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PREFACE (d) the extent to which the proposed merger shall maintain or promote exports from Zambia or employment in Zambia; (e) the extent to which the proposed merger may enhance the competitiveness, or advance or protect the interests of micro and small business enterprises in Zambia; (f) the extent to which the proposed merger may affect the ability of national industries to compete in international markets; (g) socioeconomic factors as may be appropriate; and (h) any other factor that bears upon the public interest.” Such an extensive list weakens substantially the technical approach of the Authority in the evaluation of mergers. The standard according to which mergers are evaluated should be clear and precise. This means that the standard should fully remain within a one dimensional type of measurement, i.e. the increase in market power associated with the merger. Authorities are well equipped to measure and to evaluate the effect of a merger over market power. A public interest standard introduces a multidimensional approach that requires some sort of political trade-off to be sorted out. How much exports should increase in order to more than overcome the increase in market power (prices) originating from the merger? Or how much should employment increase in order to overcome the increase in market power? These are questions that cannot be answered in a technical way. The most important point to make with respect of a public interest standard is that, while the increase in market power can be presumed with a high degree of probability, all these wider social considered in an administrative decision and, subsequently, in a Court of law. With such a long list of possible exceptions, the Authority would have to consider all sort of claims, without a clear theory to rely on in order to actually assess their validity. to prohibit even the most anticompetitive merger. The best approach would be to limit the public defences, along the lines of the United Republic of Tanzania and the Zimbabwe laws. 17 If the law is not changed, the Zambian Authority should interpret these public interest provisions very strictly and authorize an anticompetitive compelling and unquestionable. 6. Public resources dedicated to antitrust enforcement In all three jurisdictions the antitrust Authority is a relatively small, but a multiple tasks institution. Besides antitrust enforcement, the authorities are involved with consumer protection, fair trading, plus counterfeit goods (United Republic of Tanzania), relocation of Plant and Equipment (Zambia) or Tariff issues (Zimbabwe). As a result, the amount of resources dedicated to competition law enforcement and policy is extremely limited. In Zimbabwe the Authority has a staff of 29 people out of which 16 are technical and 13 support staff. There is the Director, Secretary of the Commission tition division is led by the Assistant Director for competition. Furthermore, most of the competition staff is relatively new to the Commission; three were hired in 2007 and three in 2011. The Assistant Director for competition was hired in 2008. The only experienced competition expert is the Director who has been with the Commission since 1999. Among the operational staff, none has undergone competition training at University; internally there have not been any comprehensive in-house training of staff. At most members of staff and Commissioners have attended short trainings of 2–3 days abroad. In this area, the Authority should consider mobilising resources and organized a tailor made training aimed at addressing knowledge and skills gaps for both the Commissioners and staff. The staff of the Authority is paid civil service type salaries (provided by the Public Service Commission), which are seven times lower than those of the staff of sector regulators or of the Central Bank. As a result the Authority does not attract well trained people and such salaries do not provide the right incentive for becoming a well trained antitrust enforcer. Resources dedicated to competition have to increase substantially, with the Authority increasing the number of staff, their salary and the COMPARATIVE ASSESMENT
18 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE quality of the whole organization. Otherwise the proper competitive environment. The competition authority should become like a Central Bank for the real economy. Competition oriented reforms require a technical body to design them and the Competition Authority is the right institution for being granted such powers. It should not remain a second tier institution. The goal to be achieved is for the Authority to get the resources, the quality of staff, the salary and the status of the Bank. The Authority of the United Republic of Tanzania it better funded. It has a staff of 58, of which approximately 24 is dedicated to antitrust enforcement and competition advocacy. Contrary to Zimbabwe, the staff salaries are much higher than the average civil service and competitive with the private sector, also because more than 90 per cent of the Authority’s budget has been funded by a World Bank grant. This is not a lasting arrangement. The Government will soon take responsibility for the budget of the institution. Like the Central Bank is advising the Government on economic policy, so the Competition authority should advise the Government on micro policies (economic regulation and liberalization). Indeed also in the United Republic of Tanzania the Central Bank should become the reference for the staff salaries and status of the institution. In Zambia the Authority has a total staff of 29 of which 17 is directly involved in competition and consumer issues and only half on antitrust enforcement. Staff salaries are quite good and compare well nationally and regionally. The present inadequate and staff is unable to handle the increasing number of cases and funding is the major constraint that the Authority faces. The Authority recently appointed 10 part time Inspectors and a total of 60 Inspectors are planned to be hired n all the country’s nine Provinces. All this people needs specialized training. The Zambian Authority needs appropriate Government funding, increasing substantially from the current level (at around 36 per cent of the total). The major source of the Commission’s income is tion fees are predominant. New fees to be soon established for the exemption of anticompetitive total (it may not be so because the fees may substantially reduce the incentive to notify). It is not a good policy for Government institutions to be funded by the market through fees levied on statutory activities. The major problem is that once the fees are in place every change in current practices that may be appropriate on the substance may be blocked because of the effect it may have on the funding of the Authority. In other words the funding of the Authority may become a reason to avoid well meaning reforms (for example it may become impossible to eliminate the exemption procedure if this would lead to a reduction in the competition law should be paid to Treasury, to companies, as this is likely to compromise its in- funds for the Authority, may lead to erosion of trust and credibility of its actions by the business community. If there is a need for external funding merger noti- ture could be devised to be in some sort of relation with the complexity of the analysis. In other words the fee could increase in proportion of the turnover of the acquired company, not just with the turnover of the notifying party. diction and everywhere they are biased with respect of the turnover of the notifying company. This bias should be eliminated. In Zambia there is the extra problem that fees are way too high 000). As the Zambia Report rightly notes, “the transaction costs of merger transactions, and ing parties who in most cases enter into merger transactions for economic and viability reasons. Secondly, it would not be prudent for the Com- for the funding of its operations since such fees are not a stable source of income.” achieved through Government funds, since inde-
Page 1 and 2: UNITED NATIONS CONFERENCE ON TRADE
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Page 10 and 11: COMPARATIVE ASSESMENT COMPARATIVE A
Page 12 and 13: PREFACE This comparative assessment
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Page 16 and 17: PREFACE Finally in the United Repub
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ZIMBABWE FULL REPORT ZIMBABWE
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ZIMBABWE TABLE OF CONTENTS PREFACE
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ZIMBABWE This report is part of the
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ZIMBABWE With the growing political
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ZIMBABWE of restrictive practices,
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ZIMBABWE competition authorities do
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ZIMBABWE divided according to geogr
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ZIMBABWE The Commission in 2006 whi
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ZIMBABWE to take care of themselves
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ZIMBABWE (under Section 9); basical
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ZIMBABWE Full scale investigation i
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ZIMBABWE (ii) to produce any book,
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ZIMBABWE The fact that CTC has a co
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ZIMBABWE tariat of technocrats, who
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ZIMBABWE Table 2: Number of Competi
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ZIMBABWE Regarding the handling of
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ZIMBABWE (Emphasis by the author) b
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ZIMBABWE Section 5 (1) (f) that pro
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ZIMBABWE Whilst the arguments can b
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ZIMBABWE Anti competitive agreement
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ZIMBABWE by conducting its case det
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