Overview: Unconstitutional Provisions

1. PRESENTATION TO SELECT COMMITTEE ON ECONOMIC AND FOREIGN AFFAIRSRE: COMPETITION AMENDMENT BILL17 FEBRUARY 2009Andrew Smith of Bowman Gilfillan on behalf of BLSA

2. Overview: Unconstitutional Provisions • Section 73A • Reverse onus • Prohibition on defence funding by firm • Prohibition on firm paying fine • Section 10A • Lack of exemption • Public participation • Vagueness • Section 10A • Extent of criminal offences

3. Section 73A – Reverse Onus • Long line of Constitutional Court cases - reverse onus provisions unconstitutional • S v Zuma 1995 (4) BCLR 401 (CC) • Violation of section 35 of Constitution • State to prove beyond reasonable doubt • Right to be presumed innocent • Right to remain silent • Here, presumption that firm committed cartel behaviour • Essential element of crime • Absent evidence by accused will be proved (right to silence (Fereira v Levin 1996 (1) SA 984 (CC) and s 12?) • Risk of conviction despite reasonable doubt but proved on lower standard of proof in civil forum • Therefore violates section 35 • But is it justifiable? • No reason other than convenience • Complex nature of offence requires proof • Unfair to director as not party to Competition proceedings and not fact peculiarly within his or her knowledge (not necessarily manager)

4. Section 73A – Prohibiting Assistance by Firm • Constitutional right to • Adequate time and facilities for defence (s 35(3)(a)) • Legal practitioner of choice (s 35(3)(f)) • Rights limited by s73A • Prevents choice and assistance • Violates equality rights when compared to public sector • Is it justifiable? • No legitimate purpose • Less restrictive means exist • Due to technical nature of proceedings too little too late

5. Section 10A – Complex Monopolies • Compared to other acts of prohibited conduct unequal treatment as: • No exemption provisions • No up front defence relating to economic benefit • Vagueness means will affect business decisions • Fuel industry • Banking industry

6. Public Participation • Should this not occur, fatal to legislative process • Doctors for Life 2006 (12) BCLR 1399 (CC) • No instructions but raised by other parties • Urge Committee to satisfy itself

7. Vagueness • Not even courts know what section 4(1)(b) means • ANSAC III 2005 (6) SA 158 (SCA)at para 56 • ‘Tribunal has not yet in express terms construed s 4(1)(b) and established its scope (nor what falls outside its scope). Nor is the scope of the prohibition in our view self-evident…’ • Acknowledge some acts prima facie within s 4(1)(b) may have pro-efficiency and pro-competitive effect (para 55) • Yet criminalise this conduct which requires no proof of anti-competitive effect or a defence that there is a pro-competitive effect • Is knowing acquiescence sufficient? • Section 10A ambiguous? • Could violate rule of law

8. Conclusions • Bowman Gilfillan approached to advise BLSA • Briefed Adv Wim Trengove SC with existing opinions • Agrees that there are provisions which are unconstitutional • All external legal opinions by Senior Counsel agree s 73A unconstitutional • Serious doubts raised about other provisions • Efficacy of legislation – resolve concerns now

9. Solutions • Removal of offending provisions? • Allow public participation? • BLSA offers assistance