The Competition Commission (Commission) has fined two companies
active in the mining roof bolts industry for their involvement in
the rigging of tenders and the allocation of customers in
contravention of the Competition Act.
The Commission initiated an investigation into alleged cartel
behaviour in the mining industry pursuant to receiving information
from Murray & Roberts subsidiary, RSC Ekusasa Mining
(Proprietary) Limited (RSC) which admitted, through a corporate
leniency application, its participation in a cartel. The cartel
involved Aveng (Africa) Limited t/a Duraset (Duraset), Dywidag
Systems International (Proprietary) Limited (DSI) and Videx Wire
Products (Proprietary) Limited (Videx).
The Commission's investigation revealed that the cartel may
have existed from the 1990s to 2008. However, the complaint
referral was limited to conduct which occurred between 2004 and
2006. Duraset reached a settlement with the Commission in which it
had to pay an administrative penalty of almost ZAR 22 million.
Accordingly, the matter proceeded against DSI and Videx.
The Commission specifically alleged that the two respondents were
involved in bid rigging in respect of two reverse auction tenders
put out by Anglo Platinum; an agreement to bid very low prices for
a tender from Goldfields in a bid to punish Duraset; and an
agreement to collude and assist RSC to increase its margins at
Anglo Coal.
The respondents, while admitting many of the contraventions,
alleged that the complaint was time-barred in that it was initiated
more than three years since the prohibited practice ceased.
Furthermore, the respondents alleged that they were not involved in
the contravention involving Anglo Coal and that, as a matter of
fairness, this aspect of the Commission's case was brought
against them too late in the Tribunal's proceedings.
The Tribunal found that, in respect of all but the Anglo Coal and
the Anglo Platinum contraventions, the Commission had not
established that the effects of the collusive agreements subsisted
beyond the cut-off date allowed by the Act for initiating
complaints. Regarding the allegation on the Anglo Coal contract,
the Tribunal found that to allow this late submission would have
been procedurally unfair to the respondents.
In respect of the Anglo Platinum contract, the Tribunal found that
the Commission had presented sufficient evidence of a contravention
and accordingly the collusive effect of the respondents conduct in
this regard subsisted beyond the three year prescription period
allowed by the Act.
The Tribunal confirmed the Commission's order and an
administrative penalty of ZAR 1,8 million and almost ZAR 4,8
million was imposed on DSI and Videx respectively for contravening
the Act.
Source
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.