Competition Board chairman Pierre Brooks is sharply critical of a culture of anti-competitive behaviour in South African business, Reg Rumney reports
Tougher competition policy is necessary and is on the way, promises Competition Board chairman Pierre Brooks.
In an interview with Business Mail this week Brooks sharply criticised the pervasive disregard for anti- competitive behaviour in South African business.
Referring to a recently organised conference on crime and corruption, Brooks said that while businesspeople did not show the same concern about collusion and other anti-competitive behaviour, there was tacit condonation of such practices, which were seen as normal business
“There is a culture of tolerance of anti-competitive behaviour, some of it criminal, says Brooks. “Business really cannot complain if we are looking at a more effective means of enforcing competition.”
Brooks was speaking against the background of an intense debate about the desirability of anti-trust legislation and recent salvoes fired by big business against the government on economic concentration.
“This is a generalised view,” he admits. “One must give credit to those who are willing to take a stand.”
He talks of anonymous phone calls to the board about anti-competitive acts, and of those wanting to speak out being intimidated.
“How can business talk about morality if this is the sort of thing pervading the system? And then they don’t want strong competition policy.”
New — and tougher — competition policy is definitely on the cards. Brooks is helping to shape proposals for new law, which should be put before Parliament before next year.
He illustrates the need for tougher penalties by referring to the classic case of proven collusive bid- rigging by three furniture removal companies. Each was effectively fined R2 500, but profited by R80 000 from the rigged bids. “Crime is then a profitable business.”
Big changes are mooted in the enforcement of policy as well as in penalties. “The police and authorities are understandably not as enthusiastic as we would be. Competition authorities would be more involved in enforcement, will act with more enthusiasm.”
The investigative and enforcement processes must be kept separate, but under one umbrella, in much the same way as prosecuting authorities and courts operate as parts of the justice system
Brooks says that Minister of Trade and Industry Trevor Manuel will decide when to publish the legislation for comment. “The input of big business is important but you have to look at a range of interests.”
Business cannot take the moral high ground until it adopts ethical standards. “Unless we want to become a banana republic, we have a long way to go.”