Towards a fair and efficient economy for all

1. Annual Report 2009/2010 Presentation to Parliament’s Portfolio Committee on Economic Development Commissioner Shan Ramburuth 14 October 2010 Towards a fair and efficient economy for all

2. The work of the Commission • Prioritisation • Impact on low income consumers • Alignment with government’s economic policy • Likelihood of anticompetitive conduct • Mandate: Competition Act • Prosecution of anti-competitive behaviour • Prevent concentration through merger control • Advocacy for pro-competitive conduct and regulations • Operational support • HR, Finance, IT, Security • Governance: • PFMA, Treasury regulations and other legislation Towards a fair and efficient economy for all

3. Priority sector: Food and agro-processing • Pioneer penalty of R195m for collusion in the bread cartel. Appeal heard in September 2010. Negotiating settlement in milling • Keystone Milling penalty of R6,7m for participation in the milling cartel. Negotiations currently underway with other respondents • Sasol Chemical Industries penalty of R250,7m for collusion in fertiliser products. Omnia and Yara are defending case. Interlocutory challenge of Commission’s pleadings in Competition Appeal Court • Senwes’ appeal against finding of exclusionary conduct was dismissed by the Competition Appeal Court. Matter is pending before Supreme Court of Appeal Towards a fair and efficient economy for all

4. Priority sector: Infrastructure and construction • Collusive tendering by construction companies increases the costs of government investment in new and improved infrastructure • Investigations into cement, bricks and piling markets • Raids in cement industry resulted in leniency application • Referrals and settlements on cast concrete, plastic pipes, bitumen and reinforcing steel Towards a fair and efficient economy for all

5. Priority sector:Intermediate industrial products • Pricing practices impacts on downstream, labour-absorbing industries • Focus on steel and polymers • 4 cartel cases referred to the Tribunal involving: • Manufacturing and supply of long steel products • Supply of wire and wire products • Supply of mining roof bolts • Supply of reinforcing wire mesh Towards a fair and efficient economy for all

6. Financial Services (Banking) • To increase competition in retail banking to the benefit of the consumer • Continued focus on implementing 28 recommendations of Banking Enquiry Panel • Steering Committee established – dti, Treasury and the Commission, in consultation with the South African Reserve Bank • 6 discussion papers: ATM pricing; penalty fees relating to debit orders; improving consumer experience; competition in the national payment system, payment cards and electronic payments Towards a fair and efficient economy for all

7. Enforcement cases under investigation Towards a fair and efficient economy for all

8. Enforcement cases initiated in 2009/10 (classified by sector) Towards a fair and efficient economy for all

9. Corporate leniency applications received Towards a fair and efficient economy for all

10. Prosecutions Towards a fair and efficient economy for all

11. Referral of complaints to the Tribunal against corresponding sections of the Act Towards a fair and efficient economy for all

12. Penalties in 2009/10 Towards a fair and efficient economy for all

13. Mergers notified 2007/08 to 2009/10 Towards a fair and efficient economy for all

14. Outcome of merger reviews2007/08 to 2009/10 Towards a fair and efficient economy for all

15. Mergers • Fewer merger notifications • Approximately 8% claimed financial distress • Approximately 2000 job losses from 19 transactions: conditions imposed to minimize the impact of job losses • Prohibition of Massmart and Finro merger was subsequently approved by the Tribunal after evidence provided at hearing • Approval of Aspen/GlaxoSmithKline merger - Commission’s concerns resulted in GSK extending voluntary licences for Abacavir (an antiretroviral product) to generic manufacturers Towards a fair and efficient economy for all

16. Advocacy: Focus on bid-rigging • Bid-rigging brochure developed and various workshops held with government and business • National Treasury issued practice note in terms of PFMA on Certificate of Independent Bid Determination • Comments on procurement policy and legislation • Training of procurement officials on prevention, detection and reporting of bid-rigging Towards a fair and efficient economy for all

17. International relations • Participation in international forums: • Competition Committee of OECD (papers on bid-rigging in public procurement, procedural fairness and standard setting) • Annual Conference of International Competition Network • UNCTAD’s Intergovernmental expert meeting on competition law • Collaboration with African agencies • Commissioner is vice –chair of the steering committee tasked with setting up an African Competition Forum • Chaired meeting of SADC’s competition committee • Joint Food Project with Zambia and Egypt on edible oils, milling and fertiliser • Opening address at the launch of Namibia’s competition authority • Provided technical assistance to Mauritius’ competition authority • Hosted delegates from Tanzania, the Gambia, and Botswana Towards a fair and efficient economy for all

18. Communications • Internal communications • 22 discussion forums • 13 staff meeting • 12 issues of the internal newsletter • External communications • 19 media releases • Total media coverage: 3425 print and 3878 broadcast media • Website visits: 106,738 times by 45,619 visitors • Media coverage advertising value equivalent: R145,787,617 Towards a fair and efficient economy for all

19. Human resources • Deloitte’s Best Company to work for in the public sector • Total staff complement including graduate trainees: 138 • Graduate trainees 11 • Management development programmes attended by 20 senior staff members • Implementation of results of salary benchmarking exercise to align the Commission’s salary bands with the public sector Towards a fair and efficient economy for all

20. Employment equity (race) Towards a fair and efficient economy for all

21. Employment equity (gender) Towards a fair and efficient economy for all

22. IT and knowledge management • Knowledge sharing and retention is a strategic priority • Knowledge management system designed to integrate with case management system • Improved collaboration, accessibility and reporting • Will be completed in 2010/11 Towards a fair and efficient economy for all

23. Planning and reporting • 4 audit committee meetings • Internal audits conducted on Legal Services, Enforcement and Office of the Commissioner • No material breakdown in the functioning of internal financial controls and systems • Implementation of revised risk management strategy • Compliance with legislation: • PFMA – quarterly reports, monthly expenditure reports, strategic and business plans • Annual training report and workplace skills plan • Contribution to skills levy fund was R562,959 • Unqualified audit report - 5th successive year • AG report - 23% of performance targets were not “SMART” Towards a fair and efficient economy for all

24. Financial performance review Towards a fair and efficient economy for all

25. Expenditure for 2009/10 Towards a fair and efficient economy for all

26. Thank you! Tel: 0123943332 Fax:0123944332 email: shanr@compcom.co.za Towards a fair and efficient economy for all