Validation of Competition Ordinance by November 28: CCP seeks Parliamentary sanction

The Chairman of Competition Commission of Pakistan (CCP), Khalid Mirza, has urged the government to get the Competition Commission Ordinance 2007 validated from the Parliament, or it would be disastrous for the economy and a conspiracy against the general public.
Talking to a group of journalists on Tuesday, he said that the CCP would cease to exist if the elected Parliament was unable to approve the Competition Ordinance 2007 by November 28, as directed by the Supreme Court. In case the parliament approves the Competition Ordinance, 2007, all actions and decisions taken by the Commission would get validated, he added.
He said that if the Parliament did not approve the Ordinance promulgated on October 2, 2007, its actions taken in first four months would have legal backing till February 2, 2008 but legality of action taken after February 3 to date would pose question mark on which it could not interpret.
"In case of non-approval of the Competition Ordinance 2007, it will open a Pandora's box and will have disastrous effects for the national economy", he added. He raised a question about the legal status of the orders and show-cause notices issued after promulgation of the Ordinance 2007.
"There is a big question mark on the validity of the CCP orders passed after the passage of four months period". The orders passed within a period of four months after promulgation of the Ordinance would remain valid. However, if the Parliament does not validate the Ordinance, the fate of the orders passed after four months period against cartelisation and deceptive marketing practices committed by influential groups and cartels would remain unclear.
The legal implications of not approving Ordinance would have serious consequences on the entire economy. Therefore, the Ordinance 2007 has to be approved by the Parliament at any cost to avoid such legal complications. In case the Parliament does not validate the Ordinance by November 28, 2009, he said, it would badly effect the economy.
In that case, the office of the CCP has to be closed down. The CCP Ordinance was under consideration at the National Assembly Standing Committee on Finance and its approval is required for tabling it before the Lower House. Those who were opposing this law, they were quite influential as well as very vocal but the supporters of this law were weak and largely voiceless.
"This is a conspiracy against the public to abolish the CCP as it is taking actions against influential and those who considered powerful and involved in abuse of dominance against public interest," he added. Regarding resistance in Parliament about the validity of the CCP, the CCP chief said that it was difficult for any political party to openly oppose this law during the debate in the Parliament as it is protecting rights of the consumers and general public.
However, only technical objections could be raised about the Ordinance. The Ordinance needs to be passed by the Parliament in its existing form at any cost to protect the interest of the consumers, he said. He said that the CCP is facing biggest resistance from the most powerful lobbies and corrupt groups involved in cartelisation. If the Parliament passes the Ordinance, these corrupt lobbies are afraid that they would be dealt under the CCP laws, he remarked.
About right of appeal, he said the best judicial reform talks about minimum number of stages of appeal. The global scenario clearly shows that litigation needs to be reduced. The full right of appeal against the order of CCP is available to the aggrieved person before the Supreme Court.
He termed the allegation of usage of penalty amounts by the commission as baseless. Khalid said that it took over 2-3 years for imposition of penalty and its actual collection. The whole process took several years for collection of the amount imposed under the Ordinance 2007.
The penalty directly goes into the consolidated fund of the commission and the CCP can only spend the amount from the approved budget of the Ministry of Finance, he said, adding the commission cannot spend money beyond the allocated budget. So far, the CCP has yet not recovered any amount in the form of penalties. The CCP Chairman said that the initiation of criminal proceedings against the cartels has some basic legal flaws.
The criminal liabilities have to be taken to the criminal court through the public prosecutor. In this situation, it is very difficult to prove criminal case against the companies or undertakings. He termed the inclusion of criminal penalties in Competition law not fit for the country and said that "international financial institutions have already advised us not to use criminal penalties" as these could hurt foreign direct investment.
However, a provision needs to be incorporated in the Ordinance 2007 to cancel the directorship of any company's director involved in violation of law. When asked about timing of action against the powerful fertiliser companies, he said, even the CCP Ordinance is pending before the Parliament, the commission would continue its operations to provide justice to all.
If the Parliament approves the Ordinance 2007, the CCP would continue its working on the same pattern as it was doing before. He said that Pakistan is committed with the World Bank under Poverty Reduction Strategy Paper (PRSP-II) to uphold the Competition law. In case of sugar, he said, the CCP took decision to hear the reply of All Pakistan Sugar Mills Association (APSMA) on November 14 on allegation on allegation of cartelisation.
He said that the CCP also took decision to issue a show-cause notice to fertiliser companies after holding a detailed inquiry and called them on December 4, 2009 to present their viewpoint. According to the inquiry report conducted by the CCP, various documents provided during the enquiry by the fertiliser dealers and growers prima facie indicate abuse of dominance by the fertiliser producers through following practices including tie-in and late delivery to the dealers (giving rise to more demand facilitated by less supply).
The CCP also decided to issue a show-cause notice to Bahria University for non-compliance of its earlier orders to refund the amount charged by the university under which it made obligatory on its students to purchase a laptop with provision of education services.
The CCP received some complaints from students that the university was not paying back the amount in accordance with the earlier CCP orders on which the Commission conducted an inquiry. Upon receiving unsatisfactory response, the CCP asked the University management to appear before the Commission on December 3, 2009 to explain why a penalty should not be imposed for violating the Competition law.