NEW COMPETITION LEGISLATION

21 MAY 1998


COSATU rejects with contempt business complaints about the new
competition legislation.  

Business complains that the legislation will too easily trigger the
breaking up of large business entities, which abuse their dominance. 
Business's rejection of a role for ministerial discretion in the
regulation of mergers, reveal both an unrepentant arrogance about
South Africa's past and a marked misunderstanding of the challenges
which our economy faces in the present and future.

Throughout the negotiations at NEDLAC, COSATU has argued in line with
the commitment made in the Reconstruction and Development Programme
that government needs to introduce "strict anti-trust legislation". 
Competition policy should be informed by the need to break up
apartheid era monopolies and concentrations, built up during a time of
systematic exclusion and race privilege.

COSATU's view is that given this background one of the explicit
objectives of the legislation should be the regulation and erosion of
inherited corporate power.  

COSATU supports the fact that the legislation provides for the forced
breaking up of conglomerates that abuse their dominant position, for
example through charging excessive prices or through limiting output,
production or technological development.  In fact, we have proposed in
the NEDLAC process that these provisions should be strengthened so
that in the event of an abuse of dominance forced divestiture should
apply unless it is a firm's first offence and there is another
appropriate remedy provided for in the Act.

Another key issue for COSATU is that, given South Africa's
unemployment crisis and as we approach the Presidential Job Summit, it
would be important for policy consistency that the proposed
competition legislation should include mechanisms to minimise and
avoid job losses.

In the regulation of mergers by the competition authorities and in the
practice of the Minister's discretion in the public interest review
the minimisation and avoidance of job loss must be prioritised.

Business's rejection of the minister's review powers - which enable
the Minister to block a merger on the basis of its employment
implications or where it is necessary to protect national industry
from predatory behavior - is revealing.  It reveals business's
insensitivity to South Africa's unemployment problem and their
misunderstanding of the types of mechanisms which are needed in order
to protect South African interests in our engagement with the
globalising world economy.  

Business's allegation that the ministerial review will create an
environment for corruption only reveals organised business's distrust
in the new political order.  While most people would like to see an
increase in government's powers at protecting jobs and developing the
economy, business want to see a reduction in government power so that
no one will be in a position to interfere in their own selfish and
short-run interests.

COSATU notes that even though the new Competition legislation has been
a long time coming, there has been over the past months a lot of
pressure from government for a speedy resolution of issues at NEDLAC
and much of the discussions have been extremely technical.  It is
important that in the months that there be increased popular
participation on the issue.  

The people who stand to benefit most from the law, being the vast
majority of South Africa's consumers, workers and new entrepreneurs
should be empowered to participate in its final formulation.  COSATU
intends participating actively in advancing our views in all
forthcoming public participation and parliamentary processes.

Nowetu Mpati
COSATU Head of Communications

Tel:    + 27 + 11 + 339-4911
Fax:    + 27 + 11 + 339-2281
E-mail: nowetu@cosatu.org.za