a tripartite report - Unctad

152 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE
export of such assets will not result in a substantial lessening of competition in any market in Zambia or a substantial
The requirement to notify the proposed relocation of core assets from Zambia with the Commission did not in any
the Zambian borders. Therefore, when considering a proposed relocation of assets from Zambia, the Commission
usually approaches it on the basis of a consultative process with third parties and other stakeholders in the relevant
industry, in order to determine the potential market place competition effects of the transaction.
Source: ZCC 2008 Annual Report
The following in Box 16 is an example of a relocation
of plant and equipment case that was handled
by the Commission in 2010, as reported in
the Commission’s 2010 Annual Report.
Box 16: Application by Truckmec (Z)
Limited for the Relocation of a
Tadano 25-ton Crane to the
Democratic Republic of Congo
The Commission received an application for authorization
from Truckmec (Z) Limited to temporarily
relocate a Tadano 25 ton Crane to the Democratic
Republic of Congo. Investigations by the
Commission revealed that the crane being relocated
to DRC was going to be used in the Frontier
Mine SPRL in DRC after Truckmec was awarded a
contract to do some earth moving works.
The Board resolved to authorize the relocation of
the machinery because the transaction was not
likely to adversely affect competition and fair trade
in the relevant market.
Source: CCPC Annual Report 2010.
While it can be accepted that the monitoring and
controlling of relocation of industrial assets from
Zambia is of the country’s peculiar national interest,
arising from the real threat of asset stripping
following privatization, particularly of the country’s
key mining companies, competition law is not
the best instrument to be used for that purpose
since the practice raises little or no competition
concerns. In that regard, it is noted that all the 27
cases of plant relocations that were closed by the
Commission in 2010 were authorized because the
transactions were found not likely to adversely
affect competition and fair trade in the relevant
markets. 169
The above questions the futility of the Commission
expending considerable resources in investigating
cases of relocation of plant and equipment,
which do not raise serious competition concerns.
As shown in Table 5 below, the Commission in
2010 received and handled a total of 49 such
cases which consumed a lot of its resources in investigating
and analysing, resources which should
have been better utilized in the handling of restrictive
business practices, or competition advocacy.
It can also be argued that the threat of privatization-induced
‘asset stripping’ no longer exists following
the long completion of the privatization
programme, and that in any case any competition
concerns arising from plant relocation can adequately
be addressed by the Commission using
other more appropriate competition instruments,
such as merger control.
It is therefore recommended that the
Commission stop using its scarce
resources in investigating relocation of
or concerns, and consider any competition
concerns arising from such relocations
using other competition instruments,
such as merger control.
Graph 1 below shows that cases involving unfair
trading practices and consumer protection outnumber
by far all the other cases, and that they
have been on the increase since 1998. Cases involving
restrictive business practices were a distant
second, closely followed by those involving mergers
and acquisitions. Applications for relocation of
plant and equipment have also been on the increase
over the years. The other cases, involving
trade agreements, trade associations, and control
of concentrations of market power have almost
been negligible. However, with the new require-