Dodgy vehicles shipping probed
Three Japanese firms fingered
THE Competition Commission has strongly hinted that it was expanding its ongoing probe into price fixing, market division and collusive tendering for the transportation of motor vehicles by sea to and from South Africa to the shipment of other goods.
Anthony Ndzabandzaba, who was part of the commission’s investigation team, confirmed this yesterday at a Competition Tribunal hearing in response to a question about how much the prohibited practices inflated the price of cars to consumers in South Africa.
Ndzabandzaba was reluctant to comment on the impact on the price of cars, indicating it would be a guess, but confirmed that the commission was curious and was paying attention to what was happening in this area.
“Shipping in itself is not only limited (to) the shipment of motor vehicles to and from South Africa, but includes a lot of other goods. The commission, as the investigators, are aware… there were a number of treaties signed by shipping liners to cooperate in many areas,” he said. The hearing was about a settlement agreement entered into between the commission and Chilean-based Compania Sud Americana De Vapores (CSAV) in terms of which it agreed to pay a fine of R8.8 million for a single contravention of the Competition Act related to a tender to transport vehicles for General Motors (GM) from South Korea to South Africa.
A commission investigation has implicated nine international shipping companies in prohibited practices in the transportation of vehicles, equipment and machinery by sea to and from South Africa.
Those implicated include three Japan-based companies in Mitsui OSK Lines, Nippon Yusen Kabushiki Kaisha and Kawasaki Kisen Kaisha, Norwegian based Hoegh Autoliners and Wallenius Wilhelmsen Logistics and Korea-based Eukor Car Carriers.
It is 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; Honda Motor Company; BMW South Africa; Auto Alliance (Thailand); Volvo Construction Equipment; Ford Motor Company of Southern Africa; GM; and Mitsubishi Motor Corporation.
Wallenius Wilhelmsen Logistics previously admitted to 11 instances of engaging in prohibited practices and agreed to pay a fine of R95.69 million.
Nippon Yusen Kabushiki Kaisha admitted to engaging in 14 prohibited practices and agreed to pay a fine of R103.97m.
Ndzabandzaba said yesterday CSAV was perhaps one of the smallest of the implicated companies “but there are still big entities that we think were involved in prohibited practices that we are looking into”.
He said the commission had found that CSAV was involved in three contraventions but was unable to agree on a settlement for two of them and might still refer these two cases to the tribunal for prosecution.
CSAV admitted it agreed with Mitsui OSK Lines that Mitsui would quote a higher price than CSAV to ensure that CSAV maintained its 75 percent share of GM’s vehicle shipment business from South Korea to South Africa and Mitsui its 25 percent share of this business. CSAV was awarded part of the contract in line with its collusive arrangement with Mitsui but Mitsui lost its 25 percent share to CIDO, a company that was not party to the collusive arrangement.
Andreas Wessels, the chairman of the tribunal panel hearing the case, confirmed the settlement agreement, but said the tribunal was also curious to know what impact these prohibited practices had on car prices in South Africa when the commission eventually refers further matters to the tribunal.