Bring back competition to the economy

Competition laws have existed for millennia, Lex Julia de Annova is thought to be one of the earliest laws to check corporate monopolizations. It dates back to 50BC, in the Roman Empire. Unfortunately, Pakistan in 2010, struggles with corporate anarchy in the absence of a competition law.
Its not as if Pakistan has never had such a law. In fact, since 2007, the countrys businesses were checked by one of the most comprehensive competition laws, drafted under the careful watch of the World Bank. Its current abode, however, is the Senate Standing Committee on Finance and Revenue.
On March 27, 2010 all the reins of the economy were sent loose once again. Cartelization, hoarding, price fixing, monopolization are at present all fair game. The bill was sent to the senate for a vote on February 24, 2010. During the vote, certain legislators needed time to adequately study the bill, with specific comparison to the law in other countries.
A period of 21 days was granted for deliberations back then. But it has been more than 45 days and the bill has not been voted on in the senate, neither has it been re promulgated by the President.
A major argument of the dissenting legislators is that penalties should be imposed on profits and not on revenue. A review of laws from USA, Canada, EU and India among others demonstrates that fines imposed under Pakistans competition law are considerably lenient.
India and Australia penalize offenders three years profit or 10 percent of revenue, whichever is higher. The US imposes a fine of $10 million or 3 years imprisonment. Switzerland on the other hand charges 10 percent of the revenue for three financial years. None of the countries impose a fine of less than 100 percent of 3 years profits.
Competition lawyers believe that the Pakistani law is one of the most lenient when compared with competition laws around the world. For instance, in the current law, there is no penalty for delay in supplying information requested by the CCP. In India there are daily penalties of Rs100,000 up to Rs250 million.
Law makers have also cited concerns that the CCP will be able to collect the proceeds from penalties into a fund. Interestingly, Ogra, Pemra, PTA, Nepra and SECP collect the fines they impose, themselves. Going by that logic, CCP should have the power to collect the penalties in its fund. It must be noted that the fund may not be used for administrative purposes. For that, there is an approved budget which the regulator must follow.
Recently, PSMA has been crying foul over the destruction of its industry due to falling international prices. Had the CCP been active, it would have provided the appropriate forum for the aggrieved millers to voice their concerns.
Unfortunately, the passage of the 18th Amendment by both houses of the parliament may throw a wrench in the case of the competition ordinance, as the profoundly historic amendment could be an impediment towards the re-promulgation of ordinances that have previously lapsed.
Over the past month, directives from the Prime Minister for the re-promulgation of the competition ordinance have been ignored. Is the delay in reinstating laws protecting the larger interests of the Pakistani economy intentional or criminal negligence?

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GLOBAL COMPARISON OF PENALTIES

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Country        Penalty

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USA            $10 mn or 3 years imprisonment

France         10% of worldwide turnover

Ireland        Higher of £4 mn or 10% revenue; imprisonment

Canada         Imprisonment up to 10 years and $150,000

Turkey         10% annual gross revenue

Australia      Higher of 3 times profit or 10% turnover

Switzerland    10% turnover for 3 financial years

India          Higher of 3 years profit or 10% revenue

Pakistan       15% of annual revenue

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