ENFORCEMENT COOPERATION IN THE COMESA REGION Vincent Nkhoma

ENFORCEMENT COOPERATION IN THE COMESA REGION Vincent Nkhoma Manager- Enforcement & Exemptions COMESA Competition Commission

Why Cooperation in Competition Enforcement v Globalization has enhanced geographical reach of business transactions v Globalization has triggered cross-boarder reach of anticompetitive business practices i. e. international cartels and cross-boarder mergers v Cooperation enhances effective enforcement of competition law even for the most advanced authorities.

Benefits of Cooperation In merger investigations, cooperation can result in: § Agencies sharing vital information related to the transaction § Agency coordination in substantive case analyses, timing and remedies v In anticompetitive business practices, cooperation can help in: § Increased chance of detecting international cartels through notifications between Agencies § Structured coordination of investigative activities, strategies and applicable remedies among Agencies v v. In general, assists agencies to enhance investigative and analytical efficiency and effectiveness

Forms of Cooperation v Informal “ soft law” cooperation not based on any legal instruments v Waiver based cooperation v Cooperation emanating from provisions in the national laws- Zambia, Mauritius, Malawi, etc v Competition case specific agreements between jurisdictions- Zambia and Zimbabwe v Regional cooperation instruments- COMESA Competition Regulations

Cooperation Legislative Framework in COMESA v Preamble to the COMESA Competition Regulations (“the Regulations”): Member States “recognises the desirability of setting standards for procedures by which the regional competition agency can act as a forum for exchange of views, consultations and conciliation on matters related to anti-competitive practices affecting COMESA regional and international trade”

Legislative Framework Cont. . v Article § § § 7 of the Regulations- functions of the Commission: co-operate with competition authorities in Member States; facilitate the exchange of relevant information and expertise; enter into such arrangements as will enhance its ability to monitor and investigate the impact of conduct outside the Common Market but which nevertheless has, or may have, an impact on trade between Member States

Challenges to Formal Cooperation within COMESA Inadequate capacity to handle requests for information from other jurisdictions – resource constraints, human capacity limitations; v Lack of harmonisation of the laws, approaches and enforcement modalities; v Legal restrictions on the sharing of confidential information v Legal restrictions to the admissibility of information from other jurisdictions in national courts v Sovereignty issues- need for domestication of the CCR v Inadequate mutual interest to facilitate formal cooperation v

A Move Towards Informal Cooperation v Informal cooperation is based on friendship and is unofficial v Cooperation not tied to formal agreements v Based on mutual trust between like minded competition agencies v Can be general i. e. targeting capacity building initiatives , networking, etc v Can also be case specific regarding anticompetitive business practices and mergers v Information sharing in cartels usually problematic given the sensitivity of the subject matter.

Cooperation in Merger Analysis v Article 26(6) of the Regulations- Commission notifies the relevant Member States about nature of transaction ad seek representations v The Commission and NCAs share case specific information and coordinate investigations v Views from Member States have been critical to the analysis and decision making in all 40+ mergers notified. v The Board also operated as the COMESA Competition Network going by its compositionsubstantial information shared at Board level.

Cooperation in Anticompetitive Practices Not much has been achieved yet regarding cooperation between the Commission and NCAs in this area v Draft framework of cooperation is being negotiated with NCAs – information sharing and joint investigations part of the framework v Technical assistance in formulation of leniency policies at NCAs being pursued v

Anticipated Enforcement Cooperation in Cartel Enforcement Lately, there has been an increase in the number of successful cartel prosecutions by the South African competition authority. v This success may entail that undertakings involved or those contemplating engaging in similar conspiracy may have shifted to adjacent jurisdictions where cartel enforcement is weak, such as in most Member States of the Common Market. v Commission formulating Leniency Policy to offer immunity from fines or reduced fines to undertakings which will come forward to assist the Commission to successfully prosecute cartel offenders v

Anticipated Enforcement Cooperation in Cartel Enforcement The Commission pursuing to negotiate a cooperation framework with the South African Competition Commission v Commission Leniency Policy one of the tools to assist in unlocking a cooperation agreement with South Africa. v Some of the cartels which may have impacted the Common Market include those in the following sectors: bread; Air transportation; pharmaceutical ; Cement ; Steel; Construction v

Way forward Strengthen capacity of the emerging NCAs to effectively handle case specific or general informal cooperation initiatives in the Common Market v Finalization of the framework of cooperation and exchange of information v Harmonization of the national competition laws with the Regulations to ensure uniformity in procedures, processes and enforcement modalities v Formulation of leniency policies at Member States level as an enforcement tool as well as for information gathering and sharing. v Strengthen Peer review excises in MS to promote best practices in information gathering and exchange v