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PREFACE pendence is maintained and there are no induced distortions on the type of actions the Authority takes. Any funding somehow related to an action of the Authority may induce the Authority to take that action, irrespective of the general interests that the action helps achieving. There is a further advantage with Government funding, provided that it is granted in a transparent way and without any hidden agenda: the Authority may be accountable for the use of its funding and be required to pro- This is, for example, the situation in the United States or in the United Kingdom where Parliament and Government are periodically actively evaluating the performance of antitrust Authorities and repeatedly ask if they provide value for money. Government funding has some drawbacks because it may put into question the independence of the Authority, pushing it to become too complacent with special interests (especially Stateowned enterprises). In such circumstances, it may be appropriate to provide direct funding of the Authority by some sort of a tax on undertakings, as has been done for example in Turkey (where the Authority is mainly funded by a tax on the capital increases of all incorporated or limited companies in the country) and, more recently, in Italy (where the Authority is funded via a turnover tax). 7. Enforcement Record The individual <strong>report</strong>s on the three jurisdictions indicate the output of the authorities in terms of the number of competition cases that have formed their caseload over the past: a 10–11 year period in the case of Zambia and Zimbabwe and 3 recent years in the case of the United Republic of Tanzania. The Zambian authority over the period 1998–2010 handled 386 Restrictive Business practices cases would appear that of the 103 cases handled, 13 resulted in “cease and desist” orders and a further 55 were closed. This would imply that a substantial number remains open. The introduction of a noti- up in a large increase in 2010 of new cases and - 19 ter employed in detecting and prosecuting serious violations such as cartels. Over the same period there are statistics of Commission’s determination. The Zimbabwe authority over the period 1999– 2010 handled 220 cases of Restrictive Practices tailed data indicates that the Zimbabwean competition authority takes annually on average around 8 decisions on restrictive business practices, out of which 18 per cent are decisions to proceed to a full investigation and 7 per cent are decisions to the absence of sanctions for violation, at best the decision can be assumed to be declaration of nul- competition authority takes on average 10 decisions per year. 1 per cent of the mergers handled between 1999 and 2011 were prohibited, while 20 per cent were approved conditionally. In addition, 79 per cent were either approved unconditionally or not challenged. The Tanzanian authority over the period 2008/9 to 2010/11 handled 4 cases of Restrictive agree- and reviewed mergers. A number of cases are pending before the authority’s and the strategic plan for 2011–2013 foresees an enforcement focus on cartel investigations. This overview of enforcement record suggests some conclusions. Besides Zimbabwe, each of the other two authorities has been systematically deciding more cases related to non-competition tasks assigned to it than to antitrust, also because violations of the law associated with these other tasks are somehow easier and more resources should be dedicated to antitrust enforcement. Aside from procedural penalties there are, with some notable exceptions, very few prohibition decisions. The notable exceptions such as those in the Breweries sector (Serengeti Breweries V Tanzanian Breweries, or that involving Zambian breweries) are an indication of the scope of what is attainable with stronger enforcement. The overload of merger - and for consumers from implementing competi- COMPARATIVE ASSESMENT
20 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE tion law and from having it respected resides in achieving a credible enforcement record through prohibition decisions. Faced with that challenge most authorities have introduced a combination of training and capacity building programmes in cartel detection, investigative methods, merger assessment for operational staff and instruction in case management and assessment techniques risdictions under review, training on the practical aspects of conducting investigations (how to conduct a dawn raid, what type of information to ask in the course of investigations, how to handle how to prove cartels, what type of behaviour to consider an abuse, how to set up a strategic plan for action, etc.) would be particularly important. Only by becoming more effective in investigating relevant cases, the status of the Authorities in the three jurisdictions can be enhanced. This is the experience of all authorities in the world and the three jurisdictions are no exception. First (relevant) cases should be investigated and prohibition decisions be taken. As a result the credibility of the authority would be strengthened and so would be be) the cases, is indeed impossible. III. REGIONAL AGREEMENTS All three jurisdictions participate in some Regional agreements. The United Republic of Tanzania is a member of East African Community (EAC) and the Southern Africa Development Community (SADC), while Zambia and Zimbabwe are both members of the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC). SADC is the Regional organization to which all three jurisdictions belong. While in the globalized economy there is a strong need for competition authorities to cooperate at the international and regional levels in order to address cross-border competition cases, the major weakness of some of these regional agreements is that the complexity of the tasks assigned to them is not always in line with the funds available to accomplish them. A summary of COMESA and SADC, the international organizations to which at least 2 of the countries under review belong is provided below. COMESA is now working towards becoming a custom union. Indeed the provisions of the COMESA Treaty are primarily devoted to the elimination of trade barriers, to the enforcement of antidumping rules and to the creation of a free trade area. Recent developments have occurred which are part of a progressive effort towards the creation of a common market. The move to introduce antitrust enforcement within COMESA is one of such efforts. In 2006, a full Competition Commission composed of nine Commissioners from COMESA member States was created. The Commission has been fully in place and operational since December 2009. The COMESA Competition Commission is responsible for enforcing the rules against abuse of dominance and cartel behaviour and it also has some powers with respect to merger control. The institutional structure of COMESA and in particular the existence of a COMESA court of jus- antitrust enforcement. However, jurisdictional issues are enormous since many COMESA member States are also members of other regional groupings with overlapping boundaries. As a result, for the three jurisdictions under review, the COMESA Competition Commission will have the preliminary ciding on any case. The burden in terms of litigation could be enormous. The European experience suggests that the adoption of the principle of “effet utile” may be a way to alleviate the jurisdictional issue faced by regional groupings such as COMESA. According to the principle of effet utile, what matters, even in order to determine jurisdiction, is the substance of the decision. Judges or domestic antitrust authorities could apply either community or domestic antitrust laws, but the decisions they reach should in any case conform to community case law and jurisprudence. As a result of the principle of effet utile, domestic competition laws became fully integrated with community law, not simply complementary to it, as it might have been presumed. In the past the COMESA Competition Commission lacked funding, both for the operation of the board and for recruiting staff. Adequate funds are an essential feature of any organization. Recently COME- SA started recruiting new staff, a good sign towards
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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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