UNCTAD completes peer review of Competition Law

The United Nations Conference on Trade and Development (UNCTAD) completed a successful Peer Review of the Competition Law and Policy of Pakistan with the recommendation for Competition Commission of Pakistan (CCP) to continue with an active policy towards leniency to deter cartels.
Talking to reporters here on Saturday, Chairperson CCP Rahat Kaunain Hassan said that a high level delegation representing Pakistan led by the Chairperson CCP and comprising other senior officials including Dr Joseph Wilson, Member, and Ikram ul Haque Qureshi, Director General has returned after successful completion of the Peer Review at the 13th annual session of the Intergovernmental Group of Experts (IGE) on Competition Law and Policy, at Geneva, Switzerland to participate in the Peer Review of Competition Law and Policy in Pakistan.
The Peer Review report concluded its findings with some recommendations intending to facilitate the enforcement of competition law and policy issues in Pakistan in a more efficient manner. The peer review has strongly recommended that the provision in the Act stipulating that 3 percent of the revenue of the regulatory agencies of Pakistan form part of the CCP Fund be finally implemented. Those resources would permit the Commission to focus on implementing advocacy policy more effectively by expanding its outreach and establishing its regional offices. The CCP has called the attention of the country to competition problems in some sectors and it must now become capable of proposing and employing ways and means to tackle those concerns, whilst retaining professional expertise and further enhancing capacity.
It has further recommended harmonising government policies with competition law and has expressed that competition assessment at the policy design stage is desirable and recommended to achieve regulatory objectives with less harm to competition. In this regard, it is important to: Identify existing policies that are likely to adversely impact competition; prioritise policies which should be reviewed first - such priorities have to be decided by a body representative of Government; Ensure that reviews are undertaken by sector-specific regulators in conjunction with CCP.
The recommendations deals with issues such as: financial autonomy, institutional arrangements, widening the scope of legislation and policies, enforcement's pertinent to anticompetitive conduct, active involvement in key working groups of ICN, OECD and UNCTAD, capacity building of the commission and Public Procurement Authority. Enhancing knowledge of competition law and practice amongst the academic community and further developing and strengthening relations with private consumer protection associations and NGOs.
The CCP was able to conceive and implement a successful leniency policy, in a record time. It is an uncontroversial fact that leniency is one of the most effective instruments to deter cartels. Consequently, it is recommended that the Commission continue to pursue an increasingly active policy toward leniency. It is emphasised that it is important to ensure that corrupt practices cases are distinguished from cartels and collusive behaviour. After the leniency decision, the National Accountability Bureau and Transparency International have expressed interest in the case and any such intervention or lack of clarity on this aspect may deter future leniency applications.
Bearing in mind that there is huge backlog of competition cases, the report recommends constitution of special benches that may enable expeditious disposal of cases, serving public and consumer interests. It has also been emphasised that it is important for the Government and the judiciary to recognise the need to prioritise matters of economic importance that impact on the public. This would benefit enforcement by all economic regulators and contribute towards effective enforcement by regulatory bodies.
The Peer Review Report concluded that the achievements of CCP are internationally recognised by the world competition community, as well as local business, media, government and civil society. It has been observed that CCP has been performing a crucial leadership role in taking the Pakistani economy forward to a greater level of confidence on competition-based and consumer-welfare oriented market system. As an institution, CCP has a country-wide recognition of excellent reputation based on integrity, technical competence and governance. In fact, there is a clear perception that it has been an essential example for institution building in Pakistan, favouring not only the consistency and stability of institutions themselves, but also the legal certainty able to attract the inflow of investments.
It further stated that in previous analysis of the progresses of CCP, experienced and respected commentators have called attention to what the agency has done, with outstanding competence in ascending a steep learning curve, concluding that it is to be considered one of the best performing newly established agencies in the developing world.
Discussing the challenges faced by CCP, the Report said that CCP struggles against difficulties that often challenge competition agencies in economies with a long tradition of strong government control, including a deficient public understanding of the competition policy, slow judicial review, and incomplete support from other parts of the government, mainly translated into the lack of adequate financial autonomy, Ms Rahat Kaunain referred to the report.
Among the major strengths of CCP that were repeatedly mentioned during the Peer Review process are a recognised mindset toward the importance to comply with and enforce the law and not only to punish; that the Commission is not against profit making but in favour of regulating the market; that transparency is very accountable with fairly clear decisions; a noticeable and successful advocacy program, including the very useful policy notes. CCP is also considered to have an excellent sense of responsibility and has managed to create a good leniency policy, making the business community look for legal counsel on competition issues beforehand.
Rahat Kaunain further said that in August 2012, CCP nearing completion of 5 years of its establishment had requested and volunteered to participate in a Peer Review of Competition Law and Policy organised by United Nations Conference on Trade and Development (UNCTAD). The purpose of the Peer Review is to assess the legal framework and enforcement experience in Pakistan and to draw lessons from past experiences with a view to improving competition law enforcement in the country.
The peer review team that assessed the state of competition law and policy in Pakistan and prepared the Peer Review Report comprised of competition experts including, William Kovacic, Professor of Law at George Washington University (former US FTC Chairman), Fernando Furlan, former Head of the Brazil's Council for Economic Defence, Orcun Senyücel, Head of Supervision and Enforcement Department No IV at the Turkish Competition Authority.
The session on CCP was chaired by Bruno Lasserre, President, Autorité de Concurrence de la France (French Competition Authority), and panellists were Manuel Sebastião, President, Autoridade da Concorrência, Portugal, Muhammad Nawir Messi, Chairman, KPPU, Indonesia, Richard Fleming, Deputy General Manager, Enforcement and Compliance Division, Australian Competition & Consumer Commission, and Ryohei Takai, Senior Planning Officer, International Affairs Division, Japan Fair Trade Commission.
The session discussed the performance of CCP, the regulatory framework, challenges faced by the Commission and finally suggestions and recommendations to improve the competition regime in Pakistan. The Chairperson gave point-wise replies to several queries of the panelists and drawn their attention towards the key achievements made by CCP and the challenges it faced.
About The Peer Review, she said that a voluntary peer review is scrutiny of a country's competition law and policy, institutional arrangements and effectiveness in competition law enforcement by the country's peers. The purpose of the review is to assess the effectiveness of competition law enforcement in a country, to identify challenges and to allocate areas to be improved. Henceforth, the review provides an opportunity for beneficiary countries to learn from the experiences of the other competition authorities. They are also an important tool for countries to compare their performance against international best practices.
The process of the review involves the three main phases, which includes; firstly, the peer review report which contains the identification and contract of independent experts in consultation with the reviewed country, preparation of the fact-finding visit to the country, preparation of the draft peer review report and it's sharing for the correction and then finalisation.
Secondly; the assessment, it involves the constitution of panel reviewers, preparation of capacity building project in consultation with the reviewed country, followed by interactive session, and presentation of the UNCTAD capacity-building project proposal. Thirdly; the follow-up, it encapsulates the dissemination of the finding and recommendations of the peer review report and present the UNCTAD capacity-building project proposal and seeking of funds.
As a major initiative to bring Pakistan at par with the global competition agencies, in August 2012, the Chairperson of the Competition Commission of Pakistan, Rahat Kaunain Hassan, requested UNCTAD to undertake a peer review of Pakistan's competition law and policy. The request was accepted and the review was done starting from the evolution and structure of the competition legislation followed by the Institutional framework and organisation of the Competition Commission of Pakistan. An overview of the major sections of the Competition Act for instance, abuse of dominance, prohibited agreements and exemptions, mergers and acquisitions, deceptive marketing and consumer protection was done. The performance of the commission in the prevalent challenges was also discussed, Rahat Kaunain Hassan added.