The Post, Zambia, March 09, 2010
BUSINESS entities have generally been against the adoption or implementation of a competition regime everywhere.
These corporate entities think that competition policy and law are tools for the consumers and not for them, for they fear that their enterprises or profits will be curbed due to such laws, which seek to create orderly markets.
But this is not true, when viewed from a larger perspective, for example while driving on Zambian roads, should one be delighted to see no traffic policemen manning the traffic? Perhaps not and for the benefit of all drivers, traffic needs to be regulated and that is the responsibility of a policeman.
Otherwise, there will be chaos and road accidents would become a way of life.
Similarly, a competition regime regulates the market, keeps a check on the number of potholes, that is, anti-competitive practices and promotes business welfare.
It is understood that an effective competition regime, covering competition distortions, can prevent anti-competitive abuses affecting the players within the market.
Despite concerns from the business community, competition law is beneficial especially that in certain circumstances, competition contributes to innovation, productivity and growth.
It is also believed that increased competition between firms motivates the managers to focus on increasing their company’s performance so as to maximise profits and stay away from losses.
However, there is clear evidence suggesting that the majority of Zambians were lacking awareness on issues pertaining to competition, fair trading and consumer welfare and protection.
So it is vital to note that the proposed competition and consumer protection law might not be effectively implemented to tackle matters related to consumer welfare in this country, if the intended beneficiaries, are not well educated or informed about its benefits for them.
Once empowered with information, consumers will be able to identify anti-competitive practices that affect their interests, in terms of quality, prices, access and choice of goods and services.
It is in this line that the Consumer Unity Trust Society (CUTS) Lusaka office has partnered with the Zambia Competition Commission (ZCC) to enhance awareness of multiple stakeholders on competition policy and law.
Speaking last week after holding a series of stakeholder workshops around the country, CUTS programme officer Patrick Chengo said consumers would be empowered with information on how to deal with such anti-competitive practices, particularly of the platform they should approach to address ill-effects inflicted by such practices.
Chengo said his organisation had also approached the Ministry of Education to include consumer rights and welfare protection in the school curriculum.
“We think it will be important to inculcate these issues in the minds of young ones so that capacity is built at a tender age. This then will enable them to make informed choices and take decisions that enhance their bargaining power and exercise their rights. Furthermore, the need to educate consumers on their rights and steps to take when faced with situations for which they will require remedial actions is one area that has not been addressed by the relevant authorities,” Chengo said. “Despite the existence of regulatory authorities and other groups formed to represent consumers, their lack of capacity to reach out to common consumers has been evident.”
He said the initiative would attempt to develop capacity of the common consumers and their groups so that they are able to effectively advocate on consumer welfare issues and engage with the government on relevant policy matters.
“Government efforts to protect consumers need to be complemented by efforts from the civil society and most importantly the consumers themselves. CUTS have implemented various projects on competition reforms that lead to consumer welfare in the beneficiary countries and I will like to follow the same approach in developing this proposal for implementation in the country,” said Chengo.
Under the proposed competition and consumer protection law, which will replace the competition and fair trading Act, the ZCC is seeking stronger administrative powers such as imposition of a maximum 10 per cent fine on a company’s turnover for failing to comply with the law.
Currently, the ZCC has powers to prosecute offenders through the High Court and the maximum punishment imposed is a five-year jail term or a K10 million fine.
In an interview, ZCC director for consumer protection and public relations Brian Lingela said consumer protection was a big challenge because of its diversity in nature.
He said the government was reviewing the Act that was enacted in 1994 and it was also formulating a policy on consumer protection so that consumer protection could be enhanced.
“The process to review and consolidate the Act and formulate a policy has reached advanced stages and currently the draft is with the Ministry of Justice to be fine-tuned and we hope it will be tabled before the next session of Parliament,” Lingela said. “Some of the main features of the proposed Act and policy will be disclosure of information whereby if products are not fully labeled or itemised with price tags, warranty or guarantees then offenders will be punished and we are also seeking administrative powers to impose maximum punishment of 10 per cent fine on company’s turnover since under the current Act the maximum fine is a five-year jail term or K10 million but what impact will this fine have on a large company?”
And officially opening the workshop, Kitwe district commissioner McDonald Mtine said economic liberalization brought challenges through increased imports that included having sub-standard goods flood the Zambian market.
“We need to have proper control since we are looking at the lives of people, who are at risk when using these sub standard and counterfeit goods,” said Mtine.
With proper design and implementation of a competition regime, the welfare of the business community and consumers will be enhanced and this is why it is envisaged that an appropriate and dynamic competition policy and law will be beneficial to all.
Actually it is true that competition law is beneficial for business entities since possession of unchallenged economic power reduces initiative, discourages thrift and depresses energy.
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