By Lozindaba Mbvundula | Associate, Public Relations Officer and Coordinator of Corporate Social Responsibility.
Competition issues in Malawi are governed by the Competition and Fair-Trading Commission (CFTC). This Commission is established under the Competition and Fair-Trading Act No. 43 of 1998. The CFTC is a corporate body with power to sue and to be sued. It is established under Section 4 of the Act. It is the regulatory body for all matters to do with Competition and fair-trading in Malawi. Although it may seek directions from the minister on how to conduct its functions, the Commission is largely autonomous. This paper discusses the nature of the CFTC and how it carries out its regulatory functions.
- Composition of the Competition and Fair-Trading Commission
The CFTC is comprised of 10 members, 7 of whom are nominated by the minister and appointed by the president. The other three are ex-officio members. These members are to be chosen based on their suitability for the task. Criteria considered includes their ability and experience in industry, commerce or administration or their professional qualifications. The 7 members comprise of: two persons representing business interests; a lawyer; an economist; an accountant; and two persons representing consumer interests. The Secretary to the Treasury or his representative; the Secretary for Commerce and Industry or his representative; and the General Manager of the Malawi Bureau of Standards or his representative are ex officio members of the Commission. The members of the Commission elect their Chairperson from among themselves. However, the ex-officio members are not eligible for such election. The members are immune law suits or other proceedings brought or instituted personally against any of them regarding their acts done in good faith in the course of carrying out their duties under the Act.
The members of the Commission are not its employees and do not serve on a full-time basis. Except for the ex-officio members, the members of the Commission serve for three-year terms and may be re-appointed when this period has lapsed. However, a person ceases to be a member if she/he resigns from office, dies, is absent from 3 consecutive meetings without valid causes, becomes an undischarged bankrupt, becomes of sound mind or participates in activities which contravene the Competition and Fair-Trading Act. Upon the occurrence of such a vacancy, another member is appointed to fill the position unless the period remaining before the term of the office expires is less than 3 months, in which case the minister may opt to keep the position vacant.
- Functions the Commission
As discussed above, the CFTC’s overriding function is to oversee all issues to do with competition and fair-trading and ensure that trade undertakings comply with competition regulations. Its duty is to regulate, monitor, control and prevent practices likely to have a negative impact on competition and fair-trading. This includes:
- Conducting investigations of its own motion or upon being so re-quested. These investigations relate to
- the conduct of businesses to ascertain whether an enterprise is committing anti-competitive or unfair trading practices.
- proposed mergers/acquisitions for possible anti-competitive effects and taking any actions necessary to prevent or redress the creation of an anti-competitive merger or abuse of a dominant position by a trading entity.
- Providing information
- Providing information to business entities and consumers regarding the rights and duties of traders and the rights of consumers under the Act.
- Undertaking studies and providing public reports regarding operation of the Act.
- Giving advice to the minister on matters relating to the operation of the Act, of its own motion or upon being so requested.
- Collaborating with any association or body to develop and promote the observance of standards of conduct to ensure compliance with the Act.
The powers of the Commission are not limited to the above. It may carry out other functions that are not specifically laid out but are necessary to fulfil the objective of ensuring compliance with principals of competition and fair-trading.
- Powers of the Commission
Pursuant to its duties, the Commission has been granted extensive powers under the Act. The Commission has power to conduct hearings in order to ascertain compliance with competition laws. Where the Commission is of the view that its investigations will affect a certain person’s rights, it has the power to summon such a person for a hearing. This is discretionary and depends on the Commission’s assessment. However, where a person has made a written request for a hearing showing that he is likely to be affected by an investigation or has to be heard for other reasons, the Commission is obliged to conduct an oral hearing of such a person. This is not discretionary. It must follow as a matter of course.
In the conduct of hearings, the Commission has power to summon and examine witnesses; call for and examine documents; administer oaths; require that any document submitted to the Commission be verified by affidavit; and adjourn any investigation from time to time. It may also order any person, to give it information regarding goods manufactured, produced or supplied by her/him, if this information is necessary to determine whether the conduct of the business in relation to the goods or services constitutes an anti-competitive practice. Such hearings take place in public.
The Commission also has power to designate some of its employees as investigating officers. The Commission is required to grant such officers certificates of appointment, which they display in carrying out their functions. These officers, upon production of the certificate, may enter any premises to seek out information and records relating to unfair or anti-competitive trading practices.
Upon conducting investigations into trade practices or potential mergers/acquisitions, and upon conducting hearings, the Commission has power to make orders. The Commission can make an order approving of a merger/takeover application, or declaring it anti-competitive.
- Enforceability of the Commission’s Decisions
It is evident that the CFTC has investigative and quasi-judicial powers. It conducts investigations through hearings and issues orders thereafter. The Commission is required to cause the order to be published in the gazette no later than 14 days from the date of its issuance. Orders made by the Commission are enforceable. The Commission or any person in whose favour an order has been made may enforce the order by having it certified by the Commission or a person authorised by the Commission, then lodging the certified copy with the Registrar of the High Court. Once this has been done, the Order has the same effect as a civil judgment of the High Court.
A person aggrieved by an order of the Commission has the option of appealing against the decision. The appeal must be lodged to a judge of the High Court in chambers within 15 days after the date of the order. Pending determination of the appeal, the order or finding or the Commission remains in force, until otherwise ordered by the judge. The judge has power to confirm, modify or reverse the Commission’s findings. The judge may also direct the Commissioner to reconsider the whole matter or certain
aspects. As in all matters, the judge is required to give reasons for her/his direction.
Evidently, the CFTC plays a highly significant and indispensable role in promoting, protecting, and enforcing competition and fair trading practices. The relevant laws have ensured the Commission is sufficiently empowered and well-equipped for such a tas