| CUTS>CITEE>7 Up Project>Event Reports>2nd NRG Meetings> SRI LANKA |
| Home About CUTS CITEE CART CHD C-SPAC CUTS-ARC Contact CUTS |
 |
|
|
|
National Reference Group Meetings |
|
7-8 September 2001, Goa, India National Reference Group (NRG) Meeting |
| 2nd National Reference Group Meetings |
|
Kenya, 31st October 2001, Nairobi Tanzania, 5th November 2001, Dar-E-Salaam Sri Lanka, 2nd November 2001, Colombo Zambia,
22nd
November 2001, Lusaka Pakistan, INDIA, 7th December 2001, New Delhi |
|
National Reference Group Meeting: SRI LANKA |
|
Brief Report National Reference Group Meeting on Competition Policy: Sri Lanka 2nd November 2001, Colombo The meeting, which was jointly organized by the Law & Society Trust and the Institute of Policy Studies, began with Ms. Malathy Knight-John welcoming those present and setting out the following:
Ms. Pubudini Wickramaratne then briefed the participants on the main features of the Revised Phase 1 Report (which had been distributed to the NRG members prior to the meeting). She focused on the following:
Comments from the participants on the revised report are as follows. Mr. Chanaka De Silva (Attorney at Law) commented that the proposed new Consumer Protection Authority (CPA) would not address the problems that the current competition authority (Fair Trading Commission) is facing, specifically in regard to staff and resource constraints. As such, he argued that the situation in terms of competition would not be that much different from what prevails in Sri Lanka now. Mr. Chanaka De Silva also questioned the point made in Section 4.1.5 of the report that, “Sri Lanka does not have extra territorial jurisdiction on matters of law relating to competition and anti-competition issues”. His position was that it was more an instance of the authorities not using the tools available to them to handle such cases than that of there being no legal remedies. If there was, for example, an effect on the domestic market due to an international merger, the competition authority could take action, if it wanted to do so. Ms. Shanthi Thiruneelakandan (Fair Trading Commission) agreed that the competition authority could take action with regard to such issues. The only exception to this would be in the case of financial entities (such as for instance, the Standard Chartered and Grindlays merger) that are handled by the Central Bank as per the Banking and Finance Act. Mr. Kanag- Isvaran (President’s Counsel) was of the view that the scope of the Fair Trading Commission Act, according to the principles of international law, is limited to the territory of Sri Lanka. As such, he pointed out that the FTC can use the “effects doctrine” to probe into matters having cross border implications. On the point of learning from other countries and figuring out what other countries have in terms of competition policy that Sri Lanka lacks, Mr. Moddy Fonseka (Consumer organization), suggested that lessons from developed countries should also be taken into consideration. Phase 2 QuestionnaireIn general, the consensus amongst the NRG members was that the questionnaire was comprehensive. However, one important criticism that emerged from the discussion was that it was too “India-specific”. On this point, Ms. Yvonne Schokman (Board of Investment), stressed that the questionnaire should have been more localized to the country even given the fact that it had to be comparable to some extent across the seven survey countries. Phase 2 Case Studies There was general agreement amongst the members that the following three case studies should be looked at in the case of Sri Lanka. 1. International merger – Glaxo Wellcome and SmithKline Beecham (this was suggested as a better option than the Standard Chartered – Grindlays merger by Ms. Shanthi Thiruneelakandan as inquiries on its impacts on Sri Lanka had been initiated at some level by the Fair Trading Commission.) 2. Cement 3. Service sector – Shipping Discussion on how the project and the NRG forum can bring positive externalities to competition policy and consumer protection in Sri Lanka Ms. Malathy Knight-John emphasized that the project should not be considered a mere piece of research and that it was important to have an in-built practical and pro-active agenda. Suggestions and comments were asked for from the NRG members on the various issues below. 1. Why is the competition authority so weak? What can be done to enhance its capacity? What, specifically, can this project do to help? Dr. Harsha Cabraal (Attorney at Law) argued that the problem does not lie in the law but rather in the implementation of the law – he described it as “having teeth and not biting”. Mr. Chanaka de Silva compared the FTC with the Securities and Exchange Commission (SEC) which was dormant at its inception but which now plays a very active role. He attributed this change to the leadership of the SEC and the independent sources of funding. Ms. Shanthi Thiruneelakandan commented that the competition authority has the legal power to implement but does not have the authority to do so, because it is commandeered by a Board of Directors appointed by the Minister in charge of the FTC. For instance when preliminary investigations are completed – usually within 20 days- and the results taken to higher authorities in the competition commission, action is very rarely taken. The Board of Directors is also frequently changed according to the whims of politicians. This has led to a lack of responsibility, accountability or incentive to take serious action. In addition the authority is deficient in staff and financial resources. Although appeals had been made over the years for more funds so that the authority could pay higher wages and attract more qualified personnel, these requests had been turned down on the basis that the proposed CPA would resolve these issues. However, this Consumer Protection Authority has been in the pipeline for several years and there does not seem to be any attempt to set it up given the current political climate. Mr. Kanag-Iswaran argued that pushing for the setting up of the proposed Consumer Protection Authority must be a top policy priority. There is a need for radical competition laws that may create an impact on the stakeholders of society, such that it would energize the consumer into making use of the law to remedy anti-competitive behavior. However, this cannot be considered in isolation – the setting up of the CPA along with building up strong consumer organizations and disseminating information on competition policy and consumer protection is necessary to promote active competition in the country. 2. Why do we not have active consumer organizations? Why the apathy amongst consumers? What can be done to promote strong consumer organizations? Mr. Kanag-Iswaran commented that the problem in regard to consumer protection was multifaceted. There is a lack of awareness on consumer rights amongst the general public. In addition however, even if the consumer were aware of his/her rights there is no forum to which the consumer can address complaints. He argued that a cheap and effective solution such as a tribunal commission should be considered. Mr. Chandra Embuldeniya (National Chamber of Commerce) argued here that a quick remedy such as installing a “hot line” to address complaints to is more practical than having to resort to the judicial system or commissions. Mr. Chanaka De Silva commented that there are two levels of addressing the problem here. The first is where a “hot line” / consumer organization can be used to take the complaint up at the level of the trader. The point here is that the power of the consumer lies in numbers – that is the essential use of a consumer entity. A large number of complaints can be resolved at this level. The second level is that of the judicial system which would involve time and money. The priority of the NRG at this point should be to facilitate action at the first level. Mr. Moddy Fonseka spoke about the consumer courts system in India that he felt was working extremely well. The question was raised as to whether the NRG could work towards selling the idea of consumer courts to policy makers. Mr. Kanag-Iswaran agreed to help with this and requested that a copy of the legislation about consumer courts in India be obtained. However, it was agreed that a definite action plan on this front could not be contemplated until after the December parliamentary elections, given the cycle of political party and policy changes. Mr. Chanaka De Silva commented that a small claims court system had been attempted in Sri Lanka but had not worked. He also argued that the consumer must want the remedy – the remedy should be a result of consumer pressure on policy makers. Why is the consumer not active? Mr. Moddy Fonseka argued that there was considerable interest on the part of the consumer for several years when there was a column in the national print media called ‘The Ombudsman’. This column exposed many cases where consumer interest was undermined and led to reimbursement from the offenders. However, the column was terminated when the previous writer quit. Since then the newspapers –financed by the advertisements of big companies – have not included this column, indicating a bias towards business interests as opposed to consumer interests. Mr. Leel Gunasekera (Consumer organization) argued that there is a consumer organization, which he heads but is unable to function effectively due to the lack of funds and trained personnel. 3. Identification of specific, practical expectations from the project The NRG members identified the following as some of the positive externalities that the NRG forum/project could bring about in terms of improving competition and consumer protection in the country.
|
CUTS Centre For International Trade, Economics & Environment (CITEE)D–217, Bhaskar Marg, Bani Park, Jaipur 302 016, India, Ph:
+91(0)141-228 2821-3 Fx: +91(0)141-228 2485 Email: cuts@cuts.org |
D-217, Bhaskar Marg, Bani Park, Jaipur 302 016, India Ph: 91.141.2282821, Fax: 91.141.2282485
Hosted by: www.fullestop.com |
