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Competition regime "undermining judicial system"

28 Dec 2012

An increasing number of government institutions have their own "court systems"‚ which undermine traditional judicial systems‚ says Robert Vivian‚ professor of finance and insurance at the University of the Witwatersrand.

The Competition Tribunal‚ through the Competition Act‚ is used "to garner billions of rand for the government" without meeting the constitutional requirements of due processes.

Vivian said the burden of proof in proceedings before the Competition Tribunal did not follow due process‚ as the evidence produced was never tested in a court of law.

Speaking at the Freemarket Foundation in Johannesburg this week‚ Vivian argued that there should be a clear distinction between the administrative and criminal roles taken on by some institutions‚ such as the competition authorities.

He told Business Day the competition authorities should be allowed to decide on administrative issues such as mergers and acquisitions. Matters relating to contraventions of the Competition Act should be dealt with by the criminal justice system.

"Since the Competition Act‚ a system operating as a state within the state‚ combines and confuses the executive (administrative)‚ judicial and legislative functions‚ it is not clear where to draw the line between these functions in the legislation‚" he explained.

Vivian says the Competition Act has been amended to allow for criminal sanctions in terms of prohibited practices such as price fixing‚ collusion and market division‚ which are considered serious contraventions of South African laws. Companies end up paying millions of rand in fines. The amendments to the act also provide for directors‚ managers or senior officials in a company to be jailed if they knew about prohibited practices but did nothing to stop them.

Vivian said if South Africa had gone that route when the act was first introduced‚ half the problems relating to the unconstitutional nature of the competition regime would have been solved.

"The reason we did not go that route (initially) is because it allowed the state to collect billions of rand," he added.

The Competition Amendment Act has been signed by the president‚ but its implementation date has not been promulgated.

Source: Business Day via I-Net Bridge

Source: I-Net Bridge

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