Informant protection needed to break cartelsLawmakers don’t appear keen to leave the door open for guilty-conscience whistle-blowers to spill the beans on their accomplices. Competition commission challenged without Namibia’s market competition watchdog is disadvantaged in its fight against organised cartels by lack of a policy clause allowing members of colluding firms to snitch on their accomplices.Whereas countries like the US and South Africa have reported a number of successes in prosecuting illegally cooperating businesses using ‘leniency policies’, the immunity granted informants by such clause has remained a moot point for Namibian lawmakers.
This was among the issues discussed yesterday at the opening of the Namibia Competition Commission’s (NaCC) annual awareness drive, dubbed Competition Week.
“It seems abhorrent to advocate the protection of squealers or tattletales who themselves are a part of the criminal behaviour,” said Norman Manoim, chairperson of South Africa’s Competition Tribunal since 2009.
“The truth is, no hardcore cartels were caught in South Africa until 2004, when our own leniency clause was introduced,” said Manoim, who was the guest speaker at an NaCC breakfast meeting.
The idea of a leniency clause was endorsed to the rest of the world by the US, and he said he remained convinced of its effectiveness.
“It’s one thing to say cartels are bad. It’s quite another to bring in laws to fight it,” Manoim said.
“One argument against creating laws to fight it is that cartels tend to be unstable, and as companies collude to fix prices, some among them will intentionally undermine that pact to their own benefit – leading to their natural disbanding once this comes out.”
While this could work in theory, he said, reality has shown that instead of disbanding, illegal cartels often simply resort to punishing the mutinous member before reforming themselves to address identified weaknesses.
Citing the case of South Africa’s action against cement industry players around the year 2000, he said an initial investigation by the tribunal failed to turn up any evidence. After the regulator introduced its leniency clause, companies who came out against their peers helped uncover evidence of some N$15 billion to N$20 billion implicated.
In that sense, he said the distrust and suspicions evoked in cartel members around their partners and their chances of being reported, was a key benefit to introducing a leniency clause.
Yesterday’s discussions also dealt with questions of regionally operating cartels in southern Africa, something the NaCC said was enjoying attention between SADC member countries.
Some indications of cartel behaviour in the region, participants heard, had been suggested in particularly the sugar and cement industries.
In that regard, regulators in SADC have signed an agreement under which they share information on market structures and behaviour, and several working groups were started to tackle the task.
The NaCC’s Competition Week continues today with a conference at Arebbusch Lodge.
The minister of industrialisation, trade and SME development, Immanuel Ngatjizeko, is expected to deliver the keynote address at that event.
DENVER ISAACS