What will be the fate of Competition Ordinance 2007?

KARACHI - The failure of government in approving the law draft of the Competition Bill from the Parliament has not only put a big question mark on the validity of Competition Ordinance 2007, but also on the fate of actions, taken by Competition Commission of Pakistan under the mandate of the said ordinance against the monopolistic practices and the anti-competitive behaviour of the different sectors of economy.
As the expiring date of the said ordinance is approaching soon, a heated debate has been started among different economic circles about the probable status of the Competition Ordinance 2007. They are deliberating that what will be happened after 28 November 2009 when the ordinance will be ineffective as per the directives of Supreme Court on account of not passing this law from the parliament within a given time framework.
It is pertinent to mention here that the Supreme Court, in its judgment passed on 31 July 2009, declared that 36 Ordinances promulgated prior to 15 December 2007, including the Competition Ordinance, 2007, required the approval of the parliament within a period of 120 days.
At the timing of filing this report, it is yet to bee seen how the government, with regard to the judgment of Supreme Court, will tackle this issue whether it will leave the ordinance to be lapsed or with come up to re-promulgate it.
Now, all eyes are looking at President Asif Ali Zardari, who has power to decide the future of this ordinance. Because according to law, in such cases he has authority to re-promulgate or restore such ordinances under the article 89, which says if the President goes to re-promulgate it then the said bill will be needed to approve from the parliament within the next 120 days to become it law.
It is hoped that he would give a prudential verdict in this regard keeping in view the neutrality over the transparent and accountable functioning of the Competition Commission.
One should not be astonished to see that why some of the members of National Assembly were reluctant to bring this issue in the house with an intention to not give this bill the status of law from the national legislature.
The important point is that why the Ministry of Parliamentary Affairs could not submit the said bill in the parliament to debate despite the fact that it had been unanimously approved by the National Committee Standing Committee on Finance on November 12, 2009. Even though, on the request of a member of National Assembly, affiliated with PML (Q) Speaker NA Dr. Fahmida Mirza had been put forward this bill to NA sub-committee in order to make some modifications within the existing draft of the bill.
Contrary to this, Chairman CCP Khalid Mirza had reportedly opposed the idea of amending the said bill as penalties under the existing law were enough for smooth implementation of the law.
He had also submitted his reservations over the proposed amendments to the Ministry of Finance in this regard. He had further said that the parliament right of legislators to present any bill into the House; however the present Competition Bill should be given two to three years, before any new amendment can be introduced into the Bill. The good track record of the CCP in imposing the penalties against the anti-competitive businesses and anti-consumer behaviour of the cartel lobby is the main source of concern for the powerful forces, working for the interests of civil, military and political establishments.
It is worth noting that currently, CCP is working on cases dealing with sugar, fertilizer, and LPG and against the undertakings such as the steel mill, and PIA.
This issue has been highly politicisied by treasury and opposition benches for a number of reasons as the politicisation of sensitive and significant nature of economic and financial issues is not a new phenomenon in Pakistan. It has been practicing in the country for the last 62 years regardless of any type of regime in power either authoritarian or democratic. In our society, such issues which directly linked to creating good economic governance and to curb the corruption in the public and private institutions always become political.
Our governments at all times failed to determine their priorities and agendas about basic economic issues. They even made confused economic objectives with political interest too. Our policy makers without doing proper homework and planning and not keeping in view the ground realities of national economy, adapted different economic systems and strategies haphazardly in different times.
In developed societies good economic policies are generally not affected by changing of governments. They usually continue in the best interest of the people and state as due to this approach many important developmental projects and scheme had been delayed and deadlocked in the past for the unknown period without giving any result.
Presently, our economy is standing at the cross roads of globalization and corruption. In the free and market economy, the health and viability of any economy is measured by its level of competitiveness. It is an important index and market indicator whereby potential investors do evaluate the working of economy in line with the best international standards.
The Competition Commission of Pakistan was established on 13 November, 2007 under the Competition Ordinance, 2007 with the appointment of five members including the Chairman, to maintain and enhance competition in the economy and to deal with all matters incidental to and connected with competition.
So far the CCP has taken actions against companies abusing their dominant position or undertaking deceptive marketing and fixing prices etc. It has moved against five cartels including cement, banks, chartered accountants, stock exchanges, and newspapers.
It is one of its first initiatives; the Commission challenged the Pakistan Banks Association (PBA) on its decision to collectively decide rates of profit and other terms and conditions regarding deposit accounts.
The final decision of the Commission was made on 10 April 2008. It argued that PBA had acted beyond its mandate and had been instrumental in the formation of a cartel. As a result, it had deprived small accounts- holders of the benefits they were otherwise earning on their savings accounts. The PBA and the culpable banks were ordered to discontinue the practice, not to repeat it and to pay considerable fines. The PBA was fined Rs30 million, and the seven banks involved were fined Rs25m each.
The commission appealed against the High Courts decision and on 15 September 2008 the Supreme Court allowed the commission to proceed against the banks.