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PROJECT PROGRESS REPORT OF THE 7-UP PROJECT |
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5th PROGRESS REPORT OF THE 7-Up PROJECT FOR THE PERIOD: SEPTEMBER-NOVEMBER 2001 4th PROGRESS REPORT OF THE 7-Up PROJECT FOR THE PERIOD: JUNE-AUGUST 2001 3rd PROGRESS REPORT OF THE 7-Up PROJECT FOR THE PERIOD: MARCH-MAY 2001 2nd PROGRESS REPORT OF THE 7-UP PROJECT FOR THE PERIOD: DECEMBER–FEBRUARY 2001 1st PROGRESS REPORT OF THE 7-UP PROJECT FOR THE PERIOD: SEPTEMBER-NOVEMBER 2000 |
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2nd PROGRESS REPORT OF THE 7-UP PROJECT FOR THE PERIOD: DECEMBER–FEBRUARY 2001
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1.1 This is the 2nd report of the project titled “Comparative Study of Competition Regimes of Seven Select Developing Countries of the Commonwealth” being supported by the Department for International Development, UK. The project, popularly known as 7-Up, is being implemented by CUTS, Jaipur. Its purpose is to do a comparative study of competition regimes in seven developing countries of the Commonwealth. The countries which have been chosen for the study are:
2.1 The 7-Up Project is heading towards the third quarter now. In the first quarter of the Project, mainly the preliminary activities of the Project were completed. Two partners were identified in each of the seven project countries: A research institution as the main partner and a consumer organisation as the associate partner. This was done on the basis of first hand information of their strengths, abilities, credentials and other details. An international advisory body named as Project Advisory Committee was formed to guide the project implementation in the most effective manner. The Committee constitutes of twelve members including the core researcher of the Project, Prof. Rakesh Basant, Associate Professor of Economics at the Indian Institute of Management. 2.2 To give a micro picture of the process and methodology involved over the period of two years of the Project duration, an Operational Strategy Note was also prepared in the first quarter of the Project. This OSN is a ready reckoner for the members of the Advisory Committee, Project partners and country researchers on issues related to the Project Agenda. 2.3 As a first step to achieve the goals of the project, the partners prepared a preliminary country paper on the basis of the Annotated Agenda sent to them. This paper aimed at giving a brief description of the existing competition law and other regulations, market position, socio-economic characteristics, etc. in each of these countries. A comparative analysis of these papers was made by Prof. Basant, the core-researcher of the Project as well as at CUTS. This compilation is a strong foundation for the project and would greatly help the project in understanding the current situation. 2.4 In the second quarter, the Project witnessed some major developments. For instance, the formal launch of the Project in a meeting of project partners and other experts, which was held in Jaipur, India in the month of December 2000, finalisation of the plan of action and research methodology of the Project, and formal beginning of the first phase of the project. 2.5.1 During 20-21 December 2000, the Launch Meeting of the Project was organised in Jaipur, India. The Meeting was organised for discussing the methodology of implementing the Project, with partners, experts and advisory committee members, and how to take it forward to achieve its desired goals. It provided a common platform for various experts and representatives of partner organisations and institutions to interact and benefit out of each other’s experiences. The main objectives of the meeting were to:
2.5.2 The Meeting was designed as a seminar on the first day and a workshop on the second day. Apart from the project partners, it was attended by various experts, competition practitioners, former and present executives of various international and regional organisations such as the United Nations Conference on Trade and Development (UNCTAD), the World Trade Organisation (WTO), the World Bank, the Organisation of Economic Cooperation and Development (OECD), the South Asian Association for Regional Cooperation (SAARC), the Commonwealth Secretariat and competition authorities of different countries, including Australia, Brazil, South Africa, Zambia, India. 2.5.3 The Meeting was a success in terms of participation, discussion, and it was of immense benefit to the project partners and country researchers. It marked the real beginning of the first phase of the project. A detailed report of the Launch Meeting is being enclosed herewith as Annexure-A. 2.6 Revision of Preliminary Country Papers 2.6.1 During the first quarter of the Project, the country researchers were required to prepare preliminary country paper on the basis of the annotated agenda, which was prepared in-house, corrected after receiving comments from experts and sent to them in advance. It was ensured that the core project team received the papers in advance and sent them out for comments. The researchers, on the basis of the comments received from the members of the Project Advisory Committee, revised these country papers. 2.6.2 These papers were
presented by the country researchers at the time of the Launch Meeting
and were deliberated upon. On the basis of the suggestions, which came
out of the Meeting, a list of desirable components of the preliminary
country papers was prepared. This list, which is enclosed with this
report as Annexure-B, lays down the elements, which need to be added in
the country papers. This has been communicated to all the partners and
they are in the process of revising the preliminary country papers. It
is also proposed to publish these revised preliminary country papers in
the form of a document. 2.7.1 In this period, the research methodology and strategies for its implementation were discussed. A questionnaire has been developed. This will enable the country researchers to carry out interview of respective competition authorities and collect the relevant data. 2.7.2 It includes questions on issues related to institutional framework for enforcing the competition law in project countries. On the basis of the comments and suggestions, which came up at the time of the Launch Meeting, a draft questionnaire was prepared. It was then sent to members of the Project Advisory Committee and the project partners for their comments. These comments and suggestions have been incorporated in the draft questionnaire and the final version of the same would now be sent to all the project partners. A copy of the questionnaire is enclosed vide Annexure-C. 2.8.1 One of the objectives of the Project is to form a National Reference Group (NRG) in each of the project countries. NRGs will be formed to deliberate on the inputs prepared in each country and conduct the advocacy part of the Project. The results of the fieldwork done by the project partners will be first tested at a local meeting of the NRG. On the basis of the inputs and suggestions given by the members of the NRG, the results would then be discussed at a larger meeting where all the stakeholders of the Project will participate. They would comprise of representatives of the following category of organisations/persons:
2.8.2 A preliminary list of proposed members of NRG has been prepared for India and has been circulated to all the partners. This will serve as a model and would enable the partners to prepare a preliminary list for their respective country. The partners would send the preliminary list of members to CUTS, which in turn would help them in sorting out the names and preparing the final list of the same. The list of proposed members of the India National Reference Group is enclosed vide Annexure-D. The process is on in other project countries and the core team is receiving regular feedback from the project partners. The same will be used to send out all outreach material and will be submitted with the progress report.
Project Partners 3.1 For the purpose of the project management, in each of the selected seven countries, two partners have been identified: a main partner and an associate partner. There have been some changes in this respect during the second quarter of the project. The changes have been made in the partnerships in Kenya and South Africa. 3.1.1 In Kenya there is only one partner now, which is the Institute of Economic Affairs (IEA). Earlier it was decided to have Resource Management and Policy Analysis Institute (REMPAI) as the main partner and IEA as the associate partner. However, due to differences in division of responsibilities between REMPAI and IEA, the latter felt that they would like to be associated with the Project as a participant and not as a partner. Keeping in view the reputation and in-house capacity of the IEA as a very good advocacy group on economic issues, the core team felt IEA would be capable of doing both the research as well as the advocacy part of the Project. Hence, it was decided to tie up with IEA. However, Mr. David Ongolo, the economist who had done the preliminary paper, would continue to work as country researcher for the Project. (Incidentally Ongolo’s paper was the best, and was used as a model for other countries to follow). The contract between CUTS and IEA has been signed. At the same time, it has been decided that REMPAI would remain associated with the Project as a member of the NRG. 3.1.2 In South Africa, the partners selected initially were National Labour and Economic Development Institute (NALEDI), as the main partner, and Trade and Industrial Policy Secretariat (TIPS) as the associate partner. However, NALEDI felt that the responsibilities assigned to them were not commensurate with their position. A 50-50 division was also suggested but even that was not agreed to. Hence, keeping in view that TIPS has excellent relationship with the Government and also the capacity to find a researcher, it was decided to make TIPS the research partner and for the advocacy part, the Institute for Global Dialogue (IGD) was suggested. Earlier Dr. Simon Roberts of the University of Wits had done the basic paper and was to do the research work. However, he has decided to drop out because of his full time engagement in the South African Competition Authority. The process of identification of an appropriate researcher is on and the contract with the partners will be signed in the month of March 2001. 3.1.3 Details of the project partners are given in Annexure E. 4.1 As per the Project Agenda, two periodical newsletters are to be published during the project duration. One is a bi-monthly electronic newsletter called ‘7-UpDate’ and the other is a quarterly hard copy newsletter titled ‘ReguLetter’. The project partners are required to send inputs for these newsletters on a regular basis. During the second quarter of the Project, the first issue of ReguLetter and the second issue of 7-UpDate were published. Copies are enclosed vide Annexures-F and G. The Project Team has prepared lists of electronic as well as postal addresses for the purpose of reaching out to target audience with these newsletters. The mailing lists are being updated on a regular basis. Readers’ feedback will be carried in future issues of the newsletters. a) ReguLetter 4.2 The purpose of this newsletter is to provide a forum, in particular to the civil society, to understand the issues clearly and promote a healthy competition culture in the world. It covers developments relating to competition policy and economic regulations 4.2.1 The first issue of the newsletter (No. 1 December 2000) has been published. It is a 16-page newsletter and carries a brief description of the progress of the 7-Up Project, news on industrial restructuring and an article on the new Competition Bill of India. The leader published on the cover spoke about the need and importance of an effective competition law. It talks about the myths in respect of competition law and in context of GATT and the WTO. This issue also includes an article by Mr. Philippe Brusick, Head of Competition and Consumer Policy Branch at UNCTAD, on the Fourth UN Review Conference to review all aspects of the UN Competition Code. Above one thousand copies of this newsletter were sent out to various stakeholders in India as well as abroad such as competition authorities, regulatory authorities, consumer organisations, media persons, intergovernmental organisations, etc. It was also sent out to the Project partners, country researchers, members of the Advisory Committee and other people/organisations associated with the Project. 4.2.2 The next issue of ReguLetter is scheduled to be published in the last week of March 2001 and the planning has begun. The core team has been receiving inputs from project partners. b) 7-UpDate 4.3 7-UpDate, the electronic newsletter has been designed to update the various players in the project and other target audience on the project progress, in addition to reporting interesting newsitems, which have been reported across the globe on competition and other related issues. The second issue of this e-newsletter (November-December 2000) was circulated in the first week of January 2001. It covered a brief description of the progress of the 7-Up Project in the months of November and December 2000, including a brief of the proceedings of the Launch Meeting of the Project. The section on news items carried interesting stories related to the South African competition law, the Australian Wheat Board monopoly & Korean Banks merger. 4.3.1 Steps have already been initiated for the third issue, which is scheduled to be circulated in March 2001. CUTS Africa Resource Centre (CUTS-ARC) 4.4 For the purpose of effective management of the Project and to facilitate its implementation in African countries, it was decided to establish a Resource Centre in one of the select African countries. Thus, CUTS Africa Resource Centre has been set up in Lusaka, Zambia. The city seemed to be the most advantageous place for various reasons such as lower costs, friendly attitude of the government, location of the headquarters of COMESA. A project on competition policy for all the 20 member countries of the COMESA in collaboration with UNCTAD and funded by the EU is proposed to be implemented. The Secretariat has already indicated a willingness to seek CUTS help in implementing the project. Thus the overall goals of the project will be buttressed through a collaboration and location at Lusaka. It would also prove to be helpful in getting into the various countries of the COMESA region. 4.4.1 In short, the Africa Resource Centre would provide a cost-effective way of providing assistance to a range of governments in the region, in cooperation with COMESA, to promote consistency of laws and policies, which in turn would assist in the establishment of the free trade area and reduce regional trade barriers. At the same time, it is expected to minimise the risk of duplication or wastage of technical assistance efforts by donor countries/agencies. 4.4.2 On 20th February 2001, the Centre was inaugurated by Honourable William Harrington, Zambia’s Acting Minister for Commerce, Trade and Industry. Noted persons such as Mr. Ashok K Attri, Indian High Commissioner, Dr. Nicholas Kwendakwema, Chairman, Zambia Competition Commission and Mr. George Lipimile, Executive Director, Zambia Competition Commission attended the ceremony as special guests. 4.4.3 Mr. Mwamba Makasa has been appointed as Coordinator of CUTS-ARC. He has been a civil servant having been in the Home Affairs Ministry of the Zambian government working in the area of drug control both at the national level as well as at the regional level. Following his early retirement, he worked as an expert with the SADC secretariat to develop a protocol on drug control in the region. Before starting the operations in Lusaka, he underwent a 15 days-orientation programme at CUTS, Jaipur, where he was familiarised with various aspects of the working of CUTS, especially the manner in which he would coordinate the activities of the Project out of the Centre. 4.5 Mr. Pradeep S. Mehta, CUTS, visited Cape Town, South Africa to attend a Regional Workshop on Competition Policy, Economic Development and the Multilateral Trading System: Overview of the Issues and Options for the Future. Mr. Mwamba Makasa, CUTS-ARC, was also invited at the workshop as a result of our persistent lobbying with the WTO. The Workshop, held on 22-24 February 2001, was organised by the World Trade Organisation in cooperation with the Government of South Africa, and was sponsored by DFID. Mr. Mehta spoke on “Competition Policy, Consumer welfare and the WTO: a trans-regional perspective” at the workshop. 4.5.1 Mr. Mehta also utilised this opportunity to have a meeting with several members of the 7-Up Project Advisory Committee who were present. It was held on 24th February 2001 and was aimed at briefing members on the current situation concerning the project after its launch in Jaipur, India in December 2000.. 4.5.2 The following were present: 1. Peter Holmes, University of Sussex
4.6 During February 26 to March 10, 2001, Researcher Mr. Ujjwal Kumar and Mr Mwamba Makasa, Coordinator of the Africa Resource Centre visited South Africa, Zambia, Tanzania and Kenya. The purpose of the visit was to meet all the project partners, and other actors, so as to settle various issues related to the Project. These included issues like partnering in Kenya and South Africa, researcher in South Africa, signing of contracts with project partners in these countries, issues relating to the newsletters, etc. Another purpose was to familiarise Mr. Makasa with the project partners in African countries. They had detailed interaction and discussion on what needs to be done and how is that supposed to be done. The following are the highlights of this trip:
V. PROBLEMS, SOLUTIONS, AND OTHER CHANGES 5.1 In implementing such a project, involving different partners in several countries, it is natural that some problems would arise. In this period, the following problems were encountered: 5.2 Partnerships: It was difficult to finalise partners in Kenya and South Africa. In addition to this, Dr. Simon Roberts, Researcher in South Africa expressed his inability to work on the Project on account of his leaving the University and joining the Competition Commission of South Africa on a regular basis. However, he has agreed to extend his full support to the new researcher to be appointed by the South Africa partners. Kumar’s visit to South Africa settled the issue. 5.3 Inputs for newsletters: Getting regular and adequate inputs for the newsletters was another problem. There are a number of reasons for this like absence of scanning facility with some of the partners so that they could email the news clippings rather than send them by fax or by post. They also lacked clarity as to what kind of news was needed, etc. 5.3.1 In this regard, the present position is quite better. The partners have been briefed about the types of information required and the manner in which they might send the news items to us. The opening of CUTS-ARC would further facilitate the process. 5.4 Meeting the deadlines: Coordinating with so many partners and the members of the Advisory Committee obviously consumes time. It becomes difficult to adhere to all the dates and get the activities completed by the scheduled dates. Though the schedule has been closely followed, there have been some deviations. The dates are being revised for the completion of preliminary activities though the end dates would remain the same. 5.5 Among other changes that took place just before and during the period are: A) There has been a change in the team from NCAER, the main partner in India. Senior Economist, Mr. Sanjib Pohit would now be working in place of Mr. Vivek Srivastava. B) Economist, Mr Nitya Nanda
has joined the project team, while Srinivas Krishnaswamy has moved on to
regulatory work in CUTS. Thus Ujjwal Kumar will be both project
manager and researcher, while Nitya Nanda will work as researcher. VI. PLAN FOR THE NEXT QUARTER (March-May 2001) 6.1 Possibly the most crucial quarter in the first phase of project, the fourth quarter would cover activities related to research, formation of the National Reference Group and compilation of the first phase report. 6.2 The research component would comprise of field surveys and interviews on one hand and literature surveys on the other. The field surveys would consist of interviews on the basis of a carefully designed questionnaire. The design of the questionnaires and the methodology of approach for the interviews was formulated at the Launch Meeting. 6.3 The field surveys would throw light on institutional framework of the competition authorities in the project countries. The outputs from the field survey would form the input for the first draft of the report of the first phase of the project. The country reports would be compiled and collated by the core-researcher of the project, Prof. Rakesh Basant to form the first draft of the report for comments and advise from the National Reference Group members. 6.4 The National Reference Group, which is in the process of being formed. A note on the composition and responsibility of the National reference Group is given earlier in this report. The NRG meeting would be held in the third week of May 2001, on the basis of which, the final draft of the first phase country report would be prepared by the partners. This draft would be sent to the members of the Advisory Committee for their comments. The partners would send the Revised Version of the first phase country report by the last week of June. 6.5 Newsletters: During the next quarter of the 7-Up Project, the third issue of the ‘ReguLetter’ and the fourth issue of ‘7-UpDate’ are scheduled for publication. 6.6 Project related travel: Mr. Mehta would be travelling to Johannesburg to attend an International Conference on `The Impact of Globalisation and New Technology on Competition’ sponsored by the Competition Commission and the Competition Tribunal on 29-30 March 2001. He would speak on “Competition, Globalisation and Innovation: the Challenge Facing Developing Countries in a Changing Global Environment”. He will utilise this opportunity to co-ordinate the activities of the South African project team and also visit Lusaka, Zambia for the project related coordination.
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