THE legal existence of the Competition Commission of Pakistan hangs by a thread following the failure of the National Assembly to approve the Competition Ordinance, 2007 before its expiry towards the end of the month. It falls now to President Zardari to rescue the commission by re-promulgating the 2007 Ordinance and we urge the president to do so.

The country needs institutions such as the competition commission to rein in private commercial interests and it would be a travesty if the commission were to be consigned to the scrap heap or its powers watered down. The legal attacks raised by latter-day constitutionalists seeking to kill off the commission have been two-pronged: one, it has been argued that competition issues are a provincial matter and should not be legislated by the centre; and two, that an ordinance cannot be re-promulgated after its constitutional life of 120 days has elapsed.

The superior judiciary will ultimately decide the provincial, federal issue, but it must be noted that the issue has only been raised recently, once the commission’s activism had ruffled many a powerful feather in the private sector. But such ‘activism’ is desperately needed in a country where cartelisation and anti-competitive practices have long impacted adversely on the interests of smaller businesses and the public generally.

Secondly, while the courts have indeed generally held that an ordinance cannot be re-promulgated by the president, the commission’s case falls within the exceptions that can be tolerated. It is only because of the tardiness of the leadership of the National Assembly that the competition bill has not been approved. As such, an extension of the Competition Ordinance will allow the commission to continue operating legally while parliament decides its fate.

Consider what the competition commission has done to date with a staff of just three dozen individuals: from banks to cement producers and the sugar industry to the liquefied petroleum gas business, the commission has probed into and taken action against businesses for forming cartels, fixing prices and abusing their dominant positions. If anything, the commission’s powers to impose fines are too limited and its actions too timorous on occasion. The maximum penalty the commission can impose on a business is 15 per cent of the latest year’s turnover, no matter how many years the business may have been undermining competition in its sector. And against the cement cartel, the commission only imposed half the maximum penalty despite clear evidence of cartelisation for years. However, the present commission is unequivocally better than no commission – the president must do the right thing and keep it alive.