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Convincing Policy Makers and Garnering Greater Support for Competition Reforms CREW Project

Convincing Policy Makers and Garnering Greater Support for Competition Reforms CREW Project Inception Meeting 13-14 March 2013 ITC Rajputana, Jaipur India Chilufya Sampa Zambia. Competition & Consumer Protection Commission. PRESENTATION OUTLINE. INTRODUCTION

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Convincing Policy Makers and Garnering Greater Support for Competition Reforms CREW Project

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  1. Convincing Policy Makers and Garnering Greater Support for Competition Reforms CREW Project Inception Meeting 13-14 March 2013 ITC Rajputana, Jaipur India Chilufya Sampa Zambia Competition & Consumer Protection Commission

  2. PRESENTATION OUTLINE • INTRODUCTION • COMPETITION AND POLICY MAKERS • MODES OF ENGAGING POLICY MAKERS • OTHER STAKEHOLDERS AND THEIR ROLE • CONCLUSION Competition & Consumer Protection Commission

  3. INTRODUCTION • COMPETITION IS A NEW CONCEPT IN ZAMBIA AND IN MOST DEVELPING COUNTRIES • THE FORM OF ECONOMIC SYSTEM WAS SOCIALISTIC IN NATURE AND NOT MARKET DRIVEN • GOVERNMENT INVOLVEMENT IN THE MARKET WAS HIGH • 1991 BECOME APPARENT THAT ECONOMIC SYSTEM HAD TO CHANGE TO FREE MARKET 3 Competition & Consumer Protection Commission

  4. COMPETITION AND POLICY MAKERS • THERE WAS NEED TO CHANGE THE STRUCTURE OF THE ECONOMY • POLICY MAKERS HAD BEEN TRAINED IN DIFFERENT TYPE OF ECONOMIC SYSTEM - A CULTURE OF COMPETITION DID NOT EXIST • EVEN THOUGH THE POLICIES WERE FREE MARKET ECONOMY – MIND SET OF THE POLICY MAKER WAS NOT - THERE WAS NEED TO CHANGE THE MIND SET • CCPC FOUND ITSELF IN CONFLICT WITH POLICY MAKER • E.G. ZAMTEL ON BOARD OF REGULATOR, • PROCUREMENT TAILORED TO SPECIFIC PARTIES, • PRICE FIXING IN BUS FARES SANCTIONED BY GOVT AGENCY • PROHIBITIVE LICENSE FEES IN INTERNATIONAL GATEWAY • RESTRICTIONS ON NUMBER OF PLAYERS IN CERTAIN MARKETS • RESTRICTIONS OF PLAYERS BASED ON NATIONALITY 4 Competition & Consumer Protection Commission

  5. MODES OF ENGAGING POLICY MAKERS • ADVOCACY • PARLIAMENT – MAKE PRESENTATIONS TO PARLIAMENTARY COMMITTEES – SOMETIMES IT HAS NOTHING TO DO WITH COMPETITION NEVER THE LESS DO A GOOD JOB • ANNUAL REPORTS – UP TO DATE AND PRESENTED TO PARLIAMENT • WORKSHOP FOR PARLIAMENTARIANS – THEY WILL NOT ALL ATTEND BUT YOU SHALL CAPTURE A GOOD NUMBER • IDEA IS TO RELATE TO THE PARLIAMENTARIANS PROBLEMS • MONOPOLISTIC BUS FARES TO MONGU • POSSIBLE CARTEL BEHAVIOUR IN INFRASTRUCTURE DEVELOPMENT IN CONSTITUENCIES • PARLIAMENT RADIO – PROGRAMMES WITH PARLIAMENT RADIO • COMMENTS ON TOPICAL ISSUES – ADVISORY OPINION ON TOPIC ISSUES TO VICE PRESIDENT EVERY MONDAY • SHORTAGE OF MAIZE MEAL IN THE COUNTRY – CARTEL BEHAVIOUR – RESTRICTED PRODUCTION • FUEL SHORTAGE – OBTAINED COURT WARRANT TO INSPECT FUEL FACILITIES AT OIL MARKETING COMPANIES • AIM IS TO SHOW RELEVANCE OF COMPETITIOIN IN EVERY DAY ECONOMIC ACTIVITY 5 Competition & Consumer Protection Commission

  6. MODES OF ENGAGING POLICY MAKERS • ENFORCEMENT • TO SHOW THAT THE COMPETITION IS REAL THERE IS A NEED TO ENFORCE THE LAW • ZAMBIAN BREWERIES V BETTERNOW FAMILY LIMITED (ABUSE CASE) USD 2000 • MERCURY EXPRESS ( MERGER CASE FAILURE TO NOTIFY) USD 5000 • CONTINENTAL MERGER WITH IMPACT (MERGER CASE REJECTED) • CAR GARAGES ( CARTEL CASE ) ON APPEAL • PUMA ENERGY /DANA HOLDING (MERGER CONDITION ABROGATION) USD 10 MILLION • TAMBA CHICKS/HYBRID MERGER REJECTED 6 Competition & Consumer Protection Commission

  7. MODES OF ENGAGING POLICY MAKERS • RELEVANCE TO NATIONAL AGENDA • COME UP WITH A NATIONAL POLICY ON COMPETITION • RECOGNISED THAT MANY GOVERNMENT MINISTRIES, DEPARTMENTS AND AGENCIES WERE NOT AWARE OF COMPETITION PRINCIPLES • SHOW HOW COMPETITION CAN REDUCE POVERTY – PARTICIPATE IN NATIONAL AGENDA TO COMBAT POVERTY AND HAVE A CHAPTER ON COMPETITION E.G. SHOW HOW MUCH MONEY IS LOST THROUGH CARTELS IN FERTILISER … CCPC INTERVENTION HAS RESULTED IN GOVERNMENT TO BE MORE INCLUSIVE IN FERTILISER PROCUREMENT • SHOW HOW COMPETITION CAN INCREASE JOBS OR CAN CREATE JOBS E.G. TAMBA CHICKS HYBRID MERGER TRANSACTION RESULTED IN AN AGGRESSIVE COMPETITIVE MARKET AND NOW HAS SIX COMPANIES FROM TWO • MARKET STUDIES – CCPC MARKET STUDY IN SUGAR AND VITAMIN A FORTIFICATION – NTB HAS RESULTED IN ZAMBIAN CONSUMERS PAYING MORE FOR SUGAR THAN ELSEWHERE. ONE CAN GAIN POLITICAL MILAGE WITH SUCH INFORMATION 7 Competition & Consumer Protection Commission

  8. CONCLUSION • IT IS NOT AN EASY TASK TO GARNER SUPPORT FOR COMPETITION REFORM • YOU NEED TO SHOW THE RELEVANCE OF COMPETITION TO THE CRITICAL NATIONAL AGENDA • SUGAR ISSUE – ACTION AID SAY ZAMBIA SUGAR IS ADVOIDING TAX, CCPC SAY IT’S A COMPETITION ISSUE – REMOVE THE NTB AND MARKET PRICES WILL COME DOWN • YOU NEED TO SHOW THAT COMPETITION LAW CAN BE ENFORCED • PUMA FINE IS A GOOD EXAMPLE • YOU NEED TO SHOW JOB CREATION AND POVERTY REDUCTION • DIFFICULT TO SHOW DIRECT BENEFITS IN MOST CASES BUT ALWAYS REFER TO YOUR INVOLVEMENT IN EACH TRANSACTION • THE END 8 Competition & Consumer Protection Commission

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