Levelling the playing field with Competion Authoruty

GIDEON NKALA | Wednesday March 20, 2013 00:00

Is the Competition Authority really independent? Can it really bite? These are some of the many questions that are consistently thrown in our direction as we engage with the public. The rhetorical questions are posed consistently across the spectrum in our interactions with politicians, business, students, technocrats and others. In the light of the colossal mandate that has been entrusted on the Competition Authority, the anxiety is understood.

Huge sums of public funds have been channelled to our agency and members of the public are well within their right to expect results. If truth be told, these questions are often raised in anticipation and hope. Hope that was birthed by the legislators when the Competition Act was passed by Parliament. Last week, the same questions were raised at the Competition Authority and Competition Commission Second National Stakeholders Conference at the Gaborone International Convention Centre.

Throughout the world, agencies such as the Competition Authority are afforded a significant degree of independence from influence, from inside and outside government. I have no doubt that the framers of the Competition Act had independence in mind when they set a two-tier structure of the Competition Commission and Competition Authority as a parastatal under the Ministry of Trade and Industry.

From a structural point of view, this arrangement shows that the authority and the commission are dependent on the ministry. Although there is more than a semblance of distance from the parent ministry, these entities, particularly the Competition Authority, would still be characterised as structurally dependent. Conversely, a structurally independent agency is generally removed from the ministry and the key distinguishing feature is that it is directly responsible to the legislature for its budget. These models however do not tell a story except to draw a caricature - and caricatures misrepresent reality. It is generally assumed that a structurally independent  agency will enjoy relative freedom in carrying out its enforcement and advocacy functions.

On the flip side, a structurally independent agency could result in ambiguous effects on the success of a competition body. The International Competition Network (ICN) contends that an agency that is entirely separate from government may lack good access to the decision makers in the executive and legislature.

For purposes of advocacy and influencing competition policy reform, this access is essential.  Indeed, even from a regulatory perspective, some form of interaction within government machinery is a sine qua non. Any regulator who does not benefit from information activities in the wider government and accessing platforms for input, particularly in the era of depleted resources, is tottering on the brink of comatose.

The badge of structural independence could be misleading. Those who are interested in the results and the potency of a competition agency should not be obsessed with the structural definition of an agency. One could miss the effectiveness of a competition agency while considering puritan structural independence of a body such as the Competition Authority.

It is not the shape of the agency nor the distance between the agency and the ministry that matters. Of course there is nothing to be gained from denying that in the world we live in, perception matters. But we should be careful not to allow perception to eclipse reality.  Perception could simply be misleading. The trend around the world is to consider what is termed operational independence other than to be bogged down with sometimes inconsequential issues of structure. Can the agency make independent decisions and interventions from positions that are held by government and private sector or any other organised sector? An agency that achieves such will without doubt acquire a significant degree of independence in spite of its structure.

The credibility of a competition agency hinges a great deal on its independence both real and perceived. I would posit that in the short existence of the Competition Authority, there has been every indication that it is not made of rubber but of steel, fine feather and sinews that cleanse any anti-competitive grime and hold in a vice-grip any competition transgressions. To start with, the Competition Act gives the agency enough teeth to investigate, prevent, remove anti-competition, advise government on anti-competition and adjudicate applications of mergers and acquisitions amongst other functions.

To-date, countless cases of anti-competition are under  investigation and more are coming, sound advice continues to be given and mergers are approved, some with conditions and those that would impinge negatively on competition are rejected. This is not just a show of teeth. We bite when we have to. As Mark Twain says; 'it is not the size of the dog in the fight, it is the size of the fight in the dog'.   *Gideon Nkala is the Director of Communications and Advocacy at the Competition Authority. For enquiries send your emails to gideon.nkala@competitionauthority.co.bw