Competition Law and Policy for Development: Insights from Nepal

1. Competition Law and Policy for Development:Insights from Nepal Dhrubesh Chandra Regmi South Asia Watch on Trade, Economics & Environment (SAWTEE)

2. Introduction

3. Competition Issues in Nepal • Nepal adopted Market oriented policies • Need to develop competitiveness of the domestic industries. • Optimum allocation of resources • Consumer Protection

4. Nature of Market / Competition • Manufacturing Sector • Utilities • Services

5. Sectoral Policies • Telecommunications Sector • Financial Sector • Civil Aviation Sector • Power Sector

6. Anti-competitive Practices in Nepal • Predatory Pricing • Tied Selling • Collusive Bidding or Tendering • Resale Price Maintenance • Creation of Artificial Scarcity • Price Discrimination • Unreasonably high Price • Syndicate System • Cartel

7. Competitive and Anti-Competitive Legal Provisions • 1935 – First Legal Order related to Competition in Nepal • 1960 - Essential Commodities Regulation Act • 1962 - Postal Act/ Royal Nepal Airlines Corporation Act • 1963 - Government Finance and Tender Management Act • 1964 - Nepali Language Publication Corporation Act/ Prohibition to Foreign investment Act • 1966 - Food Act • 1976 - Feed Act • 1968 - Standard Measurement and Weight Act/ National Insurance Corporation Act

8. Competitive and Anti-Competitive Legal Provisions …. • 1971 - Local Administration Act/ Education Act • 1975 - Black Marketing and Certain Other Social Offences Act • 1978 - Drug Act • 1980 - Nepal Standard (Certification Mark) Act • 1983 - Nepal Petroleum Act • 1984 - Nepal Electricity Authority Act • 1987 - Garbage Collection Act

9. Competitive and Anti-Competitive Legal Provisions …. • 1990 - The Constitution of Kingdom of Nepal / Citizen Investment Fund Act • 1992 - Industrial Enterprises Act/ Vehicle and Transportation Act Electricity Act/Insurance Act/ Foreign Investment and Technology Transfer Act • 1993 - Privatisation Act • 1996 - Telecommunication Act/ Nepal Civil Aviation Authority Act • 1997 - Consumer Protection Act; • 1998 - Iodized Salt Act • 2001 - Income Tax Act/ Nepal Rastra Bank Act

10. SAWTEE in the scenario • SAWTEE has been actively involved since 1999. • Advocating for the need of a Competition law in Nepal • Promoting Competition Culture • Creation of networks and pressure groups • Capacity building workshops

11. SAWTEE's Experience • Till date there is no well-defined competition policy in Nepal and no comprehensive legislation-draft ready yet not enacted • Nepal Government has committed to enact competition during its accession to the WTO (July 2004) • SAWTEE has been actively involved in pressurising the government to enact competition law • SAWTEE has also emphasised on the importance of an Independent Competition Commission

12. Draft - Competition Bill • Objectives • Make the national economy competitive through open and liberal market economy • Develop independent market in the country through optimal and equitable distribution and utilisation of national resources • Benefit the consumer by ensuring healthy competition in the goods and services sector • Control anti-competitive practices

13. Provisions • Anti competitive Agreements • Abuse of dominance • Mergers and Acquisition • Monopolies • Restrictive Business Practices • Competition Promotion Commission • Other Important Features of the Bill

14. Success - Elusive • Unstable governments over the past few years • Business Community still apprehensive • Unorganised Consumers • Awareness among stakeholders

15. Competition Law not enough • Other issues to be addressed • Supply side Constraints • Access to credit • Good governance

16. Thank You