Ce­ment case still un­set­tled

De­layed by le­gal pro­cesses

The Star Early Edition - - COMPANIES - Roy Cokayne

THE PROSE­CU­TION of KwaZulu-Natal-based ce­ment pro­ducer Natal Port­land Ce­ment (NPC) Cim­por by the Com­pe­ti­tion Tri­bunal for price fix­ing and mar­ket di­vi­sion con­tin­ues to drag on.

The Com­pe­ti­tion Com­mis­sion in Fe­bru­ary 2015 re­ferred the case against NPC to the tri­bunal and in­di­cated it would be seek­ing a tri­bunal or­der that NPC con­tra­vened the Com­pe­ti­tion Act and im­posed the max­i­mum penalty of 10 per­cent of NPC’s an­nual turnover for these con­tra­ven­tions. This after NPC failed to reach a set­tle­ment with the com­mis­sion.

A set­tle­ment agree­ment with La­farge in terms of which it agreed to pay a R148.7m fine was con­firmed by the tri­bunal in March 2012.

This fol­lowed the tri­bunal in Novem­ber 2011 con­firm­ing a set­tle­ment agree­ment be­tween the com­mis­sion and AfriSam in terms of which AfriSam agreed to pay a R128.8m fine.

These set­tle­ments were agreed after the com­mis­sion had ini­ti­ated an in­ves­ti­ga­tion into anti-com­pet­i­tive prac­tices in the ce­ment in­dus­try in June 2008 and in the same month con­ducted search-and-seizure raids on the premises of the four ma­jor ce­ment pro­duc­ers.

This re­sulted in PPC ap­ply­ing for, and be­ing granted, con­di­tional im­mu­nity. It con­firmed the ex­is­tence of a cartel among the four pro­duc­ers.

Chantelle Benjamin, a spokesper­son for the tri­bunal, said the NPC case had been de­layed by le­gal pro­cesses.

Benjamin said a pre-hear­ing of the case had been set down by the tri­bunal, but had to be can­celled be­cause the com­mis­sion was not ready to pro­ceed.

She said a new date had not yet been set for the pre-trial hear­ing or for the case to be heard. A pre-trial hear­ing is a closed meet­ing of the var­i­ous par­ties in­volved in the prose­cu­tion and de­fence of the case.

The meet­ing fo­cuses on pro­ce­dural is­sues, such as the num­ber of wit­nesses to be called to give ev­i­dence, the num­ber of days re­quired to hear the case and to agree on the date on which the case would be heard based on the avail­abil­ity of the var­i­ous le­gal teams, the tri­bunal panel mem­bers and the pros­e­cu­tor for the com­mis­sion.

At­tempts to ob­tain com­ment from the com­mis­sion were un­suc­cess­ful.

NPC was jointly owned by La­farge, PPC and AfriSam un­til 2002, when it was bought by Cim­por Ci­men­tos de Por­tu­gal.

The com­mis­sion claimed in the set­tle­ment agree­ments reached with La­farge and AfriSam that its in­ves­ti­ga­tion re­vealed NPC at­tended reg­u­lar meet­ings be­tween 1999 and 2002 with rep­re­sen­ta­tives of PPC, AfriSam and La­farge to dis­cuss the im­ple­men­ta­tion of the agree­ment reached be­tween them on price-fix­ing and di­vid­ing up the mar­ket.

From the 1940s, ce­ment pro­duc­ers were granted ex­emp­tions to man­u­fac­ture and dis­trib­ute ce­ment in terms of a law­ful cartel, based on agreed mar­ket shares and the di­vi­sion of South Africa into two re­gions.

This ex­emp­tion was with­drawn in 1995 and pro­duc­ers were given un­til Septem­ber 1996 to ter­mi­nate the cartel.

How­ever, the com­mis­sion’s in­ves­ti­ga­tion re­vealed the ce­ment pro­duc­ers reached an un­der­stand­ing in 1995 to con­tinue to tar­get the main­te­nance of the mar­ket share each pro­ducer had en­joyed un­der the law­ful cartel.

The four com­peti­tors also agreed to ex­change in­for­ma­tion through the au­di­tors ap­pointed by the Ce­ment and Con­crete In­sti­tute (C&CI) and in re­turn re­ceived the ag­gre­gated ta­bles from the C&CI.

The com­mis­sion claims NPC was party to the sev­eral anti-com­pet­i­tive ar­range­ments and meet­ings.

The Com­pe­ti­tion Com­mis­sion in Fe­bru­ary 2015 re­ferred a col­lu­sion and price fix­ing case against Natal Port­land Ce­ment (NPC) Cim­por to the Com­pe­ti­tion Tri­bunal for prose­cu­tion. This fol­lowed set­tle­ment agree­ments be­ing reached with both La­farge and AfriSam. PPC was the cor­po­rate le­niency ap­pli­cant in the case. PHOTO: SIM­PHIWE MBOKAZI

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