PROJECT PROGRESS REPORT OF THE 7-Up PROJECT

3rd PROGRESS REPORT OF THE 7-Up PROJECT FOR THE PERIOD: MARCH-MAY 2001

I. Introduction
II. Progress of the Project

Field Survey

Phase-I Report

National Reference Group

Project Management

III. Output

Preliminary Country Paper

Monographs on FDI policy

IV. Outreach

Newsletters

Monographs

Briefing Paper

V. Problems, Solutions & Other Changes
VI. Plan for the Next Quarter
VII. Annexures

I. INTRODUCTION

1.1 This is the 3rd report of the project titled “Comparative Study of Competition Regimes of 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:

India
Pakistan
Sri Lanka
Kenya
South Africa
Tanzania
Zambia

1.2 The main objectives of the Project are:

To conduct evaluation of existing competition legislation and its implementation on few basic principles such as budgets, composition and structure of the authority;
To identify typical problems and suggest solutions, including on the basis of practices elsewhere;
To suggest ways forward to strengthen existing legislation and institutions dealing with competition issues;
To assess capacity building needs of the government, its agencies and the civil society;
To develop strategies for building expertise among the competition agency officials, practitioners and civil society;
To help build constituencies for promoting competition culture by actively involving civil society and other influential entities during this exercise; and
To create an advocacy group at national and international levels to pursue the necessary and required reforms.

1.3 7-Up Project is heading towards the fourth quarter now. In the first quarter of the Project, primarily the preliminary activities 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. An international advisory body named as Project Advisory Committee was formed to guide the project implementation and an Operational Strategy Note was prepared to give a micro picture of the process and methodology involved over the period of two years of the Project duration. As a first step to achieve the goals of the project, the partners prepared a preliminary country paper to give 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. Rakesh Basant, the core-researcher of the Project as well as at CUTS.

1.4 In the second quarter, the Project was formally launched at a meeting held in Jaipur, India in the month of December 2000. The meeting was attended by the project partners and various experts, competition practitioners, former and present executives of various international and regional organisations and competition authorities of different countries, including Australia, Brazil, South Africa, Zambia, India.

1.5 The research methodology and strategies for the implementation of the Project were discussed and a comprehensive questionnaire including questions on issues related to institutional framework of competition authority in the project countries was prepared. Guidelines were set for the formation of a National Reference Group comprising of various stakeholders for the advocacy component of the Project. A preliminary list of proposed members of NRG for India was prepared by CUTS and was circulated to all partners in other countries as a model to enable them to prepare lists for their respective countries.

1.6 The third quarter, possibly the most crucial quarter in the first phase of the project, covered activities related to research, formation of the National Reference Group and preparation of the Phase-I country report. The following is a brief report on the progress of the project activities during the third quarter, i.e. for the period March-May 2001.

II. PROGRESS OF THE PROJECT

2.1 Field Survey
2.1.1 During this period, the fieldwork of the project was completed to a large extent. The field survey was based on a comprehensive questionnaire, which was prepared after a detailed deliberation on the subject by partners, project advisors and various other experts. The questionnaire was enclosed with the second progress report.

2.1.2 Since Phase-I of the project deals primarily with the institutional framework for enforcing competition laws in project countries, the questionnaire mainly looked at the institutional aspect of the Competition Regime. It was sent to the country partners for collecting information from the concerned persons.

2.1.3 Most of the partners were able to get the questionnaire filled from the competition authority and collect the relevant data. This exercise involved frequent visits to the Competition Authority. Detailed notes were also required to be appended with the questionnaire to give explanation in respect of the information collected.

2.2 Phase-I Report
2.2.1 Based on the above field survey and survey of existing legislation, the country partners are required to prepare the draft phase-I report. Partners are in the process of collecting information from the Authority and compiling this information into a report.

2.2.2 In order to achieve uniformity in the reports prepared, Prof. Rakesh Basant, the core-researcher of the Project, has suggested a format to the researchers. As per the format, the report would be divided into two parts: one, analysing substantive aspects of competition policy and the second, focusing on its administrative dimensions. A copy of the Suggested Format is being enclosed as Annexure A.

2.2.3 The draft report would be sent to Prof. Basant for his comments and finalised after incorporating his comments therein. This final draft of the report would then be discussed at the National Reference Group Meeting to be organised in each of these countries by the main partner.

2.3 National Reference Group
2.3.1 One of the most important activities completed during this period was the formation of the National Reference Group by the project partners. Almost all the partner countries finalised the members of their NRG and decided the date of their meeting.

2.3.2 Partners have sent the final list of the members of their NRG along with their complete communication coordinates. The list comprises of representatives of the following category of organisations/persons:

Consumer organisation
Other civil society organisations with demonstrated interest in economic issues
Research institutions, academia, experts (economists and lawyers)
Chambers of commerce
Media
Competition Authority
External Trade Department
Internal Trade and/or Consumer Affairs Departments
Politicians and/or Parliamentarians
Regulatory Authorities

2.3.3 These members have been put on the CUTS postal and electronic mailing lists so that the entire project related publications could be sent to them. The list is a rich database to reach out to an influential set of people who have a stake in the process of economic reforms.

2.3.4 Partners have finalised the dates for their NRG meetings. Almost all meetings would be held in June and would be attended by CUTS representatives. Representatives from DFID, UK and from their country offices might also attend these meetings. The draft phase-I report would be presented at the meeting and comments and suggestions that would surface there, would be taken into consideration while preparing the final report of Phase-I. The NRG would deliberate on the inputs prepared in each country and create a base that would be used for launching advocacy for strengthening the competition culture in their respective countries.

2.4 Project Management
2.4.1 For effective implementation of the Project and in order to keep a close watch on its progress, periodic review meetings of the project team are organised. Meetings are organised every week and a proper agenda is prepared beforehand for such meetings. Decisions are taken after detailed discussions.

2.4.2 These meetings help to take stock of the current position vis-à-vis various activities of the project and to plan the further process. It helps to identify the loopholes that might exist during the course of project implementation and take corrective measures. Following are some instances of such identifications:

a) At one of these review meetings, it was noted that a few provisions mentioned in the Operational Strategy Note were still not acted upon. For instance, the publication of seven monographs on investment policy for each of the seven selected countries was not done. It was decided at the meeting that the partners would be asked to start working on these monographs. For this purpose, a framework was prepared in-house in order to have some uniformity in these monographs. This framework is being annexed vide Annexure B.

b) Further, it also came in light that an action plan was to be prepared on the basis of the recommendations of the Launch Meeting of the Project held in December 2000 in Jaipur, India. A detailed plan of action was prepared and was sent to the members of the Advisory Committee. The plan would be revisited after receiving the comments from the advisors and would be acted upon thereafter. The draft plan of Action is being enclosed vide Annexure C.

2.4.3 It is also ensured that all external meetings are well planned and for this purpose, we start the preparations well in advance. For instance we have already started preparations for the Phase-I culmination meeting of the Project to be held in Goa, India on 7-8 September 2001.

III. OUTPUT

3.1 Preliminary Country Paper
3.1.1 During the first quarter of the Project, the partners prepared a preliminary country paper to give a brief description of the existing competition law and other regulations, market position, socio-economic characteristics, etc. in each of these countries. These papers were required to be revised on the basis of the suggestions that surfaced at the Launch Meeting of the Project. The partners are in the process of revising these papers and would send them soon.

3.1.2 It has been decided that the revised papers would be published as a document and the comparative analysis of these papers would also be included therein.

3.2 Monographs on FDI Policy
3.2.1 It has also been planned to publish seven monographs on investment policy for each of the seven selected countries. A framework has already been prepared for this purpose and would be sent to all partners to ensure that the monographs have some sort of uniformity.

IV. OUTREACH

Newsletters
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 third quarter of the Project, the second issue of ReguLetter and the third and fourth issues of 7-UpDate were published. Copies are enclosed vide Annexures-D, E and F. 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.

a) ReguLetter
3.2 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 second issue of the newsletter (No.2 March 2001) has been published. It is a 28-page newsletter and carries a brief description of the progress of the 7-Up Project, news on industrial restructuring, corporate governance, financial sector, utilities and an article on Kenya’s competition law. The leader on the cover spoke about global approaches to competition policy like move to set up a Global Competition Forum and response to these developments. The next four issues of ReguLetter (including this issue) would carry extracts from the Global Competition Review survey, “Rating the Regulators.” The survey appraises the abilities, and assesses the efficiency of some of the most important national and supra-national agencies shaping the business environment of the 21st century.

4.2.2 About one thousand copies of the previous issue were published but keeping in view the increase in demand, it was decided to increase the number of copies printed. So around 1,500 copies have been published of this issue and would be distributed to various stakeholders in India as well as abroad such as competition authorities, regulatory authorities, consumer organisations, media persons, intergovernmental organisations, etc. It would also be sent to the project partners, country researchers, members of the advisory committee, members of the National Reference Group of the project countries and other people/organisations associated with the project.

4.2.3 The next issue of ReguLetter is scheduled to be published in the last week of June and planning for the same has begun. The core team is receiving inputs from the project partners on a fairly regular basis.

b) 7-UpDate
4.3 7-UpDate, the electronic newsletter has been designed to update various players in the project and other target audience on the project progress, in addition to reporting interesting news items, which have been reported across the globe on competition and other related issues.

4.3.1 The third issue of this e-newsletter (January-February 2001) was circulated in the last week of March 2001. It covered a brief description of the progress of the 7-Up Project in the months of January and February 2001. The section on news items carried a brief report of the meeting organised by the International Bar Association at Ditchley Park in the UK in February 2001 to set up a Global Competition Forum and some responses to this move. It also carried an overview of competition law in Zimbabwe.

4.2.2 The fourth issue of this newsletter (March-April 2001) was also circulated during this period. Apart from a brief description of the Project progress, this issue carried an important debate around predatory pricing in the USA. The case involves the American Airlines against whom an action, brought forth by the US Justice Department failed.

4.3.3 Steps have already been initiated for the fifth issue, which is scheduled to be circulated in July 2001.

Monographs

a) All About International Investment Agreements
4.4 As was envisaged in the outreach programme of the Project, a monograph on international investment agreements, titled, “All About International Investment Agreements” has been published.

4.4.1 This briefing kit for the general reader provides an overview of recent trends in the proliferating number of bilateral and regional investment agreements. The kit highlights the key issues in these agreements and considers past initiatives and prospects at the multilateral level. A copy of the monograph is being enclosed as Annexure G.

b) Consumer Protection in the Global Economy
4.4.2 This monograph outlines the goals of a consumer protection policy and also speaks about the interaction between consumer protection laws and competition laws. It also highlights the new dimensions about delivering consumer redress in a globalising world economy, which raises jurisdictional issues and the sheer size of the market. A copy of the monograph is being enclosed as Annexure H.

Briefing Paper

Contours of a National Competition Policy: A Development Perspective

4.5 The Operational Strategy Note of the Project provides that four to five briefing papers would be brought out during the project period. The first one in this series, i.e. a briefing paper on the contours of a national competition policy, was published during this period.

4.6 A well-structured and appropriate competition policy is the key to evaluating the national competition culture and ensuring that competition contributes to public welfare. For developing countries, this means striking a careful balance between efficient markets and sustainable development. This briefing paper covers the constitutional elements of national competition policy and analyses the development considerations of different aspects of the policy.

4.7 The paper was finalised after incorporating the comments of the members of the advisory committee and some other experts. A copy of the briefing paper is being enclosed as Annexure I.

V. PROBLEMS, SOLUTIONS & OTHER CHANGES

5.1 A project of such nature, comprising of several countries, would certainly involve some problems and changes during the course of its implementation. During the period under review, the following problems were encountered:

5.2 South Africa: In respect of the South African partner, it was difficult to proceed with the activities of the project in the absence of a researcher. Dr. Simon Roberts, Researcher in South Africa, was to be engaged by the Competition Commission of South Africa for a full time staff appointment. However, that did not work out. In the meantime, Mr. Roberts took on other assignments. So, a new researcher, Ms. Shibe Lebelos, has now been appointed for the project purpose.

5.3 Meeting the deadlines: It is a difficult task to coordinate all activities such that all partners finish them at almost the same time. In this quarter also, it was difficult to adhere to the scheduled dates. Draft Phase-I report and NRG meetings could not be completed within the schedule. They have been slightly delayed but efforts are being made to get the final Phase-I report prepared in accordance with the schedule.

5.4 Follow-up with partners: To follow-up with the partners was really difficult and time consuming. It involved considerable work to push them for freezing the dates of the NRG meeting. In case of the African partners it was even more so because the meetings had to be organised in such a way that they could be attended by CUTS’ staff in one extended trip. After all efforts, this was made possible with the exception of South Africa. This was owing to the fact that they had to face some problems regarding a researcher. Their NRG meeting would be held on 29th June 2001 and would be attended by Mr. Mwamba Makasa of CUTS-Africa Resource Centre, Lusaka, Zambia.

5.4.2 Getting inputs from the partners for the newsletters on a regular basis, was yet another difficult task. However, in this regard, the current position is quite better and we are receiving regular inputs from the partners.

VI. PLAN FOR THE NEXT QUARTER (June-August 2001)

6.1 The next quarter would be the last quarter of the first phase of the project and with this would end the first year of the Project. We would enter into the second phase of the Project after this quarter.

6.2 National Reference Group Meeting: During the next quarter, one of the most important activities of the phase-I of the project would be completed. NRG meetings would be organised in all the project countries and the results of the fieldwork done by the country researchers would be tested at these meetings.

6.3 Phase-I Report: After the NRG meeting, final draft of the Phase-I report would be prepared by the country researchers. This final draft would take into consideration, the suggestions received at the NRG meeting. The draft would be sent to the members of the advisory committee for comments and thereafter the partners would prepare the final version of the report.

6.4 Compiled Phase-I country report: The final version of Phase-I reports received from the partners would then be compiled and collated by Prof. Rakesh Basant, the core researcher of the Project. The compiled Phase-I country report would be finalised after incorporating the comments received from the members of the advisory committee of the Project.

6.5 Project related travel: CUTS 7-Up Project staff would attend the NRG meetings organised by the Project partners in their respective countries and would also utilise this opportunity to discuss various other aspects of the project

6.5.1 Mr. Nitya Nanda and Ms. Anjali Bansal would be visiting Africa from 11th June to 19th June and would attend the NRG meetings of Kenya, Tanzania and Zambia on 13th, 15th and 18th June 2001, respectively.

6.5.2 Mr. Ujjwal Kumar would be visiting Sri Lanka for their NRG meeting to be organised on 19th June 2001.

6.5.3 Mr. Pradeep S. Mehta would attend the NRG meeting of Pakistan to be held on 25th June 2001.

6.5.4 The India NRG meeting would be held on 27th June 2001 in New Delhi, India.

6.5.5 Mr. Mwamba Makasa, CUTS-ARC, Lusaka, would attend the NRG meetings of Zambia on 18th June and of South Africa to be held on 29th June 2001.

6.6 Outreach:

6.6.1 Newsletters: During the next quarter of the Project, the third issue of “ReguLetter” and the fifth and the sixth issue of “7-UpDate” are scheduled for publication.

6.6.2 Briefing Kit for Activists: What does competition law and policy mean to you?
As has been envisaged in the outreach programme of the project, a briefing kit on competition law and policy would be prepared for activists during the next quarter of the Project.

VII. ANNEXURES

Annexure A: Suggested Format For Phase-I Report (Download in Microsoft Word format)
Annexure B: Framework for Monographs on FDI policy (Download in Microsoft Word format)
Annexure C: Plan of Action as per Recommendations of the Launch Meeting (Download in Microsoft Word format)
Annexure D: ReguLetter, No. 2, March 2001 (Download in PDF format)
Annexure E: 7-UpDate Vol. 1, No. 3, February 2001
Annexure F: 7-UpDate Vol. 1, No.4
Annexure G: All About International Investment Agreements
Annexure H: Consumer Protection in the Global Economy
Annexure I: Contours of a National Competition Policy: A Development Perspective

CONTACT US

CUTS Centre For International Trade, Economics & Environment (CITEE)

D–217, Bhaskar Marg, Bani Park,

Jaipur 302 016, India,

Ph: 91.141.2282821

Fax: 91.141.2282485

Email: cuts@cuts.org