The Competition Commission of Pakistan (CCP) is in no way behind the developed jurisdictions in making effective use of search and inspection as a tool of investigation to unearth cartels on the basis of record and data retrieved from associations' offices and individual undertakings.
Sources told Business Recorder here on Saturday that in almost all the searches and inspections carried out by CCP officials, they were able to gather crucial information leading to exposure of cartels' activities. So far, total 10 inspections have been conducted by the Commission. The CCP carried out six searches and inspections of associations during July-2010 to June 2011. Prior to this period, four inspections were conducted since CCP's inception in 2007. In all such cases, the CCP has been able to establish cartelisation, showing importance of this enforcement tool to unearth cartels in different sectors.
Referring to international competition jurisdictions, with powers of inspection and forcible entry, sources said that similar to various other jurisdictions such as UK, Singapore, Canada, Turkey, EU Commission and South Africa, the power of conducting 'Enter and Search' Inspection without warrant of the Court has been kept in the Act in view of its effectiveness to detect cartels. The provision of Section 34 empowers the authorised officer of the Commission to have full and free access to any premises, place, accounts, documents or computer; stamp, or make an extract or copy of any accounts, documents or computer-stored information to which access is obtained; impound any accounts or documents and retain them for as long as may be necessary for the purposes of the Ordinance. Where a hard copy or computer disk of information stored on a computer is not made available, impound and retain the computer for as long as is necessary to copy the information required and make an inventory of any article found in any premises or place to which access is obtained.
The powers of search and inspection available to the Commission under the Act are akin to the powers available to SECP under the SECP Act, 1997. The EU also has similar powers (EC Competition Law-Enforcement Regulations-13). The EU Competition Commission--the EU Commission has power to demand written information, enter premises and demand company information (dawn raids) and seek oral explanations all without the need to obtain a warrant, sources stated.
Sources said that statutory sanction for the inspection is contained in section 34 and 35 of the Act. Section 34 allows the Commission to authorise its officers to enter and search any premises likely to hold information or evidence about potential violations of the Act. The section empowers the officers to impound materials including those stored in electronic form. If entry to the premises is barred by the occupants, a forcible entry order can be issued by any two members of the Commission under Section 35 of the Act. This tool of inspection is especially helpful where the commission wants to gather firsthand information about possible collusive activities by business undertakings. The element of surprise associated with the inspection tool makes it possible for the Commission to collect evidence before it can be removed, tampered or destroyed.
According to sources, the undertakings must have an experienced corporate lawyer as in-house counsel, who are familiar to the provisions of the Act and can advise the concerned undertakings to ensure compliance with the provisions of the Act--including the inspection and impounding of documents. However, access to legal advice is not necessary during an on-going inspection. Moreover, no jurisdiction has specifically provided for a 'legal assistance' during an inspection.
Non-compliance with the orders of the commission and obstructing or interfering with the on-going inspection of the premises would entail a penalty up to Rs one million. The non-compliance of the order of the Commission constitutes a criminal offence punishable to imprisonment which may extend to one year or with a fine which may extend up to Rs 25 million.
An inspection can be conducted by the Commission whenever there is a plausible indication of an infringement of the Act. Inspections are mostly carried out in instances where there are indicators of collusive behaviour. Prior to an inspection, the Commission has to record in writing reasons as to why an inspection needs to be carried out. The undertaking being inspected is informed of these reasons at the time of the inspection. The determining force behind the successful implementation of any law is the will, determination and dedication of the human resource involved. While the law itself provides for the mechanism, it is the sheer courage of the Commission's authorised officers that have made these inspections meaningful and effective.
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