Online FCC Newsletter July-December, 2011 Issues No. 0003 - 0004 More Awareness Administered Through Exhibitions President Jakaya Mrisho Kikwete greeting FCC Officers (from right to left) Chester Kapinga, John Mponela and Martha Kisyombe at the FCC Stall during the 35th Dar es Salaam International Trade Fairs held in Dar es Salaam in July, 2011. To the President’s left (in grey suit) is FCC’s Director of Research, Mergers and Advocacy, Mr. Allan S. Mlulla. By Staff Reporter Tanzanian public had more opportunities of becoming aware of the activities of the Fair Competition Commission through exhibitions carried out during the Farmers Exhibitions in Dodoma in august, 2011, and the Exhibitions which took place at Mwalimu nyerere Grounds along Kilwa Road in Dar es Salaam to commemorate 50th independence anniversary in December, 2011. The two exhibitions were mainly used as a means to showcase achievements attained in the concerted national development efforts by both the public and the private. However, for the case of the Fair Competition Commission (hereafter referred to as FCC), it was an opportunity to demonstrate the Government’s commitment to creation and improvement of investment climate in the country through establishment of modern regulatory framework and competition oversight body with a view to promoting a level playing field for all players in the market. During FCC’s participation in the farmers’ exhibitions held at nzuguni Grounds in Dodoma in august, 2011, FCC show-cased its support to agribusiness undertakings and sensitized the public on various issues, such as the need for being aware of and adhering to competition issues, consumer rights and responsibilities, and issues relating to trade in counterfeit goods. The efforts aimed at making agribusiness undertakings more competitive in the local and international markets. This follows from the fact that the agricultural Revolution Drive (Kilimo Kwanza), aiming at placing agriculture at the driver’s seat of the economy, seeks to use all market support institutions, agro-processing firms and market growth opportunities in a manner that would yield sustainable growth of the agricultural sector and the economy at large. Some lessons were drawn during these exhibitions. The first lesson was a fact that FCC need to step up its outreach efforts by way of increasing awareness of Tanzanians and businesses operating in Tanzania on competition issues, consumer rights and responsibilities and counterfeit issues. Secondly, the general public suggested that there is a need to put a demarcation on “anti-counterfeit awareness” efforts in order for FCC to limit itself to enlightening the public on what the anti-counterfeit law (the Merchandise Marks act, (MMa) 1963, as amended) outlaws; whereas brand awareness and brand protection activities should be left to brand owners. ARTICLE/EDITORIAL 2 FCC Approves 10 Merger Applications Editorial afsat Communications (T) Ltd; Woolworths Holdings (Mauritius) Ltd and W-Store Company (Tanzania) Ltd; Telcom international THE Fair Competition Commission (FCC) and africa Online (T) Ltd; Karimjee Jivanjee approved without condition a total of 10 Ltd and Jacaranda Development Ltd; Maymerger applications out of 14 notified at the ibuye Group Ltd and Blue Financial Services Commission between July, 2011 and Decem- Ltd; and lastly Ophir Energy PLC and Dober, 2011. minion Petroleum The approved “Generally pre-merger control regimes Ltd. mergers were be- are adopted to prevent anti-competitive Speaking to the tween Puma En- consequences in markets”, FCC newsletter, the ergy Tanzania Director of Research, investment Ltd Allan Mlulla, Mergers and advoand BP Tanzania Director for Research, cacy Mr. allan Syril Ltd; HTT infraco Mergers and Advocacy Mlulla said that the Ltd and MiC Tansaid applications were zania Ltd, Tuscany approved without Rig Leasing and S.a. & Caroil S.a.S. Other conditions based on the technical analyses, mergers were between TP(SD) Ltd and which demonstrated that they neither had the Kingdom 5KR-90; africa Online (T) Ltd and capacity to create nor strengthen a position of dominance in a relevant market. He elaborated further that according to the “harm-tocompetition-test”, to which these applications were subjected, it was revealed that there was no possibility for any of these firms to act unilaterally and harm competition in the relevant markets. Mr. Mlulla said that, generally, premerger control regimes are adopted to preMembers vent anti-competitive consequences in markets. in practice most merger control Allan S. Mlulla Chairman regimes are based on very similar underlying Salma Deputy principles, that is, the creation of a dominant Maghimbi Chairperson position would usually result in a substantial Joshua Msoma Secretary lessening of or significant impediment to efFrank S. Mdimi Editor fective competition. However, mergers have to be reviewed on merits to establish the exMagdalena Utouh Member tent to which benefits outweigh their effects Emmanuel Kaale Member before they can be approved or rejected. He added that FCC has previously issued Assistants and is currently reviewing Merger Guidelines Zuberi Kabonge and, thus, called on firms to voluntarily comBlandina Kitime ply with the Fair Competition act (FCa) by making sure that they notify the Commission on their intent to merge or acquire another firm. This legal requirement is usually appliDirector General cable if the merging firms fall within the preFair Competition Commission, scribed merger notification threshold level of 2nd Floor, Western Wing, Tanzanian Shillings 800 million of turnover Ubungo Plaza, or combined assets of merging firms. Morogoro Road, P.O.Box 7883, Dar es Salaam, The FCa has clearly stipulated that firms Tanzania. failing to notify a merger or acquisition, and Tel. +255 22 2461565/6/7, which shall be found to fall within the merger Fax +255 22 2461568, notification threshold, may face severe E-mail [email protected], penalty, including paying a fine pegged up to Website: www.competition.or.tz 10% of their annual turnover, calculated from the latest audited accounts. By Salvator Chuwa, Senior Merger Analyst Editorial Boar d WELCOME dear readers to our combined edition containing the 3rd and the 4th issues of FCC Online newsletter. The previous two quarters had not been quite eventful at FCC, but major milestones were achieved in the course of implementing FCC’s legal mandate vide FCa and MMa. We are a market support institution that is poised to promote and protect effective competition in Trade and Commerce and protect consumers from unfair and misleading market conduct. To this end, the Commission has continued applying enforcement and advocacy mechanisms to promote compliance to the establishing act (FCa). The Commission held a marathon of advocacy awareness Seminars in Mara, Mwanza, Dodoma and Morogoro between november and December, 2011. We have carried excerpts of these activities in this combo issue. FCC has also had an opportunity of carrying out two consumer “Training of Trainers” Sessions in Mwanza and Morogoro in the same time. Similarly, the Commission participated in a number of exhibitions which helped in showcasing its activities to members of the public. The events also helped the Commission to understand the public views on how best to improve its activities. The Commission was able to distribute a number of communication materials during such exhibitions. We were also able to make a number of demonstrations with regard to counterfeit goods. FCC was also well represented at international arena, notably in the efforts towards developing a national Consumer Protection Policy. Similarly the Commission was also represented in the third annual african Protection Dialogue in abuja, nigeria. We have carried stories along these lines in our newsletter for readers to understand and appreciate the Commission’s efforts in carrying out its legally mandated activities. We are committed to continuing bringing you updates on FCC activities, achievements and milestones in forthcoming issues. Should you have any issues, concerns or comments, we encourage you to write the same to the editor vide the address on the left hand-side of this page. Enjoy the reading of this edition of FCC newsletter. 3 ADVOCACY SEMINARS Stakeholders Call For FCC’s Nationwide Presence consumer protection and anti-counterfeit related challenges at national Level in a more practical manner. The stakeholders indicated this during regional awareness campaigns held in these regions in the last quarter of 2011. Stakeholders in Mara and Mwanza Regions observed that the regions have a very wide and porous border points on the lake side, which makes it a challenging area for curbing counterfeit goods and other illegal forms of trade. They pointed out that smuggling of sugar to neighbouring countries has been one of the serious cases in point. They noted further that sugar smuggling and racketeering have created artificial shortage of sugar in the region, which has significantly prompted the sharp raise of the consumer price of sugar in the region. They, however, commended the Commission’s efforts in curbing counterfeit goods thus far and urged for increased awareness of members of the business community on the effects of counterfeit goods to the economy and the community, as well as the legal framework in combating the scourge. They said this will instill voluntary compliance with the law and help the economy to grow while meeting the needs of the consumers. Stakeholders in Dodoma and Morogoro Regions also shared similar observations. The advocacy awareness seminars brought together Regional and District Trade and Cooperative Officers, Tax administration officers and managers, District Directors, Representatives from Tanzania Chamber of industries, Commerce and agriculture and the Confederation of Tanzania industries. Others came from the Judiciary, Regional Offices of attorney General’s Chamber, individual Businessmen including traders, wholesalers and retailers, Manufacturing and processing firms, Tertiary academic institutions, Representatives from Consumer Protection associations, nGOs and CBOs, representatives of Regional Police Commander and the press. Mwanza Regional Commissioner, Eng. Evarist Ndikilo, making an inaugural speech to participants of an advocacy seminar for strategic stakeholders in Mwanza in November, 2011. Stakeholders in such seminars have called on the Government to expand the financial support to FCC to allow it to have presence at Regional and Zonal levels By Staff Reporter STaKEHOLDERS in the Regional advocacy awareness Seminars in Mara, Mwanza, Dodoma and Morogoro have called on the Government to speed up the commitment to empowering the Fair Competition Commission to establish zonal and regional offices in order to provide a suitable platform for addressing competition, Participants in the Mwanza Advocacy Seminar making a close follow up of the Seminar proceedings. They called for stepped up Government commitments to facilitate FCC’s presence Nationwide. 4 ADVOCACY SEMINARS Advocacy Seminars Register Milestone Achievements Dodoma Regional Commissioner, Hon. Dr. Rehema Nchimbi, speaking to participants during the advocacy seminar held at St. Gasper Conference Centre in Dodoma in December, 2011. By Staff Reporter THE Fair Competition Commission (FCC) had registered a milestone achievement in undertaking advocacy awareness seminars and consumer protection’s “Training of Trainers” drive between June and December, 2011 a total of six advocacy awareness-training seminars were carried out between June and December, 2011 in which case a total of about 600 stakeholders benefitted from the sessions. The Regions which benefitted from the advocacy seminars are Tanga and Kilimanjaro Regions (in June, 2011), Mara and Mwanza Regions (in november, 2011 as well as Dodoma and Morogoro Regions (in December, 2011). The Commission also conducted four “Training of Trainers” Workshops to Consumer Protection Stakeholders to about 120 consumer protection stakeholders from the tertiary learning institutions in Dodoma, Mtwara, Mwanza and Morogoro. The training sessions for Dodoma and Mtwara stakeholders were done in June, 2011 while those for Mwanza and Morogoro were conducted in november and December, 2011, respectively. The stakeholders’ advocacy seminars and Consumer Training sessions for consumer trainers are part of the Commission’s campaign to promote voluntary compliance to the two pieces of legislation it oversees amongst members of the business community. The same are meant to enable Government decision making entities, such as the judiciary and the local government authorities, to have a common frame of understanding of key aspects of the laws being advocated. FCC spearheads the implementation of two pieces of legislation namely the Fair Competition act (no. 8 of 2003) and the Merchandise Marks act, 1963. The same were the key subject of advocacy training, where the consumer training of trainers’ sessions covered specific consumer protection issues including “Financial Literacy Challenges”. Stakeholders to the advocacy awareness seminars and the “Training of Trainers Sessions” were drawn from Regional and District Trade and Cooperative Offices, Tax administration (especially customs), District Directors’ Offices, Representatives from Tan- zania Chamber of industries, Commerce and agriculture, Representatives from the Confederation of Tanzania industries, Representatives from the Judiciary, Regional Offices of attorney General’s Chamber and individual businessmen including traders, wholesalers and retailers, manufacturing and processing firms. Other stakeholders were drawn from Tertiary academic institutions, Consumer Protection associations, nGOs and CBOs, Representatives of Regional Police Commander, and the press. Post-seminar analysis indicates that the Commission substantially benefitted from such advocacy awareness and consumer protection training of trainers’ sessions. Some of the benefits include the pooling together of various Government bodies with a view to forge a common framework of understanding of the two market support legislation namely the Fair Competition act (FCa) and the Merchandise Marks act (MMa). additionally, members of the Business Community were enlightened of their role in fulfilling the requirements of the law (FCa & MMa) in undertaking their businesses. Members of the Business Community and the Government Machinery were provided with a common platform upon which they were able to exchange views, ideas and concerns, and establish working relationships. another benefit is the fact that the Commission was able to gather views and concerns from the stakeholders, including the need to advise the Government on financing the expansion of the Commission activities to Regional and zonal levels. additionally, representatives from the tertiary learning institutions expressed the need for having curricular on competition law and economics as well as consumer protection in the Tanzanian tertiary institutions. The overall benefit of this awareness is the fact that investment and business climate, as well as investor confidence, were given a boost in respective regions since key Regional administrators were able to conceptualize and own the market support drive in their respective working areas. The Commission intends to hold two advocacy awareness seminars in iringa and Mbeya in the first half of 2012. in addition, a specialized seminar on counterfeit products for Kariakoo traders is planned over the same period. The latter aims at equipping the traders with the requisite skills and understanding of the requirements of the law that prevents trading in counterfeit goods. 5 CONSUMER ISSUES FCC, Stakeholders, Partner in Developing Consumer Policy By Joshua Msoma Senior Consumer Protection Officer in an effort to protect all consumers in the country, the Fair Competition Commission in collaboration with Consumer Consultative Councils (CCCs) of the regulatory authorities, namely SUMaTRa, EWURa, TCCa, TCRa and the national Consumer advocacy Council (nCaC), under the leadership of the Umbrella Consumer Union “Tanzania Consumer Forum (TCF)”, has made a familiarization tour in Egypt in October, 2011 to learn from them on the best international practice in consumer policy development approaches. The study tour serves as an input towards efforts to develope the draft “national Consumer Protection Policy Document” that will coordinate and guide on the consumer protection issues in Tanzania and define the role of the Government in the area. in the said study tour FCC was represented by a Senior Consumer Protection Officer, Economist, Mr. Utukufu Ezekiel Kyando. Best practices in consumer protection models are presently well developed in several developing countries including Egypt, South africa, Ghana and Brazil. The visit intended to provide an opportunity for the team to learn, at close range, institutional set up, regulatory trilogy, consumer protection models, advocacy policies and best practices currently implemented by Consumer Protection authority in Cairo. The lessons learnt provide valuable inputs for the adoption and adaptation to our Proposed Draft of national Consumer Protection Policy (PDnCPP) and general practices in our day to day consumer protection activities. Prior to trade liberalization in 1986, which was followed by the enactment of regulatory and competition legislations between 2001 and 2003, Tanzania pursued a centrally planned economy spearheaded by the arusha Declaration of 1967, which, among others, did not have in place neither an explicit consumer protection policy nor a unified piece of legislation. Provisions relating to consumer protection in Tanzania are still scattered in several pieces of legislation to date. This makes it difficult for the average Tanzanian consumer to know his or her rights as a consumer and champion for the same. This, therefore, means that a coherent Consumer Protection Policy and a comprehensive regulatory A cross section of newspaper and commuter bus consumers at the New Post Office in Dar es Salaam. These form part of teh large Tanzanian consumer society confronted with various challenges. Such challenges call for a National Consumer Protection Policy. regime for Consumer Protection are necessary ingredients in fostering consumer’s ability to make informed choices and exercise their statutory and contractual rights and responsibilities as charted out by United nation (Un) Guidelines for Consumer Protection in 1985. Efforts in developing consumer protection policy seek to bridge these historical gaps and challenges encountered by Consumer Consultative Councils (CCCs) in adapting the eight international consumer rights. The effort will mainstream consumer protection and the international consumer rights into a common policy, legislative framework, effective enforcement mechanisms and comprehensive redress system with coherent institutional arrangements. Development of consumer protection policy recognizes that consumers in the market economy represent the weakest link and the most disorganized players among key players in the value exchange chain, (the other players being the Government and supplier of goods and services). The policy, which will be the first since Tanzania’s independence, is expected to bring about effective consumer protection mechanisms and lead to the empowerment of consumers in the various product markets. Furthermore, the effort confirms the Country’s commitment to upholding the international best practices in consumer protection initiatives, which places a policy at the driver’s seat in guiding legislative framework in the area. The policy development process started back in the financial year 2010/2011 and the final draft is expected to be ready in the first quarter of financial year 2011/2012, thereafter the document will be submitted to the Government for adoption and further considerations of policy formulation procedures. STAKEHOLDERS SEMINAR 6 VICOBA Laud FCC’s Consumer Awareness Campaigns VICOBA President, Hon. Devotha Likokola (MP) speaking during a joint TRA-FCC awareness seminar for VICOBA national representatives held in Dar es Salaam in December, 2011. To her left is FCC’s Senior Consumer Protection Officer, Mr. Joshua Msoma. By Utukufu Kyando Senior Consumer Protection Officer THE Village Community Bank (ViCOBa) President Ms. Devota Likokola (MP) applauded the move taken by the Fair Competition Commission (FCC) in reaching rural consumers through Consumer awareness Campaign. She commends the move to ViCOBa branch managers on 6th December, 2011 when attending a seminar organized by ViCOBa, TRa and FCC in Dar es Salaam. according to ViCOBa President, ViCOBa currently has 6,700 groups with at least 30 members per group country wide. This is to say, a total number of its member is more than 201,000. She pointed out that the structure and population of ViCOBa is a feasible and strategic opportunity to the Fair Competition Commission in dissemination of Consumer Education and awareness Campaign to the majority consumers. FCC‘s Consumer Protection Department, among other things, trained ViCOBa branch managers on various issues of importance to consumer protection such as the world history of consumer protection, evolution of consumer protection in Tanzania, consumer rights, consumer responsibilities, consumer protection according to the Fair Competition act, no 8. 2003, key consumer issues, effect of counterfeit goods to consumers and to the country’s economy, precautions to be taken by consumers and the importance of financial literacy to consumers. FCC is promoting the need to provide financial education to consumers and raising their level of awareness as a means to equip them to make better informed, considered and rational choices in financial services. Through financial literacy programs, consumers are expected to take more responsibility for their financial security since financial products are becoming more complex and diverse. Currently, consumers are offered a variety of credit and savings instruments both at home and across borders, provided by a range of entities from on-line banks to other types of credit institutions and brokers. This makes financial products harder to understand and to compare; it also increases the risk of buying an inappropriate product. The seminar opened up a new chapter of collaboration between FCC and Community Based Organizations this being an important initiative to enhance the role of disseminating Consumer Education to majority consumers. ViCOBa and other nGO’s structure is efficient and effective forum of disseminating Consumer Education to consumers in the country. FCC Participate in SADC Competition Roundtable Discussion By Emmanuel J. Kaale Head, Information Systems and Services THE Fair Competition Commission took part in the Southern african Development Cooperation (SaDC) Regional Meeting on Competition Policy Programme in Gaborone, Botswana from 27th to 28th november, 2011, which is an avenue for regional competition jurisdictions to share experiences and challenges in implementing Competition Policy and Law. FCC was represented in the session by the Director General, Dr. Geoffrey Mariki, the Director of Research, Mergers and advocacy, Mr. allan Mlulla and the Head of advocacy, Mr. Shadrack nkelebe. The session was a result of the decision of the 3rd meeting of the SaDC Committee on Competition and Consumer Law and Policy made in november, 2010 in Johannesburg, South africa, that dedicated session of experts on regional competition policy be organized by the SaDC Secretariat. The roundtable discussions focused on three main issues, namely: Review of the SaDC Competition Policy Programme, Consideration of the Harmonization Framework and Cooperation with other Similar Regional initiatives (EaC, COMESa and ECOWaS) Having reviewed and discussed the two consultants’ reports on modalities for cooperation and harmonization of national competition policies among SaDC Member States SaDC Group of Experts on Competition, the Group of Experts was of the view that competition policy and law is an integral component of regional integration process. The Group of Experts also agreed on the need for national competition authorities to continue their cooperation, which will ultimately lead to full harmonization and convergence as called for under the Tripartite Federal Trade agreement. Similarly, the already existing degree of cooperation and harmonization among SaDC member states with competition laws and enforcement agencies was also acknowledged and appreciated. The group observed that there was a satisfactory harmonization on competition policy and law analytical tools, design of remedies, capacity building and technical assistance. 7 CONSUMER ISSUES FCC Handover Secretariat of African Dialogue for Consumer Protection to Nigeria Director of Corporate Affairs, Mr. Michael Shilla (then Director of Corporate and Consumer Affairs), presenting a paper at the 2nd Annual African Consumer Protection Dialogue at Ngurdoto Hotel in Arusha in 2010. FCC through the named Directorate was charged with the duties of a secretariat to the African Consumer Protection Dialogue for the year 2010/2011. By Joshua Msoma Senior Consumer Protection Officer in the third annual african Dialogue Consumer Protection conference held in abuja, nigeria from 13th to 15th September, 2011, FCC handed over african Consumer Protection Dialogue Secretariat to nigerian Consumer Protection Commission (CPC) for the year 2011/2012 as per arusha Resolutions of the Second annual Conference of the african Consumer Protection Dialogue held in 2010. The Third annual african Dialogue Consumer Protection conference was held under the theme “Generation next: Consumer Protection issues affecting Children and assess- ing Online and Mobile payments Systems”. The objective the third annual african Dialogue conference was to confer consumer protection organization across africa opportunities to share best practices and undertake cross-border investigation of commercial activities that may affect consumers’ interest in their respective countries. The african Dialogue’s September, 2011 conference proved a resounding success. One of the most significant outcomes was a revision of the priority initiatives for the african Consumer Protection Dialogue. The most notable changes in the initiatives were in the following three areas: firstly, the african Dialogue agreed to in- corporate Regulatory Frameworks and Common Consumer Protection Challenges facing children in africa. among other things the african Dialogue underscored the importance of safeguarding children because they are the future of every society and the leaders of tomorrow. african Dialogue emphasized that, whatever efforts geared in ensuring children’s well being is commendable, as this will bring about sustainable development of our society. Secondly, in recognizing “sustainable consumptions”, Consumer Protection agencies were encouraged to architect and advocate policies and campaign that seek to: promote the adoption of consumption and production patterns that safeguard human rights and community well being; promoting consumer products and services with tomorrow in view; promoting present consumption and production patterns that do not damage the future generation; avoiding social, economic and environmental ills; alerting consumers on the aggressive and fraudulent commercial messages that cause environmental ills; and promote the establishment of model for sustainable consumption programmes in main towns. Lastly, in recognizing the various challenges caused by the complexity of financial markets, Consumer Protection agencies were encouraged to architect and advocate for policies that promote “financial literacy” and liaise and work with Central Banks to ensure that before new banking products are offloaded to the market, such products do have consumer friendly features as remedy mechanism to the existing weak financial consumer protection. in the year 2009, Federal Trade Commission of USa, Fair Competition Commission of Tanzania (FCC) and Consumer protection agencies in africa spearheaded the initiation of african Consumer Protection Dialogue, with the objectives of exchanging consumer protection experiences, information sharing and best practices across the globe through informal monthly teleconferencing among several regional consumer protection agencies. in the Second annual african Dialogue on Consumer Protection Conference held in arusha, Tanzania in July 2010, members appointed FCC to form the first african Dialogue (aD) secretariat for the year 2010/2011. The secretariat was chaired by Mr. Michael Shilla (Director of Corporate affairs) as aD Executive Secretary and Mr. Joshua Msoma (Senior Consumer Protection Officer) as Deputy Executive Secretary. NEWS IN PICTURES News in Pictures 8 Participants of the Mara Advocacy Seminar held at Afrilux Hotel in Musoma in November, 2011 in a group photograph. Participants in the Advocacy awareness seminar held in Morogoro in December, 2011, learning how to identify counterfeit goods. FCC’s Senior Consumer Protection Officer, Mr. Joshua Msoma (in white shirt) gives a counterfeit identification demonstration. Participants of the Mwanza Advocacy Seminar held at Gold Crest Hotel in November, 2011 in a group photograph with the Mwanza Regional Commissioner, Hon. Eng. Evarist Welle Ndikilo. Participants of the Morogoro Advocacy Seminar held at Nashera Hotel in December, 2011 in a group photograph with the Morogoro Regional Commissioner, Hon. Joel N. Bendera. FCC’s Head of Anti-counterfeit Enforcement Department, Mr. John Mponela (l) speaking to the press during the 35th Dar es Salaam International Trade Fairs (DITF) on 2nd July, 2011. FCC held a Press conference to sensitize members of the press on anti-counterfeit issues as well as general issues relating to the Fair Competition Commission. Participants in the Dodoma awareness seminar held at St. Gaspar Conference Centre, in December, 2011, following up proceedings of the seminar.
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