Lacking required strength: CCP almost dysfunctional since January

Only 2 members are working, other seats remain vacant

ISLAMABAD: The Competition Commission of Pakistan (CCP) - a quasi-judicial body responsible for protecting citizens from monopolistic practices of business entities - has virtually become dysfunctional as against the minimum of five members, only two are currently running its affairs.

The existing strength of the commission is even less than the minimum statutory requirement of three members for calling a meeting. This has made the CCP almost dysfunctional - a sign of bad governance.

The CCP will consist of not less than five and not more than seven members, according to Section 14 of the Competition Act 2010. However, since January this year, only two members including the chairperson have been working while other seats remain vacant, say sources in the commission.

Dr Joseph Wilson, member research and global competition, completed his last term in November last year. Mueen Batlay, member mergers and acquisitions, and Dr Shahzad Ansar, member of the Office of Fair Trading, completed their terms in January this year, according to sources.

Since then, all three posts have been vacant. The commission’s affairs are being run by Chairperson Vadiyya Khalil and Ikramul Haque Qureshi. Terms of both would end by December this year.

The Ministry of Finance, being the administrative ministry of the CCP, is responsible for appointing the new members. However, for the past seven months, the ministry could not perform this task, leaving consumers at the mercy of companies.

“The process for the appointment of members is under way and applications for vacant posts have been received,” said spokesman for the Ministry of Finance. He added the ministry had shortlisted the candidates and interviews would be held shortly.

Sources said some retired bureaucrats had also applied for the post of members, which was also a reason for the delay in appointing the new members.

Since existing strength of the commission is even below the legal requirement to call a meeting, its work has been adversely affected. Section 24 of the Competition Act states that minimum quorum for calling a meeting of the commission will not be less than three members.

“The CCP with two members cannot take suo motu action under Section 37 (I) of the Competition Act,” said spokesman for the CCP.

He, however, said even two members could approve merger and acquisition requests, adding about three dozen requests for mergers and acquisitions had been approved in first half of the current year.

Business entities are required to seek a no-objection certificate from the CCP before any merger or acquisition deal. Depending on the nature of the deals, the CCP can undertake the second phase of review of such deals.

However, sources said usually a two-member bench did not take decision on the sensitive nature of merger and acquisition. In case a party was not satisfied with the two-member bench, it could appeal before a three-member bench, which currently was not possible, they added.

Similarly, only the commission can decide on formally initiating a case after initial inquiry. Section 37 of the Competition Act gives powers to the commission to take suo motu notice and initiate inquiry in any matter.

It also has legal mandate to conduct studies to ensure competition in the economy. It enjoys powers of the civil court.

Mobilink, Pakistan’s leading telecommunication company, is currently in the process of acquiring an information technology service provider. However, it would need  a no-objection certificate from the CCP as the acquisition could raise monopoly concerns.

The CCP’s core mandate is to ensure competition and fair play among business entities with the objective of protecting the consumers from exploitation. However, since the CCP can no more exercise its suo motu powers, corporate entities have got a free hand to set prices.

The Office of Fair Trading has been dysfunctional for the past seven months. In the past three years, it has conducted 48 studies to determine whether the companies and business entities are exploiting their consumers.

Published in The Express Tribune, August 6^th, 2017.

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