Competition law yet to get off the ground
Tuesday, 2 February 2010
Munima Sultana
Enactment of the competition law, which the government declared to be carried out by January this year, has allegedly been facing strong opposition from certain business groups including multinational companies, as they feel worried about losing their control over the market.
Law analysts apprehend that some quarters who are edgy about losing their monopoly of business over the market might be trying to influence the government not to enact the law. The initiative has been left aside since the draft was finalised in September.
The concerns of the observers have intensified in view of the fact that the first draft competition law also did not see light due to the same reason after it was finalised in 1994. They have said although the Commerce Minister on different occasions spoke of the government's sincere commitment to enact the competition law soon to establish a healthy market free of anti-competitive practices, the law has yet to see light.
The law observers have claimed that the government is now trying to divert its focus to the competition policy after working this far to finalise the competition law.
The present government since coming to the power has declared its commitment to enact the law as it also faced tremendous pressure of price syndication involving essentials.
Commerce minister Faruk Khan while inaugurating the first ever course on Competition Policy and Law at the United International University (UIU) on October 31 announced of placing the draft law to the Cabinet Committee on Economic Affairs in November last to have enacted it by January.
However, the officials concerned of the commerce ministry could not explain the latest status of the law, but confirmed that the law has not been placed before the cabinet committee to get approval in principle.
Experts have said the draft competition law has tried to cover all sides taking opinions of all stakeholders to curb the ill practices of cartels and anti-competitive quarters in the market, and only some vested quarters concerned including those from the telecommunication and energy sectors might not feel safe with the law.
"Mostly big companies including the multinational ones which have domination over the market might feel unsafe with the law," said Monjur Ahmed, one the members of the competition law drafting committee.
There is a misconception among many business people about the law for which, he said, they might have been influencing the government to delay the process of enactment of the law.
Mr Monjur, also the chairman of the FBCCI's regional trade agreements standing committee, said the law is useful for all businesses and is a must for the hundreds of thousands of small and medium enterprises (SMEs) of the country which are unprotected under the existing law.
Law experts told the FE that the competition law has faced obstruction initially from the business groups throughout the world.
When contacted, top officials at the telecommunications and energy sectors have refrained from commenting on the law.
The ministry officials said the draft competition law was finalised in September last year after two years of work with all stakeholders including the think tanks, international experts and chambers at different stages. The International Finance Corporation, an arm of the World Bank Group, also supported the government in formulating the law by providing international experts.
R Shyam Khemani, IFC-WB group adviser, said the country's draft competiton law has been proved one of the best among those in the countries, where they were enacted.
Also the adviser of 34 countries, Dr Khemani said the success of the competition law depends on the performance of the competition commission and institutional capacity to identify and deal with cases of anti-competitive practices.
Enactment of the competition law, which the government declared to be carried out by January this year, has allegedly been facing strong opposition from certain business groups including multinational companies, as they feel worried about losing their control over the market.
Law analysts apprehend that some quarters who are edgy about losing their monopoly of business over the market might be trying to influence the government not to enact the law. The initiative has been left aside since the draft was finalised in September.
The concerns of the observers have intensified in view of the fact that the first draft competition law also did not see light due to the same reason after it was finalised in 1994. They have said although the Commerce Minister on different occasions spoke of the government's sincere commitment to enact the competition law soon to establish a healthy market free of anti-competitive practices, the law has yet to see light.
The law observers have claimed that the government is now trying to divert its focus to the competition policy after working this far to finalise the competition law.
The present government since coming to the power has declared its commitment to enact the law as it also faced tremendous pressure of price syndication involving essentials.
Commerce minister Faruk Khan while inaugurating the first ever course on Competition Policy and Law at the United International University (UIU) on October 31 announced of placing the draft law to the Cabinet Committee on Economic Affairs in November last to have enacted it by January.
However, the officials concerned of the commerce ministry could not explain the latest status of the law, but confirmed that the law has not been placed before the cabinet committee to get approval in principle.
Experts have said the draft competition law has tried to cover all sides taking opinions of all stakeholders to curb the ill practices of cartels and anti-competitive quarters in the market, and only some vested quarters concerned including those from the telecommunication and energy sectors might not feel safe with the law.
"Mostly big companies including the multinational ones which have domination over the market might feel unsafe with the law," said Monjur Ahmed, one the members of the competition law drafting committee.
There is a misconception among many business people about the law for which, he said, they might have been influencing the government to delay the process of enactment of the law.
Mr Monjur, also the chairman of the FBCCI's regional trade agreements standing committee, said the law is useful for all businesses and is a must for the hundreds of thousands of small and medium enterprises (SMEs) of the country which are unprotected under the existing law.
Law experts told the FE that the competition law has faced obstruction initially from the business groups throughout the world.
When contacted, top officials at the telecommunications and energy sectors have refrained from commenting on the law.
The ministry officials said the draft competition law was finalised in September last year after two years of work with all stakeholders including the think tanks, international experts and chambers at different stages. The International Finance Corporation, an arm of the World Bank Group, also supported the government in formulating the law by providing international experts.
R Shyam Khemani, IFC-WB group adviser, said the country's draft competiton law has been proved one of the best among those in the countries, where they were enacted.
Also the adviser of 34 countries, Dr Khemani said the success of the competition law depends on the performance of the competition commission and institutional capacity to identify and deal with cases of anti-competitive practices.