December 02, 2007	Sunday	Ziqa’ad 21, 1428

ISLAMABAD, Dec 1: The newly-established Competition Commission has been authorised to take action against cartels with a view to discouraging manipulation in business and eliminating restricted trade practices, disclosed the commission’s chairman, Khalid Mirza.

“The commission has been provided with a law to act autonomously and judiciously and we have decided to get tough against cartels, be it in sugar, cement, wheat (industry) etc,” he told Dawn on Saturday.

However, he made it clear that while the commission would play the role of a true regulator to eliminate illegal cartels and manipulation, its fundamental objective was to facilitate businesses and entrepreneurships.

Asked about the recent removal of export duty and increase of import duty on sugar, Mr Mirza said that although tariffs and prices were not his direct area of intervention, the commission would keep an eye on them to protect consumer interests.

He said a breeding ground existed for promoting cartel in the sugar industry. Sugar producers and manufacturers, he pointed out, had been involved in ‘cartelisation’. “The commission is watching the situation very carefully.”

He warned that if the industry started reducing production and not releasing sugar in the market, the Commission would intervene to check its prices.

When asked sugar prices did not fall despite sufficient stocks, he said that it was due to overall inflation and factors like increase in electricity prices and other inputs including wages.

Mr Mirza also said that the commission would check the growth of informal sector where more manipulation was found. “We will ensure that market forces are working properly and whenever we receive complaints we will intervene,” he said.

He said the formal sector was an organised industry where people largely work under certain laws. But the problem, he added, was in the informal sector as there were no sufficient checks and that the issue needed to be taken seriously.

“New competition laws allow me to take action against the informal sector,” he said, adding that enough tools had been provided to him to stop the formation of cartels.

He said the formation of a cartel was a criminal offence in most of the countries and people could be jailed for up to 25 years with heavy fines.

But in Pakistan and countries like Australia, India, Singapore and New Zealand, cartelisation was considered a civil offence. He said there was a penalty of just Rs100,000 for manipulation of laws. This had now been enhanced to Rs50 million, but the World Bank and many other international agencies still considered it inadequate.