IMPLEMENTATION OF COMPETITION LAW - Experiences from Botswana by Thula Kaira - CEO CUTS/IFC/BICF Seminar on Moving the Competition Law Agenda forward in Bangaladesh Dhaka, July 2012

PRESENTATION OUTLINE 1. Introduction 2. Rationale of Competition Policy and Law 3. Experiences from Botswana 4. Independence/Autonomy 5. Conclusions

1. INTRODUCTION The Government of Botswana through its Cabinet adopted the National Competition Policy for Botswana in July 2005 The Policy preceded by an Economic Mapping Survey that noted levels of unemployment, increasing dominance of foreign firms in Botswana’s economy

1. INTRODUCTION cont’d The EMS also highlighted: The need to safeguard and promote the growth and development of citizen-owned SMEs; and Other Government policy initiatives such as the diversification of the economy

1. INTRODUCTION cont’d Arising from the Policy, the Government through its National Assembly/ Parliament enacted the Competition Act in 2009 whose objectives in its preamble are to: Establish the Competition Authority Outline its mandate Regulate competition in the economy

Comp.law controls selfish business gains & consumer exploitation; strives to facilitate broad-based wealth creation by ensuring & provoking open, fair markets e.g questioning contracts reviewing commercial & administrative barriers to domestic trade (just as trade law tries to do the same in intl trade) EG long-term exclusive contracts; IPRs; M&As leading to monopolisation, etc 2. RATIONALE FOR COMPETITION LAW

RATIONALE cont’d Markets are susceptible to be captured by greedy business entrepreneurs to the detriment of other possible beneficiaries and hence the need for a control system

UN SET of Principles & Rules on Competition … States, in their control of restrictive business practices, should ensure treatment of enterprises which is fair, equitable, on the same basis to all enterprises, and in accordance with established procedures of law. The laws and regulations should be publicly and readily available … States should, at the national level or through regional groupings, adopt, improve and effectively enforce appropriate legislation and implementing judicial and administrative procedures for the control of restrictive business practices, including those of transnational corporations…

3. EXPERIENCES FROM BOTSWANA  Botswana is a member of the international community of trading nations and its ability to access foreign markets requires that its firms are competitive. Competition precludes competitiveness (eg SACU FTA, SADC, EPAs…)  As Bangaladeshi embarks on a process of developing its law, there is need to identify and maintain a support base for a highly misunderstood, to include: 9

EXPERIENCES … cont’d 10 Policy Makers/ Politicians Technocrats in Govt Sector Regulators Big Business The Press CSOs/ Academia Consumers Small Business

EXPERIENCES … cont’d  Identification of the ‘friends of competition’ should ideally follow this order: The Policy Makers (for funding purposes) The technocrats (for regulations to be processed) The media (to begin to understand the concepts)  Ultimately, a small business and consumer base is the ultimate power base, but it depends on their proper understanding of the law (hence need for sustained advocacy) 11

EXPERIENCES … cont’d  Recognise Govt is the owner of the Competition Policy and Law – thus its agents entrusted with implementing this law must take Govt policy into acccount.  In Botswana, we have had to: Master Govt developmental vision Play an impartial advisory role (advocacy) to Govt where there may be conflicts with policy Take into account ‘overriding’ public interests 12

EXPERIENCES … cont’d 13 THE COMPETITION AUTHORITY IS A Govt Agency Guided By Other over- arching National Policies Accountable to Govt through the Minister

EXPERIENCES … cont’d  WHILE the law may be in the abstract for most people, the effect of the decisions of a CA are usually self-evident (eg where a merger is prevented and loss of jobs occur) – theories dont sooth PAIN…  Developing countries such as Botswana have thus inculcated certain public interest considerations to be taken into account when dealing with competition matters, inter alia: 14

Maintain lower prices, higher quality or greater choice for consumers Promote or maintain efficient production, distribution or provision of goods & services Advance the strategic or national interest of Botswana in relation to a particular economic activity; Provide social-benefits which outweigh the effects on competition; Maintain lower prices, higher quality or greater choice for consumers Promote or maintain efficient production, distribution or provision of goods & services Advance the strategic or national interest of Botswana in relation to a particular economic activity; Provide social-benefits which outweigh the effects on competition; EXPERIENCES … cont’d 15

EXPERIENCES … cont’d Occur within the context of a citizen empowerment initiative of Government; Further other national development programs  In this context, we have approved or rejected mergers for instance based on P.I issues  The Act also has exemptions (except for cartels) based on P.I considerations Occur within the context of a citizen empowerment initiative of Government; Further other national development programs  In this context, we have approved or rejected mergers for instance based on P.I issues  The Act also has exemptions (except for cartels) based on P.I considerations 16

EXPERIENCES … cont’d  The State has limited the extent of application of the law to sectors where there is a statutory monopoly (& this has to be respected by a CA): Botswana Meat Corporation Botswana Power Company Air Botswana (until recently) Botswana Telecomm. Company (on fixed landline) Botswana Rail 17

EXPERIENCES … cont’d  DONT take on everything at once – priortise eg: Contract farming arrangements in the agriculture sector Role of middle-men in excessive or predatory pricing of agriculture goods Industries dominated by the same firms (long term view) Protected SOEs 18

4. INDEPENDENCE/AUTONOMY? Court of Appeal High Court Competition Commission Minister of Trade Competition Authority 19

INDEPENDENCE…cont’d  There is need to ensure that the investigation is separated from the adjudication in effect and not just on paper  Structural autonomy is relevant where there is a low culture of the rule of law  Accountability on use of funds and reporting to Parliament through an Annual Report are important  Need to have strict code of conduct  CHE GUEVARA: ‘He who receives gifts loses his freedom’… 20

5. CONCLUSIONS  Competition Policy should be carefully handled because it easily attracts well coordinated, connected, resourceful and more powers enemies but weaker and fragmented friends  A competition law that does not make sense to policy makers and general citizenry will not be funded  Ideal expertise must be attracted, motivated and retained to develop advocacy & enforcement skills  Avoid quoting too many theories: 21

JUST DO IT! 22

THANK YOU FOR FURTHER INFORMATION: Thula Kaira - CEO Competition Authority Plot 50664, Fairgrounds Office Park Private Bag Gaborone, BOTSWANA Tel: Fax: FACEBOOK: Competition Authority – Botswana Twitter: CompetitionBots