Lines deny price-fixing collusion

Last week, the SA Competition
Commission (CC) was busy
sinking its fangs into six
container shipping lines based
in SA – including the world’s
three biggest.
On the Wednesday
(September 28), and backed
by warrants from the Western
Cape and Pietermaritzburg
High Courts, its investigators
were digging through the
files at the SA head offices of
the lines in the two provinces
– and seizing documents
and electronic data they
considered were relevant to the
investigation.
The commission said it had
reasonable grounds – “based
on information from a member
the public” – to suspect that
the SA operations of Hamburg
Süd, Maersk, Safmarine, MSC,
Pacific International Line (PIL)
and CMA CGM were infringing
the SA Competition Act, 89 of
1998 in relation to alleged price
fixing.
The CC statement said
that these six lines were
being probed to see if they
“had engaged in collusive
practices to, inter alia, fix
the incremental rates for the
shipment of cargo from Asia
to SA”.
Commissioner Tembinkosi
Bonakele was adamant that
shipping line cartels resulted
in inflated prices for cargo
transportation.
“Such cartels have the effect
of significantly derailing the
economic growth of the region.”
CC spokesman, Itumeleng
Lesofe, said that any line
found guilty of contravening
the Competition Act could be
fined up to 10% of its annual
turnover. He also pointed out
that, as a result of a government
amendment to the act in May,
any cartel conduct was now
considered a criminal offence.
This, Lesofe added, would
mean that any director or
manager convicted could
be fined up to R500 000 or
sentenced to up to 10 years'
imprisonment – or both.
The CC is also keen to get one
of the lines to be a turncoat,
and clipe on the others. To
encourage this, the commission
has a ‘leniency programme’.
Under this, any member of
a cartel that comes forward
and rats on the others can
be granted leniency from
prosecution.
But the lines are all pleading
not guilty to price-fixing
and they are assisting the
commission in its enquiries.
As an e-mail released
to FTW by PIL’s SA MD,
Ivan Naik, said: “PIL SA
is co-operating in every
respect with the Competition
Commission.”
On behalf of both Maersk
and Safmarine, Maersk SA
communications manager,
Arnold Eckersley, released
the lines’ joint statement.
It said: “The fact that such
inspections are carried
out does not mean that a
company has engaged in anticompetitive
behaviour nor
does it prejudge the outcome
of the investigation itself.
Unannounced inspections are
often a preliminary step in
investigations into suspected
infringements of competition
rules.”
In a ‘Notice to Clients’,
MSC chairman Salvatore
Sarno said he was “confident
that we will not be found to
have participated in any such
collusion”.
Hamburg Süd SA’s MD Jose
Jardim also acknowledged to
FTW that the line’s Durban
office had been searched and
that they had co-operated
fully with the investigators.
However, he said: “All press
enquiries are being handled by
our Hamburg head office” – but
added that it had not yet sent
out an official memo on the
matter.
And Vitesh Ramphal, MD
of CMA CGM Shipping Agency
in SA, told FTW that his office
had fully co-operated with the
CC enquiries. “We’re keen to see
it through,” he added, “and we
have nothing to fear.”