New law punts jail time for price-fixing executives

The issue of possible pricefixing in the international forwarding community, following major such charges being laid against global air carriers and huge fines resulting, has again taken a more central stage in SA. Newspaper headlines have recently been emblazoned with government declaring war on what it terms “greedy cartels” conducting anti-competitive practices – and threatening jail for the executives responsible. In the latest onslaught, the Competition Commission (CC) opened an attack on fuel giant Sasol, which has applied for leniency before a looming investigation into anticompetitive practices in the entire petroleum and gas value chain. One report added that its fertiliser business, Sasol Nitro, could also be fined R350-million after it allegedly violated South Africa's competition laws. This joins a host of other industry areas which are being investigated or have been investigated – including dairy and bread companies, banks, steel makers and cell phone companies. It’s almost all triggered off by whistle-blowing executives, or companies themselves, all looking for exemption from prosecution. And this was the case in the CC’s high profile raids on a number of SA’s multi-national freight forwarders started in October 2007 – where price fixing for fuel and other surcharges was under scrutiny. While it was led by the CC in this country, it was conducted in conjunction with the European Commission (EC) and the US Department of Justice. This, according to the CC’s spokeswoman of the time, Mandi Mokoena, was originally prompted by a whistle-blower in the freight industry who had contacted the commission under the conditions of the corporate leniency policy (CLP). And the CC’s suggestion at the time was that changes to this CLP should be designed to make it an even more effective tool in the fight against cartels, which were seen as one of the most serious contraventions of the Competition Act. The leniency programme offers total or partial immunity to cartel members assisting the competition authorities in identifying and prosecuting cartels. And the latest news is that further major changes to the act are currently awaiting the signature of President Kgalema Mothlanthe, and will mean that directors or executives can be jailed for up to 10 years or fined up to R500 000 in their personal capacity. And where does the SA forwarding industry stand in this hot-bed of new legislation aimed at anti-competitive practices? Still right in the middle, according to Nelly Salenta, head of the CC’s investigation. “The SA investigation, linked with the international investigation, has revealed quite a lot of information,” she told FTW. “But no charges have yet been laid.” And it’s not being hurried, she added. “With these being extensive multi-national operations, the investigation can be expected to take some time yet to complete.”