GUIDELINES ON COMPETITION POLICY

Issued by: Office of the Deputy President

STATEMENT BY THE OFFICE OF THE DEPUTY PRESIDENT ON COMPETITION POLICY

The Government welcomes the opportunity provided by the release of the draft "Guidelines on Competition Policy" to reiterate our aim of aligning economic policy.

The Guidelines are really very much about bringing aspects of macroeconomic (national-level) balance and microeconomic (firm- and industry-level) efficiency into a coherent strategy.

Thus the Guidelines succeed in integrating competition policy "with our overall national policy objectives and the particular objectives of our industrial and macro-economic policies." The Guidelines are GEAR-friendly, and are grounded in the RDP.

The core Competition Policy strategies

Among the key strategies to which the Government now must give immediate attention to are:

• the establishment of a competent, professional and powerful competition policy authority;
• a reformed and much strengthened monopolies law directed at anti-competitive conduct;
• stronger divestiture measures where markets are stifled by monopolies or oligopolies;
• a review of existing securities regulations and institutions with principal oversight of corporate structure;
• a review of current practices and regulations in the area of corporate governance;
• a review of the Harmful Business Practices Act which bear principal responsibility for protecting consumer interests; and
• a review of the competitive interface between public corporations and the private sector.

There will be many opportunities through this process to increase South Africa's international and domestic competitiveness, as well as our overall development in socio-economic terms.

More competition: Who Wins?

There are challenges to our larger firms and conglomerates to look closely at areas where anti-competitive practices may prevail, even subconsciously.

But there are opportunities for these same large firms, as we reform state institutions with which they should now have an opportunity to compete. And all firms in South Africa can benefit from our renewed commitment to make our goods and service internationally competitive, for this will lower the entire cost structure of production.

Emerging enterprises that complain of barriers to entry and other anti-competitive practices will have a new voice through the new policy.

Consumers, communities and our unemployed citizens will benefit from greater competition, particularly in areas associated with basic needs and also in lig our consumer protection laws.

So too will labour benefit, in the event unjustified mergers are proposed that would drastically cut employment, and that the competition authority can prevent.

The steps we take towards codifying our new Competition Policy Guidelines into law begin this week with debate in Nedlac. Government wishes our social partners strength and solidarity as we move forward to consensus in this very important area of economic policy.