Category: Zimbabwe

Zimbabwean leader lauds antitrust efforts

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Zimbabwean President Emmerson Mnangagwa recently exalted the benefits of antitrust law at a joint COMESA-CTC (Competition and Tariff Commission of Zimbabwe) conference for sitting judges, held in Victoria Falls. Below is an excerpt of his oral remarks, given at the opening of the event:

“Competition and consumer protection laws, are therefore, key enablers of free, open and liberalised trade between countries and foreign regional integration. Against this backdrop, these laws must continue to enhance consumer interests and the realisation of our country’s development aspirations as set out in the National Development Strategy and Vision 2030. To this end, under the radar are the cartels, and all those who collude in promoting unjustified price increases, illicit activities and currency manipulation for the purposes of realising super profits.

Andreas Stargard, a competition partner at Primerio Ltd., notes that President Mnangagwa was once a practicing attorney himself, prior to his political ascent within the ZANU-PF party, although the precise history of the president’s legal studies and degrees remains somewhat murky. “As a former legal practitioner himself, Mnangagwa knows that an educated judge is a better judge. Thus, his admonition to the members of the judiciary present at the conference (at whom the event was aimed in the first place) to better acquaint themselves with competition law & economics was timely and meaningful,” he said. Stargard adds: “There is hardly anything more frustrating than presenting an antitrust case — which is usually difficult in its own right — to an uninformed judicial decision-maker, who shows little understanding or interest in the subject-matter, or who dismisses economics as extraneous; you cannot practice competition law without an understanding of economics.”

The president concluded: “In our case as Zimbabwe, competition law and the attendant robust policy frameworks are important towards the speedy realisation of Vision 2030, of becoming a prosperous and empowered upper middle income economy. This aspiration will be attained through an effective empowered and agile judicial system, which strives for fairness and increased efficiencies across all the productive sectors of the economy. It is, therefore, most opportune that this workshop is taking place at the stage when our economy is transitioning from stabilisation to growth. To this end judicial staff must be kept updated and knowledgeable about activities taking place in industry and commerce. Undoubtedly, judges and other related stakeholders remain key to the interpretation of competition and consumer protection laws. The intricate nexus between the interpretation and enforcement of laws across sectors of the economy cannot be overemphasised. The judiciary should also address competition issues that arise in disputes before the judicial system. This is pertinent more so that competition law intersects with many fields hence training such as this one is an essential requirement in modern day competition law.”

#COMESA21: New member states, new commissioners

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#COMESA21

In a milestone enlargement of the (now formerly) 19-member COMESA region, Tunisia and Somalia have acceded to the trade bloc at the 20th COMESA Summit on 19th July 2018, creating #COMESA21 – Africa’s largest free trade region.

Their application to join had been pending since 2016.  Under the Treaty, the new members will be bound by the provisions of the Treaty and must deposit their formal instrument of acceptance of the terms of admission with the Secretary General, together with an instrument of accession pursuant to Articles 194 and 195 of the Treaty with regard to a State admitted to full membership.  Says Primerio’s Andreas Stargard, “with the privilege of membership comes the obligation of agreeing to abide by the antitrust rules promulgated under the COMESA Treaty.  This includes the Competition Commission’s procedural and substantive rules and notably its merger regulations.  It remains to be seen how the still weakened bureaucratic structure of the Somali Republic will be able to implement the strictures of a working competition-law regime…”

Indeed, the CCC’s recent Notice No. 2/2018 provides that “the provisions of the COMESA Competition Regulations of 2004, and its accompanying rules, shall be enforceable in the territories of the Republic of Tunisia and the Federal Republic of Somalia with immediate effect.”

Personnel News 2018

In addition to gaining two new member states, COMESA also underwent personnel changes, adding an experienced antitrust practitioner, Zimbabwean Competition and Tariff Commission director, Ellen Ruparanganda, as one of the nine CCC commissioners, for a term of three years.  Besides Ms. Ruparanganda, Francis Lebon (Seychelles), Ali Hamadou Ali Kako (Djibouti), Thembelihle Dube (Eswatini, formerly Swaziland), Danson Buya Mungatana (Kenya), Michael Teklu Beyene (Ethiopia), Charlotte Wezi Malonda (Malawi), Islam Tagelsir Ahmed Alhasan (Sudan), and Brian Muletambo Lingela (Zambia) were also sworn in.

Harmonising agricultural seed regulations across COMESA: COMSHIP Certification

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COMSHIP advances bloc’s Certification Programme to next level

Announced in Lusaka by COMESA’s Assistant Secretary General in charge of Programmes, the long-awaited Regional Seed Certificates will be issued by member states’ national seed authorities, in an attempt to level the competitive playing field and establish guaranteed performance and yields of otherwise unpredictably performing seed products.  The COMESA programme requires verification that a registered seed lot in the region’s “Variety Catalogue” has been inspected to field standards and laboratory analysis.

Andreas Stargard
Andreas Stargard

“The COMESA Competition Commission (CCC) having approved no less than three major agricultural mergers over the past year (Bayer/Monsanto, Dow/DuPont, and Syngenta/ChemChina) — all of which involved significant seed production and R&D elements — the Regional Seed Certificate programme represents the next step in bringing to fruition the COMESA Seed Harmonisation Implementation Plan (COMSHIP), designed to align seed regulations within the trading bloc,” says Andreas Stargard, a competition lawyer with Primerio Ltd.  “The Secretariat’s stated goal of COMSHIP is not only to assure product quality and grow intra-bloc commerce, but also increase the extra-regional competitiveness of the trade group’s substantial seed industry,” in line with COMESA’s Seed Trade Harmonization Regulations of 2014.

COMESACCAccording to its own statements, whilst only five member countries (Burundi, Rwanda, Kenya, Uganda and Zimbabwe) have fully modelled their national seed laws on the COMESA Seed System, the group’s Seed Certification system is the first such “use and distribution of seed labels and certificates as a way of improving access to quality seeds in the region” anywhere in the world, based on a model suggested by the OECD.  The system will “impact virtually all of the approximately 130 million COMESA inhabitants, who stand to benefit, according to the group, from assured-quality improved seed production and usage, as well as a de-fragmentation of the historically rather localised, national markets for seeds,” commented Stargard.

Practically speaking, the seed certification labels will incorporate machine-readability, traceability, and security features, and will be printed in the COMESA official languages: English, French and Arabic.

COMESA to Introduce Seed Labels and Certificates to Boost regional Trade

A new era of antitrust in Zimbabwe: National Competition Policy moves ahead

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Having recently hosted a national sensitisation workshop on COMESA competition policy in Harare, as we reported here, Zimbabwe is expected to enact a revised competition law.  The country’s Cabinet has reportedly approved the National Competition Policy.  One element of the NCP is to reduce the time it takes the Zimbabwean Competition and Tariff Commission (CTC) to review mergers and acquisitions from 90 to 60 days, thereby encouraging “brownfield” investments, according to a minister.

Zimbabwean Industry and Commerce Minister Dr. Mike Bimha spoke at the mentioned workshop, emphasising the need for “a level playing field”: “We are now working to ensure that we have a new Competition Law in place which will assist the CTC in dealing more effectively with matters related to abuse of dominant positions and cartels,” he said.

The NCP is part of a larger project to encourage investment and is closely linked with the country’s industrial and trade policies, known as Zimbabwe Agenda for Sustainable Socio-Economic Transformation (a.k.a. “Zim-ASSET”).

The Zimbabwean NCP is not merely domestically focussed, however.  Andreas Stargard, a competition-law practitioner, highlights the more international aspects that also form part of the revised competition bill awaiting enactment by the President:

Not only does the NCP contain the usual  focus of levelling the playing field among domestic competitors under its so-called Zim-ASSET programme.  It also undergirds the so-called ‘domestication’ of the broader regional COMESA competition rules, as well as the Ministry’s bilateral agreements.  For example, Zimbabwe recently entered into a Memorandum of Understanding with the Chinese government, designed to enhance cooperation on competition and consumer protection issues between Zimbabwe’s CTC and the PRC’s MOFCOM.

Pan-African Antitrust Round-Up: Mauritius to Egypt & Tunisia (in)to COMESA

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A spring smorgasbord of African competition-law developments

As AAT reported in late February, it is not only the COMESA Competition Commission (CCC), but also the the Egyptian antitrust authorities, which now have referred the heads of the Confederation of African Football (CAF) to the Egyptian Economic Court for competition-law violations relating to certain exclusive marketing & broadcasting rights.  In addition, it has been reported that the Egyptian Competition Authority (ECA) has also initiated prosecution of seven companies engaged in alleged government-contract bid rigging in the medical supply field, relating to hospital supplies.

Nigeria remains, for now, one of the few powerhouse African economies without any antitrust legislation (as AAT has reported on here, here, here and here).

But, notes Andreas Stargard, an antitrust attorney with Primerio Ltd., “this status quo is possibly about to change: still waiting for the country’s Senate approval and presidential sign-off, the so-called Federal Competition and Consumer Protection Bill of 2016 recently made it past the initial hurdle of receiving sufficient votes in the lower House of Representatives.  Especially in light of the Nigerian economy’s importance to trade in the West African sphere, swift enactment of the bill would be a welcome step in the right direction.”

The global trend in competition law towards granting immunity to cartel whistleblowers has now been embraced by the Competition Commission of Mauritius (CCM), but with a twist: in a departure from U.S. and EU models, which usually do not afford amnesty to the lead perpetrators of hard-core antitrust violations, the CCM will also grant temporary immunity (during the half-year period from March 1 until the end of August 2017) not only to repentant participants but also to lead initiators of cartels, under the country’s Leniency Programme.

The Executive Director of the CCM, Deshmuk Kowlessur, is quoted in the official agency statement as follows:

‘The policy worldwide including Mauritius, regarding leniency for cartel is that the initiators of cartel cannot benefit from leniency programmes and get immunity from or reduction in fines. The amnesty for cartel initiatorsis a one-off opportunity for cartel initiators to benefit from immunity or up to 100% reduction in fines as provided for under the CCM’s leniency programme. The amnesty is a real incentive for any enterprise to end its participation in a cartel. In many cases it is not clear for the cartel participant itself as to which participant is the initiator. The participants being unsure whether they are an initiator finds it too risky to disclose the cartel and apply for leniency. The amnesty provides this unique window of 6 months where such a cartel participant can apply and benefit from leniency without the risk of seeing its application rejected on ground of it being an initiator.’

 

COMESA Competition Commission logoFinally, COMESA will grow from 19 to 20 member states, welcoming Tunisia at the upcoming October 2017 summit: the official statement notes that “Tunisia first applied for observer status in COMESA in 2005 but the matter was not concluded. In February, 2016 the country formally wrote to the Secretary General making inquiries on joining COMESA. This set in motion the current process towards its admission. once successfully concluded, Tunisia will become the 20[th] member of COMESA.”

This means that within 6 months of accession to the Common Market, Tunisia’s business community will be bound by the competition regulations (including merger control) enforced by the CCC.  Speaking of the CCC, the agency also recently entered into a Memorandum of Understanding with the Mauritian CCM on March 24, facilitating inter-agency coordination.  In addition, the Zimbabwean Competition and Tariff Commission (CTC) will host a national sensitisation workshop on COMESA competition policy on May 16, 2017 in Harare, purportedly as a result of “over 50 transactions involving cross-border mergers notified” to the CCC involving the Zimbabwean market.  “The main objective of the national workshop is to raise awareness among the key stakeholders and business community in Zimbabwe with regards to the provisions and implementation of COMEA competition law,” the CTC noted in a statement.