Issued by: Department of Trade and Industry
27 November 1997
The Minister of Trade and Industry, Mr Alec Erwin, today presented the National Economic Development and Labour Council (Nedlac) with the Competition Policy guidelines.
Minister Erwin announced that the new policy would benefit from a three-month period of debate, consultation and amendment within the Council's Trade and Industry Chamber. Then legislation will be tabled, with the expectation that a new Monopolies Law will be in place before the end of 1998.
He said that the new policy document has drawn a variety of macro-economic and micro-economics policy positions into a working agenda towards new legislation. The Cabinet decided to adopt this process rather than establish a Commission so as to enable consultation with Nedlac and other parties, and to streamline the process.
The document defines "public interest" in two broad aims: increasing South Africa's competitiveness, and enhancing its developmental strategies.
The policy document will lay the basis in the economy that will optimise production and distribution efficiencies - including appropriate production processes and technological innovation - through commercial interactions unhindered by anti-competitive conduct.
This is important for South Africa because international competitors complain of uncompetitive local markets with artificial barriers to entry. South Africa's regional neighbours demand fair trade and investment relations, and economic distortions caused by high levels of concentration prevent South Africa from being a world-class exporter in many fields.
The competition policy will address socio-economic backlogs by ensuring access to economic activity by those previously excluded, whether consumers or emerging entrepreneurs. Similarly, labour concerns about job losses due to competition and to mergers and acquisitions are important to build into the policy process.
Furthermore, South African consumers have a constitutional right to be informed about the full spectrum of costs and benefits of goods and services under conditions of fair and open competition.
The Competition Policy Guidelines presented today make a variety of recommendations for improving legislation and enforcement. Both anti-competitive behaviour and the broad structure of industries including ownership patterns, will come under the spotlight.
Where artificial, non-economic concentrations of wealth and power exist - and so not serve the public interest - these will be addressed forthrightly.
Yet the policy is not aimed at the absolute size of enterprises, or the prohibition of mergers and acquisitions in concentrated industries, or enforced unbundling, or the existence per se of monopolies. These will be judged on a case-by-case basis, so as to improve the position of South Africa as a whole and the economic lives of its people.
Issued by the Directorate: Communications - Department of Trade and Industry. Enquiries: Themba Rubushe - Cell: 082 773 6913