Friday, September 25, 2020

Competition Law long overdue

The revelation this week by senior government officials in the Ministry of Trade and Industry that a Competition Bill will be considered in the next sitting of Parliament is a welcome development.

The much anticipated Bill will pave way for the creation of a statutory body that will keep an eye on the industry for unfair business practices while making sure the country adheres to international standards.

Botswana, unlike other countries in the region, including South Africa and Namibia, has no Competition Law but the necessity to have one such authority was recognised through the Competition Policy.

The country has been relying on the (draft) Competition Policy that was adopted in 2005 and had limitations as it fell under the ambit of Director of Department of Trade and Consumer Affairs.

Now the good news for the consumers is that the Competition Bill was approved by Cabinet in April 2009 and due for consideration during the November sitting of parliament and subsequent establishment of legal entity with a specific role of dealing with competition issues.

At this stage, it does not matter whether the parastatal will end up being called Competition Authority or Competition Commission as it is in other countries, but what will be of paramount importance will be what impact such body will have on the society.

The Bill is good for both the consumer and a small business person who is denied a chance to participate in the economy because bigger and well resourced companies act in a predatory manner with impunity.

It will protect the unsuspecting consumer from service providers, especially that Botswana does not have strong Consumer Protection bodies.

In other countries like South Africa, the body called Competition Commission of South Africa is credited for exposing ills in the market that have helped level the playing field and protect the consumer.

The SA Competition is credited for handling bigger cases like with companies inflating the consumer prices for milk, bread, medicines (through collusive tendering), steel, cement, soda ash, piping, gas, fertilizer, bicycles and local airline tickets and protecting the interest of the consumer in the end.

In its quest for fairness, the Commission has in the past searched the offices of big companies like Pretoria Portland Cement (PPC), Lafarge Industries South Africa, AfriSam Consortium (formerly Holcim South Africa) and Natal Portland Cement Cimpor.

In Botswana, although the authority may be deemed to be coming late by the critics when bigger businesses have already established themselves, it should not be ignored that it will help smaller businesses that are trying to establish themselves in the market.

According to officials in the Ministry of Trade and Industry, the Bill seeks to ensure compliance with and adherence to locally and internationally acceptable anticompetitive business behavior and conduct.

While at the moment, small poultry producers are not given a chance to participate in the economy because heavyweights flex muscles, it is anticipated that with the authority, small producers will be given a chance to participate in the economy where it is hard to penetrate the market because bigger companies have taken the market share.

Consumers will be protected from service providers, especially in the automobile industry that are believed to be involved in price fixing where the consumer ended up suffering.

Therefore, the hope is that parliament will discuss the Competition Bill with an open mind of helping the small businesses by leveling the playing field while equally protecting the consumer.

Nonetheless, it must also be emphasised that for the parastatal to be successful on its mandate, it should be properly staffed. It should have competent employees that are well paid, fair and conversant with issues of competition and regulation.

The body should operate within a very conducive environment free from intimidation and should be given all the necessary resources and the legal teeth to deal with the would-be offenders.

An example of successful parastatals that have returned government investment on its workforce is the Botswana Unified Revenues Services (BURS).

One cannot emphasise how the statutory body that collects tax on behalf of government has succeeded where civil servants failed when it was still Department of Taxes.
Its performance is evident on the billions of Pula it managed to collect on company taxes, withholding taxes and the infamous Value Added Tax (VAT).

Many of Botswana parastatals come with good intentions but because staff appointments, especially at the senior cadre, are the ones killing the aims of such bodies because appointments are normally political.

The Competition Bill in Botswana is long overdue because there are many unfair business practices already happening in the unbridled market and there is no authority that keeps an eye on that owing to the free market dictates.

But still in bigger economies like the US and UK, where we normally attribute our free market attributes to, they have bodies that keep vultures in check.

If parliament passes this long overdue piece of legislation, Botswana will join its neighbours in the region while in the end will help in keeping with the spirit of regional integration and harmonisation.

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