Interventions by Civil Society on Competition Issues Geneva - January, 29 th of 2004 Conference of the International Network of Civil Society Organizations on Competition Civil Society Organizations on Competition

Summary Conditions for civil society participation.Conditions for civil society participation. Cases.Cases. Possible obstacles.Possible obstacles. Lessons from the Brazilian case.Lessons from the Brazilian case.

Conditions for civil society participation Conditions for civil society participation

Four conditions… 1) Transparency; 2) Competition Advocacy; 3) Efficient communication channels (access to the authorities); 4) Organization of Civil Society;

Relevant legislation Law # of June 11, 1994Law # of June 11, 1994 Project of Law 184 / 2003Project of Law 184 / 2003 Resolution # 15 of August 19, 1998Resolution # 15 of August 19, 1998 Directive # 849 of September 22, 2000Directive # 849 of September 22, 2000

Transparency Judgment sessions are public. Relevant decisions are published in the official Gazette. Most documents are public. Norms and regulations are subject to public consultations. A federal public attorney accompanies the case.A federal public attorney accompanies the case. Public hearings and consultations.Public hearings and consultations.

Example of Transparency Law “Article 12. The Attorney General of the Republic, after hearing the Higher Council, shall appoint a member of the Attorney General Office of the Republic to handle the cases submitted to CADE for review.”

Example of Transparency Resolution #15Resolution #15 Reporting Commissioner Reporting CommissionerArticle 5. Upon the receipt of the proceeding, the Reporting Commissioner shall verify jointly with SEAE, the realization of the market consult about the effect of the transaction. If necessary, the Reporting Commissioner will reach the reasonable measures according the Exhibit IV.

Example of Competition Advocacy Law # 8.884Law # Article. 7 The CADE board shall: …………………………………………… XVII Answer consultations on matters within its sphere of authority.

Example of Competition Advocacy Law # “ Article 14. SDE shall: ………………………………………………………… XV- advise the public on the various forms of violation of the economic order, as well as the means to curb such violations; ”

Example of Efficient Communication Channels Law # 8.884Law # “ Article 44. Upon invitation of the CADE president in response to an indication of the reporting official, any person may provide CADE with clarifications on relevant matters.”

Example of Efficient Channel of Communication. Directive # 849Directive # 849 “ Art. 6 th The representative or third interested part, even so not being part of the fact, will be able to assist the authority, supplying documents and necessary information to the procedural instruction.”

Organization of Civil Society Consumer groups and associations.Consumer groups and associations. Competition associations (IBRAC, GEDECOM).Competition associations (IBRAC, GEDECOM). Competition section of the Brazilian bar association.Competition section of the Brazilian bar association.

Regulatory Agencies (RAs) Before any relevant decision the RAs should accomplish a public consult. Public Associations can indicate a member to follow a process. The RAs got to follow the Executive Police. Contracts should be on official press. An Ombudsman is nominated.

Practical Examples of Civil Society Participation

The AmBev Case(2000) The two largest Brazilian breweries merged into one. AmBev gained control over more than 60% of the market. ANTARCTICA BRAHMA AMBEV

1) Three kinds of assets to make possible a new competitor in 8 months: a) Sale of Bavária brand b) Share of the Distribution Net years c) Sale of 05 units in all regions of the country. Cade’s decisions – Ambev case:

AMBEV: Sale of 05 units Cuiabá/MTBrahma Getúlio de Vargas/RS Antárctica Ribeirão Preto/SP Antárctica Salvador/BABrahma Manaus/AMAntárctica

2) Offering of access to distribution net of Ambev in each of 5 Brazilian regions Cade’s decision AmBev case:

3) Ambev could not close a unit in the next 4 years without making a public offering.

4) Workers´ Retraining and Repositioning Program Cade’s decision AmBev case:

Conditions for civil society participation in this case 6 Public Hearings. 6 Public Hearings. Public Session of Judgment. Public Session of Judgment. Live Transmission of the Judgment by TV. Live Transmission of the Judgment by TV. Decisions available to the public. Decisions available to the public.

Public Hearing on Public Services

Consequences of a price increase... Public services are a large part of a consumer basket. If electricity tariff increases by 10 %, the Consumer Price Index increases by 0,44 %.

Utility Sectors affect the poor... ( ) 138% 221% 606% 223% CPIelectricity fix telephonewater Fonte: Folha de S.Paulo

Public Hearings have been important... Choose the best index to readjust Electricity Criterion for productive factors Choice of price index for long term contracts

Public Participation is increasing… Number of Public hearings on ANEEL

Public Hearing about Electricity issues

Possible Obstacles

Institutional under-investment Political market failure The Political Economy of Competition Policy

Lessons from the Brazilian case.

Transparency and Communication are very important but not sufficient…

Organization of civil society is essential and is the big challenge of us.

Thank You! More information