Competition Commission of Pakistan (CCP) Chairperson Rahat Kaunain Hassan has said that the commission is exercising powers of search and inspection with due diligence and the business community should not consider these searches as any kind of adverse action. During the 13th quarterly meeting of Competition Consultative Group (CCG) held here on Monday, CCP Chairperson, while highlighting achievements of the 2010-2011, informed the Group that the Commission has maintained the pace of enforcement of competition law and a number of enquiries are in progress in various sectors affecting the consumers. Actions against the companies involved in cartelisation, anti-competitive and deceptive marketing practices etc are being taken by the Commission. Now, the associations particularly individual companies have started realising the importance of the competition laws. She informed that in case of search and inspections, the surprise element is very important for visiting premises of associations and undertakings.
Across the world, search and inspections have been carried out with the backing of force or law enforcement agencies. In these competition regimes, such inspections have been known as raids. Contrary to this, CCP has never used force while conducting search and inspections of associations’ premises. Even in cases of forcibly entry, the CCP has not used force. The Commission’s officials merely convince the concerned persons to give access to the record without any backing of police of any other kind of force. Resultantly, the undertakings have now started realising that the search and inspections should not be considered as stigma or show cause notice, but a routine work of the Commission, Rahat Kaunain maintained. She said that the operational cost of the Commission has been reduced by 35 percent despite limited budget of Rs 200 million for 2011-12 due to internal controls and transparent affairs in the working of the Commission. She pointed out role of CCP team including Ikram ul Haq Qureshi, Registrar of the Commission and Director General Corporate Affairs & Legal, who played key role in placing effective checks and balances thus resulting in huge savings of operational cost of the Commission. The CCP Chairperson said that the people generally confuse price hike with the competition as price increase does not cover under the competition law. The CCP is not a price regulating body, Rahat remarked.
On the international conference, the members of the CCG including Consumer Association of Pakistan and Indus Motors Company Limited highly appreciated the performance of CCP Member Advocacy & IT Vadiyya Khalil for arranging a successful international conference organised by CCP with the collaboration of Competitiveness Support Fund/USAID. The meeting was presided over by the Chairperson CCP, Rahat Kaunain Hassan, and attended by Abdul Ghaffar, CCP Member Cartel, Monopolies and Trade Abuses, Dr Joseph Wilson, Member Mergers & Acquisitions, and International Affairs, Vadiyya Khalil, Member Advocacy and IT, Mueen Batlay, Member Competition Policy and Research, Dr Shahzad Ansar, Member Office of Fair Trading and Budgetary Affairs, and Ikram ul Haq Qureshi, Registrar of the Commission and Director General Legal. The meeting was attended by representatives of State Bank of Pakistan, Oil & Gas Regulatory Authority (OGRA), Pakistan Telecommunication Authority (PTA), Engineering Development Board, Intellectual Property Organisation, 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 & Industry, ICI Pakistan Ltd.
The CCP Chairperson, Rahat Kaunain Hassan, while addressing the meeting said the Commission, in the formulation of a Roadmap (2010-13), has emphasised 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 CCP has detected violations of competition law in the form of bid rigging by certain undertakings. She said that the Commission has successfully unveiled cartelisation in the power, poultry, edible oil & 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 cartelisation power sector, she said.
The Chairperson informed the CCG 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 (2007-10). The Commission has become more confident in undertaking these inspections and identifying relevant information to gather quickly,” she said. Most recently, the Commission carried out search and inspection of All Pakistan Cement Manufacturers Association and the Kohat Cement office. The Chairperson 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 CCP Chairperson informed the CCG meeting that since its establishment, 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 FY 2010-11 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 Office of Fair Trading, the Chairperson said the Commission’s enforcement of Section 10 has resulted in a 100% 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,” she informed the meeting.
About the steps to create awareness of the competition law among the undertakings, the Chairperson informed that 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’; organised 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. In the questions and answers session, the participants of the meeting appreciated CCP’s performance. 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 further 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. In the meeting, CCP Member Advocacy & IT Vadiyya Khalil gave a detailed presentation about the international conference organised by CCP with the collaboration of Competitiveness Support Fund/USAID on 1-2 December 2011. She said the conference was very well received locally as well as internationally. Nadia Nabi, Senior Joint Director and a key member of the CCP’s enforcement team gave an overview of the ongoing cases which include sectors such as banking, telecom (CMTOs) & (LDIs), medical centers, procurement, DSL services, cement, fertiliser, pharmaceutical, and cable TV services.