Allowing the competition commission to lapse..!!

Silent Spectator · #1 Monday, September 13, 2010

ALLOWING THE COMPETITION COMMISSION TO LAPSE

[This interview first appeared in Business Recorder on July 23, 2010.]

Chairman Competition Commission of Pakistan Khalid A. Mirza in an exclusive interview to a Business Recorder panel comprising Islamabad Resident Editor Anjum Ibrahim, staff reporters Sohail Sarfraz and Wasim Iqbal, warned that the Commission will be in legal flux if CCP ordinance is allowed to expire next month.

The following are excerpts from the interview:

Business Recorder: What would be the implications if the CCP Ordinance is allowed to lapse?

Khalid Mirza: If the CCP Ordinance is allowed to lapse (on August 18) then CCP will be in legal flux.

Business Recorder: What would stop the government as well as members of the Opposition from defanging the CCP given that there is unanimity of views on this in the National Assembly?

Khalid Mirza: CCP law could be challenged in a court of law. The lawyers, legal community or civil society may get a stay order from the courts while challenging the Ordinance. I am not sure if the 18TH Amendment would be applicable or not while dealing with the CCP case. I would strongly urge the government to push the law in Parliament and get it enacted. The Senate has already approved the law unanimously.

Business Recorder: Since the inception of CCP which government has been more supportive?

Khalid Mirza: Each subsequent government, namely Musharraf, interim and the present set-up, have been less and less supportive. I have never met Prime Minster Yousuf Raza Gilani while I used to regularly meet Shaukat Aziz, and yes I was appointed during his tenure.

Business Recorder: Have your views on a possible successor been sought?

Khalid Mirza: The government has not sought my advice though I have recommended a name of a member as I believe the new chairman has to be one of the members. Most of people in government think I am difficult.

Business Recorder: Do you have any regrets as chairman CCP?

Khalid Mirza: I have no regrets at all. I did my job. I am very satisfied with what I have done. Eight competition agencies of developed countries recently identified CCP as one of the most competent agencies among developing jurisdictions of the world. However, I do regret that I did not insist that the CCP should be governed by a law passed by Parliament rather than an Ordinance.

I also regret that I did not impose a heavier fine on cement sector. We are empowered to impose a fine up to 15 percent of turnover. For the cement sector I only imposed a fine of 7.5 percent of the turnover.

Business Recorder: Was the amount of CCP penalties appropriate?

Khalid Mirza: We have not levied fines beyond the legal jurisdiction. The credibility of the CCP is due to the fact that we did impose fines honestly and with integrity. All orders passed by the CCP were supported by evidence and logic. As a result of our forceful orders, business community voluntarily came to the CCP for advice on this. On average 20-25 businesses have visited our offices for advice.

Business Recorder: Has the impact of CCP decisions been neutralised repeatedly?

Khalid Mirza: The actions taken by the CCP have had a far reaching impact. Our orders, although challenged in courts in the form of appeals and writs, have had an impact. The naming and shaming that we do has brought integrity to the table and that has had an impact on the business community.

Business Recorder: What is your view on the current increase in price of sugar?

Khalid Mirza: Sugar shortage today is a global phenomenon. In addition there is a demand surge of sugar in Muslim countries during Ramazan. The government should have built in some stocks to deal with the coming month of Ramazan. If there is a shortage then the government can intervene otherwise it should allow market forces to decide.

Business Recorder: Do you support the establishment of an independent Appellate Tribunal for hearing of appeals against CCP's decisions?

Khalid Mirza: I support the establishment of an independent Appellate Tribunal to hearing of appeals by the high courts. The competition law has to be dealt with at a national level and it is not appropriate to deal with this law at the provincial level. The CCP has been tied up with 4-5 high courts after appeals against our decisions were filed with the high courts. I would suggest that the appeals against the orders of the proposed tribunal must be heard only in the Supreme Court of Pakistan.

Business Recorder: What role if any can CCP play in controlling inflation?

Khalid Mirza: The CCP has nothing to do with inflation directly, but indirectly we do through constantly monitoring for collusion in setting prices. For example when we passed orders against the cement and poultry sectors, their prices came down.

Business Recorder: Is any industry in Pakistan operating under free market conditions?

Khalid Mirza: I think textile industry is operating in free market conditions. Let me remind you that CCP is a quasi legal body and we cannot pass judgement. I can only talk in terms of concerns, but cannot pass judgement that one sector is better than the other.

Business Recorder: What are the sectors where you have serious concerns?

Khalid Mirza: Some sectors have surprised me. I thought telecom sector was a very competitive sector. However, there are issues of deceptive marketing practices and cartelization in telecom sector. We are carrying out assessment studies for other sectors. We have to keep an eye on cement as well as other sectors from the competition point of view.

Business Recorder: How do foreign investors view Pakistan?

Khalid Mirza: When global investor wants to enter the Pakistani market, he does look at law and order situation, judicial independence, etc. However one question is invariably directed at what we do at the CCP: is there any anti-trust agency working in Pakistan? Or can the investor get protection from anti- competitive behaviour in Pakistan? [Courtesy Business Recorder]

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