K Line to pay R99m fine for Toyota shipments price fixing
JAPANESE car carrier company Kawasaki Kisen Kaisha (K Line) has agreed to pay a fine of R98.9 million for price fixing, market division and tender collusion related to the shipment of Toyota vehicles from South Africa.
The vehicles were for export to Europe, North America, the Mediterranean coast and the Caribbean islands via Europe, West Africa, East Africa and Latin America.
Sipho Ngwema, the head of communications at the commission, said yesterday although the commission charged K Line with 15 separate instances of contraventions of the Competition Act, the company had admitted to eight contraventions.
K Line’s settlement agreement with the commission still has to be confirmed by the Competition Tribunal.
Ngwema said the commission’s investigation, initiated in September 2012, found that from at least 2002 until 2013 K Line and two other Japanese-based companies, Mitsui OSK Lines (MOL) and Nippon Yusen Kabushiki Kaisha (NYK), and Norwegian-based Wallenius Wilhelmsen Logistics (WWL) colluded on a tender issued by Toyota South Africa Motors (Tsam) to transport Toyota vehicles from South Africa abroad by sea.
Ngwema said the investigation revealed that K Line, MOL, NYK and WWL agreed on the number of vessels they would operate on the South Africa to Europe routes at agreed intervals or frequencies and these companies further agreed on the freight rates they would charge Tsam for the shipment of its vehicles.
NYK and WWL in 2015 admitted to colluding on this tender and settled with the commission. NYK paid a fine of R103.97 million and WWL a fine of R95.69m.
MOL, another Japanese company, was not fined, as it was first to approach the commission and co-operated with its investigation.
Anthony Ndzabandzaba, who was part of the commission’s investigation team, told a tribunal hearing in 2015 that nine international shipping companies had been implicated in prohibited practices in the transportation of vehicles, equipment and machinery by sea to and from South Africa.
Apart from MOL, NYK and WWL, other implicated companies included Norwegian based Hoegh Autoliners and Korea-based Eukor Car Carriers.
Fix prices It was alleged these companies agreed to fix prices, divide markets and collude on tenders issued by a number of companies, including Toyota Motor Corporation and Toyota South Africa Motors; Volkswagen and Volkswagen South Africa; Nissan Motor Corporation through its Renault-Nissan Purchasing Organisation; Daihatsu Motor Company; Honda Motor Company; BMW South Africa; Auto Alliance (Thailand); Volvo Construction Equipment; Ford Motor Company of Southern Africa; GM; and Mitsubishi Motor Corporation.
Ndzabandzaba was speaking at a hearing about a settlement agreement entered into between the commission and Chilean-based Compania Sud Americana De Vapores in terms of which it agreed to pay a fine of R8.8m for a single contravention of the Competition Act related to a tender to transport vehicles for GM from South Korea to South Africa.
Business Report reported in March this year that premium car manufacturer BMW was pursuing damages claims in South Africa against international car-shipping companies, including MOL and K Line Shipping South Africa, the local subsidiary of Kawasaki Kisen Kaisha (KL), for anti-competitive practices.
These claims stemmed from collusive tendering, price fixing and market division in the roll-on/ roll-off in the vehicle-shipping industry, including to and from South Africa.