Prime Minister's Advisor on Institutional Reforms and Austerity, Dr. Ishrat Hussain has opposed restructuring of Competition Commission of Pakistan (CCP) but recommended removal of incumbent Chairperson and effective follow up of cases pending in courts.
The federal cabinet which is scheduled to meet on Tuesday (today) will discuss his report prepared after seeking replies of questions from the CCP.
"Had the legal impairments been removed and the CCP had a new leader the recent wheat and sugar crises could have been inquired by the CCP as it has professional expertise," he said, in his report prepared in accordance with the decision of the federal cabinet.
The Cabinet in its meeting held on December 10, 2019 tasked Dr. Ishrat Hussain, Advisor to the Prime Minister on Institutional Reforms & Austerity to examine the structure of CCP and give recommendations on strengthening the Commission so it could effectively safeguard tconsumers interests against collusive practices.
Dr. Ishrat Hussain has submitted a final report signed on March 11,2020 on restructuring of CCP where following recommendations have been made for strengthening the Commission;(i) Prime Minister's directions regarding vigorous pursuing of the court case pertaining to termination of the services of Chairperson and two members of CCP is required to be carried out by the Finance Division;(ii) Attorney General for Pakistan may be advised to expedite the hearings and disposal of the constitutional petitions against Competition Act 2020 pending for last ten years before the Lahore High Court (LHC);(iii) Law Ministry may be advised to immediately fill in the vacant positions in the Competition Appellate Tribunal and ;(iv) Federal and Provincial Governments should be advised to make references for prima facie violations of the Competition Act 2010 to the CCP and also act upon the policy notes of the Commission after stakeholders consultation.
Dr. Ishrat Hussain in his recommendations has observed that CCP has adequate legal, administrative, financial and enforcement powers to act as a bulwark against market abuses, cartelization and collusive practices and promote competition.
The report maintains that there is no need at present to carry out any restructuring or reorganization of the Commission. The Commission has also acquired human resources and expertise to carry out its functions and financial resources to engage best experts in the field. However, the Prime Minister has expressed his concern that despite the Cabinet's decision to terminate the services of Chairperson CCP on October 4, 2018, being void ab initio, the Chairperson is continuing to perform her functions based on a stay order granted by the court in November 2018. The report has recommended that the Prime Minister's directives issued on January 20, 2020 need to be vigorously pursued by the Finance Division.
The report has further asserted that major stumbling block in the functioning of CCP is the constitutional challenge to its ability to extend the Act in the provinces after the 18th amendment. The matter is pending since 2010. In the light of this legal suit, the firms that have been penalized by the Commission have obtained injunctions and stay orders against the orders of the Commission. Their behaviour therefore remains unaltered. He recommended that the Attorney General for Pakistan may be advised to expedite the hearings and disposal of the constitutional petition pending for the last ten years before the LHC. All other punitive actions and penalties cannot be enforced because of the injunctions and stay order obtained by the accused firms. The high courts may be moved to remove the restraining orders imposed upon the CPP.
The report has suggested that the Law Ministry may be advised to immediately fill in the two vacant positions in the Competition Appellate Tribunals. The federal and provincial governments should be advised to make references for prime facie violations of the Competition Act to the CCP and also act up upon the policy notes submitted by the Commission after the stakeholder consultation.
Dr. Ishrat Hussain, in his recommendations was of the view that unless the recommendations are implemented, the effectiveness and impact of the CCP would remain subdued, adversely affecting the smooth functioning of key product and input markets.
"Had the legal impairments mentioned in the recommendations been removed and the CCP had a new leader the recent wheat and sugar crisis could have been inquired by the CCP as it has professional expertise and market structure knowledge and would have come up with sound remedial measurers to avert such situations from recurring in the future," he maintained.
In order to implement recommendations of the report, a meeting of Finance Secretary with the Secretary Law and Deputy Attorney General from the office of Attorney General of Pakistan was held on March 30, 2020 wherein following actions were recommended to be taken ;(a) the office of Attorney General of Pakistan to seek an early hearing in the intra-court appeal filed in Islamabad High Court pertaining to termination of services of the Chairperson and two members of CCP;(b) Law & Justice Division will issue appropriate instructions to the office of Attorney General for Pakistan for filing an application in the Supreme Court of Pakistan for consolidation of all constitutional petitions challenging the CCP Act 2010 in one High Court and expedite its hearing and ;(b! Law & Justice Division to expedite the appointment on vacant positions of Competition Appellate Tribunal (CAT).
CCP is of the view that it imposed penalties of Rs 27 billion between 2007 to December 2019. The major sectors were telecom, fertilizer and cement. Rs 24 billion or almost 89 per cent was imposed against three following sectors i.e. Telecom-Rs 9 billion; fertilizer Rs 8.6 billion and cement Rs 6.4 billion.
However, penalties have not been recovered due to court injunctions and stay orders and therefore the expected deterrent effect of the penalties on those found guilty of anti-competitive behaviour has remained mute.
The Commission recommended measures on sugar industry in April 2018 and automobile industry in September 2018 to the federal and provincial governments but no action has been taken on those measures so far. The Commission has also recommended the establishment of Real Estate Regulatory Authority to orderly conduct the real estate business in the country.
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