CGF BODY OF KNOWLEDGE PUTS SPOTLIGHT ON COMPETITION LAW IN SA

There is no longer any doubt that being a director, and charged with common law and legislative duties, is serious business in South Africa as new laws, regulations and business codes continue to flood the business landscape. Not only are directors being 'squeezed' for better performance with higher delivery expectations recommended through reports such as King III on Corporate Governance, they are also being swamped by more litigious legislation such as the Competition Act of 1998 and the recently approved Competition Amendment Act of 2009.

As the business competitive forces in South Africa increase, directors will need to deploy extraordinary measures to keep themselves informed of the increasing rules for business survival - these being found within the evolving laws, regulations and codes for good corporate governance practices.  Whilst South Africa's economic system is mostly built upon free market principles, directors must now more than ever before be on the alert that their companies are not intentionally or unintentionally partaking in anti-competitive conduct or restrictive business practices such as price fixing or collusive tendering.

The new Competition Amendment Act 2009 now extends its reach of the Competition Act of 1998 to those companies in concentrated markets which coordinate their conduct, without necessarily reaching an agreement to raise price or entry barriers.   If a firm is found guilty of price fixing, market division or collusive tendering, its directors and executives can be held personally liable for the breach of the Act and receive a criminal sentence of up to 10 years imprisonment or a fine of R500 000 or both if they are convicted.

In a marketplace which has become 'free' since our new 1994 democracy, directors may well be cautioned to know that the market and their personal actions may not be as 'free' as they may want to believe. There are a number of new adversaries waiting to pounce on directors who don't adhere to the law and their fiduciary duties, including the behaviour expected of them.  It is hardly surprising then, that we may just find directors taking their positions more seriously as they comprehend the gravity of their duties in terms of laws such as the Competition Act. Failing to do so, will be a certainty for personal disaster.

Proudly South African member and strategic partner, CGF Research Institute (Pty) Ltd, as part of its Corporate Governance Body of Knowledge, has developed a comprehensive, yet concise report - Competition Law in South Africa - which covers all salient aspects of this important topic. 

This report enjoys the peer review of Paul Coetser (Director and Head of Competition: Werksmans incorporating Jan S. de Villiers) and Simie Siwisa (Director: Economic Policy - Business Unity South Africa [BUSA]) and covers:

• History of competition law in South Africa
• The Competition Act, No.89 of 1998

            - Objectives
            - Enforcement Agencies - Competition Commission, Competition Tribunal     and the Competition Appeal Court
            - Prohibited practices, including Restrictive horizontal practices, Restrictive    vertical practices and Abuse of dominance
            - Exemptions
            - Mergers
            - Consequences of non-compliance

• The Competition Amendment Act, No.1 of 2009

      - Criminalisation provisions and the reverse onus
      - Complex monopolies

• Competition law and risk management

For further product related information, kindly contact Terry Booysen, CEO of CGF Research Institute (Pty) Ltd at tbooysen@cgf.co.za

Source: Article courtesy of CGF Research Institute (Pty) Ltd