UNCTAD Work on Competition Law and Policy and its Contribution to Development

1. UNCTAD Work on Competition Law and Policy and its Contribution to Development Presentation by Pierre Horna LL.M. Responsible of the COMPAL Programme. Competition and Consumer Policies BranchUNCTAD Vi study tour for the University of West Indies

2. Agenda • Brief introduction: the link between Competition and Development • UNCTAD’s mandate on Competition Law and Policy

3. Agenda • Brief introduction: the link between Competition and Development • UNCTAD’s mandate on Competition Law and Policy

4. Why have developing countries adopted competition policy as part of their development strategies?

5. Argelia (1995) Ivory Coast (1978) Gabon (1989) Etiopía Kenya (1988) Madagascar* Malawi (1998) Islas Mauricio (2008) Morocco (2000) Namibia (2003) Nigeria* Senegal (1994) Seychelles* South Africa (1995, rev. 1980) Swaziland (2006) Sudán (2006) Tanzania (1994, rev. 2004) Tunisia (1991) Zambia (1994) Zimbabwe (1997) Camerún (2007) Egypt (2004) Ghana * WAEMU (2000) Africa * Competition Law in preparation

6. Asia and the Pacific • China (1993, rev. 2006) • Islas Fiji (1993) • Filipinas * • India (1969, rev. 2001) • Indonesia (1999) • Iran * • Jordania (2000) • Malasia * • Oman • Pakistan (1970) • República Democrática Popular Lao (2003) • Republic of Korea (1980) • Saudi Arabia (2004) • Sri Lanka (1987) • Thailand(1979, rev. 1999) • Taiwan (1992) • Vietnam (2004) * Competition Law in preparation

7. Latin America and the Caribbean • Argentina (1980) • Brazil (1960, rev. 1994) • Chile (1973, rev. 1980 ) • Colombia (1992, rev, 2009) • Costa Rica (1992) • Jamaica (1993) • Mexico (1992) • Panamá (1996) • Peru (1990, rev 2008) • Venezuela (1991 rev. 2006) • Bolivia (2008) • El Salvador (2004) • Guatemala* • Honduras (2006) • Nicaragua(2007) • Uruguay (2008) • Paraguay* • Ecuador ** • Dominican Republic (2008) • Trinidad & Tobago (2006))) * Law in preparation ** Regional Law applicable at national level

8. First, some Definitions: It needs to be distinguished between: • Competition • Competition policy • Competition law • Competitiveness

9. What is Competition? “a process of rivalry between firms … seeking to win customers’ business over time” [UK Competition Commission] “Competition is a basic mechanism of the market economy and encourages companies to provide consumers products that consumers want. It encourages innovation, and pushes down prices. In order to be effective, competition needs suppliers who are independent of each other, each subject to the competitive pressure exerted by the others.” [European Commission]

10. Benefits of Competition • Lower prices of products and services • Better products and services • Wider choices for customers • Greater efficiency (allocative and productive) • Stimulation of innovation

11. Competition Law • Set of rules that aims at protecting the process of competition • One element of the legal framework for a well-functioning market economy • Competition law elements: • Prohibition of the abuse of market power (unilateral behaviour); • Prohibition of anti-competitive/restrictive agreements • Merger control • [Control of state aid]

12. Competition Policy • Broad definition covers: The full range of government policy measures that influence competition in domestic markets (including e.g. trade law elements, such as tariffs) • Narrow definition limited to: The design, effective implementation and enforcement of competition law.

13. Principal Objectives of Competition Law and Policy • To improve economic efficiency • To promote consumer welfare • To contribute to economic development

14. Secondary Objectives of Competition Law and Policy • Protect small and medium-sized companies • Provision of state assistance on a non-discriminatory basis • [...]

15. So why are developing countries adopting competition laws? • Competition law as a cornerstone of the legal framework of a well-functioning market economy • Ensure that customers benefit from trade liberalisation • Interaction between competition policy with foreign direct investment

16. Agenda • Brief introduction: the link between Competition and Development • UNCTAD’s mandate on Competition Law and Policy

17. Three Pillars of the Competition and Consumer Policy Branch (CCPB) Consensus Building (Intergovernmental Machinery) Research Technical Assistance UN Set of Principles and Rules on Competitionof 1980

18. UNCTAD UNCTAD Conference takes place every fourth year Last UNCTAD Conference: Accra Ghana 20-25 April 2008 Review of UNCTAD Mandate and prioritisation of work Consensus Building • Conference to review the UN Set on Competition takes place every fifth year • To Affirm the usefulness of the Set on Competition and revise the competition mandate • Intergovernmental Group of Experts (IGE) Meeting on Competition every year • To evaluate the work program on competition and to update the areas of focus CCPB

19. Research • UNCTAD undertakes extensive research on trade, economic, investment, competition areas etc. • CCPB’s research papers and studies focus on competition and consumer protection issues • Current examples: • Background papers for IGE based on information provided by member States • Research paper on competition in the informal sector (not published yet) • Research paper on industrial policies for competition officials (not published yet)

20. Competition Law & Policy Competition Advocacy Adoption of laws / law reforms Training (competition officials, judges) Institution building Peer Reviews Cooperation Consumer Protection Consumer Protection Advocacy Adoption of laws / law reforms Training (consumer protection authorities) Institution building Cooperation Technical Assistance (TA)

21. TA: Competition Advocacy Objective: • Creating awareness for the role of competition in promoting a culture of competition • Implementation through: • Advisory missions • Workshops/training programs UNCTAD Government Competition Authority Academia Business Community Consumer groups

22. Adoption of Competition Law Preparatory process: Economic Mapping Legal inventory Competition Policy Lay draft competition law (UNCTAD Model Law as reference) Official drafting Enactment Competition Law Revisions Prompted by: Enforcement experiences Changes in international competition arena Focus on specific provisions or complete overhaul of the law Examples: Kenya, Jamaica, Zambia TA on the legislative level

23. Example for an « all inclusive approach » Botswana • 2000: Starting point • 2004: Finalisation and adoption of two reports, i.e. economic mapping and legal inventory • 2005: Competition policy published • 2006: Finalisation of Lay draft law • 2007: Official drafting • 2008: Enactment

24. TA: Training programmes Types of training: • General courses for all stakeholders • Tailored courses for: • Case handlers (Kenya, Zambia, Senegal) • Commissioners (Malawi, Zambia, Zimbabwe,) • Judges and Prosecutors (Malawi, Trinidad & Tobago, UEMOA) Tools: • Competition manual • Material for training of trainers • Online training • Tailor-made investigations materials

25. TA: Institution Building UNCTAD assists member States • To develop institutional frameworks based on competition law provisions • Examples: Malawi, Egypt, Trinidad & Tobago • Designing pamphlets (information materials), • Examples: Malawi, Egypt, Romania

26. TA: Peer Reviews • Concept: • To allow countries to be voluntarily reviewed by other countries (peers) • Reviewers identify successes and challenges • Recommendations are presented and discussed • Recent peer reviews: • Kenya and Jamaica (UN 5th Review Conference November 2005) • Tunisia (IGE November 2006) • UEMOA/Senegal & Ivory Coast (IGE July 2007) • Costa Rica (IGE July 2008) • Indonesia (IGE July 2009 – ongoing)

27. Consumer protection mandate • UNCTAD works with member States to develop consumer protection laws and conducts training on consumer issues • Examples: Botswana, Bhutan,Laos, Cambodia • Tools: • Consumer protection manual & other materials

28. Many thanks! pierre.horna@unctad.org