Uncaging the beast

Omair Zeeshan May 03, 2010

KARACHI: Political compulsions, questions of funding and getting the Competition Ordinance passed into law were problems that the Competition Commission of Pakistan (CCP) was already facing.

Now the CCP will work with one hand tied behind its back, say observers. This comes at a great price to the economy and the consumer, they add.

In 2009, an incapacitated and underfunded CCP took action against banks, the cement industry, chartered accountants, stock exchanges, and the petroleum industry. This did not go down well, say analysts.

Now the Commision is stuck between the Senate and a hard place, and is just waiting to see how badly the committee limits its powers before passing them into law.

For its part, the Senate Standing Committee recommends that the CCP’s power be reduced. Vested lobbies are hell bent on finding creative ways to make it ineffective, it is alleged.

They have already succeeded in a way, say some. The Competition Bill passed by the National Assembly comes complete with measures to delay the CCP.

Businesses affected by the CCP’s decisions will have the right to appeal before high courts, though this will only delay the implementation of the CCP’s actions, say observers.

However ineffective this measure may seem, it’s addition to the bill only serves to highlight the power that people who are campaigning against the CCP wield.

A lapse in judgment

As part of its work, the CCP fights collusion and monopolies of the kind that the All Pakistan Sugar Mills Association is suspected of.

It protects the economy from wrong practices of some in the cement sector which has had a long history of cartelisation and cost Pakistan’s economy Rs120 billion from 2003 to 2008, analysts estimate.

The CCP also exposed the Ministry of Industries for protecting a cartel in the cement sector by preventing an inquiry against the powerful cement manufacturer lobby.

The organisation was also able to expose a collective decision by the Pakistan Banking Association to fix profit rates and charge Rs50 from small account holders with balances under Rs 5,000 which deprived small savers from availing profits on any deposits

All good things

The Ordinance was supposed to lapse on March 26, 2010 if not passed by the National Assembly.

Not suprisingly, it was not passed by the National Assembly.

Clipped wings and vested interests, or how people want the CCP gone so that they can make money

Government officials assured the CCP chairman, Khalid Mirza on April 14 that the Competition Ordinance would be re-promulgated with retrospective effect and necessary saving provisions in the coming days.

Then in a surprising move, it referred the Competition Law to the Senate Standing Committee on finance, despite the law already having been passed by the National Assembly. “Certain interests are bent on weakening the commission and stripping it of its powers to safeguard their interests,” alleged Khalid Aziz Mirza, Chairman of the CCP on March 12, 2010.

Pakistan’s economy and the CCP’s fate depends on these people

Members of the Senate Standing Committee on finance disagreed with the CCP’s actions against the manufacturing sector at a hearing on April 22, 2010. It is believed that they thought the actions were a deliberate attempt to hurt the sugar and manufacturing industries.

Their being so blunt about their disagreement with the CCP’s actions puts into direct question the business interests of some of the members who are sitting on the committee, say officials, who asked not to be named.

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