Competition, consumer protection policy set to even business playing field
By Moombe Hamoobola
FROM the late 1980s when most economies, especially in Africa, were centrally controlled, there has been an international recognition of the role that competition plays in a free market economy.
In 1991, Zambia embarked on free market economic reforms, which resulted in trade liberalisation, privatisation and de-regulation.
A liberalised economy has brought in the ability by the private sector and individuals to own property and businesses.
For this reason, the Ministry of Commerce, Trade and Industry has come up with a draft national Competition and Consumer Protection Policy, following the Government’s realisation that market forces alone may not be able to address all the problems in the market place, especially in situations of market failure.
While institutional failure may be addressed by regulatory measures and reforms, the market failure arising from anti-competitive practices by firms require the attention of a competition policy.
Therefore, the policy is aimed at ensuring that individuals and businesses comply with the competition, fair trading and consumer protection law, which has been marred by lack of sufficient knowledge on the issues and the enforcement system, and has previously not been seen as a national priority.
Minister of Commerce, Trade and Industry Felix Mutati said his ministry considered that it was in everyone’s interest to trade in an environment where business terms and conditions were fair, not secretive, transparent and devoid of underhand methods and other secret deals that would likely disadvantage those that were not privy to such secret dealings.
Mr Mutati said his ministry wanted to ensure that any category of agreements, decisions or practices that could prevent, restrict and distort competition to an appreciable extent to any market or transaction, were monitored, controlled and prohibited at national level and in all possible situations.
Mr Mutati said the policy would assist the Government in monitoring, controlling and prohibiting anti-competitive practices or tendencies.
The minister said the policy set out the Government’s vision and mission in developing competitive markets that would lead to industrial and economic growth and development.
He called on all Government organs and other stakeholders to work together to implement the policy.
The draft policy has been posted on the website and a group of experts who started with Livingstone on Monday will be holding workshops around the country to get views from the private sector, other Government organs and the public at large on their contributions and subtractions to the draft.
According to the draft policy that has been a joint and consultative effort between various stakeholders working with the staff of the Zambia Competition Commission (ZCC) and the Ministry of Commerce, Trade and Industry, it provides guidance and strategies that the Government needs to ensure that it attains the objectives of the competition and consumer aspirations in the economy.
The policy has a vision of seeing Zambia become a middle-income country by 2030.
To achieve this and improve people’s living standards and opportunities, the Government has no alternative but to improve the competitiveness and productivity of its firms and institutions.
The general expectation of the Competition and Consumer Policy is to preserve and promote competition as a means of ensuring that there is efficient allocation of resources in the economy.
The policy is aimed at simplifying the Act of Parliament so that even laymen would easily read and understand how they could file in complaints to ZCC if other business people and firms unfairly treated them.
The policy is also aimed at making information more available to the public and other sectors so that people would have the basis and direction on which to handle their business and notice foul play when it arises.
The policy also talks about regulating mergers and acquisitions to preserve and create a competitive market structure that would deliver competitive outcomes for the benefit of all economic agents and consumers.
The policy is also aimed at regulating dominant firms and those that, under certain presumptions based on their market behaviours, are considered to possess market power to allow them act independently of its competitors, customers and suppliers or own over 50 per cent of the market share so that they do not unfairly use their market power to engage in unfair business practices to the detriment of competitors, consumers and suppliers.
The policy, however, points out that the Zambian competition law does not prohibit the existence of monopoly or dominant position of market power because, by their nature, companies want to make profits and grow big because it is their size that allows to undertake research and developments, enter export markets and invest in newer and more efficient technologies.
The policy states further that firms should not be punished for dominating the market in an economy as doing so would discourage investment and innovation and may result in reduced competitiveness and economic growth.
The policy also advocates equal access to essential economic facilities.
Essential facilities are infrastructural facilities or resources that cannot be easily duplicated, without access to which competitors cannot reasonably provide goods and services to their customers.
Some of the examples are railway lines, harbours and ports, network facilities and power lines.
However, the current competition and fair trade law in Zambia does not define guidelines on what can be classified as an essential facility and what measures competitors have to undertake to access the facilities.
The policy further states that because there is no duty currently imposed on companies running essential facilities, it has been difficult to combat abusive or unsatisfactory monopolistic situations in public interest.
The policy fights against anti-competitive trade practices that would restrict or distort competition.
Anti-competitive trade practices include business conduct between competitors (horizontal) and business arrangements between companies on different levels of production (vertical restraints).
The policy also addresses the issue of cartels, which are considered to be a conspiracy against the public to subject consumers to high fixed prices, market allocation, and bid-rigging which all prevent effective competition.
Generally, the policy looks at various business issues aimed at giving an opportunity for all businesses to trade on equal grounds and prevent retailers and consumers from being taken advantage of by giants while guarding these giants from being condemned unnecessarily.
The draft policy has also given an opportunity to all Zambians, especially those in the business world, to give their views on how the policy should reflect.
