-to test Caricom’s competition body

With local producers facing harassment in accessing regional markets, Guyana intends to test the effectiveness of the Caricom Competition Commission.
Chairman of the local commission Ramesh Dookhoo spoke of his expectations during a workshop on Competition Law and Policy in Caricom, held at the International Conference Centre yesterday. Dookhoo made it clear that he was grounded in business and the objective was to make money. To this end he expressed the hope that the framework established by Caricom would not become a talk shop like some other Caricom initiatives. “Businesses want to see action on the ground,” he stressed, “They want to see benefits from decisions arrived at (at) the level of the heads of government.”

Ramesh Dookhoo

Guyana has taken the lead role to establish a competition and consumer policy in fulfillment of one of its obligations under the Revised Treaty of Chaguaramas. The objective of the competition policy is to ensure that the economic benefits of free markets in a single market place are maximized, through supporting free competition by both domestic and regional firms. Such a policy acts as the custodian of the free market economy, by supervising market structures and consumer interests and by allowing redress only in those markets where market failures exist.

Competition commissions in member states are to work with the regional commission to ensure there is no anti-competitive behaviour in countries and markets. They are the independent vehicle through which the competition policy is implemented and are basically a guardian institution of the free market. The commission is mandated by Article 169 of the revised treaty to ensure that the benefits expected from the establishment of the Caricom Single Market and Economy (CSME) are not frustrated by anti-competitive business conduct. It can also among other things apply the rules of competition in respect of anti-competitive cross-border business conduct and provide support to member states in promoting and protecting consumer welfare.

It is against this background that Dookhoo strongly condemned the unfair trade practices which some local producers are faced with in the markets of Caricom sister states.  “So we intend to put your commission to work to ensure that companies in Guyana are no longer continuously harassed by some countries in the region who throw barriers in our face ,” he admonished Dr. Kusha Haraksingh, Chairman of the regional body.

He pointed out that just last year Guyana  opened its flour market allowing for the import of several other brands from Caricom sister states  but when the local manufacturer tried to export  to a few of those same countries, “it was not a pleasant experience.” “We need to see acceptance of our products on those markets,” he argued.

He pointed out too that if a truly integrated single economy is to be forthcoming, a complementary effort needs to be made in this regard. He noted that anti-competitive behaviour tends to stifle entrepreneurship, investments, product quality enhancement and prices that reflect the cost of provision and tends to prevent consumers from making a choice when they purchase goods or a service.

Challenges
Addressing the gathering, Haraksingh pointed to a number of challenges which have been present since before the commission was even able to begin discharging its mandate. He noted that the regional body can only do its work in conjunction with national commissions and pointed out that enforcement must take place at the national level so there could be implementation of laws. Citing Guyana, he said the Competition and Fair Trading Act of 2006   gives the commission power and so its judgments are binding and enforceable.

However, he mentioned that like other countries in the region there was a lack of competition awareness here. He said that a challenge was how to deal with the relevant jurisprudence. He insisted that the region had its own peculiar circumstances and its unique definitional problems. In this regard, he noted that it was important for the region to establish its own meanings of terms like “dominance” and “abuse,” which may have different connotations from other countries. “My view is that the important challenge is to develop our own jurisprudence. This is what the Caribbean has to do…. It has to stand up in the world, not as a clone of America or Europe but as a region in its own right, with its own thinking, with it own jurisprudence and with its own idea of competition law,” he declared.

Further, Haraksingh pointed to the matter of advocacy and rules which have been set as to what must be done, stemming from statements from the United States and Europe. “Yet in the financial crisis we see some action taking place that strike at the root of competition culture,” he noted, while emphasizing that the region has to stand up and develop it own idea as to how competition law should operate.

Pointing to the recent decision by the Caribbean Court of Justice (CCJ) in relation to a case between Caricom and Trinidad Cement Limited (TCL), Haraksingh argued that the region was now moving into an era where “you have to be careful about fairness.” He said this was important since all decisions and procedures are coming under scrutiny and will be judged for fairness citing that the decision of competition agencies in developing agencies are challenged particularly because of procedural irregularities. TCL had moved to the court after Caricom suspended the Common External Tariff (CET) on cement imports. The court did not find in favour of TCL but in its ruling set criteria for the Secretary General to follow in future consideration on the issue. “So this is an important challenge… how to make sure not only the decisions are fair but that the fairness is seen so it could resist challenges,” he emphasized.

He threw out a challenge to businesses, advocating for them to conduct their own competition audits and look at their behaviour to see if any could be deemed illegal.

Domestic examples
Finance Minister Dr. Ashni Singh in opening remarks pointed to the telecommunications and transport sectors in which positive effects of competition is seen. With regards to the former he noted that government’s position on liberalizing the sector is well known. He said the drastic effects which the subsector cellular service has witnessed speaks for itself. In the area of domestic transportation, Singh said government engagement with local providers has resulted in them refraining from raising fares artificially high. However this was not the same for transport out of Guyana, Singh said, as he made reference to high fares being charged from Guyana to the US and other destinations as compared to costs from other Caribbean states to those same countries. He said this was clearly a fact of them taking advantage of their dominance in the market and charging unduly high prices.

He pointed out that there were many times when policy positions were taken at the national level and the relevant interventions made but the type of trickle down effect was not realized.

Meanwhile, Guyana’s competition commission still has some way to go before any functions are discharged. Minister with Cabinet responsibility Manniram Prashad announced at the forum that his ministry will draft a complementary bill to the act on Consumer Protection which will be laid in the National Assembly before year end, following which the competition commission will be renamed the Competition and Consumer Protection Commission.

He acknowledged that the current legislation which was brought into being by the Competition and Fair Trading Act of 2006 refers specifically to a primary responsibility, being the protection of consumer interest–yet the name of the implementing body did not convey this. He said this could lead to one view but assured participants that this was not the case and that the Act is very explicit on the mandate of the commission in respect of consumer rights and representation.