funding.[161] MBIE concluded the policy banks were public bodies. It considered there wasevidence from Baosteel's Annual Report of loans from the Central Bank. This wasnot the PBOC according to the GOC. MBIE said that "in the absence of informationfrom [Baosteel]" it was assuming this was a loan from one of the policy banks.97[162] In assessing whether the Chinese producers received a benefit from loansprovided by policy banks, MBIE referred to the subsidy rates found in EC 2013 (OCS)and USDOC 2016 (CRS). It also discussed the information from publicly availablesources concerning Baosteel. It considered the benchmarks used in the EC andUSDOC investigations were not appropriate because of Baosteel's credit rating. Evenassuming Baosteel paid no interest, the benefit it received would have been 0.005 percent. This was too low to be meaningful.(ii) Information from overseas investigations on SOCBs[163] MBIE's advice to the Minister that SOCBs were not public bodies did not placeany weight on the findings of overseas investigations. ABCP 193 (Gal) was not aboutSOCBs so for present purposes this can be put to one side. MBIE was entitled to placeno weight on the USDOC findings considered in DS379 given the findings weresomewhat historic. Of more potential relevance were EC 2013 (OCS) and USDOC2016 (CRS).[164] In EC 2013 (OCS) the EC received cooperation from some of the exportingproducers but not from others. From the cooperating producers it selected theexporting producers that had the highest volume of exports to the EC. These formedthe basis for its conclusions for all the cooperating producers. As part of itsinvestigations, the EC conducted verification visits to the Chinese sites of the selectedcooperating producers. The GOC provided some information and the EC alsoconducted a verification visit with the GOC. The GOC did not provide informationrelating to the cooperating producers not selected by the EC for its sample nor for thenon-cooperating producers. In the absence of information about the non-cooperatingproducers the EC considered the subsidised schemes available to the sampled97 An example of MBIE legitimately drawing an adverse inference similar to overseas investigations.cooperating producers were also available to the non-cooperating producers on a "bestfacts available" basis.[165] The EC considered the GOC had been non-cooperative about whether therewere preferential loans and interest rates for the organic coated steel industry.98 TheEC resolved to refer to secondary information. The Commission relied on sourcessuch as WTO policy reviews, Deutsche Bank banking sector reviews and informationfrom the World Bank. The information established that: the SOCBs held the highestmarket share and were the predominant players in the Chinese financial market; thefive largest SOCBs (namely, the ABC, the BoC, the CBC, the Bank ofCommunications, and the ICBC) represented more than half of the Chinese bankingsector; the great majority of loans provided to the cooperating exporting producerswere from the SOCBs (including the BoC, the CBC and the ICBC); and there wasevidence of intervention by the State in the way SOCBs made decisions on interestrates for loans granted to Chinese companies. The EC considered there was "a greatdeal of circumstantial evidence, supported by objective studies and reports, that a largeamount of government intervention is still present in the Chinese financial sector".99The EC concluded that the SOCBs were public bodies.[166] The EC's use of secondary sources was a legitimate "best facts available"evidential basis on which to make its determination. It is not the same as makingassumptions adverse to a party simply, or assuming the worst, because they have notcooperated. Of particular interest to MBIE's investigation is that the BoC, the CBCand the ICBC are three of the four SOCBs that MBIE discussed and concluded werenot public bodies. Other than the "totality of the facts available" comment, MBIEdoes not articulate a reason for placing no weight on the EC's finding and coming tothe opposite determination.[167] The USDOC's approach to non-cooperation is as follows:10098 The EC sought information from the GOC about its role in the Chinese banking sector andspecifically about its majority- or full-ownership of such banks. The GOC responded that it didnot have any such information and the EC states in its report that this was deemed as non-cooperation because it is unlikely that the GOC is not aware of assets that it owns or does not own.The EC noted that much of the requested information was not provided.99 EC 2013 (OCS) at [169].100 USDOC 2016 (CRS) at pp 7-8.[The relevant US] Act provides that the Department shall apply "factsotherwise available" if necessary information is not on the record or aninterested party or any other person [fails to cooperate] [T]he Act further provides that the Department may use an adverseinference in selecting from among the facts otherwise available when a partyfails to cooperate by not acting to the best of its ability to comply with arequest for information. Further, [the Act] states that an adverse inference mayinclude reliance on information derived from the petition, the finaldetermination from the investigation, a previous administrative review, orother information placed on the record. When selecting an adverse rate fromamong the possible sources of information, the Department's practice is toensure that the rate is sufficiently adverse "as to effectuate the statutorypurposes of the adverse facts available rule to induce respondents to providethe Department with complete and accurate information in a timely manner".The Department's practice also ensures "that the party does not obtain a morefavourable result by failing to cooperate than it had cooperating fully."[168] This deals with two different points. The first is that non-cooperation may leadthe authority to rely on secondary sources. The second is that when deciding upon therate of a subsidy from the possible sources of information, the USDOC will make anadverse inference and select a rate that ensures the non-cooperating Member state doesnot benefit from its non-cooperation.[169] The first of these points is legitimate and unobjectionable decision making. Itis making a decision in the absence of primary information by referring to othersecondary sources of information in order to make an accurate determination. MBIEneed not have had any reservation about relying on a decision that has taken thisapproach merely because of this. The second of these involves a policy choice. Itresults in higher subsidy rates than other approaches to how rates might be set in theface of non-cooperation. It is reasonably open to investigatory authorities to havedifferent views about whether this approach is appropriate for their jurisdiction (solong as it does not transgress into punishment, as identified in DS299). It was open toMBIE to discount USDOC findings about subsidy rates that had taken this approach.[170] USDOC 2016 (CRS) determined that SOCBs were public bodies providingsubsidies. This determination was made on the basis of secondary sources, not on anadverse inference or "assuming the worst" basis. USDOC considered:(a) There had been an insufficient period since regulatory reforms in theChinese banking sector had been made to see if they had actuallyresulted in changes. The record did not provide any evidence ofchanges.(b) There was no evidence to contradict its earlier findings that the bankingsector did not operate on a commercial basis and was subject tosignificant distortions. These distortions were primarily from theGOC's dominant role in the financial sector and its use of the banks toeffectuate policy objectives.(c) The Steel Plan specifically encouraged financial institutions to complywith development policies for the steel industry, including producers ofcorrosion resistant steel.(d) The 12th Five Year Plan required government entities to coordinatefinance policy towards the development of the corrosion resistant steelindustry.[171] The USDOC 2016 (CRS) finding that SOCBs were public bodies was relevantinformation. In making its public body finding it had not made adverse assumptionsbut merely relied on secondary sources of information. The USDOC 2016 (CRS)investigation period (1 January 2014 to 31 December 2014) pre-dated MBIE'sinvestigation (1 July 2015 to 30 June 2016) although not by a great deal. MBIE'sFinal Report did not identify what had changed in that time such that no weight shouldbe placed on the findings.[172] I conclude that USDOC 2016 (CRS) and EC 2013 (OCS) were relevantsecondary sources of facts available. MBIE gave them no weight. The Minister wouldhave understood from MBIE's advice that this was because these investigations hadused an AFA approach, which involved "assuming the worst". This was not anaccurate statement of the basis on which these investigations had concluded thatSOCBs were public bodies. In fact, MBIE had taken a similar approach to thoseinvestigations in concluding that policy banks were public bodies.101 The advice tothe Minister that SOCBs were not public bodies was flawed in this respect.101 See discussion at [161] above.[173] Whether MBIE would have found that SOCBs were providing benefits to theChinese producers of the subject goods at a meaningful level is not known had itconfined its consideration to USDOC 2016 (CRS) and the EC 2013 (OCS).102 Its viewon loans from "the policy banks" suggests it would not have. However, as thecomparison table above shows, there were a number of other investigations which hadfound that Chinese-produced steel products received benefits from SOCBs at ameaningful level. Because MBIE had such limited direct information from which tomake its assessment, those other investigations potentially provided relevant andreliable information. That was particularly so if any of them had considered theChinese producers of the subject goods in this case and if those producers hadcooperated with the investigating authority.(iii) Particular relevance of EC 2017 (HRS) to policy loans issue[174] As it happened, a day before MBIE released its Essential Facts andConclusions report, the EC 2017 (HRS) report was given. The subject goods of thisinvestigation were hot rolled flat products of iron, non-alloy or other alloy steel fromChina. The EC selected the largest four of the nine Chinese producers whose goodswere exported to the EC for its investigation.103 These four included the ShougangGroup. The selected four producers, including the Shougang Group, replied to theEC's questionnaire. The EC also conducted verification visits at the producers'premises. This included visits to nine sites in China and Hong Kong operated by theShougang Group, including a visit to the Chinese site of the Shougang entity thatproduces galvanised steel coil supplied to New Zealand.104[175] The investigation considered policy loans. As discussed above, the FinalReport drew a distinction between policy banks (CBD, EXIM and ADBC)) andSOCBs (the ABC, the BoC, the CCB and the ICBC). It found that the policy bankswere public bodies but this was not established for the SOCBs (the ABC, the BoC, theCCB and the ICBC). The EC made no such distinction. It sent questionnaires to the102 It is true that the USDOC 2016 (CRS) had employed an adverse assumption approach todetermining subsidy rates (albeit not to its public body finding).103 The EC's approach is to select a sample from which it draws conclusions about others. The GOCand producers are able to make submissions about the appropriateness of the sample. Havingconsidered the submissions it received, the EC concluded its sample was appropriate.104 Refer above at [46].GOC about the CDB, the ADBC, the EXIM, the ABC, the BoC, the CCB and theICBC. It also asked to forward the questionnaire to any other financial institution fullyor partially owned by the GOC.[176] The GOC contacted only EXIM, ABC, the BoC, CCB and ICBC and thesebanks provided responses. The GOC said the others operated independently. Theresponses from EXIM, ABC, the BoC, CCB and ICBC did not provide any specificinformation about loans to the sample producers. Nor did the EC receive responsesfrom the other thirty state-owned banks who provided loans to the four sampleproducers. The EC then conducted site verifications of EXIM, ABC, the BoC, CCBand ICBC. It described all five as "state-owned banks". These banks accounted for asubstantial part of the loans granted to the four producers. For the Shougang Groupthey accounted for 80 to 95 per cent of its loans.[177] The EC reviewed China's laws, plans and guidelines and concluded the GOChad created a normative framework that had to be adhered to by the managers andsupervisors of the banks. It used this framework to "exercise control over the conductof the five cooperating state-owned banks whenever those were providing loans to thesteel industry".105[178] The EC then looked for "concrete proof of the exercise of control in ameaningful way on the basis of concrete loans".106 The five banks would not providetheir specific credit risk assessments. However, from the verification visits, the ECestablished that, with few exceptions, loans were provided to the four producers atinterest rates close to the benchmark rates of the PBOC regardless of the producer'sfinancial and credit risk situation. In other words, the "loans were provided belowmarket rates when compared to the rate corresponding to [their] risk profile".107 Allfour producers had also received revolving loans which allowed them to immediatelyreplace the capital of the loan at the maturity date with fresh capital from new loans.In Shougang's case, payment schedules were restructured or debt was forgivenbecause of financial difficulties. For one entity in the Shougang Group, the GOC had105 EC 2017 (HRS) at [120].106 At [121].107 At [123].intervened to enable a debt restructuring against the financial institution's betterjudgment.[179] The EC investigation concluded that:108[T]he GOC has exercised meaningful control over the conduct of the fivecooperating state-owned banks with respect to their lending policies andassessment of risk, where they provided loans to the steel industry.[180] The five banks were therefore "public bodies". In the steel sector, the legalframework was being implemented in the exercise of governmental functions. Thisconclusion was not based only on the formal indicia of control. It was also based onthe examination of meaningful control actually exercised.109[181] The EC investigation reviewed the loan information relating to each of the fourproducers. This included detailed comments on the financial position of the ShougangGroup, which was "in a generally difficult financial position".110 It determinedsubsidy rates for all four producers for preferential loans. Of the four, the subsidy ratefor the Shougang Group was highest at 27.91 per cent (made up of 27.17 per cent fromthe SOCBs and 0.74 per cent from other financial institutions).(iv) MBIE's consideration of EC 2017 (HRS)[182] MBIE considered EC 2017 (HRS) in Annex one to the Final Report.111 Annexone said the EC's conclusions on policy loans did not warrant a different approach tothat set out in the Essential Facts Report because:(a) MBIE had concluded that policy banks were public bodies but that thebenefit from loan assistance was too low to be meaningful.(b) The EC's conclusions on policy loans were based on AFA.108 At [128].109 The EC went on to explain why these conclusions should apply to the other 30 SOCBs (includingthe China Development Bank). In summary this was because they had similar ownership andstructure, were subject to the same framework and the loans from the five banks considered wereall similar.110 EC 2017 (HRS) at [206].111 Annex one was concerned with comments on MBIE's Essential Facts Report. EC 2017 (HRS)report was received after the Essential Facts Report.(c) In the brief time MBIE had to consider the report, it did not change itsview.[183] These reasons do not address the fact that the EC had reached a directlycontrary view to the Final Report on the four SOCBs considered in that report. TheEC had concluded they were public bodies whereas the Final Report concluded thiswas not established. Moreover, MBIE's advice to the Minister that the EC'sconclusions were based on AFA was wrong. Although the EC had a degree of non-cooperation from the GOC and, to some extent, the SOCBs, the EC conductedverification visits where it obtained details of the loans to the four selected producers.MBIE did not mention that one of the four selected producers was the ShougangGroup, there had been a verification visit to the Shougang entity at issue here, and theShougang Group was found to have received material benefits from policy loans.[184] I appreciate MBIE was in a difficult position. A determination is to be madewithin 180 days after the investigation was initiated. In this case that meant a deadlineof 9 July 2017. EC 2017 (HRS) was dated 8 June 2017. NZ Steel forwarded the reportto MBIE on 23 June 2017. If, on the basis of EC 2017 (HRS), MBIE was going tomaterially alter its views as set out in its Essential Facts and Conclusions Report itwould have needed to give the GOC an opportunity to comment first. There was avery compressed time to do this within the 180 day period.112[185] On the other hand, MBIE had the responsibility for carrying out theinvestigation. It could have been keeping itself up to date on relevant overseasdevelopments; it did not need to wait for NZ Steel to provide EC 2017 (HRS).Moreover MBIE could have said that in the time available it was not in a position toassess whether EC 2017 (HRS) altered any of its views and it was therefore makingits decision without reference to it. NZ Steel says this would have left EC 2017 (HRS)as new information able to be considered if a fresh application were to be made.113112 As to investigation timeframes and consultation obligations under the DCD Act, see the recentdecision of Dobson J in Heinz Wattie's Ltd v MBIE [2018 NZHC 2309, particularly at [37], [38]and [69]-[73].113 NZ Steel suggests that if MBIE did not have enough time to consider EC 2017 (HRS) and obtainthe GOC's views on it, one option might have been to invite NZ Steel to withdraw its applicationunder s 11(1)(d). The Secretary could then initiate a further investigation under s 11(3). In myHowever, because MBIE did consider EC 2017 (HRS) and said it did not alter itsconclusions, a fresh application on the basis of it would be pointless.[186] I do not agree that a fresh application would have been pointless given thatMBIE's views about EC 2017 (HRS) were caveated by "in the time available".Additionally such an application could be supported by further new information suchas the EC Staff Working Document issued on 19 December 2017.114 This report wasprepared on the basis that the EC had "well-founded indications of the possibleexistence of significant distortions" in China or sectors within China. The reportexamined a number of sectors including the steel industry. Its summary of this sectorincluded the following comments:115 The government guides the development of the sector in accordance witha broad range of policy tools and directives related, inter alia: to marketcomposition and restructuring, raw materials, investment, capacityelimination, product range, relocation, upgrading, etc. Through these andother means, the government directs and controls virtually every aspect in thedevelopment and functioning of the sector. The different plans also show thatSOEs will be a key instrument through which the government envisagesdeveloping the steel sector in the coming years SOEs serve thegovernment's strategic industrial policies In addition, the financialinstitutions, in particular those that are state-owned, play a key role inimplementing the government's policies in the steel sector. [187] I am satisfied that the advice to the Minister on the relevance of overseasinvestigation findings to the assessment of whether the Chinese producers of thesubject goods received subsidisation through policy loans was inadequate. Iterroneously advised the Minister that they used an AFA approach. This was not thecase on the issue of whether SOCBs were public bodies and only partially correct inrelation to the subsidies found. The advice about EC 2017 (HRS) was wrong. Thiswas especially material because: it discussed the same banks considered by MBIE; itconsidered one Chinese producer common to MBIE's investigation; and theinvestigation period in EC 2017 (HRS) partly coincided with the period investigatedby MBIE. The EC 2017 Staff Working Document similarly indicates the error wasview it is not clear whether this course would have enabled the Secretary to initiate a furtherinvestigation.114 European Commission Commission Staff Working Document on Significant Distortions in theEconomy of the People's Republic of China for the Purposes of Trade Defence Investigations(19 December 2017). Referred to as EC 2017 Staff Working Document.115 At [14.6].material in the sense that a different decision was possible if the correct test wasapplied.Inputs to LTAR(i) MBIE's advice on input materials[188] The Final Report considered the relevant input materials were hot rolled coil,cold rolled coil and zinc.116 The information supporting the conclusion that suppliersof these inputs were not public bodies came from the GOC, Zong Cheng and publiclyavailable information:(a) The GOC said that input producers in China are independent businessentities operating on a commercial basis. Input producers are bound tocomply with company law and key provisions of this law include thatthe shareholders' meetings determine the significant operational issuesand plans for the company.(b) Zong Cheng confirmed it purchases hot rolled coil, cold rolled coil andzinc. It provided a list of its suppliers. These were government-ownedcompanies. Zong Cheng said it paid market prices for the goods. Ananalysis of the prices paid indicated they were not inconsistent withprices available in the Chinese market.(c) Angang, Baosteel and Shougang are integrated steel producers and sodo not purchase inputs from other suppliers. According to Angang's2016 annual report and Baosteel's 2015 annual report, market pricesapply to connected party transactions.[189] The overseas investigations supported the opposite conclusion to the onereached by MBIE. As to these, the Final Report said:117116 NZ Steel's application had also referred to aluminium but MBIE had confirmed that the goods donot include aluminium.117 The Final Report did not discuss the Canadian investigations although they had been referred toNZ Steel's application(a) USDOC 2016 (CRS) found that companies producing hot rolled steel,cold rolled steel and zinc purchased by YPC were public bodies. Forthe remaining producers the GOC had failed to cooperate and soUSDOC determined they were public bodies was on the basis of"AFA".(b) The ADRP 2013 (Gal) overturned the conclusion of the ACBP 193(Gal) that SIEs that produced and supplied hot rolled coil to Chineseproducers of coated steel were public bodies.(c) Although AADC 322 (Reb) disagreed with ADRP 2013 (Gal) andfound that Chinese suppliers of inputs could be considered to be "publicbodies", MBIE did not agree with AADC 322 about the relevant WTOdecision on which the AADC's decision was based. MBIE alsodisagreed with the approach in AADC 322 of finding that a verticallyintegrated firm could provide inputs to itself at LTAR because thatapproach risked double counting.(d) EC 2013 (OCS) considered that SOEs producing hot rolled and coldrolled coil were public bodies. They often "performed governmentfunctions" described in the steel plans and "it was a fact that the GOCis using the iron and steel industry as a prolonged arm of the state inorder to achieve goals and targets set in those plans".118 The EC alsodiscussed the government control over the SOEs. The EC's views werebased on publicly available information and information from otherinvestigations because limited information had been provided by theGOC.[190] MBIE concluded that SIEs supplying hot rolled coil, cold rolled coil and zincas inputs into the production of galvanised steel coil were not "public bodies". Thiswas particularly based on ADRP 2013 (Gal). MBIE considered the evidence did notshow the SIEs were supplying these inputs on the basis of any government directionor authority. The positive evidence, as provided by Zong Cheng, was that prices118 Final Report at [302].reflected market prices. Similar conclusions applied to any non-government-ownedsuppliers.[191] It can be seen that MBIE placed no weight on USDOC 2016 (CRS) becauseMBIE considered USDOC had used AFA. It placed no weight on ACBP 193 (Gal)because it had been overturned by ADRP 2013 (Gal). It placed no weight on AADC322 (Reb) because MBIE disagreed with its interpretation of the WTO decisions. Itplaced no weight on EC 2013 (OCS). This seems to have been because it wasconcerned about the reliability of that decision given the GOC's limited cooperationwith the EC's investigation. It did not discuss the Canadian decisions.(ii) Were the overseas investigations relevant[192] USDOC 2016 (CRS) concerned flat rolled steel products clad plated or coatedwith corrosion resistant metals. YPC was the only producer that cooperated with theinvestigation. It replied to USDOC's questionnaire and allowed a verification visit ofits premises. All the subsidies found for YPC were based on information obtainedfrom YPC except that for export buyers' credits. For that programme USDOCdetermined the subsidy using AFA. USDOC determined a subsidy for YPC of 23.74per cent for the provision of hot rolled steel, 2.11 per cent for the provision of coldrolled steel and 0.22 per cent for zinc. Given YPC had cooperated with theinvestigation, the advice to the Minister that the public body determination involvedAFA was possibly not entirely accurate.[193] As already discussed, MBIE's advice to the Minister about the test for publicbody as discussed in ADRP 2013 (Gal) and AADC 322 (Reb) was not correct. Thefindings in ACBP 193 (Gal) remained a potentially relevant source of information forMBIE's investigation. As to inputs at LTAR, ACBP 193 (Gal) said:119In the dumping investigations ACBPs found that the cost of HRC in the booksand records of Chinese manufacturers of galvanised steel and aluminium zinccoated steel did not reflect competitive costs. ACBPS found that the ironand steel industry in China was affected by a range of government influences,which affected the price of HRCACBPS considers that a number of factorshave affected the market for HRC in China and these would impactANSTEEL's price to Yieh Phui China (and other customers).119 ACBP 193 (Gal) at 52-53.ACBPS observes that ANSTEEL's domestic sales of HRC during theinvestigation period were at a loss and ANSTEEL as a whole operated at aloss during the investigation period. ACBPS also found that ANSTEEL wasin receipt of a number of capital injections from the Government of China bothduring, and prior to, the investigation period. This suggests that ANSTEELand its shareholder (the GOC) are not operating subject to ordinarycommercial considerations and that the price of HRC can be set independentlyof the costs of production, whether or not they are themselves subsidised.[194] The ACBP 193 (Gal) assessed overall subsidies for YPC and Zong Cheng at5.2 per cent and 10.3 per cent respectively. This was relevant information in thatAngang, YPC and Zong Cheng are three of the Chinese producers of the subjectgoods.120 Its usefulness to MBIE's investigation was diminished because theinvestigation period was around four years prior to MBIE's investigation period andbecause the report did not identify what proportion of the total subsidies was made upof inputs at LTAR. Advice to the Minister might have said that weight could not beput on ACBP 193 (Gal) for these reasons rather than because it had been overturnedby ADRP 2013 (Gal). Advice to the Minister might also have said that AADC 322was of limited relevance on this aspect of MBIE's investigation because the inputs atissue were billet and coke.[195] As discussed earlier, some of the producers of organic coated steel cooperatedwith the investigation in EC 2013 (OCS). The fact the EC had found that SIEsproviding hot rolled coil and cold rolled coil were public bodies was of some relevanceto MBIE's investigation. It was also of some relevance that the weighted averagesubsidy rate was 25.37 per cent for the cooperating producers (that is, well above anegligible level). MBIE might have considered little weight could be put on it becausethe information was dated and involved different producers than here, rather thanbecause it was not reliable given the limited cooperation from the GOC.121120 Angang appears to be the same company as within the same group as Ansteel.121 EC 2017 (HRS) investigation considered whether iron ore, coke and coking coal were inputsprovided at LTAR. The EC considered this was not established for any of these inputs. It did notconsider the inputs considered in this case.[196] CBSA 2016 (CAS) found that the SOEs supplying inputs were public bodies.The GOC had not cooperated so this finding was based on other material. CBSAconsidered:122 the GOC continues to direct, and administer the Chinese steel industrythrough its five-year plans on iron and steel, as well as steel pipe SIEs areeffectively performing a public policy function through their pursuit of stateplans and industrial and economic policies, thus supporting the indication thatSIEs and SOEs are in fact performing government functions. the CBSA determined that there is sufficient evidence that the GOCexercises meaningful control over state-owned steel suppliers and producers.Therefore, there is reason to believe that the SOE suppliers of raw materialsare "government" as they possess, exercise or are vested with governmentauthority [197] The CBSA further concluded that domestic prices in the Chinese flat rolledsteel sector, which included hot rolled coil, were not substantially the same as theywould be if they were determined in a competitive market. It went on to calculatesubsidies. Again, of relevance to MBIE's investigation is that this was anotherinvestigating authority reaching the same conclusion, on a legitimate factual basis, thatSIEs and SOEs supplying inputs such as hot rolled coil were public bodies.[198] MBIE's view that SIEs were not public bodies was material to its assessmentof the remaining programmes. The Final Report advised the Minister that if thesubsidies for inputs at LTAR were removed from the findings in USDOC 2016 (CRS)and EC 2013 (OCS), the rates established for other programmes in those investigationswere de minimis and were not significantly different from MBIE's conclusions.[199] Overall I consider the advice to the Minister incorrectly dismissed therelevance of overseas investigations because they had used AFA. The overseasinvestigations had consistently found that SIEs supplying hot rolled coil to Chineseproducers of steel products were public bodies and they had done so on legitimatefactual bases. There was also information indicating that hot rolled coil had beensupplied at less than cost through government influence. The important question forMBIE's consideration was whether there was a factual basis for concluding that122 Canada Border Services Agency Statement of Reasons concerning the final determination withrespect to the dumping and subsidizing of Certain Carbon and Alloy Steel Line Pipe Originatingin or Exported from the People's Republic of China (10 March 2016) at 56-57.something had or might have changed subsequent to these investigations. Thatquestion was not part of MBIE's advice to the Minister.[200] As it happened, information following the investigation indicates nothing haschanged. The EC 2017 Staff Working Document discussed the continuing role of theGOC in the steel sector. Further, ADRP 2018 (Hol), dated February 2018, upheld theAADC's view that a Chinese exporter, Tianjin Youfa, was the beneficiary of thesubsidies in the form of hot rolled steel provided by public bodies at LTAR. Thisincluded upholding the view that SIEs supplying hot rolled steel were public bodies.[201] ADRP 2018 (Hol) relied on findings in an earlier investigation, backgroundinformation about the Chinese hot rolled coil, the EC 2017 Staff Working Documentand the lack of a response by the GOC. As to the latter it commented that, if thesituation had changed in the period since the earlier investigation, it would be expectedthat the GOC would have provided information to support this. It also commentedthat findings in its earlier investigations could be relied on where they are reasonablyproximate to the inquiry period and include the product and manufacturers involvedin the inquiry. ADRP 2018 (Hol) therefore provides a useful confirmation that otherinvestigations may be relevant sources of information in the face of a lack ofcooperation.[202] In summary, MBIE's advice to the Minister did not properly inform her thatthere was a consistent international consensus, legitimately based on facts available,that SIEs supplying the inputs of relevance in this case were public bodies. Althoughthis consensus was somewhat dated, the question was whether there was reliableevidence that anything had changed. Advice in these terms was material because lateroverseas reports provide evidence that it had not.Land use rights[203] The Final Report accepted that land use rights were provided by a governmentor other public body. This was because all land in China is owned by the State or bypeasants' collectives, with municipal and county governments being responsible forallocating land use rights in accordance with legislative and regulatory requirements.The issues were whether the Chinese producers of the subsidised goods received landuse rights at LTAR (a benefit) and whether the prices they paid were specific to anenterprise or industry.[204] The Final Report concluded there was no countervailable subsidy by way ofgovernment provided land use rights at LTAR. In reaching this conclusion, MBIEconsidered the information from the GOC and Zong Cheng was the best availableinformation. The GOC had advised that it did not set the price of land use rightsspecific to any industry or region and the transfer of rights was based on marketprinciples. Similarly Zong Cheng had advised the price it paid was similar to the pricepaid by another business in the same locality engaged in a different business activity.The Final Report concluded that "there is no financial contribution provided by wayof the provision of land-use rights for LTAR".123[205] In reaching this conclusion MBIE said:(a) USDOC 2016 (CRS) had relied on "facts available" and the subsidy forYPC (one of the investigated manufacturers) of 0.36 per cent was basedon the benchmark of land values in Thailand from an earlierinvestigation;124(b) An Australian investigation (it does not identify which one) had foundthat land use tax exemptions for foreign-invested enterprises was not acountervailable subsidy;(c) EC 2013 (OCS) had used a benchmark from Taiwan, establishing ratesof subsidies of 0.73 per cent as the weighted average for cooperatingexporters and 1.36 per cent for non-cooperating exporters.[206] MBIE questioned the appropriateness of using land use rights prices fromanother jurisdiction as a benchmark for determining whether there was a benefit. Inthe end it considered the information from the GOC and Zong Cheng was the bestinformation available. I am not entirely clear why this was but infer it was partly123 MBIE Final Report at [281]. I understand this conclusion concerned whether there was a benefit,although MBIE appeared to have doubts about the specificity requirement as well.124 The Final Report referred to "YFC" but this appears to be a typographical error.because of MBIE's view the overseas investigating authorities had used AFA andpartly because of the benchmarking issue.[207] NZ Steel submits that MBIE's conclusion failed to take into account thefindings of EC 2017 (HRS). It says this was particularly relevant because, on the basisof positive evidence, it had concluded that Shougang had received a subsidy for landuse rights.[208] In reaching its views in EC 2017 (HRS), the EC referred to its findings inprevious investigations that: prices for land use rights were arbitrarily set by theauthorities; industrial policy was relevant to the price of industrial land; and access toindustrial land was limited to companies respecting the industrial policies set by theGOC. The EC considered its current investigation in EC 2017 (HRS) showed nonoticeable changes. It found that none of the four producers in its sample had gonethrough a bidding or similar public offering process for any of their land use rights.Historically the land use rights were allocated free of charge. More recently they wereallocated at negotiated prices and neither the GOC nor the producers providedevidence that the negotiated prices were based on market prices. Further, theShougang Group had received refunds from local authorities to compensate for pricesthey had paid for land use rights and payment for some of the land only had to be madeseveral years after the land had been put to use.[209] EC 2017 (HRS) concluded land use rights should be considered a subsidy. TheGOC argued that any benefit could not be specific because all companies would havethe same starting point in the absence of a functioning market. The EC rejected thisbecause prices set by local authorities have to take into account the government'sindustrial policy and steel is an encouraged industry. The evidence collected from thefour producers confirmed this encouragement was applied in practice.[210] To assess the level of subsidy the EC used Taiwan land prices as thebenchmark. Taiwan was regarded as appropriate for a number of reasons including itsphysical proximity, its comparable level of economic development and economic tieswith China. The EC concluded the subsidy rate for the Shougang Group's land userights was 7.63 per cent. For the other three producers it calculated subsidy ratesbetween 1.46 per cent and 2.71 per cent.[211] In Annex one to the Final Report MBIE commented that EC 2017 (HRS) didnot cause it to change its view on the provision of land use rights. This was becauseMBIE had concluded that there was no financial contribution provided. Annex onedid not alert the Minister to the fact that EC 2017 (HRS) had reached a contraryconclusion to MBIE about whether one of the Chinese producers of the subject goods(a Shougang entity) had received a subsidy by way of land use rights at LTAR, northat this conclusion was based on a detailed investigation which had included visits tothe Shougang sites.[212] I therefore disagree with the Minister's submission that NZ Steel's complaintgoes only to the weight that MBIE placed on EC 2017 (HRS) and as such is not aground of review. I agree with NZ Steel that the Final Report did not accurately informthe Minister about EC 2017 (HRS) and explain why it did not cast doubt on MBIE'scontrary conclusion. This meant the Minister was not properly informed about thisrecent and relevant investigation involving verified information (rather than"assuming the worst" analysis).[213] The Minister submits there are reasons why it would not be appropriate toextrapolate the Shougang Group findings in EC 2017 (HRS) to the relevant Shougangentity in this case. The Minister says the EC's subsidy finding for the Shougang Groupwas an outlier. For the other three producers the EC found subsidy rates of 1.46 percent, 2.71 per cent and 1.2 per cent. The higher rate for Shougang appears to havebeen because it received refunds from local authorities for its costs in carrying outbasic infrastructure and other work on the land. The Minister says there is no basisfor concluding that Shougang Jingtang United Iron and Steel Co, the Shougang entitythat is one of the Chinese producers of the subject goods in this case, as opposed tothe other members of the Shougang Group, received these refunds. The existence oflocal authority refunds was also a new issue for MBIE that was raised at a very latestage in the investigation. In any event, the Minister submits there was no basis toapply the EC's subsidy for Shougang to any of the other Chinese producers, nor forapplying the EC's higher (2.7 per cent) rather than the lower (1.2 per cent) to theseChinese producers.[214] It is correct that EC 2017 (HRS) considered Shougang on a group basis. Fromthe overall subsidy for the Shougang Group, EC 2017 (HRS) does not identify thesubsidy for the particular Shougang entity relevant to this case nor whether it receivedthe refunds for infrastructure work. That does raise a question about whether it wouldhave been appropriate to have relied on EC 2017 (HRS) by applying the 7.63 percentto the Shougang entity in this case. However the significance of EC 2017 (HRS) isthat it indicated the GOC and Zong Cheng's responses may not have been reliable andtherefore raised doubt about whether MBIE should have relied on those responses asthe best evidence.[215] NZ Steel suggests MBIE might have contacted the EC to find out whether ithad information specific to the relevant Shougang entity in this case. Counsel for theMinister understood there was no practice of seeking and receiving information fromother jurisdictions and did not know whether confidentiality obligations might preventthis. It is therefore not known whether the EC would have provided any informationto MBIE about Shougang in response to such a request, nor whether, if informationwas provided by the EC, that would have occurred before the end of the 180 daytimeframe and in sufficient time for the GOC and Shougang to have an opportunity torespond. NZ Steel's suggestion is one for MBIE's consideration in futureinvestigations rather than an established error of process in this one.[216] NZ Steel submits MBIE also erred in disregarding the EC 2013 (OCS) viewthat prices were determined by local government, even where an auction process washeld. The Final Report specifically noted this point but decided the best availableinformation was the information from the GOC and Zong Cheng. NZ Steel disagreeswith that view, but this does not give rise to a reviewable error in and of itself.[217] NZ Steel also says that MBIE relied solely on the one price provided by ZongCheng without verifying that information or considering the broader market situation.However that is not entirely correct. MBIE compared that price to the price NZ Steelhad referred to in its application. It also took into account the information from theGOC and the overseas investigations it discussed. This also does not give rise to areviewable error in and of itself.[218] Lastly, NZ Steel says MBIE rejected the use of an external benchmark withoutconsidering whether China's unique legal framework for land ownership would resultin market distortions. The Final Report specifically noted China's unique legalframework for land ownership. It considered this was a reason that made the use ofexternal benchmarks challenging. The submissions touched on but did not developwhether it was appropriate to use an external benchmark. In the absence of moredetailed submissions about the appropriateness of using an external benchmark (asoverseas investigations have) I do not consider this issue further. NZ Steel can putforward its arguments about this if a re-investigation takes place.Other programs[219] MBIE was satisfied that electricity was provided by a government or otherpublic body. However the Chinese producers of the subject goods had not benefittedfrom preferential electricity rates that were specific to certain enterprises. In reachingthis view, the Final Report referred to the GOC's response that electricity prices inChina are based on market principles. It also referred to Zong Cheng's advice that itreceived no discount for electricity and that industrial electricity is cheaper in NewZealand and a range of other countries than it is in China.[220] The Final Report referred to: EC 2013 (OCS) where the subsidy rate for non-cooperating companies was 0.17 per cent; USDOC 2016 (CRS) which based itssubsidy finding of 0.58 per cent on AFA; and AADC 322 (Reb) which concluded thatthe producers did not receive specific or preferential electricity tariff rates. Thisconfirmed the position as stated by the GOC and Zong Cheng. Further support forMBIE's conclusion is provided by EC 2017 (HRS). It considered whether the fourproducers it sampled received electricity at preferential rates. Based on the verifiedinformation it concluded they had not. The four producers either generated powerthemselves or purchased it from the grid at the officially established price levels set atthe provincial level for large industrial clients. There was no evidence they receiveda lower preferential rate or received any specific electricity-related subsidy.[221] In these circumstances the Minister was not inadequately informed aboutoverseas investigations on this programme. The same is true of import tariffexemptions. On this topic the Final Report concluded:342. MBIE is satisfied that there is reliable information which indicatesthat manufacturers of galvanised steel coil exported to New Zealandmay have received benefits under this programme, but notes theconclusions on the level of subsidy reached by the Australianauthority with regard to its investigation into similar products, whichreflects the low level of subsidisation indicatively calculated byMBIE.343. MBIE concludes that there is no countervailable subsidy arising fromthe provision of import tariff exemptions to manufacturers ofgalvanised steel coil exported to New Zealand which providesbenefits.[222] The Australian investigation referred to was ACBP 193 (Gal). This had applieda zero subsidy rate for both cooperating and non-cooperating exporters. The EC 2013(OCS) report had applied a rate of 0.89 per cent (attained from a different investigation(coated fine papers) in the absence of other information). USDOC 2016 (CRS) applieda subsidy of 0.56 per cent for both VAT and tariff exemptions. The low subsidy ratesin these two investigations were therefore not inconsistent with MBIE's conclusion.[223] There was also no error in MBIE's advice about overseas investigations onexport buyers' credits. MBIE was satisfied there was no financial contribution becauseno shipments to New Zealand qualified for the programme. This distinguished theinvestigation from other investigations.[224] MBIE concluded that there was no subsidy provided to Zong Cheng throughgovernment grants and that subsidies for the other (non-cooperating) Chineseproducers of the subject goods totalled 0.08 per cent. MBIE's conclusion wassupported by the information before it, including USDOC 2016 (CRS).[225] Lastly NZ Steel's application referred to a number of subsidy programmesinvestigated elsewhere. There was not much information about these programmes andoften only negligible subsidies were found. MBIE considered that no other subsidieswere provided to Zong Cheng. Any subsidies to the other Chinese producers of thesubject goods were at such a low level that no sum should be included in the totalsubsidy calculation. MBIE had insufficient information to make findings beyond thisand therefore no reviewable error arises.Other secondary sources[226] NZ Steel submits that MBIE's investigation was inadequate. It says MBIE wasrequired to do more by way of investigation in light of the limited and unverifiedinformation from the GOC and the Chinese producers of the subject goods. It wasrequired by art 12.5 of the SCM Agreement to satisfy itself as to the accuracy ofinformation provided and it was required by s 7(5) of the DCD Act to rely on "bestavailable information" to fill evidential gaps. NZ Steel accepts that this did not haveto be through verification visits but says MBIE had to do more than rely on informationprovided by the GOC and Zong Cheng at face value.[227] An investigation under the DCD Act must be carried out in accordance with itspurpose. As discussed earlier, that purpose is to empower the Minister to imposecountervailing duties to prevent material injury to a domestic industry, and to do so inaccordance with New Zealand's obligations under the SCM Agreement to the Memberstate from where the goods under investigation originate. As a Ministry media releaseput it: "New Zealand's trade remedies regime is an important safety net for ourdomestic producers, aimed at ensuring New Zealand industries are not injured byunfair, injurious trade by another country's exporters".125[228] The Act's purpose means that MBIE's investigation must be fair to both theinvestigated Member state and the domestic industry. An investigation must beconducted in that light. There are a range of ways MBIE might achieve that whenfaced with limited cooperation from the Member state and the producers of the subjectgoods. I have already discussed the use of findings from overseas investigations andthe possibility of contacting investigating authorities to obtain further informationabout their investigations (which may or may not possible). Verification visits areanother possibility but I agree with the parties that they are not required.125 Ministry of Foreign Affairs and Trade "Briefing: Applications from the NZ Steel Industry forTrade Remedy Measures on Galvanised Steel Coil and Steel Reinforcing Bar" (30 November2016) (obtained under Official Information Act 1982 request) at annex B – Media [3.0].[229] Another possibility is to search for publicly available information. It isapparent that MBIE did this. It is therefore not correct to say that MBIE simply reliedon information it provided at face value. NZ Steel submits MBIE's investigation failedto come to grips with the state of the steel industry in the GOC and the implications ofthat. It has referred to a publication entitled "China's Great Wall of Debt; ShadowBanks, Ghost Cities, Massive Loans and the End of the Chinese Miracle".126 Thisdiscusses that China's response to the 2007 global financial crisis was that banks lentvast amounts of money to provide stimulus to the economy such that now it isextraordinarily leveraged and that "Chinese factories produce about half of the world'ssteel" which is "far more than the country could ever hope to use".127 Other commentsinclude that China has long used foreign nations' access to its economy as a politicaltool; China's economy operates in ways radically different to the United States with acomplex set of incentives that influence economic decisions; and China's authoritieshave an incredible amount of discretion to impose their will on markets and firmsalike. This is a 2018 publication. It was therefore not a secondary source available toMBIE when it carried out its investigation.[230] NZ Steel has provided an affidavit from Professor Nicholas Lardy, aneconomics expert with particular expertise in China. He has written eight books onthe Chinese economy and has contributed to the chapters of many more books. Hediscusses evidence that suggests there is large-scale subsidisation of certain industriesin China, including the steel industry. He discusses why that is. He discusses theunprofitability of enterprises such as those supplied hot rolled and cold rolled coil andsays the GOC is "providing indirect subsidies through the state-dominated system thatallows these firms to sell products at less than the cost of production, seemingly yearafter year" which is a program that allows these producers to sell inputs at LTAR.[231] The information from Professor Lardy or the books he refers to may certainlyhave assisted MBIE. However it is like the verification visits. MBIE was not requiredto carry out its investigation in any particular way. It was required to adopt a robustand fair investigation aimed at arriving at a determination based on reliable facts butthe manner in which it did so was open to MBIE. If NZ Steel wanted MBIE to take126 D McMahon China's Great Wall of Debt (Little Brown, 2018) at 186.127 At xiv.into account Professor Lardy's evidence, it should have submitted that evidence duringMBIE's investigation. There is no error per se in MBIE not sourcing this kind ofevidence of its own volition. It is more illustrative of the kind of evidence MBIE couldresort to when faced with limited cooperation from the GOC and Chinese producers.[232] NZ Steel also filed a detailed affidavit from Stephen Gospage. He hasextensive EC experience, specialising in subsidy and countervailing duty issues as aninvestigator; as the EU's representative on the WTO committees and informal expertgroups; and in EC policy work amongst other things. His affidavit critiques MBIE'sanalysis, its failure to carry out a verification visit of Zong Cheng at least (as the solecooperating producer) and its discounting of the findings of internationalinvestigations (in particular the two EC reports). This is the sort of evidence that NZSteel might have put forward to MBIE before its investigation was completed.Although the time frame may have been tight, it might have put at least some of MrGospage's expert comments forward in response to the Essential Facts and ConclusionReport. Or it might have put it forward following the Provisional Measures Report tobolster the submissions it made on that report which were to similar effect asMr Gospage's evidence.[233] Other than to consider what other secondary sources might have been availableto MBIE, I have not taken into account the evidence of Professor Lardy and MrGospage. It is not appropriate to allow material which was not before the decisionmaker, largely brought into existence after the impugned decision was made, and todo so essentially for the purpose of casting doubt on the substantive unreasonablenessof the decision.128 There is also the issue that Mr Gospage's evidence is largely adiscussion of the overseas decisions which the Court is able to review for itself. That128 Pharmaceutical Management Agency Ltd v Roussel Uclaf Australia Pty Ltd [1997] 1 NZLR 650(CA) at 658 per Richardson P (affirmed by the Privy Council in Roussel Uclaf Australia Pty Ltdv Pharmaceutical Management Agency Ltd [2001] NZAR 476 (PC) at 482 per Lord Lloyd);Attorney-General v Zaoui [2005] NZSC 38, [2006] 1 NZLR 289 at 316 per Keith J. See also HWoolf, J Jowell, C Donnelly and I Hare De Smith's Judicial Review (8th ed, Sweet & Maxwell,London, 2018) at [11-048]-[11-050]; P A Joseph Constitutional and Administrative Law in NewZealand (4th ed, Thompson Reuters, Wellington, 2014) at 994; Attorney-General v Daniels [2003]2 NZLR 742 (CA) at [102] per Keith J; and Kim v Minister of Justice [2016] 3 NZLR 425 at 433-434 per Mallon J.discussion would have also needed to have met the "substantially helpful" test foradmission of expert opinion evidence.129Like goodsThe issue[234] NZ Steel's application described the goods as being:Galvanised steel coil with a thickness equal to or greater than 0.3mm and lessthan or equal to 1.9mm and a width greater than 600mm, with a hot dippedgalvanised (zinc) coating.[235] MBIE considered the description of the goods should be altered as follows:Galvanised steel coil with a thickness equal to or greater than 0.3mm and lessthan or equal to 1.9mm and a width greater than 600mm but not greater than1260mm, with a hot dipped galvanised (zinc) coating.[236] NZ Steel submits MBIE erred in limiting the goods description to a width ofup to 1260 mm. This ground of review is only relevant if it is found that the Minister'sdecision not to impose countervailing duties must be quashed for other reasons and areconsideration or further investigation must take place. NZ Steel does not point toany other impact on the determination of whether the subject goods were subsidisedthat an error on the scope of the goods would have had (that is, whether expanding thescope of the investigation by considering galvanised steel of larger width would haveled to different findings on subsidisation and/or injury).The DCD Act[237] Under the DCD Act, an investigation about whether goods are subsidisedrelates to "goods". The application for an investigation can be made by New Zealandproducers of "like goods". The DCD Act does not define "goods". It defines "likegoods" as follows:like goods, in relation to any goods, means—(a) other goods that are like those goods in all respects; or129 Evidence Act 2006, s 25.(b) in the absence of goods referred to in paragraph (a), goods which havecharacteristics closely resembling those goods[238] The Minister makes a final determination on whether the "goods" are beingsubsidised and whether that is causing material injury to an industry. Industry isdefined as meaning the New Zealand producers of "like goods" or a major proportionof those producers.130 Any measures imposed are applied to the "goods".[239] This means that measures are applied to goods, which are like goods that areproduced in New Zealand and which are materially injured by the subsided goods.The potential harm from including products that are not manufactured in New Zealandis that, if a countervailing duty is imposed, it would result in price increases onproducts that may not be causing injury to the domestic injury. Conversely, if thesubject goods for a countervailing duty are too narrow, there will be other goodsentering New Zealand at a price advantage and to which consumers can switch,causing harm to New Zealand producers of like goods.The Final Report view[240] The Final Report noted that the goods produced by NZ Steel were a subset ofthe galvanised steel coil imported into New Zealand. One of the limitations on NZSteel's goods, compared with the imports, concerned the width of the coil.131 NZ Steelproduced galvanised steel coil with widths of up to 1260 mm. Forty-eight per cent ofimports from China have widths greater than 1260 mm, which is outside NZ Steel'scapability. Whether the subject goods should include widths outside NZ Steel'scapability was the subject of submissions from importers and discussions with andsubmissions from NZ Steel.[241] The Final Report said that to determine whether goods produced in NewZealand are like goods, MBIE normally considers physical characteristics, functionand usage, pricing structures, marketing and any other relevant considerations. In thiscase the key considerations were manufacturing capability, price continuity orconnectivity and commercial interchangeability. As to these:130 DCD Act, s 3A.131 The other difference was "the spangle". This difference is not in issue.(a) NZ Steel was unable to produce galvanised steel coil to a maximumwidth of 1260 mm without significant capital investment to widen thefactory.(b) MBIE accepted there would be some price connectivity between NZSteel's goods and galvanised steel coil of greater widths in somecircumstances. This was because a large proportion of galvanised steelcoil produced or imported in New Zealand is slit (meaning cut length-ways) into narrower cuts of steel. So if a firm wanted, say, 300 mmwidth steel it could import 1500 mm steel and slit this into five sheets.This would be in competition with, and therefore price-connected to,1200 mm steel, which could be slit into four sheets. However, inMBIE's view, price connectivity likely extended to a range of othersubstitutable products, for example galvanised steel coil can be used toproduce steel-framing for residential construction and so was likelysubstitutable with timber. Price connectivity was therefore not adeciding factor in determining the scope of the subject goods.(c) MBIE considered interchangeability was limited to where steel wasfurther processed into narrower products. There are likely to be caseswhere wider steel has specific applications that cannot be easilyinterchanged with narrower steel.[242] The Final Report concluded that NZ Steel's manufacturing limitations and thespecific uses for the wider steel were sufficient grounds to limit the subject goods towidths up to 1260 mm and these considerations were not outweighed by the priceconnectivity and "the limited commercial interchangeability" with widths greater than1260 mm. It concluded that galvanised steel coil of widths greater than 1260 mm didnot closely resemble lesser widths.NZ Steel's challenge to this view[243] NZ Steel submits MBIE's decision to limit the subject goods to product up to1260 mm lacks adequate foundation. NZ Steel filed an affidavit from Dr WolfgangScholz, an expert in metals-based engineering, in support of this submission.[244] Dr Scholz explains that, although NZ Steel's plant has physical limitations forproducing wider coil, the manufacturing process is substantially the same for differentwidths (i.e. they use the same source products, inputs and machinery). He says MBIEhas not taken this into account.[245] Dr Scholz also provides more detail on the extent to which coil greater than1260 mm is substitutable with coil of lesser width. He explains that around six percent of the galvanised steel coil market by volume is for applications that NZ Steelcannot meet due to its width specifications. For all other applications, that is 94 percent of the market by volume, galvanised steel coil can be easily slit into the desiredwidth. Major distributors and some end-users have the equipment to do this. For thisreason wide coil can and does compete with narrower coil.[246] Dr Scholz says this level of commercial substitutability is reflected in strongprice connectivity between coil of different widths. The price of galvanised coilincreases proportionally with product width. This is logical because there is nodifference in input costs or the manufacturing process. All steel is sold on a per tonnebasis and wider steel of the same thickness has proportionally more mass. If widercoil is not subject to the same duties as narrower coil then it has a price advantagebecause wider coil can always compete with NZ Steel's narrower coil (by being slit tosize).[247] Dr Scholz also explains there is no price connectivity between galvanised steelcoil and timber framing as suggested by MBIE. The price of timber framing connectsto the export price of logs. About 53 percent of all New Zealand logs are exported andthe domestic sales are priced to export parity. In contrast, New Zealand steel goodsare priced to import parity following the world's steel price of commodity coil steelproducts. The price of steel on the world market has declined significantly over therecent longer term whereas world log and timber prices have generally increased. Atthe product level, pricing data between 2013 and 2017 shows no correlation betweenthe unit price for steel and timber. The prices are unconnected.[248] Dr Scholz concludes that, because of the strong interchangeability and priceconnectedness between the different widths, and that users will likely choose thelowest price under technical parity, wider coiled steel coming into the New Zealandmarket with a cost advantage would still cause commercial injury to NZ Steel.[249] Based on Dr Scholz's evidence, NZ Steel submits MBIE made a mistake oflaw or fact as to whether coil of less than 1260 mm width was like goods with coil ofgreater width. Put another way, it says MBIE's determination was based on seriouserrors of fact or flawed assumptions.My assessment[250] As MBIE submits, Dr Scholz's evidence was not before MBIE when it gaveits decision. NZ Steel could have put this evidence before MBIE during itsinvestigation. Other parties would then have had an opportunity to comment on it.They might, for example, have been able to comment on the comparative costs ofimporting and cutting down wide steel versus the costs of importing narrow steel.They might also have been able to challenge the degree of substitutability by empiricaldata about the extent to which this occurs.[251] A judicial review must focus on the information that was before the decisionmaker. This affidavit does not meet the test for admission because: it could have beenobtained and put before MBIE with reasonable diligence; it does not go to whetherMBIE's advice was wrong about the existence of subsidies; and MBIE has not had theopportunity to test the information as part of its investigation.[252] That said, Dr Scholz's evidence will be relevant if there is a reinvestigation ora further investigation. On its face that evidence provides a strong challenge to theviews reached by MBIE. Those views were based on assumptions about the extent ofsubstitutability and connectivity which do not appear to have taken into account thekind of matters Dr Scholz has referred to. The determination of the relevant subjectgoods may need reconsideration in light of this evidence and any other evidenceobtained in that further investigation.Relief[253] NZ Steel's pleadings seek a declaration that the Final Report and the Minister'sDecision are inconsistent with the requirements of the DCD Act and unlawful; an orderquashing the Minister's decision; an order that the Minister reconsider her decision inaccordance with any declarations made by the Court; an order that the Ministercontinue to consult with the applicant before making any new decision; and costs. Inits submissions it also sought an order quashing the Final Report.[254] As explained at the hearing, NZ Steel seeks to have the investigation start againand the 180 day period for that to occur would apply. Counsel for the Minister submitsit would make sense to restart the process under a new investigation to ensure it iscompliant with the SCM Agreement. He also submits that this might cover a differentinvestigation period in order to have the most up to date information. In that event thenew Act would apply to the investigation.[255] I am satisfied there were material errors in the advice to the Minister (the FinalReport and Briefing). It is therefore appropriate to quash the Minister's Decision. Itdoes not follow, however, that the Final Report should be quashed. The Final Reportis advice to the decision maker, not the decision itself. MBIE's reinvestigation neednot cast aside all the work that it contains even though it will be necessary for MBIEto prepare a new report with fresh advice to the Minister.[256] The usual accompanying remedy in judicial review is for the Minister toreconsider the decision in light of the Court's reasons and any further directions. Theseremedies are now provided in ss 16 and 17 of the Judicial Review Procedure Act 2016.The suggestion from counsel for the Minister that the whole process commence againbut with a fresh application makes some sense: it would enable the whole process tobegin again, including all necessary consultation, and the 180 day period would bereset.132132 I am not sure if there is a fee associated with an application but if there is, I expect it could bewaived.[257] On the other hand, NZ Steel is entitled to a reconsideration of its applicationalready made and in accordance with the Act as it stood at the time.133 As it will notbe a fresh application, it does not follow that the 180 day statutory time frame is reset.It is a matter for MBIE and the Minister over what period of time the reconsiderationis to take place and what further work is required in order to reconsider what decisionis to be made (although 180 days would be at the outer limit).[258] I have therefore decided to direct a reconsideration of NZ Steel's existingapplication (unless NZ Steel advises MBIE within two weeks of the date of thisjudgment that it would rather submit a fresh application). I make no directions as tothe period for that reconsideration nor as to the consultation that will be necessary.Consultation should occur as is appropriate in light of the matters being reconsidered.The reconsideration is to be conducted in light of the reasons in this judgment forquashing the Minister's Decision.[259] Costs were briefly discussed at the conclusion of the hearing. My preliminaryview is that if costs are to be ordered in NZ Steel's favour, category 3B would beappropriate. If there is any issue about this, the parties have leave to file submissionson costs. Such submissions should be kept brief and are to be filed within three weeksof this judgment.Result[260] The application for judicial review is granted. The Minister's decision wasunlawful because it was based on advice containing material errors as to the propertest for determining whether an entity is a public body, as to the grounds on whichoverseas investigations had made their findings, and as to the relevance of thoseinvestigations as providing a valid source of available information in light of thelimited cooperation from the GOC and the Chinese producers of the subject goods. Imake a declaration to this effect.[261] The Minister's Decision is quashed. NZ Steel's existing application is to bereconsidered in light of the reasons in this judgment, unless NZ Steel advises MBIE133 This was the view in Heinz Wattie's Ltd v MBIE, above n 112.within two weeks of the date of this judgment that it would rather submit a freshapplication.[262] Costs are reserved. The parties have leave to file submissions about this. Suchsubmissions should be kept brief and are to be filed within three weeks of thisjudgment.Mallon JAnnexure 1Abbreviation TermAADC Australian Anti-Dumping CommissionABC Agricultural Bank of ChinaACBP Australian Customs and Border Protection ServicesADBC Agricultural Development Bank of ChinaADRP Australian Anti-Dumping Review PanelAFA Adverse facts availableAngang Angang SteelAnti-Dumping Agreement WTO Agreement on Implementation of Article VI of the GeneralAgreement on Tariffs and Trade 1994Baosteel Baoshan Iron and Steel Co LtdBoC Bank of ChinaChangshu Changshu Everbright Material Tech LimitedChina The People's Republic of ChinaCAS Carbon alloy steelCBRC China Banking Regulatory CommissionCBSA Canada Border Services AgencyCCB China Construction BankCDB China Development BankCPC Communist Party of ChinaCRS Corrosion resistant steelDCD Act The Dumping and Countervailing Duties Act 1988EC European CommissionEU European UnionEXIM Export Import Bank of ChinaAbbreviation TermFinal Report Galvanised Steel Coil from China: Final Report (July 2017)Gal Galvanised steelGATT General Agreement on Tariffs and TradeGOC The Government of the People's Republic of ChinaHol Hollow steel sectionsHuangshi Huangshi Sunny Strip Aluminium and Zinc Coated LtdHuijin Central Huijin Investment LtdHRS Hot rolled steelICBC Industrial and Commercial Bank of ChinaLTAR Lower than adequate remunerationMBIE Ministry of Business, Innovation and EmploymentMinister Minister of Commerce and Consumer AffairsNDRC National Development and Reform CommissionNZ New ZealandNZ Steel New Zealand Steel LimitedOCS Organic coated steelPBOC The People's Bank of ChinaReb / Rebar Reinforced barSASAC State-owned Assets Supervision and Administration CommissionSCM Agreement The WTO Agreement on Subsidies and Countervailing MeasuresShougang Shougang Jingtang United Iron and Steel CoSIE State-invested enterpriseSil Silicon metalSOCB State-owned commercial bankSOE State-owned enterpriseAbbreviation TermUS United States of AmericaUSDOC United States Department of CommerceVAT Value added taxWTO World Trade OrganisationWTO Agreement The Agreement establishing the World Trade Organisation adopted atMarrakesh on 15 April 1994YPC Yieh Phui (China) Technomaterial Company Limited (amanufacturer)Zong Cheng Jiangyin Zong Cheng Steel Co LtdAnnexure 2Abbreviation DocumentAustraliaACBP 193 (Gal) Australian Customs and Border Protection Service Alleged Subsidisation ofZinc Coated Steel and Aluminium Zinc Coated Steel, Report No 193,28 June 2013ADRP 2013 (Gal) Australian Anti-Dumping Review Panel Review of Decisions RegardingDumping Duties and Countervailing Duties for Zinc Coated (Galvanised)Steel and Aluminium Zinc Coated Steel Exported from the People'sRepublic of China, 15 November 2013AADC 237 (Sil) Australian Anti-Dumping Commission Alleged Subsidisation of SiliconMetal Exported from the People's Republic of China, Report No 237, 7 May2015AADC 322 (Reb) Australian Anti-Dumping Commission Alleged Subsidisation of SteelReinforcing Bar Exported from the People's Republic of China, ReportNo 322, 19 September 2016ADRP 2018 (Hol) Australian Anti-Dumping Review Panel Hollow Structural SectionsExported from the People's Republic of China, Republic of Korea, Malaysiaand Taiwan, ADRP Report No 63, February 2018CanadaCBSA 2014 (Reb) Canada Border Services Agency Certain Concrete Reinforcing BarOriginating in or Exported from the People's Republic of China, 4218-39CV/138, 23 December 2014CBSA 2016 (CAS) Canada Border Services Agency Certain Carbon and Alloy Steel Line Pipefrom China, NQ-2015-002, 10 March 2016European CommissionEC 2013 (OCS) Council implementing regulation (EU) No 2015/2013 Imposing aCountervailing Duty on Imports of Certain Organic Coated Steel ProductsOriginating in the People's Republic of China OJ L 73/16, 15 March 2013EC 2017 (HRS) Commission implementing regulation (EU) No 2017/969 ImposingDefinitive Countervailing Duties on Imports of Certain Hot-Rolled FlatProducts of Iron, Non-Alloy or other Alloy Steel Originating in the People'sRepublic of China, OJ L 146/17, 8 June 2017United StatesUSDOC 2016 (CRS) Issues and Decision Memorandum for the Final Determination in theCountervailing Duty Investigation of Certain Corrosion-Resistant SteelProducts from the People's Republic of China (US DOC), C-570-027,24 May 2016USDOC 2017 (CAS) Issues and Decision Memorandum for the Final Determination in theCountervailing Duty Investigation of Certain Carbon and Alloy Steel Cut-to-Length Plate from the People's Republic of China (US DOC), C-570-048, 17 January 2017Abbreviation DocumentWorld Trade OrganisationDS295 Mexico – Definitive Anti-Dumping Measures on Beet and Rice – Complaintwith Respect to Rice WT/DS295/AB/R; 29 November 2005 (Report of theAppellate Body)DS299 European Communities – Countervailing Measures on Dynamic RandomAccess Memory Chips from Korea WT/DS299, 17 June 2005 (Report of thePanel)DS379 United States – Definitive Anti-Dumping and Countervailing Duties onCertain Products from China WT/DS379/AB/R, 11 March 2011 (Report ofthe Appellate Body)DS436 United States – Countervailing Measures on Certain Hot-rolled CarbonSteel Flat Products from India WT/DS436/AB/R, 14 July 2014 (Report ofthe Panel)United States – Countervailing Measures on Certain Hot-rolled CarbonSteel Flat Products from India WT/DS436/AB/R, 8 December 2014(Report of the Appellate Body)DS437 United States – Countervailing Duty Measures on Certain Products fromChina WT/DS437/R, 14 July 2014 (Report of the Panel)United States – Countervailing Duty Measures on Certain Products fromChina WT/DS437/AB/R, 18 December 2014 (Report of the AppellateBody)United States – Countervailing Duty Measures on Certain Products fromChina WT/DS437/AB/R, 21 March 2018 (Panel Compliance Report)