THE country boasts of a large number of apparently disparate laws that cover various aspects of consumer protection.
These laws, however, have not been properly enforced. While much of the blame can be attributed to the executive for its ineffectiveness, the judiciary also needs to review its performance.
In Pakistan as well as in many other jurisdictions, the primary protection of the consumer is derived from competition, or ‘anti-trust’ legislation. One of the key issues is what else can be done to strengthen the judiciary’s role in this respect.
‘Consumer’ does not simply mean the individual or lay consumer at the retail level. Each business house is not only a producer or a seller of goods and services, but also a buyer and consumer of goods and services. Consumers are up and down the supply chain! The competition law makes no exceptions and simply seeks to protect all consumers from anti-competitive behaviour.
Clearly defined, ‘consumer protection’ is not ‘consumer welfare,’ which is a broader, more holistic concept. Of course, consumer protection is a significant element of consumer welfare.
The competition law ordinance, promulgated first in October 2007, and then re-promulgated twice before its permanent, parliamentary enactment in October 2010, is a veritable ‘Magna Carta’ for protecting the consumer from exploitation. In a holistic fashion, this law sets out the principles and norms of sound competitive behaviour as well as the manner in which these norms are to be enforced.
The law provides for its enforcement by the Competition Commission of Pakistan (CCP), which is conceived to be a quasi-judicial, quasi-regulatory law enforcement agency.
Appeals from decisions of the Commission go to the Competition Appellate Tribunal, a court headed by a retired Supreme Court judge, and appeals from the Tribunal go to the Supreme Court.
Incidentally, for the due and necessary exercise of its powers, CCP is deemed to be a civil court, to have the same powers as are vested in a civil court, and its proceedings are deemed to be judicial proceedings. The Commission is thus – at the periphery, at least –very much a part of the judicial organ of the state.
In its initial years, the Commission moved decisively against cartelisation in various sectors, as well as collusive tendering, abuse of dominance, unacceptable concentrations, and deceptive marketing practices. The parties affected included several banks, cement companies, LPG companies, sugar companies, the largest refinery, the steel mill, power companies, all three stock exchanges, cellular companies, jute manufacturing units, a leading business school, a government sponsored trust, several leading newspapers, a professional association, PIA, port dredging companies, TCP, and two fertiliser companies held by an Army trust.
At the same time, CCP has to ensure that its decisions are well grounded in law, that the facts on the basis of which its decisions rest are substantially correct, that it fully takes into account commercial and economic realities, and that it applies the competition law in a just and reasonable manner in the context of our peculiar circumstances and societal ethos.
However, it is a matter of concern that a few recent decisions of the Commission do not appear to be entirely in consonance with these principles. It is also a matter of concern that since its inception, nearly all the CCP’s decisions have been challenged in the high courts by way of writ – stay orders have been issued, but cases have yet to be heard and decided! Who knows when this will happen!
Unfortunately, the Competition Appellate Tribunal, set up as envisaged under the competition law, was operational for a very brief period, and is again no longer functional – both the chairman and one of its members have vacated their positions, and now only one member is left.
Operating under the administrative aegis of the ministry of law, the situation of the tribunal is really quite pathetic: it is housed in rather unsuitable and uninhabitable premises; it lacks proper staffing; it has no offices for the members, no court room, no library, no computers, no internet connection, no linkage to any electronic law library; and the budgetary allocation and resources available to it are woefully inadequate – tribunal members have not even been paid their salaries.
Under these circumstances, the tribunal just cannot function. It is quite obvious that the ministry of law is not serious about the Competition Appellate Tribunal and the important role it is required to play under the law.
There are clearly two issues: firstly, there is a dire need to resolve general governance issues that impinge upon the effectiveness of the courts of law, i.e. the entire area of stay orders, adjournments, selection of cases to be heard etc. Secondly, there is a need to take all the steps necessary to achieve a duly functional and efficacious Competition Appellate Tribunal.
Appeals from the decisions of the Tribunal go to the Supreme Court, and it seems to me to be fit and proper for the Tribunal to be placed under the administrative control of the Supreme Court rather than the ministry of law. This should go a long way to ensuring the enforcement of the competition law in a fair and just manner, so that the productive efficiency of the economy is enhanced and the consumer is protected from anti-competitive behaviour.
While remaining fully within the ambit of the law – in fact, through the due application of the law in letter and spirit – the CCP, the Competition Appellate Tribunal, and the courts have a duty to ensure that the market mechanism does not malfunction.
A free and competitive market is an indispensable tool for giving our economy the best possible chance of providing a level playing field to all stakeholders, which is probably the best way to afford protection to the interests of consumers at all levels in the supply chain.
Uninformed forays into the area of price fixing, as has been attempted on occasion by our courts, on the misguided notion of providing relief to retail consumers, has resulted in distorting the market, disturbing the price discovery mechanism, rampant commodity shortages and acute distress for the consumer. This is often the high cost of arbitrarily fixing a low price.
The author is a former chairman of the Competition Commission of Pakistan