Levelling the playing field with Competition Authourity

Thula Kaira | Wednesday August 29, 2012 00:00

The National Competition Policy (NCP) of Botswana of 2005 stands as the first comprehensive document to address problems of a competition nature in the economy of Botswana. The NCP addresses itself to commercial activities of the Government and its agents, big or small firms.

For this purpose, there was recognised a need to have a legal instrument that canonised competition principles and rules into a transparent, accountable and autonomous system. It is difficult to separate the word 'competition' from 'fairness', 'equity', 'justice' or even 'transparency'. Following these principles, the Government of the Republic of Botswana enacted the first competition law for the country, i.e. the Competition Act No. 17 of 2009. This was primarily in fulfilment of the NCP recommendation under its paragraph 9.1, which stated that  'In order to ensure compliance with and adherence to locally and internationally acceptable anticompetitive business behavior and conduct, Government will formulate a Competition Act, through which competition in the market place will be regulated.'

Further the NCP called for the institutional arrangements for the formulation, review, and monitoring of the implementation of the Competition Policy and its related legislation to remain the responsibility of the Ministry of Trade and Industry whilst the Competition Authority was to be responsible for the implementation of this Policy and enforcement of the Competition Act. As per the best practice models, the Competition Act was modelled in a manner that it took into account the international best practices, which again were espoused in paragraph 10 of the NCP that for the Competition Policy to succeed, Government will: 

*Establish an Independent Competition Authority*Ensure compliance and enforcement of the rules of fair play; and *Maintain an effective and equitable balance between the interests of business and those of the public. 

There was envisaged in the NCP that as part of its responsibility to implement the NCP and its related legislation, the Competition Authority will have power to enforce the Competition Act, including conducting investigations, prosecuting transgressions of the Competition Act, and presiding over disputes. Parties aggrieved by the decision of the Competition Authority will have the right to appeal to the High Court.

The philosophy of having an independent Competition Authority, or of any such institution that wields investigative and prosecutorial powers, has been a subject of debate by academics, practitioners, policy-makers and pressure groups.

While the word 'independence' may be interpreted in various ways, the idea is to have not just an institution that is professional and rule-of-law focused, but to have a law that affords such professionalism to be checked and accountable to some other body. While independence (or autonomy) is important for Competition Authorities the world over, it has been demonstrated that such independence is only useful to society with accountability.

Accountability in the implementation of the NCP and the Competition Act must be demonstrated in how such fits into the overall national developmental vision and programmes of the Government at large. A renegade implementation system that is constantly at variance with the overarching national vision and developmental plan is bound to find itself not useful to developmental process. A law must be seen to address a problem for which it was enacted and if it does not do so, must be reviewed and/or repealed altogether.

In this regard, the framers of the Competition Act in Botswana, while recognising the need for independence in investigations and prosecutorial functions/powers of the Authority, made the Authority accountable for good governance principles to another independent body, the Competition Commission. The Competition Commission is a 7-member tram appointed by the Minister of Trade and Industry.

Thus the Authority cannot presume 'blank-cheque' independence to use public funds in a manner it deems fit without justifying its budget as well as internal processes to the Competition Commission and other policy control measures as may be prescribed by the Ministry of Trade and Industry, the Ministry of Finance, the Auditor-General or a relevant parliamentary committee.

The Act has also made it mandatory for the Authority's financial records to be audited by an external auditor and a copy of the Annual Report to be tabled in Parliament through the Hon. Minister of Trade and Industry. In terms of labour relations, the Authority does not have any 'independence' to deal with its staff in a manner contrary to the national laws governing employee welfare.

In terms of the quasi-judicial powers, the Authority cannot and does not make final decisions in its own cases (except for Mergers) but its cases have to be presided over for adjudication by the Competition Commission, who in turn are not involved in investigations. This symbiosis between independence and accountability is also critical to ensure that no one organ in the implementation system hijacks the other's role, while playing the crucial law that the law intended for each organ to perform in the public interest. Independence is not to be used as a sword against the public interest rather as a shield to protect the public interest. 

Independence is both in structural and behavioural terms. Structural meaning the reporting lines, of which behaviour permeates these reporting lines. In terms of structure, there are three levels of structure in terms of good governance/policy guidance i.e. the Authority at the bottom level, then the Competition Commission at the middle level, then the Minister of Trade and Industry at the top-level.

For quasi-judicial functions (i.e. case investigations, adjudication, etc), the Competition Authority is at the bottom level, then the Competition Commission at the middle-level, and the judiciary (i.e. the High Court and Court of Appeal) at the top level. In terms of behaviour, the Competition Act has inbuilt codes of conduct and confidentiality matters for Commission members, while for Authority staff there is a comprehensive code of conduct.

Thula Kaira is the Chief executive Officer of the Competition Authority.For feedback email:  gideon.nkala@competitionauthority.co.bw