Press Campaign 3rd WCD (2012)

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Saving consumers from cartels demanded
Pakistan Observer, December 08, 2012

The speakers at a seminar demanded strict measures to protect consumers from the cartels. They also demanded independence of regulators, effective enforcement and monitoring mechanism, awareness raising and healthy business practices.

The speakers were discussing at a seminar on ‘Adverse Impact of Cartels on the Poor’ organized by Sustainable Development Policy Institute (SDPI) to contribute into international efforts to celebrate 5th of December as ‘World Competition Day’. The culture of competition is quite weak in many countries and consumers have limited understanding about the harmful effects of cartels. Thus, the World Competition Day allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumer – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the need to crack down cartels.

Chairing the proceedings Dr Vaqar Ahmed, Head-Economic Growth Unit, SDPI maintained that consumer as a constituent has always been ignored in public policy discourse and economic growth agenda in Pakistan.

This news item can also be viewed at: http://pakobserver.net/

World Competition Day in Kazan
FAS News, December 06, 2013

On 5th December 2012, in Kazan the Federal Antimonopoly Service (FAS Russia) marked the World Competition Day by opening an international workshop on antimonopoly policy and enforcement. Following the annual tradition, the event was attended by representatives of competition authorities of Austria, Azerbaijan, Belarus, Bulgaria, China, the Czech Republic, Estonia, France, Finland, Kazakhstan, Korea, Kirgizia, Mexico, Moldova, Serbia, the USA, and Ukraine.

Lenar Shafigullin, the Head of “FAS Training-and-Resource Centre” Federal State Institution, gave a welcoming address at the opening of the first international workshop organized at the FAS Training-and-Resource Centre in Kazan. He told participants the history of establishing the Training Centre and prospective areas of its work. As one of the priority objectives he outlined development of international cooperation, in particular, engaging foreign experts, devising specialized training courses, master-classes and training exercises on the pressing issues of competition policy, organizing research-to-practice conferences, forums and other events jointly with the leading international educational and research centres in order to exchange the best enforcement practices.

“We will endeavour to make FAS Training-and-Resource Centre a universal platform, literally the centre for developing competition and expanding business opportunities as well as improving the work of human resources of the system of Russian antimonopoly authority, and in the future – foreign countries, including the CIS. Our main objective is to ensure the Centre being in demand”, stated Lenar Shafigullin.

Deputy Head of FAS Andrei Tsyganov welcomed the participants and reminded that on 5th December 1980 the UN General Assembly had adopted the Set of Multilaterally Agreed Equitable Principles and Rules for Control of Restrictive Business Practices at its 35th session. That’s why several states and non-governmental organizations proposed to annually celebrate World Competition Day on 5th December. Russia and some other countries supported the initiative.

Deputy Head of FAS informed the workshop about the main areas of the efforts and achievements of the antimonopoly authority in the field of competition policy. He highlighted efficiency of the measures towards improving the antimonopoly law. For instance, in 2012 FAS introduced the mechanism of warning – a new instrument of competition enforcement aimed at eliminating violations and its reasons initiating a case.

“An economic entity has the right to choose – either to execute the warning or to remain under surveillance of the antimonopoly authority. According to the statistics, 74% of such warning issued by FAS and its regional offices in 2012 were executed”, stated Deputy Head of FAS.

Andrei Tsyganov discussed in more details the problem of numerous violations by the authorities and outlined systemic measures adopted by FAS to eliminate such violations, in particular, by tightening administrative liability (the institute of disqualification).

Competition advocacy certainly is a no less important element of competition policy, ensuring understanding of the importance of compliance with the principles of competition by business, the authorities and society. It helps improve competitive environment and conform to the norms of the antimonopoly law, and positively affects well-being of the population. FAS employs a wide range of competition advocacy tools, including its Internet site and an e-journal, 28 Expert Councils on various areas of activity of the antimonopoly body, and continuous presence in social networks. Andrei Tsyganov also pointed out establishing the Government Commission on Competition and Development of Small and Medium Business, which had been formed to coordinate activities of executive bodies and interact with representatives of business community to devise proposals on the national policy in this field.

In conclusion, Deputy Head of FAS highlighted in more detail some aspects of international activity of the Russian antimonopoly authority, in particular, in the CIS (the Interstate Council on Antimonopoly Policy, the Headquarters for Joint Investigations of Violations of the Antimonopoly Law of the CIS Member-States, the Common Economic Space), as well as under the umbrella of international Working Groups on Oil, Pharmaceuticals and Roaming. He paid special attention to bilateral cooperation with the European Commission on the basis of the relevant memorandum and with competition authorities of the EC member-states.

Andrei Tsyganov emphasized importance of the workshop for exchanging information about achievements of competition authorities and problems facing them in the field of competition policy, which, undoubtedly, would facilitate further development of competition across the world, exchanging the best practices in order to enhance efficiency of competition enforcement and reduce violations of the antimonopoly law.

This news item can also be viewed at: http://en.fas.gov.ru/

Konkurrenca: Gjykatat anulojnë vendimet antimonopol pa arsyetim
MAPO Online, December 06, 2012

Autoriteti i Konkurrencës në Shqipëri ngriti dje shqetësimin se lufta ndaj marrëveshjeve të ndaluara dhe formave të tjera të konkurrencës së pandershme po pengohet nga gjykatat. Në disa raste gjatë këtij viti, gjykatat kanë anuluar në mënyrë të paarsyetuar vendime të Autoritetit të Konkurrencës që ndëshkonin biznese për shkelje të ligjit për mbrojtjen e konkurrencës. Së fundmi, Autoriteti i Konkurrencës ka nisur hetime në tregun e transportit detar, të importit dhe tregtimit të vajit vegjetal, ndërkohë që ka gjobitur të gjitha kompanitë e sigurimit të jo-jetës për marrëveshje të ndaluar në tregun e sigurimit të detyrueshëm motorik. Zonja Milo vë në dukje se vitet e fundit është rritur ndërgjegjësimi i biznesit për rolin e institucionit, çka është pasqyruar në numrin në rritje të ankesave pranë Autoritetit të Konkurrencës. Dje ishte Dita ndërkombëtare e Konkurrencës, ditë që ka si qëllim të rrisë ndërgjegjësimin për të mbrojtur konsumatorët dhe sidomos të varfrit nga marrëveshjet e ndaluara në treg.

This news item can also be viewed at: http://www.mapo.al/

CCP for creating awareness on ills of cartelization
Business Recorder, December 06, 2012

Chairperson Competition Commission of Pakistan (CCP) Rahat Kaunain stressed the need for introducing a compact academic course on competition law at premier institutions to create awareness about cartelisation and value of free-market economy among future policy makers.

Addressing a seminar on the occasion of the World Competition Day, with the theme, ‘Adverse Impact of Cartels’ here on Wednesday, the CCP Chairperson said that the introduction of academic courses on competition law at leading universities etc will create awareness, and ignite interest, in this particular field of law which has assumed increasing importance in economic regulation.

“It will seek to create a nexus between the competition regime and the academic circles in the country providing sustainable increase in knowledge relating to competition issues,” she added. The World Competition Day has been marked by many competition agencies across the world and the CCP held a seminar for academia and called for co-ordinated efforts to curb cartelization, the most pernicious anti-competitive conduct.

The Chairperson informed the participants that the Commission was currently dealing with several cases, including poultry, entertainment, urea/fertiliser, telecom and aviation sectors. She said that the Commission’s effectiveness and its performance has been internationally acknowledged, adding that as a result of effective enforcement, the Commission got ‘Fair’ rating in independent evaluation by the Global Competition Review (GCR) in 2010 and 2011, and was also shortlisted by GCR for the Enforcement Award in the category ‘Agency of the Year – Asia-Pacific, Middle East and Africa’ for 2012′. They were further informed regarding peer review of the Commission by the United Nations Commission on Trade and Development (Unctad).

The peer review has been requested for and volunteered by CCP and the evaluation will be shared at the next meeting of Unctad expected to be held in July next year which will be presented before 152 countries. The Chairperson said that the peer review is an effort on behalf of CCP for the strengthening of the institution as well as building the image of Pakistan.

The Chairperson reiterated CCP’s commitment to pursue hard core anticompetitive conduct ie, horizontal agreements among competitors not to compete such as price fixing, bid rigging and market allocation. She emphasised that all stakeholders including the government, the business community, judiciary, media, and consumer right groups can play a crucial role to strengthen and help CCP detect cartels and purge Pakistan’s economy of this ‘supreme evil of anti-trust’, as described by the US Justice Department.

The seminar was attended, from the Commission, by Chairperson Rahat Kaunain Hassan, Members Dr Joseph Wilson and Vadiyya Khalil, and from academia by large number of students and faculty members of various universities, ie National University of Science and Technology (NUST), Szabist, Quaid-i-Azam University and Bahria University.

The World Competition Day is marked to commemorate the adoption of the UN Set on Competition Policy on December 5, 1980, which is a multilateral agreement on competition policy that provides a set of equitable rules for the control of anti-competitive practices; recognises the development dimension of competition law and policy, and; provides a framework for international operation and exchange of best practices.

The participants were briefed on the enforcement of Competition Law, with particular focus on Section 4 of the Competition Act, that deals with cartelization. They were informed that the during the last five years, the Commission has moved very decisively against cartelization in various sectors, ie banks, cement, chartered accountancy, stock exchanges, dredging, poultry, telecom, jute, power, shipping, cooking oil and ghee, media.

The Commission has imposed fines of Rs 8.5 billion for different violations of competition law. However, the effectiveness of the Commission’s orders/actions shall be more visible upon disposal of pending cases before the courts. Earlier, CCP Member Dr Joseph Wilson gave a detailed presentation on the Competition Act of 2010. CCP Member Vadiyya Khalil briefed the participants on the advocacy strategy of CCP. The participants took keen interest in the seminar.

At a second seminar on ‘Adverse Impact of Cartels on the Poor’ organised by Sustainable Development Policy Institute (SDPI), Nadia Nabi, Director Enforcement, Competition Commission of Pakistan (CCP) briefed participants on various aspects of cartelisation debate and informed participants that CCP was diligently protecting the rights of consumer by ensuring that anti-competiveness business practice were controlled which mainly entails collaborative price fixation, territory/ customers division, restricting production and collusive tendering.

Citing references, she said that cartels are major drain on economy whose impacts on prices ranging between 10 and 20 percent. Giving details of recent CCP actions, including the CNG issue, Nadia Nabi, added that the commissions inspection teams have recently conducted inspection visit on CNG stations and an enquiry committee has been formed to investigate that whether any malpractices has been done by CNG association on CNG prices . She also added that the committee would also review policy framework on the issue and a policy note would be issued in case one is required.

This news item can also be viewed at: http://www.brecorder.com/

On World Competition Day: Attention shifts to impact of Cartels on the poor
New Delhi, December 06, 2012

“Our competitors are our friends, our customers are the enemy” is an actual statement made by an executive of Archer Daniel Midland, in the famous case of the lysine (a feed additive) cartel, which was caught on video by the FBI few years ago.

“Cartels are the most vicious anticompetitive practice”, said Dr Geeta Gouri, Member, Competition Commission of India. She was speaking at a roundtable on the World Competition Day organised by CUTS International on 5th December at Delhi.

The roundtable is part of a series of events being organised around the world by competition authorities and advocacy groups to celebrate the third World Competition Day. This year’s theme was on the “Impact of Cartels on the Poor”.

Dr Gouri added that for example cartelisation in the agriculture sector is impacting consumers and poor farmers the most who are not getting a fair price for the products. “A topic that needs to be further studied is the agriculture market and the primary level mandi which are cartels controlled by a particular class of traders all over the country”.

Parliamentarian Dr E M Sudarsana Natchiappan echoed Dr Gouri, when he said that mandi traders buy tomatoes around Rs. 2.00 per kilo in a collusive manner and sell it at Rs.25.00 per kilo to vendors in markets in Tamil Nadu. Referring to the current hot debate in the parliament on FDI in retail, he said that the opposition is supporting such cartels.

Dr Ashok Ganguly, a nominated Rajya Sabha MP also addressed the audience and emphasised on the various facets of cartelisation that one comes across in day to day life, particularly in the political sphere. Organising farmers in order to fight against the middlemen in the sector is extremely important, he emphasised.

CUTS Secretary General, Pradeep S Mehta reminded the audience that the Congress Party in its election manifesto had declared a war against the Agriculture Produce and Marketing Act, which creates and nurtures such traders’ cartels, but little attention is being paid due to the political economy.

Earlier, while welcoming the participants, Mr Mehta spoke about the campaign since 2010 to ask the international community to adopt the World Competition Day with the purpose of bringing greater attention to competition reforms and its benefits to the economy and consumers. “This day has been chosen because the UN had adopted the UNCTAD Set of Guidelines on Competition Law on 5th December, 1980.

During the roundtable discussion, Prof Sri Ram Khanna of VOICE raised pertinent questions regarding the capacity of CCI to bust cartels. He mentioned that every time prices of air tickets, real estate, tyres, medicine or even milk and sugar spike, issues pertaining to cartelisation are raised. But proving the existence of cartels and busting them isn’t easy.

In India, cartels have thrived mostly because there simply was no effective watchdog till the CCI was set up and mandated to go after such cartels. All that its toothless predecessor, the Monopolies and Restrictive Trade Practices Commission, did was to pass wordy ‘cease-and-desist’ orders, which the cartels callously ignored.

Among other panellists, Dr. Aditya Bhattacharjea, Delhi School of Economics and Mr Hari Prasad, Associate Fellow of CIRC also spoke at the event. About 60 people participated at the lively event, of which many were young lawyers and students.

In conclusion, Mr Mehta requested the Government of India and CCI to observe the World Competition Day, as various other competition agencies have done, such as Philippines, Zambia, Bulgaria, Russia, Pakistan, Austria, Malawi, South Africa.

For further information please contact:

Udai S Mehta, Head, CUTS Centre for Competition at usm@cuts.org or 09829285926

SDPI organises third ‘World Competition Day’
Daily Times, December 06, 2012

Observing the third ‘World Competition Day’, the speakers at a seminar demanded strict measures to protect consumers from cartels. They also demanded independence of regulators, effective enforcement and monitoring mechanism, awareness raising and healthy business practices. The speakers were discussing at a seminar on ‘Adverse Impact of Cartels on the Poor’ organised by Sustainable Development Policy Institute (SDPI) to contribute to international efforts to celebrate December 5 as ‘World Competition Day’. The culture of competition is quite weak in many countries and consumers have limited understanding about the harmful effects of cartels. Thus, the World Competition Day allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumer – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the need to crack down cartels. Chairing the proceedings, SDPI Economic Growth Unit Head Dr Vaqar Ahmed maintained that consumer as a constituent has always been ignored in public policy discourse and economic growth agenda in Pakistan. He appreciated the revised ‘Competition Act 2010’, calling it a big achievement, but at the same time raised concern that markets in Pakistan are not still open and performing in a responsible manner.

This news item can also be viewed at: http://www.dailytimes.com.pk/

CCP holds seminar to mark World Competition Day
Daily Times, December 06, 2012

Calls for coordinated efforts to curb cartelisation

On the World Competition Day, marked under the theme, ‘Adverse Impact of Cartels’ by many competition agencies across the world on Wednesday, the Competition Commission of Pakistan (CCP) held a seminar for academia and called for coordinated efforts to curb cartelisation, the most pernicious anti-competitive conduct.

The seminar was attended by CCP Chairperson Rahat Kaunain Hassan, members Dr Joseph Wilson and Vadiyya Khalil, and from academia by large number of students and faculty members of various universities, like, National University of Science and Technology (NUST), SZABIST, Quaid-e-Azam University and Bahria University.

The World Competition Day is marked to commemorate the adoption of the UN Set on Competition Policy on December 5, 1980, which is a multilateral agreement on competition policy that provides a set of equitable rules for the control of anti-competitive practices; recognises the development dimension of competition law and policy, and provides a framework for international operation and exchange of best practices.

While addressing the seminar, the chairperson emphasised the need for the introduction of an academic course regarding competition law at premier academic institutions, which will further create awareness, and ignite interest, in this field of law which has assumed increasing importance in economic regulation. “It will seek to create a nexus between the competition regime and the academic circles in the country providing sustainable increase in knowledge relating to competition issues,” she added.

The participants were briefed on the enforcement of Competition Law, with particular focus on Section 4 of the Competition Act that deals with cartelisation. They were informed that the during the last five years that the commission had moved very decisively against cartelisation in various sectors, like banks, cement, chartered accountancy, stock exchanges, dredging, poultry, telecom, jute, power, shipping, cooking oil and ghee, media. The commission had imposed fines of Rs 8.5 billion for different violations of competition law. However, the effectiveness of the commission’s orders and actions shall be more visible upon disposal of pending cases before the courts. The chairperson informed the participants that the commission was currently dealing with several cases including poultry, entertainment, urea or fertilizer, telecom and aviation sectors.

She said that the commission’s effectiveness and its performance has been internationally acknowledged, adding that as a result of effective enforcement, the commission got ‘fair’ rating in independent evaluation by the Global Competition Review (GCR) in 2010 and 2011, and was also short-listed by GCR for the Enforcement Award in the category ‘Agency of the Year – Asia-Pacific, Middle East and Africa’ for 2012. She further informed regarding peer review of the Commission by the United Nations Commission on Trade and Development (UNCTAD). The peer review has been requested for and volunteered by CCP and the evaluation will be shared at the next meeting of UNCTAD expected to be held in July next year which will be presented before 152 countries. The chairperson said that the peer review is an effort on behalf of CCP for the strengthening of the institution as well as building the image of Pakistan.

The chairperson reiterated CCP’s commitment to pursue hardcore anticompetitive conduct like, horizontal agreements among competitors not to compete such as price fixing, bid rigging and market allocation. She emphasised that all stakeholders including the government, the business community, judiciary, media, and consumer right groups can play a crucial role to strengthen and help CCP detect cartels and purge Pakistan’s economy of this ‘supreme evil of anti-trust’, as described by the US Justice Department. staff report.

This news item can also be viewed at: http://www.dailytimes.com.pk/

World Competition Day: providing a level playing field for competitors
Dawn, Pakistan, December 06, 2012

Cartels are a major drain on the economy and restrict innovation and growth, said experts, while highlighting the importance of strict implementation of competition laws in the country

While the Competition Commission of Pakistan (CCP), on its part, has imposed fines amounting to 8.5 billion, on business entities violating competition laws. But violators have obtained stay orders from various courts.

In this regard, a number of seminars were held on Wednesday to commemorate the ‘World Competition Day’. Speakers demanded strict measures to be taken, to protect consumers from cartels. They also demanded independence of regulators, effective enforcement and monitoring mechanism, awareness campaigns and healthy business practices.

“The effectiveness of the CCP’s orders and actions shall be more visible, after disposal of pending cases before the courts,” said Rahat Kaunain Hassan, Chairperson CCP, while speaking at a seminar. She informed that the Commission was currently dealing with several cases, including poultry, entertainment, urea/fertiliser, telecom and aviation sectors.

In the last five years, the CCP has moved against cartelisation in various sectors: banks, cement, chartered accountancy firms, stock exchanges, dredging, poultry, telecom, jute, power sector, shipping, cooking oil and media.

“We are committed to giving competitors a level playing field. And in the process discouraging price fixing, bid rigging and market allocation,” Ms Hassan stressed.

Meanwhile, at another seminar, titled, ‘Adverse impact of cartels on the poor’ organised by Sustainable Development Policy Institute (SDPI), the focus was on creating awareness in the society and using the World Competition Day as a platform.

Waseem Hashmi from Consumer Rights Commission of Pakistan (CRCP) said that increasing influence of cartels, even in policy making circles, had made it harder to make them accountable.

“Not only consumers but even new entrants to the industry, are severely affected by malpractices in the business sector,” he added. He informed that Punjab has only 11 consumer courts, in 36 districts, under the act of 2005. Whereas, there is little work done in Khyber Pakhtunkhwa and Balochistan and no competition bill enacted in Sindh.

He also added that people are not aware of consumer courts and don’t know how to approach them.

Dr Vaqar Ahmed, Head of Economic Growth Unit, SDPI, maintained that the consumer has always been ignored in the public policy discourse and economic growth agenda in Pakistan.

“Now when Pak-India trade liberalisation initiatives are being taken, there is a need for synergy between competition agencies in South Asia to restrict the negative impacts of cross border trade,” Dr Vaqar added.

This news item can also be viewed at: http://dawn.com/

Denonconi shkeljet e konkurrencës
Monitor, December 05, 2012

Mbrojtja e konkurrencës së lirë dhe efektive është një nga kushtet kryesore për të pasur një ekonomi tregu funksionale. Sot, në Datë 5 dhjetor, komuniteti ndërkombëtar i konkurrencës kujtoi Ditën ndërkombëtare e konkurrencës. Kjo ditë ka në fokusin e saj impaktin e marrëveshjeve të ndaluara te të varfrit, sipas një njoftimi zyrtar të Autoritetit të Konkurrencës.

Qëllimi i kësaj ditë është që të rrisë ndërgjegjësimin e të gjithë aktorëve dhe faktorëve që ndikojnë mbi konkurrencën e lirë për marrjen e masave për të mbrojtur konsumatorët nga dhe sidomos të varfrit nga marrëveshjet e ndaluara në treg.

Në këtë kuadër, Autoriteti i Konkurrencës kërkon të sensibilizojë biznesin, Autoritetet e ndryshme publike dhe veçanërisht gjykatat për rëndësinë e luftës ndaj marrëveshjeve të ndaluara për konsumatorët. Këto marrëveshje kanë një ndikim të drejtpërdrejtë mbi jetesën e më të varfërve në çdo shoqëri dhe përbëjnë një pengesë për qeveritë e vendeve të ndryshme për të siguruar mbrojtjen e këtyre shtresave të shoqërisë. Është llogaritur se ndërmarrjet pjesëmarrëse në marrëveshje të ndaluara përfitojnë miliarda dollarë në kurriz të ndërmarrjeve të tjera, taksapaguesve dhe konsumatorët në përgjithësi.

Veçanërisht të ndjeshme për shtresat e varfra të shoqërisë janë marrëveshjet e ndaluara në ushqimet dhe shërbimet bazë. Psh. Autoriteti i Konkurrencës ka ndaluar dhe parandaluar në disa raste marrëveshjet e ndaluara në tregun e prodhimit të bukës të cilat në disa raste kishin çuar në një rritje të çmimit me rreth 40%.

Kultura e konkurrencës mbetet në nivele të ulëta në shumë vende të botës dhe konsumatorët kanë njohuri të kufizuara mbi efektet e dëmshme të karteleve. Në këtë mënyrë Dita ndërkombëtare e Konkurrencës, ka si synim nxitjen e diskutimeve mbi përfitimet që sjell konkurrenca për konsumatorët dhe veçanërisht për shtresat në nevojë në mënyrë të drejtpërdrejtë apo në mënyrë të tërthortë. Në këtë mënyrë synohet që të nxitet kultura e konkurrencës dhe mbështetja e publikut për luftën kundër marrëveshjeve të ndaluara.

Pesë dhjetori është caktuar si dita ndërkombëtare e Konkurrencës, për shkak se në këtë datë, në vitin 1980 është miratuar nga Asambleja e Përgjithshme e Kombeve të Bashkuara, “Seti shumëpalësh i parimeve dhe rregullave të mbi kontrollin e praktikave kufizuese të biznesit”

Në kuadër të ditës ndërkombëtare të konkurrencës, Autoritetet e konkurrencës, organizata të ndryshme, ndërmarrje, dhe individë të interesuar, bëjnë aktivitete të ndryshme për të festuar ditën ndërkombëtare të konkurrencës me qëllim rritjen e ndërgjegjësimit për rëndësinë dhe përfitimet që vijnë nga konkurrenca e lirë dhe efektive.

This news item can also be viewed at: http://www.monitor.al/

Journée mondiale de la concurrence 2012 – Les cartels impactent lourdement sur les pauvres
Le Défi Quotidien, December 05, 2012

A few weeks ago during a radio interview on DUMA fm I almost created a stir, when discussing the mandate of the Competition Authority I said the Authority is charged with the responsibility to identify and stop cartel behaviour in Botswana’s business space.

“Is the word ‘cartel’ really appropriate? Surely in Botswana we have not descended to that level,” protested the radio presenter who was obviously taken aback and unnerved by the use of a word he found a misnomer in Botswana’s business environment.

Today, December 5, Non-Governmental Organistations across the globe are celebrating World Competition Day under the theme,” harmful effects of cartels on consumers”.This day coincides with the day the United Nations General Assembly passed the UN set of principles and rules on competition.

To many of us the mention of a ‘cartel ‘transports us to the Box Office realities where we visualise the Colombian, Mexican and other South American drug cartels that infiltrate, paralyse law enforcement through callous and corrupt means imaginable and visit violence upon anyone who stands in their way.

Cartels whether in drugs or in any other industry are motivated by greed and the desire to reduce competition. Without competition, cartels steal and rob from the public or consumers. Some studies say the median price index achieved by cartels over a long period could be as high as 25 percent. Differently put, in an area where the market is dominated by cartels there is a high likelihood that the public could be losing up to 25 percent. Considering that this is only a median ,the overcharges burden could be much higher and this has grave consequences for the poor.

Adam Smith is credited with an observation that I find very apt on this occasion. Smith found it intriguing that businesses trading in the same market seldom have any merriment to share between themselves. The rivalry and boundary wall, Adam observed, collapses when the intention is to conspire against the public, often in contrivance to raise prices against the public. Competition literature is replete with instances where competing business firms collude to enter into an agreement to fix prices, rig tenders, allocate markets in order to maximise profits. This is what is characterised as cartel conduct.

Competition regulators are often girded with commensurate legal armour to weed out any cartel behaviour. In pursuit of this goal, identifying and breaking up of cartels is critical.

During the radio discussion alluded to above, the radio journalist wanted to know whether there is cartel activity in Botswana.

Without any empirical finding by the Competition Authority it would be misleading to say otherwise. Suffice to add that the Botswana government had commissioned an economic mapping survey conducted by Botswana Institute for Development Policy Analysis (BIDPA) which study informed the Competition policy of 2005. This study identified market dominance in sectors such as meat industry, cement, sugar, beverages, mining and motor vehicle distribution. The survey opined that firms in these sectors enjoy substantial market power. It might be helpful to consider that studies generally conclude that cartels predominately occur where there are a limited number of firms trading in the same or fairly homogenous products.

Every year the public and consumers lose billions of dollars to business cartels and this cannot be allowed to go on. This year, we in Botswana should add our voice to the global clarion call against harmful effects of cartels.

On the occasion to mark Competition Day, we urge Batswana to help amplify the benefits of open markets while at the same time highlighting the harmful effects of the anti-competitive conduct. In the era of economic recession, budget cuts and austerity measures the cartel overcharges burden should stick out like a sore thumb.

We at the Competition Authority urge Batswana to be vigilant against cartels. Most importantly, we implore civil society, media, prosecutors and legislators to take a tough stance that will lead to the deterrence of cartels. In other jurisdictions civil societies groups are calling upon legislators to impose stiffer penalities on cartel conduct.

Fortunately for us in Botswana, the government has domesticated the UN set, SADC/SACU anti-competitive principles through the enactment of the the Competition Act of 2009. The act explicitly forbids price fixing (indirect or direct), dividing markets by allocating customers, suppliers or regions, bid rigging, production restraints, collective denial to market entry.

This news item can also be viewed at: http://www.mmegi.bw/

Competition day: say no to cartels
The Monitor, December 05, 2012

A few weeks ago during a radio interview on DUMA fm I almost created a stir, when discussing the mandate of the Competition Authority I said the Authority is charged with the responsibility to identify and stop cartel behaviour in Botswana’s business space.

“Is the word ‘cartel’ really appropriate? Surely in Botswana we have not descended to that level,” protested the radio presenter who was obviously taken aback and unnerved by the use of a word he found a misnomer in Botswana’s business environment.

Today, December 5, Non-Governmental Organistations across the globe are celebrating World Competition Day under the theme,” harmful effects of cartels on consumers”.This day coincides with the day the United Nations General Assembly passed the UN set of principles and rules on competition.

To many of us the mention of a ‘cartel ‘transports us to the Box Office realities where we visualise the Colombian, Mexican and other South American drug cartels that infiltrate, paralyse law enforcement through callous and corrupt means imaginable and visit violence upon anyone who stands in their way.

Cartels whether in drugs or in any other industry are motivated by greed and the desire to reduce competition. Without competition, cartels steal and rob from the public or consumers. Some studies say the median price index achieved by cartels over a long period could be as high as 25 percent. Differently put, in an area where the market is dominated by cartels there is a high likelihood that the public could be losing up to 25 percent. Considering that this is only a median ,the overcharges burden could be much higher and this has grave consequences for the poor.

Adam Smith is credited with an observation that I find very apt on this occasion. Smith found it intriguing that businesses trading in the same market seldom have any merriment to share between themselves. The rivalry and boundary wall, Adam observed, collapses when the intention is to conspire against the public, often in contrivance to raise prices against the public. Competition literature is replete with instances where competing business firms collude to enter into an agreement to fix prices, rig tenders, allocate markets in order to maximise profits. This is what is characterised as cartel conduct.

Competition regulators are often girded with commensurate legal armour to weed out any cartel behaviour. In pursuit of this goal, identifying and breaking up of cartels is critical.

During the radio discussion alluded to above, the radio journalist wanted to know whether there is cartel activity in Botswana.

Without any empirical finding by the Competition Authority it would be misleading to say otherwise. Suffice to add that the Botswana government had commissioned an economic mapping survey conducted by Botswana Institute for Development Policy Analysis (BIDPA) which study informed the Competition policy of 2005. This study identified market dominance in sectors such as meat industry, cement, sugar, beverages, mining and motor vehicle distribution. The survey opined that firms in these sectors enjoy substantial market power. It might be helpful to consider that studies generally conclude that cartels predominately occur where there are a limited number of firms trading in the same or fairly homogenous products.

Every year the public and consumers lose billions of dollars to business cartels and this cannot be allowed to go on. This year, we in Botswana should add our voice to the global clarion call against harmful effects of cartels.

On the occasion to mark Competition Day, we urge Batswana to help amplify the benefits of open markets while at the same time highlighting the harmful effects of the anti-competitive conduct. In the era of economic recession, budget cuts and austerity measures the cartel overcharges burden should stick out like a sore thumb.

We at the Competition Authority urge Batswana to be vigilant against cartels. Most importantly, we implore civil society, media, prosecutors and legislators to take a tough stance that will lead to the deterrence of cartels. In other jurisdictions civil societies groups are calling upon legislators to impose stiffer penalities on cartel conduct.

Fortunately for us in Botswana, the government has domesticated the UN set, SADC/SACU anti-competitive principles through the enactment of the the Competition Act of 2009. The act explicitly forbids price fixing (indirect or direct), dividing markets by allocating customers, suppliers or regions, bid rigging, production restraints, collective denial to market entry.

This news item can also be viewed at: http://www.mmegi.bw/

World competition Day today focuses on ‘impact of cartels on the poor’
DailyFT, December 05, 2012

“Our competitors are our friends, our customers are the enemy” is an actual statement made by an executive of Archer Daniel Midland, in the famous case of the lysine (a feed additive) cartel, which was caught on videotape by the FBI. As the international competition community once again gears up to observe the third World Competition Day on 5th of December this year (dedicated to the theme, Impact of Cartels on the Poor), there is a need to reflect on measures to protect consumers from cartels, and sharpen such measures to the extent possible.

Cartels are capable of affecting directly the daily life of the poorest of the society and in undermining the efforts of government to provide comprehensive social security to this section of society. Cartels steal billions of dollars from businesses, taxpayers and ultimately from consumers. For example, there had been cases of price-fixing and other types of collusion between certain business entities in the basic foods industry of South Africa. Bread cartel uncovered by the Competition Commission of South Africa increased the price of basic bread by 35 cents, slashed the discount of distributors from 90 to 75 cents and refused any alternatives to them. The penalty imposed on the accused brands amounted to an approximate 10% of their national turnover for bread operations for the 2006 financial year. Further, the milk cartel had fixed prices indirectly by co-ordinating the removal of surplus milk from the market, while fixing the price of UHT milk and allocating geographic areas in which they would not compete in selling. The price of raw milk paid to farmers has dropped to its lowest level in 40 years. The Commission further found that corporations had exchanged sensitive information on procurement prices of raw milk in various ways.

Small economies are also not immune to the pernicious effects of price fixing conspiracies and other anti-competitive practices. A cement cartel that was in operation in Sri Lanka and ripping-off consumers was highlighted in a publication brought out by the Institute of Policy Studies of Sri Lanka (IPS), Law and Society Trust (LST), and Consumer Unity and Trust Society (CUTS) in 2003. This study also highlighted prevalent anti-competitive activities in the pharmaceuticals and shipping industries. The importance of effective competition policy for Sri Lanka has been highlighted in another study by the same three organizations titled: “Towards a New Competition Law in Sri Lanka” brought out in 2002 and more recent work of the IPS (http://www.ips.lk/percr/publications.html). The two critical problems in Sri Lanka are the lack of a pro-active competition authority combined with the absence of active consumer interest groups.

The culture of competition is quite weak in many countries and consumers have limited understanding about the harmful effects of cartels. Thus, the World Competition Day (WCD) allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumer – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the need to crack down cartels.

The 5th of December 1980, saw the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (UN Set), being adopted by the UN General Assembly at its thirty‐fifth meeting on 5 December, 1980. It is therefore important that the 5th of December be remembered and commemorated each year as a World Competition Day. To reach out to the common man with the message, ‘Say No to Cartels’, various stakeholders such as competition agencies, Civil Society Organizations (CSOs), development organizations and individuals around the world are planning to organize seminars/roadshows, publish newspaper articles/press releases, press conference, etc to celebrate the ‘World Competition Day’ with the purpose of creating awareness about the importance and benefit of competition by curbing Cartels.

The cause has been supported in the form of a letter to UNCTAD towards formal adoption of the day by many countries (Competition Agencies) viz: Namibia, Zimbabwe, Pakistan, The Gambia, Fiji; Russia, Zambia and United Kingdom; and many more countries are in the process to send formal letter to UNCTAD.

Recently, the Philippines Government passed a proclamation declaring 05th December, as the National Competition Day to give due recognition to the CUTS Campaign on WCD.

This news item can also be viewed at: http://www.ft.lk/

Afghanistan Observes World Competition Day
Kabul, December 05, 2012

5th December is World Competition Day and Afghanistan today joined the international community in observing the day. The activities to mark the day took place at the Ministry of Commerce and Industries in Kabul. Speaking on the occasion, the Deputy Minister responsible for Administration in the Ministry of Commerce and Industries, Dr. Sadrudin Sahar deplored the practice of anti- competition which he said was detrimental to the economic growth, but encouraged the private sector to fully participate in the economic development of Afghanistan. “Free market economy must be led by the private sector and the government must support it”, he said. In his remarks, the representative of the private sector, who is also the President of Afghanistan of Board of Entrepreneurs in Afghanistan Mr. Haji Ahagh, stressed the need for fair competition in the market place and urged all the business community to be active members of the competition regime. His sentiments were echoed by the Director of Competition Promotion and Consumer Promotion Directorate (CPCPD), Mr. Hafizullah Walirahimi who noted that controlling the market is not the task of the Government because in a free market economy, the markets respond to the demand and supply adding that “CPCPD as government encourages market growth, prevent anti-competitive practices and abuse of dominance”.

The World Competition Day has been observed since 2010 following the adoption of the competition Set of policies as proposed by the International Network of Civil Society on Competition (INCSCO). The World Competition Day has become an annual event that reminds governments and the general public of the importance of promoting competition as one of commercial “best practices” in a free market economy. The day also offers the opportunity to raise awareness of the consumers across the world to realise the benefits of the competition regime in any commercial activity.

Afghanistan first celebrated the day in 2011 under the guidance of Competition Promotion and Consumer Protection Directorate (CPCPD). The Ministry of Commerce and Industries established CPCPD to spearhead the functioning of a competition regime in Afghanistan in order to benefit from the economic development of a free market economy. The directorate is receiving technical support from the Civilian Technical Assistance Programme (CTAP) and Harakat.

For more information please contact:

Fardin Frotan, Head of Communication and Outreach Department
Phone: +93-707858470 | Email: frotan.fardin@gmail.com

This can also be accessed in PDF

Cartelisation in agriculture affects poor farmers: Experts
ZeeBiz.com, December 05, 2012

Cartelisation in the agriculture sector is impacting consumers and poor farmers the most who are not getting a fair price for the products as a result, a panel of experts said.

“A topic that needs to be further studied is the agriculture market and the primary level mandi which is a cartel controlled by a particular caste and class. There is the class that controls the farmers, and the upper level market,” Competition Commission of India (CCI) member Geeta Gouri said at a discussion on ‘impact of cartels on poor’ today.

Rajya Sabha MP E M Sudarsana Natchiappan said the consumer is not getting the benefit due to cartelisation in the agriculture sector.

According to him, a farmer is selling his produce to an intermediary at a very low price who in turn sells it to the market vendors at a very high price, and the same is sold in the market to consumer at an even higher price.

This news item can also be viewed at: http://zeenews.india.com/

Strict measures to protect consumers from the cartels
Sarifeen.com, December 05, 2012

Observing the third ‘World Competition Day’, the speakers at a seminar demanded strict measures to protect consumers from the cartels. They also demanded independence of regulators, effective enforcement and monitoring mechanism, awareness raising and healthy business practices.

The speakers were discussing at a seminar on ‘Adverse Impact of Cartels on the Poor’ organized by Sustainable Development Policy Institute (SDPI) to contribute into international efforts to celebrate 5th of December as ‘World Competition Day’. The culture of competition is quite weak in many countries and consumers have limited understanding about the harmful effects of cartels. Thus, the World Competition Day allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumer – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the need to crack down cartels.

Chairing the proceedings Dr Vaqar Ahmed, Head-Economic Growth Unit, SDPI maintained that consumer as a constituent has always been ignored in public policy discourse and economic growth agenda in Pakistan. He appreciated the revised ‘Competition Act 2010’, calling it a big achievement, but at the same time raised concern that markets in Pakistan are not still open and performing in a responsible manner.

He also drew the attention of competition agencies towards public entities, who in his opinion, are dominant market players in some cases and are influencing prices, production and services in the country’s economy. Appreciating the recent Pak India trade liberalization initiatives, Dr Vaqar said that now there is greater need of synergies between ‘Competition Agencies’ in South Asia to ensure that trade within the region is inclusive, beneficial to consumers and address the common goal of poverty alleviation in the region.

Nadia Nabi, Director Enforcement, Competition Commission of Pakistan (CCP) briefed participants on various aspects of cartelisation debate and informed participants that CCP is diligently protecting the rights of consumer by ensuring that anti-competiveness business practice are controlled which mainly entails collaborative price fixation, territory/ customers division, restricting production and collusive tendering. Citing references, she said that cartels are major drain on economy whose impacts on prices range from 10 to 20 percent.

Giving details of recent CCP actions including CNG issue, she added that the commissions inspection teams have recently conducted inspection visit on CNG stations and an enquiry committee has been formed to investigate that whether any malpractices has been done by CNG association on CNG prices . She also added that the committee would also review policy framework on the issue and a policy note would be issued in case one is required.

Earlier, she referred many factors affecting efficiency of CCP including backlog of cases in courts and lack of understanding and awareness in the society.

Waseem Hashmi from Consumer Rights Commission of Pakistan (CRCP) said that increasing influence of cartels, even in policy making circles, has made it harder to make them accountable. As a result, the consumer and new entrants to the industry have severely been affected by these malpractices, he added. He discussed various legal frameworks, and deliberated upon the abuse of dominant position by companies, deceptive marketing and various penaltiy mechanisms. He informed that Punjab has only 11 consumer courts in 36 districts under the act of 2005, whereas there is little work done in KP and Balochistan adding that there is no competition bill enacted in Sindh. He also added that people are also not aware of consumer courts as well and how to approach them. This necessitates Empowerment of consumer through Awareness and Capacity Building, Eminent businessman and director Fazal Industries Ltd, Mian Waqas Masud narrated various examples of cartelization in automobile, cement, power and sugar industry in Pakistan. He was of the view that consumer interests are compromised because of weak enforcement, low penalties, and most importantly complex and costly complaints lodging mechanism. He commented that cartels are ripping of the consumer in collusion government officials who in most case turned a blind eye towards unethical and unlawful business practices.

This news item can also be viewed at: http://sarifeen.com/

World Competition Day: Impact of cartels on the poor
The Island, December 05, 2012

“Our competitors are our friends, our customers are the enemy” is an actual statement made by an executive of Archer Daniel Midland, in the famous case of the lysine (a feed additive) cartel, which was caught on videotape by the FBI. As the international competition community once again gears up to observe the third World Competition Day on 5th of December this year (dedicated to the theme, Impact of Cartels on the Poor), there is a need to reflect on measures to protect consumers from cartels, and sharpen such measures to the extent possible.

Cartels are capable of affecting directly the daily life of the poorest of the society and in undermining the efforts of government to provide comprehensive social security to this section of society.Cartels steal billions of dollars from businesses, taxpayers and ultimately from consumers. For example, there had been cases of price-fixing and other types of collusion between certain business entities in the basic foods industry of South Africa. Bread cartel uncovered by the Competition Commission of South Africa increased the price of basic bread by 35 cents, slashed the discount of distributors from 90 to 75 cents and refused any alternatives to them. The penalty imposed on the accused brands amounted to an approximate 10% of their national turnover for bread operations for the 2006 financial year. Further, the milk cartel had fixed prices indirectly by co-ordinating the removal of surplus milk from the market, while fixing the price of UHT milk and allocating geographic areas in which they would not compete in selling. The price of raw milk paid to farmers has dropped to its lowest level in 40 years. The Commission further found that corporations had exchanged sensitive information on procurement prices of raw milk in various ways.

Small economies are also not immune to the pernicious effects of price fixing conspiracies and other anti-competitive practices. A cement cartel that was in operation in Sri Lanka and ripping-off consumers was highlighted in a publication brought out by the Institute of Policy Studies of Sri Lanka (IPS), Law and Society Trust (LST), and Consumer Unity and Trust Society (CUTS) in 2003. This study also highlighted prevalent anti-competitive activities in the pharmaceuticals and shipping industries. The importance of effective competition policy for Sri Lanka has been highlighted in another study by the same three organizations titled: “Towards a New Competition Law in Sri Lanka” brought out in 2002 and more recent work of the IPS (http://www.ips.lk/percr/publications.html). The two critical problems in Sri Lanka are the lack of a pro-active competition authority combined with the absence of active consumer interest groups.

The culture of competition is quite weak in many countries and consumers have limited understanding about the harmful effects of cartels. Thus, the World Competition Day (WCD) allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumer – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the need to crack down cartels.

The 5th of December 1980, saw the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (UN Set), being adopted by the UN General Assembly at its thirty?fifth meeting on 5 December, 1980. It is therefore important that the 5th of December be remembered and commemorated each year as a World Competition Day. To reach out to the common man with the message, ‘Say No to Cartels’, various stakeholders such as competition agencies, Civil Society Organizations (CSOs), development organizations and individuals around the world are planning to organize seminars/roadshows, publish newspaper articles/press releases, press conference, etc to celebrate the ‘World Competition Day’ with the purpose of creating awareness about the importance and benefit of competition by curbing Cartels.

The cause has been supported in the form of a letter to UNCTAD towards formal adoption of the day by many countries (Competition Agencies) viz: Namibia, Zimbabwe, Pakistan, The Gambia, Fiji; Russia, Zambia and United Kingdom; and many more countries are in the process to send formal letter to UNCTAD.

Recently, the Philippines Government passed a proclamation declaring 05th December, as the National Competition Day to give due recognition to the CUTS Campaign on WCD.

This news item can also be viewed at: http://www.island.lk/

President Aquino declares December 5 as ‘National Competition Day’ to promote competition and level the playing field in the market
President Office Philippines, December 04, 2012

President Benigno S. Aquino III has declared December 5 of every year as “National Competition Day,” to underscore the need to promote competition and level the playing field in the market. The Chief Executive issued the directive by virtue of Proclamation No. 384 signed by Executive Secretary Paquito N. Ochoa Jr. on May 18.

“Sections 13 and 19, Article XII of the 1987 Constitution provide that the State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity and shall regulate or prohibit monopolies when the public interest so requires,” President Aquino said.

The President said Executive Order No. 45 (series 2011) has created the Office for Competition under the Office of the Secretary of Justice. The EO, likewise, designated the Department of Justice (DOJ) as the country’s “Competition Authority” to ensure fair domestic trade.

Under EO No. 45, the DOJ is tasked to investigate all cases involving violations of competition laws and prosecute violators to prevent, restrain, and punish monopolization, cartels, and combinations in restraint of trade. The EO, likewise, ordered the DOJ to enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices; and supervise competition in markets by ensuring that prohibitions and requirements of competition laws are followed.

The EO further directs the DOJ to monitor and implement measures to promote transparency and accountability in markets; as well as prepare, publish, and disseminate studies and reports on competition to inform and guide the industry and consumers. The DOJ is also tasked to promote international cooperation and strengthen Philippine trade relations with other countries, economies, and institutions in trade agreements.

“In carrying out the mandate provided under EO 45, the Office for Competition had the occasion to observe from its foreign counterpart, particularly the Association of South East Asian Nations Region, the benefits of competitive markets and the harmful effects of anti-competitive practices to the citizens,” the President noted.

“As part of a global family implementing competition policy and law, we join our colleagues in the global competition network in the observance of “World Competition Day” on the 5th day of December of every year,” he said.

This news item can also be viewed at: http://www.president.gov.ph/

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