Cosatu tells MPs bill will aid investment

Trade union federation Cosatu has argued that the contentious Competition Amendment Bill will actually attract investment, contrary to what some opposition parties and local businesses have suggested.

The bill is aimed at extending the mandate of the competition authorities and the executive to tackle high levels of economic concentration. It is also meant to tackle the limited transformation in the economy and the abuse of market power by dominant firms.

“Much of the attacks by local business interests on the bill claim that it will deter investment. Yet, in reality, foreign investors and institutions, including the World Bank, complain about the collusive practices and concentration in the economy and identify these as the real reasons for the lack of investment,” Cosatu said in a submission to the select committee on business and economic development in the National Council of Provinces.

The committee is conducting public hearings on the bill. In October, the National Assembly adopted the bill, despite objections by the opposition parties.

The opposition objected to various proposals, particularly the minister’s regulatory role, which they said would give too much power to the economic development minister.

Analysts have raised concern about the clause on “intervention in merger proceedings involving a foreign acquiring firm”, saying this would give the government the right to block foreign investment.

In its submission, Cosatu called on the government to act more decisively to deal with collusion and concentration as these hamper development and contribute to inequality.

“Economic exclusion and concentration contribute to the record-breaking levels of inequality in SA,” the federation said. The bill will undo the concentration in the economy by the “old, white boys club, who are keeping emerging black players out”, it said.