Powerful segments lobbying to make Competition Commission toothless

[Naveed Yaseen]

By Mansoor Ahmad
LAHORE: Competition Ordinance 2007 may be diluted to take out the sting that has annoyed the powerful segments of society, when it is presented in parliament by the deadline of November 27 set by the Supreme Court, relevant circles express fear.

The federal government is bound to get 37 ordinances, promulgated by former president Pervez Musharraf, ratified by parliament before November. Competition Ordinance 2007, under which the Competition Commission of Pakistan (CCP) is operating, is one of those ordinances.

The CCP has played a vital role in curbing anti-competitive practices and use of dominant position by a company or a cartel. The News has learnt that those affected by CCP actions are making all-out efforts to convince the government either to let the Competition Ordinance lapse or make amendments in the original ordinance to make the CCP toothless like its predecessor — Monopoly Control Authority.

The parties affected by CCP actions include several banks, cement companies, the largest refinery, stock exchanges, cellular companies, a leading business school, a government-sponsored trust, several newspapers, a professional association and two fertiliser companies.

An interesting point to note is that only the newspapers accepted the CCP verdict with an open heart while most of the others appealed against its decisions in the Supreme Court. Now it is up to the apex court to decide these cases speedily.

The CCP imposed the highest penalty on cement units. On August 27, 2009, it slapped a cumulative fine of over Rs6 billon on different cement manufacturers who were found involved in cartel-like behaviour. However, the cement firms can appeal against the decision in the Supreme Court within 60 days, ie by October 27.

The CCP has also seized data of various sugar mills and the Pakistan Sugar Mills Association to investigate allegations of cartel-like behaviour.

The Supreme Court has asked the Commission to evaluate the cost of sugar and submit its findings after examining the record of sugar mills and their association.

The sugar lobby is the strongest in the corporate class. Many political families owning sugar mills and having representation in parliament will exert pressure if the Competition Ordinance is placed for approval in the Senate and the National Assembly.

So far the Commission has issued six policy advisory notes to the government and government agencies on various aspects of public policy and regulation which were patently adverse to accepted competition norms.

The Commission has moved decisively against cartelisation in various sectors, collusive tendering and abuse of dominance, unacceptable concentration and deceptive marketing practices.

Pakistan’s new competition law puts the country squarely in line with international best practices due to adoption of a system which prohibits anti-competitive agreements and abuse of dominant position while requiring compulsory pre-clearance of mergers and acquisitions; and establishment of the Competition Commission as an administrative enforcement body, operationally independent of the government, with quasi-judicial functions and subject to appeal to courts.

http://www.thenews.com.pk/daily_detail.asp?id=201901