Congratulations! The competition law in Pakistan has come back from the dead. After staying 23 days in a limbo, the Competition Ordinance was repromulgated on April 23.
But instead of being a new and improved formula, the reintroduced law misses the whole point: protecting the rights of citizens by ensuring that proceedings of the law run smooth.
The element in question in the reinstated ordinance is the right to appeal penalties. Under the old law, parties could only appeal to the Supreme Court against the penalties awarded by the Competition Commission of Pakistan.
But under the new law, such appeals can be made to the High Courts as well.
In simple words, what this means is that appeals that would normally take a year or so to get processed through the apex court, can now take anywhere from ten to fifteen years to reach a verdict in the high courts. Ten years can totally alter the dynamic of an industry. A cartelization problem today would most likely be a non-issue a decade from now.
When it was first instituted, CCPs revenues were supposed to be drawn from payments made by other regulatory bodies.
However, that hasn happened and the CCP is largely dependant on the administration budget approved by the Ministry of Finance. In the absence of any results owing to pending high court cases, this funding may be slashed substantially in the coming years.
One has to wonder if there is more to it than meets the eye for why the competition ordinance was brought back. According to some sections of the media, the World Bank Group has directed the government in Islamabad that a $500 million loan will not be doled out to Pakistan in the absence of anti-trust laws.
So, it seems that face saving measures have been entertained by the government to secure international funding.
Before the ordinance becomes a law, the bill has to be voted on in the Senate. For some time now, it has been sitting with the Senate Committee for Finance and Revenue. Apparently, the lobbying power of sugar, cement and banking sectors is in full force to dilute the law further.
Lawmakers claim that the penalties awarded by the CCP are much too harsh. However, an examination of international competition laws in these columns some weeks ago clarified that the laws in Pakistan are lenient compared to regional countries.
Pakistan is a signatory to the UN Consumer Rights Protection Act of 1985. Despite this, the competition laws being drafted in the country are tilted in favour of the business barons as opposed to the consumer. Lawmakers supposedly want to take away the power from the CCP to conduct surprise checks. They also want to reduce penalties even further.
Whats most unsettling is that the Consumer Rights Commission of Pakistan, sitting a stones throw away from the halls of power in Islamabad hasn taken any action, outside of token support of the competition law.
"We should have done something about this, but we missed it", one consumer rights official told BR Research. Well then, better late than never.
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