Competition Commission of Pakistan (CCP) will maintain its focus on public procurement, concession agreements, and will expand the Office of Fair Trade role to curb deceptive marketing, restricting associations to their mandate, and improving the legal framework to promote the competition perspective. This was informed at the quarterly meeting of Competition Consultative Group (CCG) held on Monday. Addressing the meeting, CCP Chairperson Rahat Kaunain Hassan said the commission roadmap emphasizes its focus on certain areas, given their relatively greater impact on the economy these areas include public procurement, concession agreements, expanding the Office of Fair Trade (OFT)’s role to curb deceptive marketing, restricting associations to their mandate, and improving the legal framework to promote the competition perspective.
Public procurement is one of the key area where the commission has detected violations of competition law in the form of bid rigging by certain undertakings.
She said that the commission has successfully unveiled cartelization in the power, poultry, edible oil and ghee, and jute sectors, where the significance of competition issues in public procurement have been highlighted. The most recent action in this regard investigation and legal proceedings initiated against Pakistan Electric Power Equipment Manufacturers Association (PEMA) for cartelization power sector.
She informed the meeting that the commission has been active in initiating actions against non-compliant undertakings and conducting search and inspections. “There were eight search and inspections during the period under review compared to four in the preceding three years (2007-2010). The commission has become more confident in undertaking these inspections and identifying relevant information to gather quickly. Most recently, the commission carried out search and inspection of All Pakistan Cement Manufacturers Association and the Kohat Cement office.
She said that search and inspections have also been conducted by the Commission in Pakistan Ship’s Agents Association, Pakistan Vanaspati Manufacturers Association, Pakistan Edible Oil and Refiners Association, Pakistan Electric Power Equipment Manufacturers Association, FICO High-Tech (Pvt.) Limited, Pak Elektron Limited, and 1Link guarantee Limited. She also gave an overview of the recent orders issued by the Commission. The commission has examined about 318 potentially competition-reducing agreements and issued exemptions on grounds of economic merit, with and without conditions, under the gateway provision of law.
In last fiscal year alone, 66 exemptions were granted. Similarly, during FY 2010-2011, 67 cases of acquisition of shares, 14 cases of mergers between the undertakings and 3 joint venture cases were reviewed by the commission and NOC given to the applicant undertakings. Three cases were also subjected to a second-phase review. Speaking about the OFT, she said enforcement of Section 10 has resulted in a 100 percent rate of compliance by undertakings. An online complaint cell has been established within CCP to take consumer complaints related to deceptive marketing and other anti-competitive practices.
About the steps to create awareness of the competition law among the undertakings, the she said the commission has developed a Voluntary Competition Compliance Code to promote voluntary compliance of the law; published a booklet on ‘Protection from Anti-Competitive Practices: A Guide for Consumers and Businesses’; organized an international conference in December 2011; held 13 meetings of Competition Consultative Group to solicit feedback from key stakeholders; and issued policy notes to highlight and enhance competition to government and other regulatory bodies.
Responding to a question, the Chairperson made it clear that CCP keeps an unbiased approach while conducting enquiries and where violations are not proved, the commission stops further proceedings against the concerned undertakings. She said the business community should not take the surprise search and inspections and issuing show cause notices by CCP as adverse actions as by doing so, CCP does not intend to target specific business interests.
CCG is a forum provided by CCP to solicit feedback and suggestions on competition related issues and policies from public and private sector representatives, legal community, academia, media and the government. The meeting was presided over by the Chairperson CCP and attended by representatives of State Bank of Pakistan, Oil and Gas Regulatory Authority (OGRA), Pakistan Telecommunication Authority (PTA), Engineering Development Board, Intellectual Property Organization, CEO of Competitiveness Support Fund, Consumer Association of Pakistan, daily Business Recorder, Friedrich-Nauman-Stiftung, Institute of Chartered Accountants of Pakistan, Unilever Pakistan Limited, Indus Motors Company Limited, Pakistan Business Council, Overseas Investors Chamber of Commerce and Industry, ICI Pakistan, besides members of CCP.
