INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

(A BRIEF ON EXPERIENCE OF THE COMESA REGION ) George K. Lipimile

Director & Chief Executive OfficerCOMESA Competition Commission.

glipimile@comesa.int

What is COMESA ? The Common Market for Eastern and Southern Africa

- promoting regional economic integration through trade and investment.With its 19 member states, population of 430 million (2008) and an annual import bill of around US$ 152 billion (2008) and an export bill of over US$ 157 billion (2008), COMESA forms a major market place for both internal and external trading. Its area is impressive on the map of the African Continent covering a geographical area of 12 Million (sq km).

BETWEEN COMPETITION LAW AND SECTOR REGULATION

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

COMESA Members States: Burundi, Comoros, Djibouti, DR Congo, Egypt*,

Ethiopia*, Eretria, Libya, Kenya*, Madagascar*, Malawi*, Mauritius*, Rwanda, Swaziland*, Seychelles*, Sudan*, Uganda, Zambia*, Zimbabwe*.

*Member States with Competition Laws.• 8 COMESA Countries are part of SADC and 4 part of

EAC.• A tripartite Taskforce has been set-up to harmonize

the programmes and the overall regional integration process for the three Regional Economic Communities.

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

• COMESA Competition Regulations and Rules : Having regard to Article 55 of the COMESA

Treaty.The Regulations were ratified by the Council of

Ministers on 17th December, 2004. They are now law in all Member States.

The first Commissioners were appointed in December 2007, (Mr. Peter Njoronge elected as first Chairman ).

Government of the Republic of Malawi has offered to host the Commission in Lilongwe.

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

Application of the COMESA Regulations:Apply to all economic activities whether

conducted by private or public persons … having effect, within the common market;

Apply to conduct which have an appreciable effect on trade between member states and which restrict competition in the common market.

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

• Superiority of the COMESA Competition Regulations -: The Regulations shall enjoy primacy over national

competition law. The common market legal system shall have precedence over national law and a Member State may not unilaterally nullify a provision of the regulation by its own subsequent domestic legislative measure.

In accordance with Article 10(2) of the Treaty, the Regulations shall be binding on all the Member states in their entirety.

it is envisaged that in future all the national competition laws of the COMESA member states shall have their national competition laws modelled on the COMESA regional competition Regulations.

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

Importance of Regulated Sectors - : Cover -: Banking, Energy, Telecommunication, Water

and Sanitation, Insurance, etc Traditionary they occupy dominant position (natural

monopolies) and regulated by government department or incumbent operator hence, subject of liberasation and privatization,

Very sensitive economic sectors e.g. provider of services, employment, contributor to GDP.

Very important during EPAs Negotiations (Services). Too many dedicated seminars on the issue ( e.g SA-

Banking Sector)

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

Approach by Member States : Sector regulated Activities - : No exemptions, but follow similar approach -: 1. The economic activities of an enterprise in a sector where a

regulator exercises statutory powers is subject to competition. 2. The Competition Authority shall, for the purpose of coordinating

and harmonizing matters relating to competition in other sectors of the economy, enter into a memorandum of understanding with any regulator in that sector, in a the prescribed manner and form.

3’ The Competition Authority may, where it determines that a regulated sector is unduly restrictive of competition, conduct a market inquiry into the sector.

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULAT

Memorandum of Understanding.Negotiated between the Competition Authority

and each Sector Regulator,There are provided for in the statute hence, it has

legal effect,Aims to reduce regulatory uncertainty, forum

shopping, avoid duplication, and conflict,Attempts to clearly state the responsibilities and

functions of each institution involved (Division of labour),concurrent jurisdiction,

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

• Member states with or in the process of having an MOU - :

Malawi, Zambia, Zimbabwe, Kenya, Swaziland, Mauritius, and Seychelles.

OTHERS : South Africa, Namibia and Botswana.

INTERFACE BETWEEN COMPETITION LAW AND SECTOR REGULATION

Position at Regional Level - :Article 3 of the Regulations -: Scope of Application “

These Regulations shall have primary jurisdiction over an industry or a sector of an industry which is subject to the jurisdiction of a separate regulatory entity (whether domestic or regional ) if the latter regulates conduct covered by Part 3 and 4 of these Regulations*. This Article does not apply to conduct expressly exempted by national legislation.

*Anti-competitive Business Practices and Conduct, and Mergers and Acquisitions.

COMPETITION LAW AND POLICY

THANK YOU.

COMMENTS TO - :

George K Lipimile. Director and Chief Executive Officer. COMESA Competition Commission. Lilongwe, Malawi. glipimile@comesa.int