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1.1 This is
the 7th quarterly 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 undertake a comparative study of competition regimes in seven
developing countries of the Commonwealth. The countries which have been chosen
for the study are:
India Kenya Pakistan South
Africa Sri Lanka Tanzania Zambia
1.2 The main
objectives of the Project are:
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To conduct
evaluation of existing competition legislation and its implementation on few
basic principles such as budgets, composition and structure of the
authority;
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To
identify typical problems and suggest solutions, including on the basis of
practices elsewhere;
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To suggest
ways forward to strengthen existing legislation and institutions dealing
with competition issues;
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To assess
capacity building needs of the government, its agencies and the civil
society;
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To develop
strategies for building expertise among the competition agency officials,
practitioners and civil society;
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To help
build constituencies for promoting competition culture by actively involving
civil society and other influential entities during this exercise; and
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To create
an advocacy group at national and international levels to pursue the
necessary and required reforms.
1.3 The
project is running in its eighth quarter now. In its first quarter, primarily
the preliminary activities of the project were completed. Partners were
identified in each of the seven project countries. 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.
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 researchers got the
questionnaires filled from the concerned authority and collected all the
relevant data. This data was then put into a draft country report for which a
format was suggested by the core researcher of the project and was sent to the
partners. This report was to be discussed at the NRG meeting. The partners
finalised the members of their NRG, which included representation from all
stakeholders. The dates of the NRG meetings were also decided during this
period.
1.7 The fourth
quarter comprised the last three months of Phase I of the Project. During this
period, NRG meetings were organised and the Phase-I country reports were
prepared in each project country, in a particular format, which was given to all
partners. These Phase-I country reports were compiled and collated to form Draft
Phase-I Synthesis Report. The Phase-I culmination meeting was also held in the
first week of September. This marked the beginning of Phase-II of the project.
1.8 During the
fifth quarter, i.e. the first quarter of Phase-II of the project, 2nd
NRG meetings were held to discuss the revised country reports and to finalise
the case studies for second phase. The partners were able to finalise the three
case studies to be taken up during the Phase-II of the project.
1.9 The
project stepped completely in its second phase during the sixth quarter. The
preliminary activities to facilitate research were completed and partners began
to work on the case studies to be taken up during phase-II of the project.
1.10 The
previous quarter witnessed the detailed research work on phase-II of the
project. The following is the report of the activities done during March-May
2002. It also includes a brief on the work done during the month of June 2002.
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2.1 Phase-I
Country Reports
2.1.1 During
the period under review, the phase-I country reports were finalised. The country
reports were given a common format – a foreword, a preface and a brief write
up on the highlights of the NRG discussions were included in all the reports.
These reports are now being sent for printing and are expected to be publoished
by the end of July 2002.
2.1.2 Almost
all the phase-I country reports are complete with the exception of Zambia,
Pakistan and India. The Zambia report needs some minor changes which are being
done at CUTS; the foreword is being awaited for the Pakistan report. Saleem Asghar Mian, Chairman, Monopoly Control Authority,
Pakistan, has agreed to write the foreword and it would be sent to us soon; the
India report also does not have a foreword at present. Rakesh Mohan, a noted
Indian Economist, has been requested to do the foreword. He is very busy and
hence this delay. It is expected that he would be able to do the same very soon.
If he doesn’t then another important person will be approached.
2.1.3 The
final versions of the country reports would also be put on the website as and
when they are sent for printing. The earlier version is available on http://cuts-international.org/7up-country-report-index.htm
2.2 Phase-I
Synthesis Report
2.2.1 The
draft phase-I synthesis report was further revised and is now in its final
stages. The report was circulated to all partners, researchers and advisory
committee members for their suggestions, in parts – first the main body of the
report was sent followed by the chapter on conclusions and recommendations. The
suggestion of including as many comparative tables as possible was taken into
consideration and the report now has several such tables.
2.2.2 The
report would now be deliberated upon at the Phase-II Review Meeting of the
project to be held on 5-6 July 2002 at Geneva. After taking into the
consideration the comments that would emerge at this meeting, the report would
be finalised and then it would be published for wider distribution.
2.3
Phase-II Research
2.3.1 Phase-II
primarily deals with cross border competition concerns and a case study approach
has been adopted to proceed with the work. Three case studies were identified in
each of the project countries. The list of the cases identified in each country
is annexed vide Annexure A.
2.3.2 During
the previous quarter, the researchers were able to work on these case studies
and draft reports were sent to CUTS. The case study reports have been prepared
as per a format that was sent to the researchers for ensuring uniformity and for
facilitating the process of comparison. The outline is being annexed vide
Annexure B.
2.3.3 The
draft case study reports would now be commented upon by CUTS as well as by the
members of the advisory committee and revised thereafter. These case study
reports would take the form of phase-II country reports, which would be prepared
and published by the partners. The phase-II country reports would be a synthesis
and not just a collection of the case studies.
2.4 Fringe
Meeting at Montevideo, 17th April 2002
2.4.1 It has
been CUTS policy to organise as many fringe meetings as possible, wherever
feasible, to take advantage of the presence of the concerned people of the 7-Up
community and discuss the project related issues.
2.4.2 A
meeting of the 7Up Project was held on 17th April 2002 at the
Montevideo Sheraton Hotel, on the fringe of the Research Scoping Meeting on
Competition Policy organised by IDRC on 18-19th April 2002, where
some members of the project team were also invited. The purpose of the meeting
was to take stock of the work progress vis-à-vis
the activities of the 7-Up Project and to plan the next 7-Up meeting.
2.4.3
Discussions were held on the Phase-I country reports- their printing,
publishing, etc.; Phase-I synthesis report; phase-II case studies and phase-II
country reports. Some beyond the project activities were also discussed at
length at the meeting. A copy of the minutes is annexed vide Annexure C.
2.5
Phase-II NRG Meeting – India
2.5.1 The
Phase-II National Reference Group (NRG) meeting for India was held on 8-9th
June 2002 at Chennai, India. The meeting deliberated upon the new competition
law of India, particularly in context of cross border issues. Presentations were
made with the help of several examples of cross border competition abuses in
India. The set of recommendations on competition policy and law, regulatory
design and environment, sectoral investment policy and on the services sector,
which had emerged at the previous NRG meeting held in January 2002, were further
refined.The meeting was attended by representatives from consumer organisations,
academia, research institutions, media, regulatory bodies and the government. A
brief report of the proceedings is annexed vide Annexure D.
2.6 Project
Related Travel
2.6.1 During
this period, Pradeep Mehta, Secretary General, CUTS, participated at the
Research Scoping Meeting on Competition Policy organised by IDRC on 18-19th
April 2002 at Montevideo. He made a presentation on the 7-Up Project at one of
the sessions of the meeting. The opportunity was also utilised for organising a
fringe meeting of the project on 17th April (para 2.4)
2.6.2 Ralf van
de Beek, lawyer at CUTS and working closely on the research inputs of the
Project, visited Africa during 6th to 13th June 2002. He
visited Kenya, Tanzania and Zambia to follow-up on the case studies for phase-II
of the Project as well as take stock of some other issues. His visit proved to
be very useful in making the concepts clearer to the researchers and explaining
to them as to what exactly is the purpose of each case study. David Ongolo,
Advisor, CUTS-ARC also accompanied him to Lusaka.
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Newsletter
3.1 As per the
Project Agenda, two periodical newsletters are being 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 seventh quarter of the project, the sixth issue of
ReguLetter and the tenth issue of 7-UpDate were published. Copies are enclosed
vide Annexures 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.
3.2.1 The
sixth issue of the newsletter (No.6 March 2002) has been published. It is a
24-page newsletter and carries a brief description of the progress of the 7-Up
Project, news on industrial restructuring, corporate affairs, financial sector,
utilities and an article on the competition regime of Sri Lanka. The leader on
the cover speaks about the need of competent and credible corporate governance
quoting the example of the Enron scandal. The issue carries a brief on Microsoft
settlements and a write-up on the cement cartel in India. It carries a special
article on competition challenges in a globalising economy, in the context of
developing countries, based on some experiences from South Africa.
3.2.2 About
four thousand copies of this newsletter were published, keeping in view its
increasing demand. These copies have been distributed to various stakeholders
such as competition authorities, regulatory authorities, consumer organisations,
media persons, intergovernmental organisations, etc. It was also circulated to
the project partners, country researchers and members of the Project Advisory
Committee.
3.2.3 The next
issue of ReguLetter is scheduled to be published in the last week of June.
Writing work for the same has been done and the same is being edited at present.
b) 7-UpDate
3.3 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.
3.3.1 The
tenth issue of this e-newsletter was circulated during this period. This issue
covered a brief description of the progress of the 7-Up Project and interesting
news items like ‘Europeans warn Pentagon over merger review’ and ‘Brussels
likely to warn Carlsberg and Heineken’. It also gave information about the
forthcoming events on competition policy and law being organised around the
world.
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4.1
As mentioned in our previous progress report, the project continues to show its
impact in the 7-Up countries and beyond, both direct and indirect. Competition
policy and law has been a little known area even in countries like India and
Pakistan who have had such policy and law have been fairly long. But now there
is an increasing awareness on competition law and policy in all these countries.
The major contributing factor to this has been the NRG meetings that were held
in these countries.
4.2
Another interesting aspect of this growing awareness is that, it is not limited
to the project countries only. It is having some spillover effects in other
developing countries also. Moreover, the project is being considered as first
such study in the developing world. Hence CUTS has been receiving queries from
different places, on competition issues in the context of developing countries.
4.3
As a result of the growing popularity of the project, CUTS has constantly been
invited for several meetings, conferences and workshops to talk about the
project and share the experiences gained. More and more countries and people are
interested to know as to what is happening and how can they utilise the
knowledge in respect of their country.
4.4
As mentioned earlier in this report, the 7-Up Project was discussed and
deliberated upon at length at the Research Scoping Meeting on Competition Policy
organised by IDRC on 18-19th April 2002, where some members of the
project team were also invited.
4.5
CUTS was invited to participate at the Regional
Seminar on Competition Policy & Multilateral Negotiations, 16-18 April 2002,
Hong Kong, organised by UNCTAD
in collaboration with Hong Kong Consumer Council. It was essentially a capacity
building exercise on competition issues that the Doha Declaration envisaged for.
The programme was attended by representatives from several countries of the
Asia-Pacific region. Nitya Nanda, Economist, participated in the seminar and a
report was circulated at the CompetitiOnline Forum. The report is being annexed
vide Annexure G
4.6
Nitya Nanda represented CUTS at the conference “Informing the Doha Process:
New Trade Research for Developing Countries” at Cairo, Egypt on 20-21 May
2002. The conference was organised by
the World Bank in collaboration with the Egyptian Centre for Economic Studies,
Cairo.
4.6.1
The objective was to identify ways that WTO rules could better reflect
development priorities and identify needed research in policy areas of relevance
to the 2003 Ministerial. It was to set the stage for subsequently organising a
targeted programme at research that would provide developing countries with
timely information upon which they can formulate a more effective negotiating
position. CUTS was invited to give inputs on Regulatory Issues: Investment and
Competition Policy.
4.7
A request was received from the United Nations Economic and Social Commission
for Asia and the Pacific (UN-ESCAP), Bangkok to write an article of 3000 words
on competition policy in the context of developing countries for their Bulletin
2002/03.
4.8
An invitation was received from the Thailand Development Research Institute to
address the Thai consumer groups on the topic of competition policy advocacy at
a conference on “Building Constituency for Competition Policy and Law”
organised on 3-4 June 2002 at Bangkok.
4.9
CUTS has also received a request from VINASTAS, a quasi-government consumer
organisation in Vietnam, for assistance in developing a competition law for
their country. Vietnam is presently developing the Law of Competition and
Monopoly Control that is expected to be enacted in near future.
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V
Management & Coordination
5.1 In order
to ensure quality outputs, planning for all events is done much in advance.
Planning has already begun for the Phase-II review meeting of the project to be
held on 5-6th July 2002 at Geneva.
5.2 Keeping in
view, the demands arising from time to time, certain decisions are taken which
might have not been included in the project plan. For instance, in order to
increase the credibility of the phase-I country reports, it was decided to
include a preface and a foreword while publishing them. The preface was to be
written by the head of the partner institution and the foreword had to be from
some renowned economist or academician who would be significant for the project
purposes.
5.3 Periodic
internal meetings of the project team are organised to review the progress of
the project and action plan is prepapred for better management of the project
activities. These meetings are properly minuted so that the team is clear about
the responsibilities assigned to them and the time frame for completing them.
5.4 It was
felt during the project implementation that there was a need for expansion in
the project funds. The second phase of the project involved extensive research
and there was also a need for phase-II NRG meetings, which were not accounted
for in the original project plan.
5.4.1 A
proposal was then submitted to DFID for expansion in funds and granting an
extension in the project duration. The proposal was accepted. The budget
break-up for the partners is being worked out and formal letters giving the
scope of work in the extended period would soon be sent to the partners and
researchers.
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6.1 It is obvious that such a
comprehensive project would involve some problems and changes during the course
of its implementation. During the period under review, the following problems
were encountered:
6.2 Follow-up with partners:
During the period under review, it was really difficult to get the case studies
from the partners. Many of the drafts did not adhere to the format that was sent
in advance and as such had to be redrafted. Some sector specific case studies
dealt with just one merger case and
did not take an overall view of the sector. The partners and the researchers had
to be explained time and again about the purpose of the case studies. All this
has delayed the completion of this activity and the drafts are still being
revised. It was felt that the partners were not clear about the three types of
case studies to be taken-up during the second phase. They were under the
impression that three merger cases have to be done. CUTS needs to be more
precise when specifying any such requirements.
6.3 Researchers in South
Africa – Since Simon Roberts and Shibe Lebelo had discontinued working on
the project, Vani Chetty, competition lawyer with a private law firm, and Trudi
Hartzenberg with the University of Cape Town, have been assigned the
responsibility of carrying out the research for second phase of the project for
South Africa on behalf of the Institute for Global Dialogue. CUTS pushed IGD to
involve them otherwise the project would have been at a standstill. Vani Chetty
has done two case studies and the third would be done by Trudi.
6.4 Researcher in Pakistan
– Mahvash Saeed Qureshi, Economist, is doing the case study work on behalf of
Sustainable Development Policy Institute, Islamabad. This change was made by
SDPI as Sajid Kazmi, who was doing the research, is very busy with many other
activities.
6.5 Core Researcher –
Rakesh Basant has been unable to produce the required quality of the outputs.
The time plan was also not being followed. For instance, the phase-I synthesis
report, which was found to be quite off the line at the Goa meeting, remained
unrevised even after six months of the meeting. The revisions had to be finally
done at CUTS. Similarly for the second phase, almost all the work including
framing of the outline for case study reports, was done at CUTS.
6.5.1 Keeping this in
consideration, it has been decided that it would be best if Rakesh withdrew from
the second phase of the project. The work would now be carried by the 7-up team
at CUTS.
VIi. Plan for the Next Quarter
7.1 The period
from June to August 2002 would have been the last quarter of the project. But an
extension of another three months has been granted by DFID. This period would
primarily focus on completion of phase-II activities and giving a final touch to
phase-I.
7.2 Phase-I
country reports would be printed by the end of July and sent to the partners
for local distribution.
7.3 Phase-II
Review Meeting would be organised on July 5-6, 2002 at Geneva. It would take
stock of the case studies and plan the way ahead.
7.5 Phase-I
synthesis report would be finalised after being deliberated upon at Geneva.
This report would then be published by CUTS for wider distribution.
7.4 Phase-II
country reports would be drafted after revising the case studies according
to the discussions of the Geneva meeting.
7.5 Phase-II
NRG meetings would be organised sometime in August to deliberate upon the
case studies, draft phase-II country reports and to formally launch the phase-I
country reports.
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