March 15, 2007	Thursday	Safar 25, 1428

ISLAMABAD, March 14: The ministries of finance, law and justice have formally cleared the draft law to establish the Competition Commission, which will now be approved by the federal cabinet in its next meeting, a senior government official told Dawn on Wednesday.

"Now you can say that various kinds of departmental hurdles have eventually been removed to convert the much-awaited Monopoly Control Authority (MCA) into a competition body for broadening its scope to effectively deal with cartelisation, merger of companies and restrictive trade practices," he further said.

The World Bank has been expressing its concern over the delay in converting MCA into a competition body aimed at creating a competitive environment and regulating business activities in the country.

The Bank is said to have asked the government to firm up an "action plan" to be supported by the donors for the drastic restructuring of the MCA and thus having a Competition Commission. The Bank regretted that although Prime Minister Shaukat Aziz had approved, in principle, the setting of Competition Commission it continued to be delayed for the last many months.

The World Bank mission, sources said, will visit later this month or early April to gauge the work so far done for having a Competition Commission. The Bank and the Department for International Development (DFID) of England are providing necessary financial support for the restructuring of MCA and its conversion into a commission.

When contacted Chairman of MCA and the head of the proposed Competition Commission Mr Khalid Mirza said as soon as the cabinet approved the new organisation, he would start implementing the relevant rules for ensuring better business practices.

"In fact I am already working as to what kind of an organisational design for the commission is required," he said adding that there will be a broader "scope of action" to put in place a healthy and competitive environment.

Responding to a question, he said he would look into illegal cartels and various restrictive trade practices through public advocacy and hearings.

Mr Mirza said he was watching all businesses and was constantly in touch with the market. "My job will be to ensure the growth of the industry but it will have to conduct itself in a non-manipulative manner," he said.

He said while he wanted the business to grow, he would very much like to protect the public interest. The new proposed law, he said, would protect obligations and that the capacity of the businesses needed to be strengthened.

To a question, he said that after the approval of the cabinet, it depended on the prime minister as to how would he want the setting of the Competition Commission. If the issue was sent to the Parliament then there will be legislation over the issue otherwise, the prime minister could also get it done through a presidential ordinance, he said.

He said he had got a study conducted to ensure prudent business practices and that he has already cleared pendency in the MCA."But we are keeping a watch on collusive approaches and we would apply the law to deal with unscrupulous people," Mr Mirza said. He said the working of MCA had been streamlined to some major extent. He said his emphasis would be on integrity and anybody who lies during proceedings in the MCA, he is taken to task.

The World Bank has been urging Pakistan to track down illicit cartels to regulate businesses in the absence of which it would be difficult to attract sizable local and foreign investment in the country.

"We understand that proven or suspected cartels have existed and many still exist in cement, sugar, ghee, autos, fertiliser and perhaps other industries which need to be investigated," said a World Bank funded report.

The report - Establishing a Functioning Competition Commission - said that cartels were by a long way the "chief impediment" to competition in Pakistan and that there is a need to conduct a thorough inquiry as what types of anti-competitive conduct are most prevalent in the country.

"We understand that the MCA has investigated 103 cases of monopoly, including cars, batteries, tobacco, electrical, gases and chemicals. Of course, this figure by itself provides no indication of abuse of monopoly position. At the very least, however, it suggests a wide field for inquiry", the report concluded.

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