Cement case still unsettled
Delayed by legal processes
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