By Acting executive Director of ERCA,
Mrs Henrietta Didigu
I welcome distinguished members of the fourth realm to the first of a series of media events to be organized in the Gambia by the ECOWAS Regional Competition Authority. I want to thank you all for responding to our invitation at very short notice. This event provides ERCA the opportunity of enlightening you on the operations of the ECOWAS Regional Competition Authority (ERCA), its mandate and objectives, the scope of its jurisdiction, the future impact of its intervention in the regional market, its proposed relationship with the business community as well as collaboration with National Competition Commissions and most importantly the role the media should play in the area of competition,
2. In 2007, ECOWAS adopted a Regional Competition Policy Framework that outlined the purpose and basic principles of Competition Law and its many benefits within the community market and to the regional integration process as a whole. The Policy reported on the state of Competition law in the region at the time as well as the conditions for implementation and enforcing Competition principles in the ECOWAS space.
3. The adoption of the Policy was naturally followed by the enactment of two (2) Supplementary Acts, the first one which is the Supplementary Act A/SA.1/12/08 adopting the Community Competition Rules and the modalities for their application within ECOWAS and the second one which is the Supplementary Act A/SA.2/12/ 08 on the establishment, functions and operation of the ERCA.
4. In 2014, the ECOWAS Authority of Heads of State and Government granted the government of The Gambia hosting rights for this new Agency. ERCA is thus comfortably housed in premises graciously provided by the Gambian Government.
The Role of ERCA Within the Context of Enforcing Competition Law Policy in West Africa.
1. Understanding the role and mandate of ERCA requires an appreciation of the objectives and usefulness of a competition law regime in any given market. Competition principles are generally acknowledged as important components of economic growth and development and have played a role in the economic prosperity of developed nations. Application of these principles essentially seeks to create a level playing field for market participants to ply their businesses, thus promoting dynamic entrepreneurship, productivity and innovation. Consumer welfare is assured because of the availability of competition in terms of pricing and quality of goods. The end result is the establishment of stable market conditions where both the producers and consumers thrive.
2. In adopting competition rules, ECOWAS hopes to build a competitive community and reinvigorate its regional integration strategy. Competition policy is seen as a necessary complement to our trade, industrial and investment policies.
A. The objectives of the Supplementary Act
At this juncture, a close look at the provisions of the ECOWAS Supplementary Act which established the regional competition rules is important. These rules are meant to accomplish the following:
i. promote, maintain and encourage competition and enhance economic efficiency in production, trade and commerce at the regional level;
ii. prohibit any anti-competitive business conduct that prevents, restricts or distorts competition at the regional level;
iii. ensure the consumers’ welfare and the protection of their interests and
iv. expand opportunities for domestic enterprises in Member States to participate in world markets.
B. The scope of jurisdiction of the community competition rules
As provided under the Supplementary Act
they apply to:
I. Agreements and concerted practices in restraint of Trade;
ii. Abuse of a dominant position or Monopolization practices e.g. predatory pricing, refusals to deal and discriminatory behavior;
iii. Mergers and acquisitions;
iv. State induced competition distortions; distortions caused by Member States which are likely to influence trade within ECOWAS.
There are agreements and activities which are exempt from the application of competition rules and principles and these include the following:
i. collective bargaining agreements between employers and employees for the purpose of fixing terms and conditions of employment;
ii. agreements and trade practices approved by a regional competition organ of ECOWAS where these trade practices are authorized under this Supplementary Act;
iii. activities expressly exempted by virtue of any treaty or any instrument or agreement in relation thereto or flowing therefrom, so long as the activities are not inconsistent with the purposes of the Supplementary Act;
iv.activities of professional associations designed to develop or enforce professional standards of competence reasonably necessary for the protection of the public; and
v. such other activity that may be declared by the Council of Ministers after consultation with the ECOWAS Competition Authority.
C. Operations of ERCA
ERCA has been established as the central enforcement Organ at the regional level, charged with region wide application and enforcement of competition rules. It is mandated to undertake the following:
Ø keep under review commercial activities in the Community Market with a view to ascertaining practices which may distort the efficient operation of the market conduct or which may adversely affect the economic interests of consumers;
Ø carry out on its own initiative or at the request of private persons or government officials from the Member States or of the Community Court of Justice, such investigations in relation to the conduct of business in the Common Market as will enable it to determine whether any enterprise is engaging in business practices in contravention of the Supplementary Act adopting the Common Competition Rules.
Ø preclude and eliminate anti-competitive practices amounting to an abuse of a dominant market position;
Ø propose for adoption, through the ECOWAS Commission, to the Council of Ministers, the setting and periodic review of the schedule of fines and various levels of compensation to be applied within the framework of this Supplementary Act;
Ø at the request of the executive and judicial authorities of Member States and Community institutions, issue advisory opinions regarding the interpretation and application of the Community Competition Rules;
Ø co-operate with national and regional competition agencies in taking measures necessary to ensure implementation of the obligations arising from this Supplementary Act;
Ø co-operate with and assist any association, intergovernmental organization, or body of persons in developing and promoting the observance of standards of conduct for the purpose of ensuring compliance with the provisions of this Supplementary Act;
Ø make available to persons engaged in business as well as to consumers, general information with respect to their rights and obligations under the Supplementary Act adopting the Community Competition Rules;
Ø undertake studies and publish reports and information regarding matters affecting the interests of consumers in the implementation of the Supplementary Act adopting the Community Competition Rules;
Ø as input into the activity report of the Community, prepare and transmit to the President of the ECOWAS Commission, an interim report and an annual report on the activities of the Authority;
Ø contribute to the training of the staff of national competition structures and provide them with support notably in the management of investigations, creation of a competition-related database, advocacy on competition and consumer protection.
It is important to recall that the mandate for enforcing competition principles and policy in the region is shared between States and ECOWAS. The ECOWAS policy has attempted to make a distinction between circumstances that would attract either regional or national intervention.
Intervention is initiated at the regional level by ERCA when the anti competitive activity or situation directly affect regional trade and investment flows or if the conduct can only be eliminated within the framework of regional cooperation. In other words acts of enterprises and States that have a regional dimension. On the other hand States’ National Competition Commissions are charged with addressing anti competitive acts that are localized.
An important assignment being undertaken within the establishment phase of ERCA is providing a clearer guide that distinguishes regional and national action.
D. The Powers of ERCA
ERCA has the following powers as enshrined under Article 4 of the Supplementary Act A/SA.2/12/08 on the establishment, functions and operation of the ERCA.
Ø ordering the termination of a contract;
Ø prohibiting the conclusion or implementation of a contract;
Ø prohibiting the imposition of terms external to any transaction, the effect of which is to reduce competition;
Ø prohibit discrimination or preferences in price matters and other related aspects, and
Ø requiring the transparent publication of commercial information (prices, scale of rates, general terms of sale, product composition and expiry dates);
In considering applications for authorizations, mergers, acquisitions or business combinations as provided for in Article 7, paragraph 3, of the Supplementary Act adopting the Community Competition Rules, the Authority shall, in particular, take into consideration the following data:
Ø the position on the market of the businesses concerned as well as their economic and financial power;
Ø the structure of all the markets concerned;
Ø the actual or potential competition from enterprises located within or outside the ECOWAS Common market; Henrietta Didigu, acting executive director of ERCA ECOWAS Media Briefing