Fijian Competition and Consumer Protection Policy Statement

FIJIAN COMPETITION AND CONSUMER PROTECTION POLICY STATEMENT

Ministry of Commerce, Trade, Tourism and Transport Levels 2 and 3 Civic Tower Victoria Parade, Suva

Contents

Contents ...... 2 A. Introduction ...... 3 B. Objectives...... 3 C. Policy framework for Competition and Consumer Protection ...... 4 I. The Role of Government ...... 4 i. Ensuring Decision-Makers Consider Markets ...... 4 ii. Lowering Entry Barriers...... 4 iii. Making Government Business More Competitive ...... 5 iv. Public Procurement...... 5 II. Rules for Businesses in Fiji ...... 5 i. Protecting the Competitive Process...... 6 ii. Sector-Specific Regulation...... 7 iii. Access to Infrastructure and Services ...... 7 iv. Empowerment of Micro and Small Enterprise ...... 8 III. Protecting Fijian Consumers ...... 8 i. Fair Consumer Transactions ...... 8 ii. Women, Rural, And Disadvantaged Consumers ...... 9 iii. Price and Rent Control ...... 9 IV. International Markets ...... 10 i. International Trade and Investment ...... 10 ii. Cross-Border Enforcement ...... 10 D. Implementation and Oversight ...... 10 I. Strengthening Institutions ...... 10 II. Accountability, Monitoring and Evaluation ...... 11

A. Introduction

1. The Fijian Competition and Consumer Protection Policy Statement (‘Statement’) sets out Government's commitments in relation to competition and consumer protection in the Fijian markets for goods and services.

2. The Fijian Government recognises that in order to achieve a ‘Better Fiji for All’, markets need to be competitive, efficient, fair, and informed. These are key features of a well-functioning competitive market economy and are the drivers for transformative socio-economic development.

3. An effective legal framework for Competition and Consumer Protection can bring immense benefits to both the market players and the national economy as a whole. These are reflected as social benefits as they impact large numbers of consumers spread across Fiji. The benefits include: a. increased efficiency in the production, distribution and supply of goods and services; b. increased dynamic efficiency in the continued innovation of goods and services; c. efficient allocation of resources; and d. Lower prices, higher product and service quality and a wider choice for consumers.

B. Objectives

4. The principal objective of the Statement is to support economic growth that is sustainable and inclusive, by promoting competition and consumer protection in the Fijian markets. This can help achieve a positive socio-economic transformation for all Fijians in the following ways: a. Economic growth is achieved when the inflation-adjusted market value of the goods and services produced in the economy increases over time. b. Economic growth is sustainable when it can be maintained without creating significant environmental, economic or other problems, especially for future generations. c. Economic growth is inclusive when it reduces poverty and increases employment opportunities for all groups in Fiji.

5. The Statement aims to ‘promote greater self-regulation and compliance and reduce restrictive trade practices’1. It addresses problems related to anti-competitive conduct and agreements, the control of mergers and acquisitions, misuse of market power, particularly in markets opened up as a result of major reforms, globalization, the increased integration of global value chains and the increase in cross-border trade. The Statement also addresses the need for effective consumer protection.

6. Together, these objectives will improve consumer welfare by making markets work well.

C. Policy framework for Competition and Consumer Protection

I. The Role of Government

i. Ensuring Decision-Makers Consider Markets

7. Government, acting through the Ministry of Commerce, Trade, Tourism and Transport (‘Government’), will work to promote competition. This recognises that policies should be consistent with the principles of promoting competition, including enforcement and advocacy. Compelling public policy justifications will be required for legislation, policies and regulations that restrict competition.

8. When competition is in tension with other public interests, a restriction on competition might be acceptable where: a. the proposed restriction on competition is the least anti-competitive way to achieve the policy objective; and b. there is a clear and compelling case that the restriction is in the interest of the wider community.

ii. Lowering Entry Barriers

9. Where existing laws, practices and procedures of Government might inhibit the development of competition in the Fijian markets, Government will progressively review legislation, regulation and

1 Ministry of Economy, 5-Year and 20-Year National Development Plan: Transforming Fiji (2017), p. 87.

administrative procedures to ascertain whether those create barriers to entry into, or expansion within, markets in Fiji.

iii. Making Government Business More Competitive

10. Government will seek to ensure that entities undergoing State Owned Enterprise (SOE) reform do not take advantage of any change in their status or supervision to engage in conduct that is anti-competitive.

11. Where services are provided by operators of natural monopoly infrastructure, their prices may be set, administered or overseen by authorities independent from those operators, on the basis of transparent criteria.

12. Unless there are compelling reasons to the contrary, enterprises that are connected with the public sector may not enjoy special advantages relative to private sector enterprises.

13. A ‘level playing field’ should exist between Government business activities and private sector enterprises. Government business activities that compete with private provision should comply with competitive neutrality principles. This means that Government business activities should not enjoy a net competitive advantage in a market simply as a result of government ownership.

14. This Statement notes that competitive neutrality is not appropriate in all cases, such as those where it hampers the achievement of important societal goals but, where exceptions are justified, they should be subject to objective determination.

iv. Public Procurement

15. Government re-affirms the principles of the Procurement Regulations 2010 pursuant to the Financial Management Act 2004, which is aligned to this Statement. Government will continue to promote a sound, fair and competitive public procurement system that ensures efficiency, integrity in public service delivery and confidence in the private sector.

II. Rules for Businesses in Fiji

i. Protecting the Competitive Process.

16. Government will modernise and improve the FCCC Act to provide better protection of the competitive process against conduct and transactions that have anti-competitive effects.

17. Misuse of market power is contrary to the public interest. The FCCC Act will be amended so that misuse of market power is assessed and determined by applying a substantial lessening of competition test and a ‘rule of reason’ standard when assessing potential anti-competitive conduct. a. A ‘rule of reason’ standard requires reasonable proof that conduct’s anti-competitive effects outweigh any pro-competitive gains.

18. This Statement recognises the power of innovative techniques for tackling anti-competitive conduct. For example, overseas experience indicates that a ‘whistle-blower’ immunity programme for those who notify the FCCC of cartel conduct, will do much to destabilise and deter cartel behaviour.

19. Government will review and amend the competition provisions of the FCCC Act, with the objectives of enabling the FCCC to effectively deter and combat conduct that is anti-competitive and designing a pro-competitive regulatory regime. General objectives include: a. simplifying the language of competition laws, to make them more accessible; and b. providing legal certainty

20. Key reforms proposed to the legislation include: a. agreements between competitors that are likely to prevent or restrict competition will be prohibited generally; b. certain kinds of cartel agreements between competitors (such as, but not limited to, price- fixing, bid-rigging, market allocation, collective boycotts) will be deemed to have the effect of substantially lessening competition; c. an exemption for “collaborative activities” will be enacted, subject to safeguards under the FCCC Act, to exempt cooperative arrangement between competitors that are pro- competitive in their effect;

d. The exercise of market power by a person with market power in a given market in a way likely to have the effect of substantially lessening competition in the same or another market will be prohibited; e. a pre-merger notification regime will be maintained. This will require all mergers which meet an FCCC prescribed threshold to be notified to the competition authorities. The form of this threshold is to be specified by the FCCC, and may include market share, transaction value, and domestic or global turnover threshold components; f. mergers or acquisitions likely to substantially lessen competition in a market will be required to undertake remedial actions sufficient to offset the anticompetitive effects of the transaction or may be prohibited or legally voided; and g. mergers and acquisitions which were not notified in advance to the FCCC and which are likely to have the effect, or have already had the effect, of substantially lessening competition in any market will face remedial actions, up to and including being legally voided.

ii. Sector-Specific Regulation.

21. Government re-affirms its commitment set out in the 5-Year and 20-Year National Development Plan for the formation of a multi-sectoral regulator (‘MSR’).

22. Government will enact amendments to the FCCC Act to support recovery from the regulated industry of the FCCC’s reasonable costs of regulation.

23. The Government will, in determining an appropriate model of MSR for Fiji, have regard to: a. achieving regulatory efficiency, in order to promote public welfare over the long term; b. consistency with the justifiable requirements of stakeholders; c. consistency of regulatory principles across sectors, where practical; d. compatibility with institutional capacity; and e. ease of implementation of legislative and administrative changes.

iii. Access to Infrastructure and Services

24. Government will keep under review the operation and effectiveness of the regime for registration of access agreements and arbitration of access disputes in respect of the infrastructure facilities and services of “regulated industries.” a. Regulated industries are those with an essential infrastructure or resource that cannot be easily replicated and without access to which competitors cannot reasonably provide goods and services to their customers b. It is imperative that access to essential infrastructure is provided to third parties on agreed terms and conditions and at competitive prices. The access needs to be non- discriminatory. Therefore, the FCCC Act will enable third-party access to significant bottleneck infrastructure, on a case-by-case basis, where it would promote a material increase in competition in dependent markets and would promote public interest.

iv. Empowerment of Micro and Small Enterprise

25. Micro and small enterprises, including those operating in the informal economy, should have rights and recourse similar to those of consumers, in their dealings with other traders. This recognises that enterprises can also be the victims of anti-competitive practises or unfair conduct and that it is desirable they should have rights and recourse similar to those of other consumers.

26. Exemptions for joint or collective buying and promotion, and for collaborative or co-operative activities, should apply to cartel prohibitions under the FCCC Act, subject to safeguards. This recognises the positive social welfare impact of these activities.

III. Protecting Fijian Consumers

i. Fair Consumer Transactions

27. Government recognises that the effective protection of consumers' rights and the promotion of competition in Fiji can often be complementary.

28. Government will review and amend the consumer protection provisions of the FCCC Act, with the objectives of: a. maintaining an institutional emphasis on consumer welfare objectives; b. simplifying the language of consumer protection laws, to make them more accessible;

c. providing legal certainty; d. enabling the FCCC to effectively deter improper conduct that is contrary to consumers’ interests; e. promoting dialogue between consumers and their stakeholders; and f. facilitating consumers’ access to satisfactory remedies.

29. Government will have regard both to international best practices and to Fiji’s particular needs and circumstances in developing legislation to review the existing consumer protection provisions of the FCCC Act.

ii. Women, Rural, And Disadvantaged Consumers

30. Government recognises that not all consumers have the same needs, and that additional care must be taken to ensure that the welfare of disadvantaged groups is protected. This Policy recognises the importance of taking into account these differing circumstances to ensure that the welfare of all consumers is adequately protected.

31. The FCCC shall continue to collaborate with the Consumer Council of Fiji and other relevant agencies to raise awareness and advocate for consumer rights and potential remedies. Emphasis will be placed on raising awareness among women and members of disadvantaged groups.

iii. Price and Rent Control

32. This Statement considers that, where robust competition can exist, consumer welfare is better protected by the competitive process than by controls on prices. The Government will impose control on prices or rents only where there is limited realistic prospect of competition developing in the short term and where the imposition of these controls will not frustrate the development of competition in future.

33. Each price control will expire within a prescribed period of time after it has been imposed. The FCCC will be required to justify the continuation of any price or rental controls, primarily in terms of limited competition in the relevant market. The Minister may write to the FCCC to require evidence justifying a price control, at any time during a price or rental control period.

IV. International Markets

i. International Trade and Investment

34. Fiji is a member of the World Trade Organisation (‘WTO’) and party to a number of trade arrangements for preferential or duty-free access to overseas markets. These arrangements promote economic growth. Government, acting through the Ministry of Commerce, Trade, Tourism and Transport, will continue to remove market entry barriers and ensure greater participation of the Fijian private sector in international trade.

35. Government recognises the importance of domestic competition in fostering international competitiveness, and notes that this Statement is an important component of the Government’s trade strategy. Conversely, Government also recognises the importance of considering the effects of international trade policy on competition in domestic markets in Fiji.

ii. Cross-Border Enforcement

36. Government will review and update the provisions for application of the FCCC Act to the conduct of persons where their conduct affects markets within Fiji, even if occurring partially or wholly outside of Fiji.

37. Government will develop proposals for amendments to the FCCC Act to provide a statutory basis for cooperation arrangements between the FCCC and its overseas counterparts, including for requesting information or assistance and for responding to requests. This acknowledges the multi- national structure of businesses and the interconnected actions of modern competition and consumer protection agencies.

D. Implementation and Oversight

I. Strengthening Institutions

38. Government is committed to ensuring that the institutions responsible for administering and enforcing Fiji’s competition and consumer protection laws will be effective in this role and achieve the law’s desired outcomes.

39. For the reforms outlined in the Statement to succeed, Government will: a. continue to recognise the FCCC as an Independent Commission; b. ensure compliance and enforcement of the legislation; c. ensure resourcing requirements of FCCC are met while working toward the goal of the FCCC being a self-funded organisation; and d. maintain an effective and equitable balance between the interests of business and those of the public.

40. Government will consider whether provisions should be enacted to facilitate private actions by businesses or consumers to enforce the competition and consumer protection rules and recover compensation for loss or damage they have suffered, subject to a prescribed limitation period.

II. Accountability, Monitoring and Evaluation

41. The FCCC will conduct work aligned to the Statement and enforce the FCCC’s governing legislation. The enforcement of the FCCC’s governing legislation remains the primary duty of the FCCC and, in the event that there should be a conflict between the governing legislation and this Statement, the governing legislation is to take precedence.

42. The Ministry of Commerce, Trade, Tourism and Transport will oversee the implementation of reforms outlined in the Statement and prepare a timeline and action plan for its effective implementation. The Ministry will also monitor and report on its progress to the Fijian Cabinet through the Hon. Minister for Industry, Trade and Tourism.

43. Cabinet has approved a Working Group to formulate a Competition and Consumer Protection Policy and review the Legal Framework. This Working Group may make recommendations from time to time for possible improvements and changes to the Statement and the way in which it is implemented. The Working Group will also assist in the coordination of reforms.

44. The Statement shall be reviewed by Government every five years and, if necessary, be updated to ensure its continued applicability. Government shall be responsible for formulating criteria and benchmarks for the evaluation of the Statement by independent experts.