Final Report - World Trade Organization

More documents

Recommendations

Info

I. There were 7 countries in the project; II. The project had 7 objectives; and III. The project aimed to pull UP the socks of the competition authorities in the project countries. Objectives The stated objectives of the project were to: 1. conduct an evaluation of the existing competition legislation and its implementation in the target countries; 2. identify typical problems and suggest solutions based on practices prevalent elsewhere; 3. suggest ways forward to strengthen the existing legislation and institutions dealing with competition issues; 4. assess the capacity-building needs of the governments, their institutions and civil society; 5. develop strategies for building expertise among competition-agency officials, practitioners and civil society at large; 6. help build constituencies for the promotion of a competition culture; 7. create an advocacy group both at national and international levels to pursue the necessary reforms. Methodology and Findings The project was divided into two phases. Phase I was meant to conduct a research study of the existing competition regimes, while Phase II involved an analysis of their functioning by a case study approach. The distinguishing feature of the 7-Up project is the inclusion of countries of different sizes at varying levels of economic development. While the two least developed countries Zambia and Tanzania have enacted their competition laws only recently (in 1995 and 1994 respectively), probably under pressure from international lending institutions, the two large developing countries India and South Africa have had competition laws in place for a much longer period (since 1969 and 1979 respectively). In fact, the latter have framed new laws in 2003 and 1998 respectively in order to cope with changing times. The remaining three developing countries Kenya, Pakistan and Sri Lanka are in the process of adopting a new law. The findings of the quantitative-cum-qualitative analysis of the competition regimes of the selected countries are quite revealing. What follows is a brief discussion on them. Budgets l The size of funding varies considerably within the 7-Up group, both in absolute and relative terms. l In general, the budget of each competition authority is low in absolute terms, the only exception being that of South Africa. South Africa’s competition regime appears to be the best funded. Its budget was US$7.74mn in absolute terms and 0.033 percent of the annual government budget in the year 2000. It would Figure A: CA’s Budgets as % of Government Expenditure 0.06 0.05619 Competition Authority Budget as % Government Expenditure - 2000 0.05 0.04 0.03 0.02 0.01 0.00 0.00089 0.00731 0.00240 0.03327 0.00288 0.01604 0.00579 India Kenya Pakistan South Africa Sri Lanka Tanzania Zambia Brazil (2001) 0.01386 USA viii w Pulling Up Our Socks
Table A: Human Resources in the Competition Authorities India Kenya Pakistan South Africa Sri Lanka Tanzania Zambia Staff (2000/2001) Full time members 4 1 3 1 1 1 0 Part time members 0 0 0 8 5 0 12 Professional 23 24 5 37 7 2 5 Support staff 125 6 25 32 7 3 6 Total 152 31 33 78 20 5 23 l be interesting to note that 49 percent of the budget (1999/2000) of the South African Competition Commission was obtained from filing fees paid by companies seeking a merger. The budgets of the three South Asian competition authorities, as a percentage of the respective government’s total expenditure, are much lower than those of the African countries in the project. In relative terms, India’s competition authority has the smallest budget and the Zambian and South African competition regimes have the largest. Figure A provides the details. Personnel l The competition authorities find it very difficult to attract and retain competent and qualified staff. Most of them maintain a skeleton staff. In countries where the numbers are higher, the staff mainly comprises support staff and not professionals. For details, see Table A. l The professional staff of all the seven competition authorities is dominated by economists. There is a general shortage of lawyers. Besides, even where the professionals have an economic or legal background, their skills are not of the required standard. l The process of recruitment is not systematic and is not taken very seriously in most of the countries. Lack of training facilities available to the professional staff aggravates the problem. l Lack of funds and proper salary scales are two key reasons why the competition authorities have been unable to attract top quality economists and lawyers. Except in Zambia and South Africa, the salaries paid are considerably lower than the salaries paid in the private sector. Even the agencies of Zambia and South Africa have difficulties in attracting and retaining competent staff. In Sri Lanka, the professional staff members are paid salaries that are lower than even those in the government sector. Case Handling l Adequacy of legal provisions is the most important aspect of a competition regime determining its l l l l l effectiveness. The inadequacy or lack of legal clarity in dealing with cases, though prevalent in all countries, was most prominent in the case of India. The lack of research and investigative capacity in the seven countries makes it very difficult for the competition authorities to deal with cases judiciously. In most of the competition regimes, competition cases take unusually long to deal with. This can be partly explained by the lackadaisical attitude of the staff, especially in the authorities of the South Asian members. Further, the authorities in some countries are not manned by the right kind of people. In such situations, dealing with cases with an international dimension is an even greater problem, as the authorities are oblivious of the activities and prosecution of international cartels in developed countries and hence do not take action such cartels in their own countries. Moreover, little attempt is made to communicate with the competition authorities of developed countries for information and cooperation to handle international cases. Notably, the losses inflicted by such cartels are substantial in developing countries as evident in Table B that provides estimates of losses in the 7-Up countries due to the notorious vitamins cartel. The autonomy of a competition authority is of crucial importance for the effective handling of cases. In all 7-Up countries, except in Kenya and Tanzania, competition authorities are de jure autonomous. Yet government interference is quite evident. In Sri Lanka, although government interference permeates the system, it is not apparent so far as handling of cases is concerned. There are other kinds of external influence on the competition authorities as well. Sometimes, they get swayed by public opinion/emotions or national sentiments and take decisions not in the best interests of competition. Lobbying by different interest groups can make a difference in many jurisdictions. It was generally observed that businesses are more active in lobbying and consumer movements are Pulling Up Our Socks w ix
Page 1 and 2: PULLING UP OUR SOCKS - A STUDY OF C
Page 3 and 4: PULLING UP OUR SOCKS -A Study of Co
Page 5 and 6: C O N T E N T S LIST OF TABLES.....
Page 7 and 8: List of Tables Table 1: Socio-Econo
Page 9 and 10: Foreword Since the second part of t
Page 11 and 12: Preface The title of this research
Page 13: Executive Summary Introduction Tran
Page 17 and 18: Chapter-1 Introduction: The 7-Up Pr
Page 19 and 20: Chapter-2 Socio-Economic Context of
Page 21 and 22: Table 2: Industrial Structure India
Page 23 and 24: countries, state-owned enterprises
Page 25 and 26: Chapter-3 Background and Objectives
Page 27 and 28: In Kenya, most transactions in the
Page 29 and 30: In India, engineering services, ele
Page 31 and 32: promulgated in 1988 had ‘control
Page 33 and 34: Chapter-4 Scope and Coverage 66 4.1
Page 35 and 36: Sri Lanka’s Fair Trading Commissi
Page 37 and 38: competition law doesn’t frown so
Page 39 and 40: dominance’ investigations, focusi
Page 41 and 42: takes over or merges with ‘x’ t
Page 43 and 44: a state’s exercise of governmenta
Page 45 and 46: Table 4: Practice specific exemptio
Page 47 and 48: Table 5: Enterprise specific exempt
Page 49 and 50: The approach of the South African a
Page 51 and 52: Chapter-5 The Competition Authoriti
Page 53 and 54: This bundling of powers is increasi
Page 55 and 56: The methods of analysing the static
Page 57 and 58: Table 8: Facilities Country India K
Page 59 and 60: Commission in handling cases. It al
Page 61 and 62: Further, the competition authoritie
Page 63 and 64: all 7-Up countries can learn from t
Page 65 and 66:
Chapter-6 Competition Authorities:
Page 67 and 68:
In a globalising world it may be a
Page 69 and 70:
It can well be expected that when t
Page 71 and 72:
CAs are not aware of many of the in
Page 73 and 74:
Chapter-7 Competition Issues with I
Page 75 and 76:
Box 1: International Cartels - The
Page 77 and 78:
administrative fine not exceeding t
Page 79 and 80:
corporations: GE and Honeywell, bec
Page 81 and 82:
Box 3: The Cola Saga in India The c
Page 83 and 84:
to the removal of quantitative rest
Page 85 and 86:
Chapter-8 Conclusions and Recommend
Page 87 and 88:
acking of the government or lacks t
Page 89 and 90:
ones is their general lack of funds
Page 91 and 92:
2. International donors could finan
Page 93 and 94:
hands of a few families, Pakistan
Page 95 and 96:
Annexure-1: The Acts Country Year A
Page 97 and 98:
COUNTRY PARTNERS 1. India National
Page 99 and 100:
Annexure Table 2a: Coverage of Enti
Page 101 and 102:
Annexure Table 3a: Monopolisation,
Page 103 and 104:
Annexure Table 3b: Restrictive Trad
Page 105 and 106:
Annexure Table 3c: Mergers & Acquis
Page 107 and 108:
Annexure Table 3d: Unfair Trade Pra
Page 109 and 110:
Annexure Table 4b: Status, Power an
Page 111 and 112:
Annexure Table 4c: Sanctions and Re
Page 113 and 114:
Annexure-4 SURVEY QUESTIONNAIRE Com
Page 115 and 116:
16. How many Members (Governing Com
Page 117 and 118:
26. What is the system of evaluatio
Page 119 and 120:
38. What powers and functions does
Page 121 and 122:
52. If yes, what are the criteria f
Page 123 and 124:
58. Status of pending (from the dat
Page 125 and 126:
65. Time taken for completion of ad
Page 127 and 128:
75. What are the obstacles that the
Page 129 and 130:
94. (a) If any, which are the secto
Page 131 and 132:
Annexure-5 What the Stakeholders Th
Page 133 and 134:
This is particularly true in the ca
Page 135 and 136:
Advocacy The NRGs also felt that it
Page 137 and 138:
Frederic Jenny, Chairman of the WTO
Page 139 and 140:
insignificant market share prior to
Page 141 and 142:
CUTS Centre for Competition, Invest
show all

Final Report - World Trade Organization

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?