INSIDE Online FCC Newsletter April-June, 2012 Issues No. 0006 Parliament Passes MMA Ammendments Cartel Invetigation Techniques Pg. 4 Pg.6 News in Pictures Pg. 8 UNIDO Extends Assistance to FCC to Enhance Investment Climate By Staff Reporter The Fair Competition Commission (FCC) and the United Nations Industrial Development Organisation (UNIDO) have embarked on initial partnership with a view to undertaking ‘Technical Institutional Capacity Building and Development Cooperation’ between the two organisations. The move aims at furthering the efforts initiated by the Tanzanian Government with respect to improving the investment climate by harnessing the effectiveness of the Market oversight body in exercising oversight on competition, consumer protection and anticounterfeit issues. To that end, the FCC led by the by Director General, Dr. Geoffrey Mariki, and UNIDO Country Representative, Mr. emmanuel Kalenzi (as well as the UNIDO Programme Officer, Grace Bingileki), held a discussion at the Commission’s premises on 8th May, 2012. Dr. Mariki explained the role of the Commission which, among others, includes controlling anti-competitive agreements (cartels), mergers and acquisitions that strengthen the position of dominance in the market and misuse of market power by dominant players in the market. he added that FCC is also mandated to fight counterfeits and protection of consumers in the economy, citing that these roles aim at creating a level playing field for all actors in the economy. Through its roles, FCC contributes in ensuring and sustaining favorable investment climate in the country, capable of attracting both domestic and foreign investors. “It is the desire of every investor to operate in a level playing field; therefore, a more efficient FCC will enhance investors confidence in the Tanzanian economy, portraying the country as a UNIDO Country Representative, Mr. Emmanuel Kalenzi (left), signing a visitors book when he visited FCC offices on 8th May, 2012. Right is the FCC Director General, Dr. Geoffrey Mariki. Prior to joining FCC, Dr. Mariki served in various international posts for more than 30 years as an industrial expert. This includes his service as a UNIDO representative in Africa and elsewhere. viable investment destination with a stronger institutional and enabling legal framework for curbing unruly market conducts such as monopoly tendencies, cartels and counterfeit trade, since these render markets inefficient and businesses unprofitable”, explained Dr. Mariki. Responding to Commission’s submission, the UNIDO Country Representative, Mr. Kalenzi, explained that his institution has an objective of promoting productive activities through Small and Medium enterprises (SMes), Private Sector Competitiveness and all areas dealing with productivity. “This mission of ours augurs well with the Commission’s work hence deeming cooperation between the two organizations a worthwhile undertaking”, 3 ARTICLE ON COUNTERFEITS /EDITORIAL FCC Continue the Swipe on Counterfeit Goods By Magdalena Utouh, Head of Counterfeit Surveillance DURING the last quarter of 2011/2012 financial year , FCC continued its relentless swipe on counterfeiters in Dar es Salaam. The Commission carried out four dawn raids (search and seizure operations) between April June 2012, based on complaints received from brand owners. The brands Editorial Boar d Members Allan S. Mlulla Chairman Salma Deputy Chairperson Maghimbi Dr. Deo Nangela Member Joshua Msoma Secretary Frank S. Mdimi Editor Magdalena Utouh Emmanuel Kaale Member Member Assistants ET P ITION CO M S SI O N MI FAIR COM Zuberi Kabonge Blandina Kitime for fair play in the economy Director General Fair Competition Commission, 2nd Floor, Western Wing, Ubungo Plaza, Morogoro Road, P.O.Box 7883, Dar es Salaam, Tanzania. Tel. +255 22 2461565/6/7, Fax +255 22 2461568, E-mail [email protected], Website: www.competition.or.tz that were said to be counterfeited include SP, NOKIA and hP. With regard to SP branded piston rings, FCC conducted a raid on 12th April, 2012 in Kariakoo, where it found some shops selling counterfeited SP piston rings. Parallel to that FCC also carried out another raid in respect of the same brand on 27th April, 2012 in Morogoro and found counterfeited SP piston rings. The Commission also conducted another raid in Kariakoo area where it found some shops stocking and selling counterfeited NOKIA Mobile phones. . FCC carried out another search and seizure operation on 21st June, 2012 and netted selling counterfeited hP branded goods. “The Chief Inspector is mandated to search privately owned premises, shops or warehouses suspected to contain counterfeit products”. These include toners, catridges and computer accessories. All counterfeited products found during the raids were seized forthwith and culprits were penalized accordingly. The Chief Inspector is mandated by the Merchandise Marks Act to seach privately owned premises, shops or warehouses suspected to contain counterfeit products. Similarly, the Commission is mandated to and does conduct daily inspections in major entry points, particularly the Dar es Salaam port and the inland container depots. Conducting of dawn raid is another tool employed in cracking down trade in counterfeits. It entails sudden search and seizure operations on premises suspected to stock counterfeit products. 2 Editorial WelCOMe dear readers to our sixth issue of FCC Online Newsletter. The publication gives a quick review of activities undertaken by FCC or in which FCC participated during the past quarter. We are pleased to report of substantial achievements registered and major milestones reached in the course of implementing FCC’s legal mandate vide FCA and MMA from April to June, 2012. We were able to discharge our responsibilities as a credible market support institution, with a view to promoting and protecting effective competition in trade and commerce and protecting consumers from unfair and misleading market conducts. We continued to apply enforcement and advocacy mechanisms to promote compliance with the Fair Competition Act (FCA). During this quarter under review the Commission was able to host a bilateral technical assistance meeting between UNIDO and FCC, held at FCC office premises in May, 2012. The meeting sought to streamline areas of technical assistance that UNIDO wishes to extend to FCC with a view to enhancing investment climate in Tanzania. The lead story has details on the historic efforts. FCC has also continued waging the war against counterfeit goods during the quarter. A story on the subject has covered areas involved in the swipe against counterfeit goods. The Commission’s effort to improve the manner in which war against counterfeit goods is waged has reached higher heights. The Merchandise Marks Act, which is the formal legislation for spearheading the fight against counterfeit goods, has been amended by the Parliament in April, 2012 session. This newsletter issue has captured this development. The Commission has received, considered and reviewed mergers notified by various parties at Commission between April and June, 2012. The Newsletter carries a story about these amendments. We have also carried articles on Consumer education initiatives for SMes, Cartel Investigation Training, hIV/AIDS Training for FCC Staff, Capacity Building initiatives and Resignation of FCC Director General. enjoy the reading of this sixth edition of FCC Newsletter. 3 INTERNATIONAL TECHNICAL ASSISTANCE UNIDO Extends Assistance to FCC to Enhance Investment Climate Participants in the meeting between FCC and UNIDO held at FCC office premises on 8th May, 2012, pose for a group photo after the meeting. They are from right to left; Ms. Zaytuni Kikula, A Senior Merger Analyst, Mr. Michael Shilla, the Director for Corporate Affairs, Dr. Geoffrey Mariki, the Director General, Mr. Emmanuel Kalenzi, the UNIDO Country Representative, Mr. Allan Mlulla, the Director for Mergers, Research and Advocacy, Dr. Deo Nangela, the Director of Compliance and Ms. Grace Bingileki, UNIDO Programme Officer. said Mr. Kalenzi. During the discussions, UNIDO agreed to extending support to two key areas of cooperation, namely; launching a consumer education and public awareness campaign on FCC, and establishment of a knowledge management depository based on intranet system at FCC. Consumer and Public Awareness initiatives will help the general public to understand the manner in which the Commission operates, the justice dispensation procedures, rules and guidelines as well as the appellate routes for parties seeking to challenge Commission’s decisions. It is also aimed at attracting other development partners to extend further technical assistance in such areas as capacity building for the judiciary and other strategic stakeholders at the law enforcement 1 levels. On the other hand, the knowledge-based intranet system, the infrastructure of which shall be developed under such technical assistance arrangement, shall enable FCC to operate in an “e-Government” framework, thereby enabling operations to continue and substantive decisions to be made even when key staff and decision makers are not physically on duty station. Specifically, the current support is intended to assist in designing and developing a state of the art intranet system. FCC has already sent two staff from the Corporate Affairs Division to Malaysia from 31st March to 7th April, 2012 to attend requisite training. The assistance will further complement Government’s efforts to modernise and improve its activities with a view to enhancing intra-governmental institutional communica- tions vide e-government solutions. Additional areas for cooperation highlighted in the discussion were mostly focused on strengthening knowledge and skills capacities of Commissioners and staff of the FCC and members of the Judiciary in handling of competition, consumer protection and anticounterfeit issues. The overall success of the technical assistance project is expected to benefit the economy through delivery of timely competition justice, elimination of counterfeit goods in the economy and improved policy and legislative framework in the economy. The launching of the consumer and public awareness as well as the establishment of a knowledge based intranet facility are poised to commence within the last quarter of the year 2012. MMA AMMENDMENTS/MERGERS 4 Parliament Passes MMA Amendments FIlE PhOTO: A cross section of Members of Parliament getting explanations from FCC official on how to identify counterfeit goods in a seminar held in Dodoma in Agust, 2008. By John Mponela, Head of Counterfeit Enforcement DURING its April, 2012 session, the Parliament passed amendments to the Merchandise Marks Act, 1963 to enhance its scope in combating counterfeiting in Tanzania. The move follows endorsement of the proposed amendments from various stakeholders earlier in 2011, which aim at improv- ing Tanzania’s overall investment climate and favour fairness in business undertakings. Salient features of the approved amendments include broadening of definitions, incorporation of crimes originating from technological advancements and tasking brand owners’ participation in combating counterfeiting in Tanzania. likewise, the amended piece of legisla- tion has required brand-owners to work together with the Chief Inspector of the Merchandise Marks in combating trade in counterfeit, especially in the area of brand awareness and protection. Similarly, the amended legislation has provisions that makes it more punitive in a manner commensurate with the gravity of the offence. FCC Reviews Notified Mergers By Zaytuni Kikula, Senior Merger Analyst FCC received and reviewed two merger applications notified at the Commission between 1st April and 30th June, 2012. The first merger application received, evaluated and approved was between a consortium of Oakleaf Investments holdings 76 (Proprietary) limited and the Government employees Pension Fund (GePF) of South Africa, duly represented by the Public Investment Corporation limited (PIC). The same was notified at the Commission on 5th April, 2012. The acquiring consortium expressed their intent to acquire more than 99% of the issued share capital of AfriSam Consortium (Proprietary) limited, a locally registered firm with a strategic interest in one of the giant cement factories, Tanga Cement. The acquiring firm expressed the acquisition intention as to recapitalize and enhance target firm’s economic ability and business viability. The application was analysed in order to ascertain whether or not the transaction is likely to harm competition significantly as provided under section 11(1) of the Fair Competition Act, 2003 (FCA), that a merger is prohibited if it creates or strengthens a position of dominance in a market and Part V of the Fair Competition Commission Procedural Rules, 2010. The merger was approved without conditions by the Commission on 6th June, 2012. The second merger application received and reviewed by the Commission was between eTC Group and export Trading Company lTC (eTC). This was notified at the Commission on 8th May 2012. In this transaction, the acquiring firm intended to acquire 99.9% shares in target firm as a way of restructuring group activities globally. The objectives were explained as follows; to gain proper and adequate financing, to have consolidated operational costs, to attain higher operational efficiencies through having one parent company and to raise large capital base to support its other subsidiaries. The merger relates to the business of importation and distribution of fertilizer in mainland Tanzania. The application was analysed in order to ascertain the potential likelihood of significantly harming competition, as provided for under section 11(1) of the Fair Competition Act, 2003 (FCA), that a merger is prohibited if it creates or strengthens a position of dominance in a market and Part V of the Fair Competition Commission Procedural Rules, 2010. Substantial lessening of competition test to which the merger applications are subjected, revealed that there were no possibility for the first applicant to act unilaterally and harm competition in the relevant markets, but rather they will enhance competition and strengthen the economy. The Commission approved the OakleefAfrisam merger application without conditions based on the technical analysis. As of 30th June, 2012, the review of the second merger application, between between eTC Group and export Trading Company lTC (eTC), was still on going. 5 CONSUMER EDUCATION FCC Administer Consumer Education to SMEs By Joshua Msoma Senior Consumer Protection Officer FCC has administered Consumer education and Awareness to Small and Medium enterprises (SMes) in various parts of the country’s business capital, Dar es Salaam. The educational initiative sought to raise the awareness of members of the busienss community (SMes). That is making them undertand their duties and responsibilities as distributors of goods in a manner that is in line with the requirements of Fair Compeitition Act No.8 of 2003 (FCA). Awareness and educational issues of interest administered by FCC during such training and awareness creation sessions related to provisions of the FCA and the Merchandise Marks Act, 1963 (MMA), as amended. The training promoted voluntary compliance to the requirements of FCA and MMA in full. FCC implemented the awareness and educational programmes through its Consumer Protection Department. Three seminars in that respect were undertaken Ilala and Temeke Districts, partic- ularly to members of the business community in Kigamboni, Kariakoo and Segerea in Dar es Salaam Beneficiary SMe groups included all traders’ groups ranging from retailers, wholesalers, importers, exporters, manufacturers, processors and academic institutions just to mention a few. Stakeholders learned of powers of the FCC carried out three consumer educational and awareness seminars to SMEs in Ilala and Temeke Districts, particularly to members of the business community in Kigamboni, Kariakoo and Segerea, in Dar es Salaam Commission and routes for appealing decisions made by the Commission. The Kigamboni joint awareness seminar benefitted 40 participants and was held on 15th March, 2012. Other joint seminars to medium and small-scale taxpayers were held in Kariakoo and Segerea on 20th and 25th April, 2012 respectively. The Kariakoo seminar attracted 70 participants whereas the one held at Segerea involved 130 participants. About 800 FCC’s educational and communication materials were disseminated to the seminar participants during such seminars. The materials included brochures on Consumer Rights and Obligations brochures (in Swahili and english), Brochures on how to Identify Counterfeit Products, FCC General Information Brochure (in Swahili and english) and copies of the Consumer Voice Magazine. During the seminar session, participants expressed their content on having their awareness raised on subjects of the day, since they had no knowledge of FCC and its activities. They commended the educational initiative saying the same will enlighten more entrepreneurs and make them comply voluntarily with the requirements and provisions of FCA and MMA. More awareness and educational programmes are envisaged to be carried out in the 2012/2013 financial year. FCC Staff Responsiveness to HIV/AIDS Pandemic Scaled Up By Emmanuel Kaale, Head of Information Systems and Services One of the great threat to health and development in Tanzania is hIV/AIDS epidemic. Over two million people are reportedly living with hIV/AIDS in Tanzania. According to Tanzania Commission for Aids (TACAIDS) statistics these victims are mostly sexually active aged between 15 and 49 years, very young and vibrant potential workforce at the prime working life. International labour Organisation (IlO) estimates that hIV/AIDS pandemic will cause the labour force in over 30 countries, Tanzania inclusive, to shrink by about 10% to 35% by the year 2020, if appropriate measures to arrest the situation won’t be taken to revert the current prevalence trends. No affirmative cure to hIV/AIDS has been discovered to date, despite the fact that the scourge has been around for quite some- time now. The first case of hIV/AIDS was recorded in Tanzania in 1983. In realization of the effects of this pandemic, the FCC has put in place a comprehensive hIV/AIDS policy for its staff and has been organizing training on hIV/AIDS for its staff for the second year running now, since institutionalization of the hIV/AIDS Policy. The second training was held in June, 2012 and was commissioned by the resource persons from the Public Service Management College experts, led by Ms. Agatha Wanderage. Participants at the seminar received the findings of researched information, statistical trends and preventive strategies to combat hIV/AIDS. FCC Staff were also introduced to the “labour and employment Code of Practice on hIV/AIDS” as it pertains to work place action. Other issues covered in the seminar include; the truth on hIV/AIDS, difference between hIV and AIDS, historical background of AIDS in human body, Symptoms, relationship between life style and dangerous environments, effects of hIV/AIDS in the economy, legal frame work on people living with hIV/AIDS, National Policy on hIV/AIDS, use of ARVs, positive living, stigma, use of condoms, importance of knowing health status, hIV/AIDS treatment options, mental health, substance abuse, nutrition and advocacy. Similarly, staff had an opportunity of taking voluntary hIV/AIDS status testing at a testing-centre set up at FCC during the training. The sensitization seminar is an integral part of FCC’s ultimate goal which is to promote positive behavior and hence reduce the hIV/AIDS infection rate to employees, their spouses and better care for those living with hIV/AIDS. This is an initiative being used by TACAIDS to scale up its work place response to hIV/AIDS in the Country. CARTEL INVESTIGATION TRAINING 6 FCC Staff Trained on Cartel Investigation Techniques A Principal Analyst from the South African Competition Commission, Ms. Nompucuko Nontombana, stressing a point during the special training to Tanzanian law enforcers held at FCC office premises in May, 2012. By Laiton Mhesa Senior Investigations Officer The Republic of South Africa’s Competition Commission experts held a four days technical training on investigation techniques to technical staff from FCC, the Police Force and the Fair Competition Tribunal. The training session that ran from 14th to th 17 May, 2012 took place at the FCC’s office premises at Ubungo Plaza in Dar es Salaam. Resource persons who carried out the training were Ms. Nelly Sakata and Ms. Nompucuko Nontombana, from the South African Competition Commission. The training session aimed at equipping participants with the requisite practical investigation skills that will enable them to carry out their duties effectively. Inaugurating the training session, the Director of Compliance at FCC, Dr. Deo Nangela expressed the Commission’s gratitude to South African Competition Commission for providing the needful training on investigative techniques to law enforcing agents in Tanzania. Dr. Nangela expressed his optimism that the workshop will impart the practical skills and understanding to members from the par- ticipating institutions that will enable them to undertake their responsibilities and duties more efficiently and effectively. “It is my sincere hope that all of us will take the results of this programme as an essential key to unlock that which might have been regarded as the ‘Gordian Knot’ in the course of discharging our duties,” Dr. Nangela pointed out. The training, among other things, emphasised on the use of “dawn raid”, a technique widely used in gathering evidence in investigations of cartels and other anti-competitive conducts. The approach banks on the trainers’ experience that evidence relating to anti-competitive conducts such as cartels are difficult to come by and may at some point during investigation may require application of a sudden inspection procedure. The training also involved a mock “dawn raid” into offices of a firm alleged to lead its competitors into engaging in anti-competitive conducts. Participants expressed their appreciation on the usefulness of the training programme and were optimisti that they will employ the skill in carrying out their duties. A Senior legal Counsel from the South African Competition Commission, Ms. Nelly Sakata (R), leading a “Mock Dawn Raid” as part of the cartel investigative training in May, 2012. left is the Director for Mergers, Research and Advocacy, Mr. Allan Mlulla and centre is the head of Enforcement, Mr. Justine Nyenza. 7 CAPACITY BUILDING FCC Staff Participate in Capacity Building Initiatives Minister for Information, Youth, Culture and Sports, hon. Dr. Fenella Mukangara (MP), adressing Governemnt Communications and Information Officers in Mwanza on 10th June, 2012. By Staff Reporter A CROSS section of the Fair Competition Commission staff participated in various capacity building initiatives between April and June, 2012. The first in the list is the head of Investigation Department, Ms. Grace Freedom Nicholas. Ms. Grade Freedom, had an opportunity of attending a training programme called “Competition law and market economy Growth” in Seoul, Korea, from 10th to 29th April, 2012. The training was jointly organized by the Korea International Agency and the Korea Fair Trade Commission. The training brought together 18 participants from 10 countries, with Tanzania being represented by two participants, one from FCC and another from the Ministry of Industry and Trade. Some of the key areas covered during the training include Regulation of cartels, Business Group Policy (to address anticompetitive conducts involving large family businesses), Abuse of Market Dominance and Unfair Trade practices, Merger control, Case handling procedures and enforcement of consumer law. Similarly, the head of Internal audit, Mr. Godfrey Machimu, and head of Finance, Mr. Bezil ewala, participated in a six day workshop on “Combating Fraud and Corruption in Africa” held at Airport Grand hotel, Boksburg, South Africa from 21st to 26th June, 2012. The programme was organized by Diante Africa Marketing and Training. The participants had an opportunity to learn various issues concerning fraud and corruption. These included; the differences, causes, effects and preventive measures. Causes for committing both fraud and corruption were expounded. Causes for fraud were identified by the resource persons as pressure, opportunity and rationale, in what is termed, ‘The Fraud Triangle’. Causes for committing corruption were identified as low public sector salary as the prime cause; others being greed, loss of income and job dissatisfaction. The effects of fraud and corruption were also addressed, the predominant ones being undermining the development capacities of states, distorting priorities. The Four Pillars to stop corruption were identified as Preventive Measures, Criminalization law enforcement, International Cooperation and Asset Recovery. Preventive Measures in Public Sector includes Transparency Integrity and Accountability. These can be achieved through personnel management and code of conduct; enforcing compliance to public procurement and public finance management; and integrity of ju- diciary and prosecution services. Other preventive strategies include the ethical Dimension of Fraud Prevention and the Code on Corporate Governance. In the same vein, a Senior Communications and Public Relations Officer, Mr. Frank Mdimi, attended a seven day Working Session of Government Communication Officers held at Victoria Palace hotel in Mwanza, Tanzania from 10th to 16th June, 2012. The meeting was officially inaugurated by the Minister for Information, Youth, Culture and Sports, hon. Dr. Fenella Mukangara (MP) on 10th June, 2012 and was closed by the Mwanza Regional Commissioner, eng. evarist Welle Ndikilo on 16th June, 2012. They both urged the Government Communication Officers to step up their efforts in informing the public of various activities taking place in the ministries and Government Departments and Agencies. FCC Presented a paper on “The Role of the Media in Strengthening Competition, Consumer Protection and Fighting Trade in Counterfeit Goods.” Various other educative and informative papers were presented during this workshop. These were of relevance to better institutional performance. These included such issues as the Change from Analogue to Digital Broadcasting technologies and its significance to the public and the introduction of the e-Government in Government undertakings. Dr. Mariki Resigns from DG Post By Staff Reporter FCC’s Director General, Dr. Geoffrey Mariki has resigned from his post on medical grounds effective 30th June, 2012. Dr. Mariki’s leadership is highly appreciated for his diligence and commitments to strengthening Commission’s performance in technical, financial and managerial aspects. Prior to his appointment to the post of Director General, Dr. Mariki had served as a Commissioner of FCC since 22nd May, 2009. he joined the Commission after retiring from the UN Industrial Development Organisation (UNIDO) in various senior position capacities in Africa and elsewhere. Dr. Geoffrey Mariki previously served as fully accredited Diplomatic Representative and Chief of Mission of the United Nations Industrial Development Organisation (UNIDO) covering ethiopia, Kenya, Rwanda, Burundi and eritrea. Dr. Geoffrey E. Mariki NEWS IN PICTURES News in Pictures The former FCC’s Senior human Resource and Administrative Officer, Mr. Elibariki Kingu, bidding farewell to FCC staff after being appointed to the post of a District Commissioner (DC) in May, 2012. Mr. Kingu is the District Commissioner for Igunga District in Tabora Region. A cross section of FCC staff following up presentations during a cartel investigation training led by experts from the South African Competition Commission in May, 2012. A cross section of participants to the Annual Working Meeting of Government Communications and Information Officers held at Victoria Palace hotel in Mwanza from 10th to 16th June, 2012, in a group photo with the Minister for Information, Youth, Culture and Sports, hon. Dr. Fenella Mukangara (MP) (seated, centre), and the Permanent Secretary in the Ministry, Mr. Seth Kamuhanda (second left, seated) on 10th June, 2012. 8 FCC’s Director General, Dr. Geoffrey E. Mariki (R) speaking during a meeting with UNIDO Delegation at FCC premises in May, 2012. left is the UNIDO Country Representative, Mr. Emmanuel Kalenzi, who led the UNIDO delegation. FCC Director General, Dr. Geoffrey E. Mariki (in multi-colour shirt) speaking during a staff meeting with FCC Staff in May, 2012. Others in the picture are Director of Compliance Dr. Deo Nangela (left) and Director of Corporate Affairs, Mr. Michael Shilla (centre). A cross section of FCC Staff listening to Director General, Dr. Geoffrey Mariki (not in the picture) on various staff matters during a staff meeting held at the Commission Premises in May, 2012.
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