The Competition Commission of Pakistan (CCP) held a hearing today into the matter of hearing notice issued to the Trading Corporation of Pakistan (TCP) regarding potential violation of Sections 3 of the Competition Ordinance, 2009 regarding competition restrictive clauses in the terms and conditions in the sugar tenders. The hearing was conducted by a three Member Bench comprising Mr. Khalid A. Mirza, Chairman, Ms. Rahat Kunain Hassan, Member (Legal) and Mr. Abdul Ghaffar, Member (C&M). The hearing was attended by TCP representatives including its Chairman Mr. Saeed Ahmed Khan along with some traders and experts. The Bench appreciated the serious and responsible way TCP presented its case and assisted the Bench. Due to the positive and forthcoming approach of the TCP team, all parties present were able to resolve the concerns in relation to the terms and conditions of the tenders, which prima facie were preventing, restricting or reducing competition in the relevant market. During the hearing, TCP agreed to the following: • The tender to be opened on the February 13, 2010 has been merged with the tender scheduled for February 15, 2010. Accordingly, the quantity of sugar for tender scheduled for February 15, 2010 shall be enhanced to 2,00,000/- MT and shall now be opened on February 17, 2010; • The conditions in clause 15(a) of the Terms & Conditions for the tenders relating to shipment will be amended, which shall read as follows: “First shipment of at least 12,500 MT 5% MOLSO within three (3) weeks (excluding voyage time) from the date of opening of L/C and subsequent shipments within the period of the contract and in a manner so as to ensure no less than the minimum shipment i.e. 12,500 MT 5% MOLSO on average per week.” • The terms and conditions of the Tenders will be amended to allow containerized shipment as an option on established international terms and conditions; • Transshipment in the case of containerized shipment will be allowed in the terms and conditions of the tenders. The Commission therefore issued a consent Order directing TCP to implement the decision made during the hearing and to issue a corrigendum in terms of the above in two newspapers of national circulation by 13 February 2010 reflecting the understanding arrived at during the hearing. Earlier the Commission had taken notice of the news items appearing in the daily Business Recorder on January 19, 2010, January 22, 2010 & January 28, 2010 and appointed Enquiry Officers to verify whether the terms and conditions of the TCP tenders, floated to import 500000 MT of refined sugar, were preventing restricting or reducing competition in the relevant market in violation of the provisions of Section 3 and/or Section4 of the Ordinance. The Enquiry Officers submitted their Preliminary Enquiry Report on February 09, 2010 before the Commission pointing out that certain clauses of the terms and conditions of Tenders were found to be potentially of concern. These clauses inter alia included: i) Clause 2 wherein Solution Colour ICUMSA Unit Max. was fixed at 120, Sulphur Dioxide mg/kg was fixed at 15.0 ppm and Copper mg/kg, Max. was fixed at 2.0, ii) Clause 6 wherein the packing bags dimensions were given, iii) Clause 10, which provides that the bids were to be submitted personally and no bid through courier or fax shall be accepted, iv) Clause 15 where minimum quantity of shipment was fixed and then time period for subsequent shipments were also fixed, v) and Clause 19 wherein it is provided that transhipment is not allowed and no other cargo is to be shipped along with the sugar. The Enquiry Officers in the Preliminary Enquiry Report had recommended that status quo should be maintained till the Final Enquiry Report is issued, keeping in view the urgency of the matter and the fact that prima facie there is likely to be a violation of Section 3 of the Ordinance. Owing to the fact that the tender terms prima facie seemed to exclude competitors from the tendering process and was likely to result in import of sugar at a higher price which could adversely impact the consumer and the public at large, the Commission had issued a Notice of Hearing under Section 30 read with Section 31 & 32 of the Ordinance to TCP as to why an appropriate action may not be taken under the Ordinance. In addition to notice of hearing to TCP, a Public Hearing Notice was also published in the leading newspaper, inviting all parties concerned to attend the hearing.
The Competition Commission of Pakistan (CCP) held a hearing today into the matter of hearing notice issued to the Trading Corporation of Pakistan (TCP) regarding potential violation of Sections 3 of the Competition Ordinance, 2009 regarding competition restrictive clauses in the terms and conditions in the sugar tenders. The hearing was conducted by a three Member Bench comprising Mr. Khalid A. Mirza, Chairman, Ms. Rahat Kunain Hassan, Member (Legal) and Mr. Abdul Ghaffar, Member (C&M). The hearing was attended by TCP representatives including its Chairman Mr. Saeed Ahmed Khan along with some traders and experts. The Bench appreciated the serious and responsible way TCP presented its case and assisted the Bench. Due to the positive and forthcoming approach of the TCP team, all parties present were able to resolve the concerns in relation to the terms and conditions of the tenders, which prima facie were preventing, restricting or reducing competition in the relevant market. During the hearing, TCP agreed to the following:
• The tender to be opened on the February 13, 2010 has been merged with the tender scheduled for February 15, 2010. Accordingly, the quantity of sugar for tender scheduled for February 15, 2010 shall be enhanced to 2,00,000/- MT and shall now be opened on February 17, 2010;
• The conditions in clause 15(a) of the Terms & Conditions for the tenders relating to shipment will be amended, which shall read as follows: “First shipment of at least 12,500 MT 5% MOLSO within three (3) weeks (excluding voyage time) from the date of opening of L/C and subsequent shipments within the period of the contract and in a manner so as to ensure no less than the minimum shipment i.e. 12,500 MT 5% MOLSO on average per week.”
• The terms and conditions of the Tenders will be amended to allow containerized shipment as an option on established international terms and conditions;
• Transshipment in the case of containerized shipment will be allowed in the terms and conditions of the tenders. The Commission therefore issued a consent Order directing TCP to implement the decision made during the hearing and to issue a corrigendum in terms of the above in two newspapers of national circulation by 13 February 2010 reflecting the understanding arrived at during the hearing. Earlier the Commission had taken notice of the news items appearing in the daily Business Recorder on January 19, 2010, January 22, 2010 & January 28, 2010 and appointed Enquiry Officers to verify whether the terms and conditions of the TCP tenders, floated to import 500000 MT of refined sugar, were preventing restricting or reducing competition in the relevant market in violation of the provisions of Section 3 and/or Section4 of the Ordinance. The Enquiry Officers submitted their Preliminary Enquiry Report on February 09, 2010 before the Commission pointing out that certain clauses of the terms and conditions of Tenders were found to be potentially of concern. These clauses inter alia included:
i) Clause 2 wherein Solution Colour ICUMSA Unit Max. was fixed at 120, Sulphur Dioxide mg/kg was fixed at 15.0 ppm and Copper mg/kg, Max. was fixed at 2.0,
ii) Clause 6 wherein the packing bags dimensions were given,
iii) Clause 10, which provides that the bids were to be submitted personally and no bid through courier or fax shall be accepted,
iv) Clause 15 where minimum quantity of shipment was fixed and then time period for subsequent shipments were also fixed,
v) and Clause 19 wherein it is provided that transhipment is not allowed and no other cargo is to be shipped along with the sugar. The Enquiry Officers in the Preliminary Enquiry Report had recommended that status quo should be maintained till the Final Enquiry Report is issued, keeping in view the urgency of the matter and the fact that prima facie there is likely to be a violation of Section 3 of the Ordinance. Owing to the fact that the tender terms prima facie seemed to exclude competitors from the tendering process and was likely to result in import of sugar at a higher price which could adversely impact the consumer and the public at large, the Commission had issued a Notice of Hearing under Section 30 read with Section 31 & 32 of the Ordinance to TCP as to why an appropriate action may not be taken under the Ordinance. In addition to notice of hearing to TCP, a Public Hearing Notice was also published in the leading newspaper, inviting all parties concerned to attend the hearing.
© CCP 2023, Competition Commission of Pakistan ©All rights reserved
