Competition Law calls for pro active approach
27/01/2009

After conducting an internal investigation petrochemical giant Sasol has decided to approach the Competition Commission to come clean on possible transgressions of the Competition Act. The move has been welcomed by analysts who are of the view that Sasol is taking the moral high ground, no doubt hard on the heals of the hefty fine recently imposed on Sasol by the European Competition Commission.

Sasol said that its competition law compliance review of all its businesses had revealed two competition law contraventions in Sasol Gas, and that it had informed the commission of the contraventions. In return for the information Sasol was granted leniency upon the condition of providing full co-operation with the commission in its investigation.

At the same time competitors of Sasol are no doubt sitting uneasy as they will now be investigated for possible market allocation and price fixing practices.

It has become apparent that directors and managers are often surprised on how pervasive the Act is with regard to the company’s business. Directors and managers should have a thorough understanding of the possible impact of the Act on the company’s business and that a comprehensive audit of business practices are conducted on a regular basis. In industries where business relationships are governed by complex arrangements, such as licensing, franchising or supply agreements, which could even have developed before the Act was introduced, Companies should review the position.

Companies turning a blind eye to Competition Law transgressions are exposed to serious risks, financially and otherwise, and must specifically bear in mind the incentive to competitors to uncover these practices. In trying economic times it is even more likely that struggling competitors would resort to these measures.

The Competition Commission’s Corporate Leniency Policy has further increased the risk of competitors spilling the beans in instances where companies have agreed not to compete. This policy operates on a “first through the door” basis in terms of which the cartel member which blows the whistle on the cartel received immunity from prosecution.

The introduction of criminal liability for persons with “management authority” who caused or knowingly acquiesced in the anti competitive conduct of the company by the Competition Amendment Bill has further raised the stakes and Companies should not wait for the Bill to be signed into law before taking steps to uncover and deal with anti competitive conduct.


Jac Marais
Senior Associate
jac-m@adamsadams.co.za