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Review of Recent Experiences in the Formulation and Implementation of Competition Law and Policy in Selected Developing Countries

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Review of Recent Experiences in the Formulation and Implementation of Competition Law and Policy in Selected Developing Countries UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT UNCTAD Review of Recent Experiences in the Formulation and Implementation of Competition Law and Policy in Selected Developing Countries Thailand, Lao, Kenya, Zambia, Zimbabwe Edition 2005 UNITED NATIONS New York and Geneva, 2005 Foreword Since the mid 1970s, UNCTAD has been dealing with the issues of competition law and policy and its interface with the development dimension. As evidenced by the large and growing number of countries which have adopted or are in the process of preparing competition laws and policies, there is growing awareness among developing countries, including the least developed countries (LDCs), of the important role which competition law and policy can play in promoting efficiency, economic growth and poverty reduction. This volume highlights the opportunities and challenges which the formulation and implementation of an effective competiton law pose for developing countries. The focus of the country reviews is on the experience gained by the five countries over the last five years on the policy options available to them and on the need for formulation of appropriate institutional framework for effective enforcement. It also identifies best practices and lessons from the five country reviewed and which can contribute to better enforcement and improved economic performance and growth. The key lessons of the country reviews is that merely adopting a competition law is no panacea. Adequate institutional framework, human resources and transparency and fairness in the enforcement process are needed to ensure that competion law and policy are implemented well for markets to function properly, particularly for the poor. The country reviews make a series of recommendations for legislative and institutional reforms for Thailand, Lao, Kenya, Zambia and Zimbabwe that are needed for effective enforcement of competiton law and promoting domestic competition, international competitiveness and development. It is hoped that this publication, which is launched on the occasion of the 5th UN Conference to Review All Aspects of the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, which is to be held in Antalya, 14 - 18 November 2005, will raise awareness and enhance expertise among competion agency officials, private sector stakeholders, consumer organizations and sector regulators about the crucial importance of transparency and fairness in the enforcement of competion law. UNCTAD/DITC/CLP/2005/2 ii CONTENTS THAILAND ....................................................................................................................... 1 1. Introduction .............................................................................................................1 2. The Economic Setting of Competition Law of Thailand ........................................ 2 2.1 The Economic Setting .....................................................................................2 Industry group ................................................................................................................. 4 2.2 Important Economic Regulations.................................................................... 5 2.3 The Role State Enterprises (SOEs) ................................................................. 8 3. Major Element of Thailand Competition Law ...................................................... 10 3.1 The Legislation Process: The Product of Political Compromise .................. 10 3.2 Objective of the Act ...................................................................................... 11 3.3 Statutory Framework..................................................................................... 11 3.4 Administration............................................................................................... 11 3.5 Relations with Competitors........................................................................... 12 3.6 Other Exemptions.......................................................................................... 12 3.7 Conducts Prohibited by the Act .................................................................... 12 3.8 Other Exemptions.......................................................................................... 16 3.9 Enforcement .................................................................................................. 16 3.10 Sanctions ....................................................................................................... 17 3.11 Appeals.......................................................................................................... 17 3.12 Private Suit .................................................................................................... 17 3.13 The Competition Act and Consumer Protection Act .................................... 17 4. Thailand‘s Competition Authority ........................................................................ 18 4.1 The Competition Commission ...................................................................... 18 4.2 The Sub-Commission.................................................................................... 19 4.3 The Specialized Sub-Commission ................................................................ 19 4.4 Investigative Sub-Committee........................................................................ 19 4.5 The Office of the Competition Commission................................................. 20 5. Handling of Competition Clauses ......................................................................... 21 5.1 The Proceeding.............................................................................................. 21 5.2 Cases Handled ............................................................................................... 22 6. Proposed Areas for Amendment to the Competition Act of 1999 ........................ 31 6.1 Substantive law............................................................................................. 31 6.2 Procedural law............................................................................................... 33 6.3 Enforcement Agency..................................................................................... 33 6.4 Administrative and Judicial Review ............................................................. 35 6.5 Sanction......................................................................................................... 35 7. Conclusion............................................................................................................. 35 Lao PDR........................................................................................................................... 37 Introduction ................................................................................................................... 37 Part I: Competition........................................................................................................ 38 1. The Lao Economy ................................................................................................. 38 1.1 Economic structure and characteristics......................................................... 38 iii 1.2 Structure of the market and the level of competition.................................... 41 1.3 National development and poverty reduction strategies ............................... 42 2. Structure of government and administration......................................................... 44 2.1 Post-independence political and socio-economic developments. .................44 2.2 Constitutional and legal framework .............................................................. 45 2.3 Administrative bodies ................................................................................... 46 3. Implications of trade and investment regimes for Competition Policy and Law.. 47 3.1 Decree on Competition.................................................................................. 47 3.2 Past practices and implementation of competition requirements prior to the new Decree................................................................................................................ 49 3.3 Trade policy regime. ..................................................................................... 49 3.4 Industrial and investment policies................................................................. 52 3.4.1 Industrial Policies.................................................................................. 52 3.4.2 Investment policies....................................................................................... 55 3.5 Privatisation policy........................................................................................ 56 3.6 Labour policy ................................................................................................ 57 3.7 Government procurement policy................................................................... 58 3.8 Governance.................................................................................................... 59 4. Barriers to competition in the Lao PDR................................................................ 60 4.1 Barriers to competition from foreign suppliers............................................. 60 4.2 Anti-competitive practices of foreign firms operating in Laos..................... 60 4.3 Cross Border Anti-competitive Practices.....................................................
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