‘Influential groups lobbying to get rid of CCP laws’

[Naveed Yaseen]

By Sajid Chaudhry
ISLAMABAD: Chairman Competition Commission of Pakistan, Khalid Mirza warned that most powerful lobbies and influential groups wanted to destroy the Competition Ordinance 2007 and are making an organised attempt to get rid of the CCP laws.

He asked for help from the media and the civil society to play their roles in saving the anti-competitive laws and the commission at a time when the law is passing through process of vetting at the parliament.

He was speaking to media persons at a Journalists Training Workshop to sensitize them on competition policy and law as well as performance of CCP here at a local hotel.

He pointed out that most powerful lobbies and influential groups, against whom actions were taken by the CCP, have started a campaign against it. It also included those powerful groups against whom the commission is intended to initiate action for committing serious violations of the CCP laws. These influential lobbies have vested interest and collectively started a campaign against the commission to internally de-stabilize the CCP office with the intention to takeaway all its powers available to its Members and officers. “ I want to inform that the commission is facing serious threats from the rent seekers,” On the other hand, we have no army/guards or sufficient financial backing and are solely depending on the CCP laws. “Hence political and financial support of the commission is the need of the hour,” he opined.

He also hinted life threats to the senior CCP officials, who are facing resistance from the organised groups operating against the commission. Earlier, some of my friends used to ask me to wear bullet proof jackets for the sack of fun. Now, people are seriously advising the CCP officials to take some strict security measures seriously.

He said that the business community should understand that such competition laws would promote business and bring economic stability in the country. The implementation of competition laws would also bring prosperity by providing a conducive business environment to the business community. Contrary to this, some businesses assume that actions of the CCP against cartelization are against them. To dispel such impression, the CCP is interacting with the businessmen to educate them about the CCP laws.

Responding to a query, he said that the India has setup competition department seven years ago, but no action has been taken against any company or group. The new CCP law is perfect when compared with other international laws. However, the new law lacks powers to initiate criminal proceedings against those involved in cartelization and other violations of the CCP ordinance. Secondly, the CCP is not empowered to suspend the board of directors of a company involved in violations of the law.

When international agencies and commissions aboard examined the CCP law, they highly appreciated the law, but suggested that the penalty is very less in the Pakistani law. Despite such objections, the law is perfect for the Pakistani business environment.

About the report on sugar price fixation, the CCP has thoroughly analysed the cost audit reports of 11 mills including five each from Punjab and Sindh and one from NWFP. The published audit reports of most profitable mills, whose accounts have been maintained by reputable chartered accountant firms, have been analysed. The cost audit has been conducted on the basis of data maintained by most profitable sugar mills of the country.

According to the CCP inquiry report, the examination of the documents reveals that sugar mills under the auspices of PSMA are prima facie involved in fixing of sugarcane prices. All sugar mills have been divided into regions and zones and prices of sugarcane are fixed for each region and zone notwithstanding the support price fixed by the Government.

Secondly, territorial allocations are in practice amongst the sugar mills and there are documents indicating commitment inter se the mills that restricts procurement of sugarcane by one within a radius of 15 km of another mill. The PSMA zonal and regional committees in this regard take up violations. The CCP opined that the PSMA appears to determine quotas for raw sugar imported through Trading Corporation of Pakistan (TCP). The quotas are fixed on the basis of the previous year’s production figures.

The CCP said that the PSMA appears to be lobbying with the government that the establishment of new sugar mills or syrup processing mills should not be allowed. It also appeared that PSMA is restricting TCP to buy sugar only from PSMA members against quotas and prices set by the PSMA. This can be gathered from the certificates of membership issued by PSMA to its members for selling of sugar to TCP. The CCP said that PSMA appears to control the supply of sugar in the market by directing sugar mills to start or stop off-loading stock in the market and monitoring buying of sugarcane, supply dispatches, and the production of sugar mills through hiring professional services of a chartered accountant’s firm similar to the arrangement in the cement industry, inquiry report added.

http://www.dailytimes.com.pk/default.asp...2009_pg5_1