Competition Tribunal on 2013 Strategic Plans

Economic Development

23 April 2013
Chairperson: Mr Z Ntuli (ANC)
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Meeting Summary

The Competition Tribunal  briefed the Committee on its 2013 Annual Performance Plan. The mandate of the Tribunal was to promote competition in the economy in regard to employment, and the practices within a sector. The organisational environment was displayed, and it was noted that it was still a small organisation of 13 staff, but was hoping to increase this by another six. The terms of office of seven out of the eleven Tribunal members would expire in July 2014 and the Tribunal wanted to ensure that their replacements were in place, well in advance, so as not to hinder or slow down the work of the Tribunal. Particular efficiencies had been gained in the past year, with the introduction of case management systems that tracked matters and the customer surveys which aimed to understand stakeholder needs. The training and development programme was also outlined. Challenges included space constraints, and it needed to undertake a gap analysis but shortage of budget affected its ability to do this. It wanted to promote stakeholder awareness and was working on posting decisions on the website, within defined time lines. Ms Carrim outlined the challenges that the Tribunal faced. It was experiencing space challenges and was currently in discussion with the Ministry. There was also a need to institute a gap analysis but there were difficulties in doing this at the moment, because of budget shortages. There was heavy emphasis on the training and enhancing the expertise of staff. On the financial side, it had a budget of R33.08 million, and was given permission by National Treasury to retain the surplus, built up over the last fourteen or so years, because of fluctuating filing needs.

Members were appreciative of the presentation but asked how the Tribunal measured the impact of its work and commented that perhaps its role may not be clearly enough defined. They asked about the staff retention problems, and which customers the Tribunal served. Members wanted to know whether it was accessible to the man on the street, how it promoted itself, whether it impacted on the poor and how many jobs it might have saved, or whether it had any systems to assess this. They enquired how many cases had been handled over the last year, and suggested that whilst it was useful to put the decisions on the website, it might be necessary also to consider other methods of communication. Members asked about what sort of interaction there was between the Tribunal and universities, how it obtained interns, what it could offer by way of internships and learnerships, and what kind of training it offered internally and externally. Members also asked about the impact of cartels, and of the construction industry inquiry, how the Tribunal’s work impacted on the poor, what concerns it needed to address, and sought more information on the budget projections. More questions were asked about the case management system and the likelihood that more full time Tribunal members may be required in the future. They asked about consultants, whether the Tribunal was able to cope with the volume of work, and what the ideal staff establishment would be.

Meeting report

Election of Acting Chairperson
Mr Z Ntuli (ANC) was elected to chair the meeting, and noted apologies.

Competition Tribunal 2013 Strategic Plan presentation
Ms Yasmin Carrim, Full-Time Ex Officio Tribunal Member, Competition Tribunal, tendered the apologies of Chairperson of the Board, Mr Norman Manoim, who was in Madagascar.  She noted that the Competition Tribunal (the Tribunal) was a small organisation, in comparison to the Competition Commission (CC) and it was a reactive organisation in the sense that it acted only on referrals given to it by others. Its mandate was to promote competition in the economy. It had high regard for issues of employment, small businesses owned by historically disadvantaged individuals (HDIs).

Its mandate required it to make expeditious decisions on disputes referred to it, and to do so in a manner that encouraged transparency, fairness and efficiency.

Ms Carrim noted that the decisions of the Tribunal were posted on the website, since it had more international visitors than local ones, particularly those from the BRICS countries.

The decisions of the Tribunal were intended to promote and maintain competition in South Africa, to educate people and create awareness on competition matters. Another of its strategic goals was to strengthen Tribunal capabilities and ensure that it performed core functions.

The Tribunal had eleven members, and she expressed appreciation for the expertise that they had added to the Tribunal over the years, including Mr Reyburn, whose term of office would be ending this year, after ten years. The terms of office of seven members, including that of the Chairperson of the Tribunal, would expire in July 2014. She said the Tribunal would engage with the Ministry to ensure that the functioning of the Tribunal was not unduly affected by delays in making new appointments. In relation to capacity, she noted that an economist had been appointed in 2013.

She indicated that the previous year, the Tribunal was busy with complex issues and that in this year it was looking at potential from Sasol, particularly around plastics manufacturing.

In this year, the Tribunal would be 13 years in existence, meaning that it was still a young organisation. It was still quite small. For delivery purposes, it had embarked on a structural review, and was concentrating on promoting efficiency and benchmarking of a salary review and capacity. She stated that it was a public entity, that had managed to go quite far along its processes, and in June 2013 it would be presenting a report. It had already indicated the need to employ more people. Its salaries, however, were less than other public sector entities, and this meant that it also had quite a high attrition rate of staff. Originally, the Tribunal had appointed people and sent them for training to equip them for their work at the Tribunal. It was now ensuring that all those who entered the organisation would be able to add value immediately because they had the appropriate skills and capacity.

There were three stages to the organisational structure; namely, the gap analysis, the job profiling and grading and a benchmarking exercise.

Amendments to the legislation would affect the Tribunal only if more matters were referred to it by the Commission as a result of the changes.

She noted that the enhancement of organisational efficiency was an ongoing process. This was done through different processes. Firstly the Tribunal had introduced a Case Management System, which was an electronic document system that facilitated the tracking of all cases and yielded performance information. The official launch of this had been done in February 2013. Secondly the Customer Survey aimed to understand stakeholder needs and improve Tribunal performance. It assessed judicial processes, the conduct of hearings, decision making, document management and issuing of rulings, and external communication. Training and development was conducted, not only for the staff, but to promote the Tribunal’s work. The Tribunal continued to focus on partnerships with the University of Pretoria, for case management internships, with Wits and Johannesburg Universities in relation to economists, and with technikons and universities in Johannesburg, Pretoria and Cape Town, for internships in Corporate Services. Currently, the Tribunal was offering six internships, consisting of four university students and two school leavers. It would be permanently employing two, and it was proud of this progress.

Ms Carrim outlined the challenges that the Tribunal faced. It was experiencing space challenges and was currently in discussion with the Ministry. There was also a need to institute a gap analysis but there were difficulties in doing this at the moment, because of budget shortages.

Ms Jeneen de Klerk, Head: Corporate Services, Competition Tribunal, presented the budget and financial performance. She reiterated that a major part of the Tribunal’s work involved stakeholder awareness and its goal was to communicate the activities and decisions of the Competition Tribunal effectively, by posting  decisions on the website, with certain defined time lines. In its operations, there was a heavy emphasis on training and enhancing the expertise of staff.

She noted that the Tribunal had built up a surplus, and had been given permission by National Treasury to retain it for use. She noted that the surplus had not been built up through under-spending, but because of fluctuating filing fees, which had accumulated over the last 14 to 15 years, and this had also been accumulating interest.

She noted that the Tribunal, as a public body, was obliged to ensure that it paid invoices presented to it within 30 days and this was important because most of the suppliers were small businesses who needed to have good cash flow. The Tribunal operated on two payment cycles per month.

The total budget for 2013/2014 was R33.08 million.

The reporting tool CSAL was noted, which was also reflected on the presentation, with performance based targets for a specified period. She noted that this tool allowed for a note of all mergers and case details, which helped the Tribunal then to focus on a number of reports. Similar recording happened for costs, to show the various cost component, and then to provide total reports on costs, like salary, travelling, and accommodation. This helped to isolate and indicate where there might be delays and challenges.

Mr M Hoosen (ID) asked how the Tribunal measured the impact of the work that it performed in terms of its mandate, if it had done any studies to look into this, and what the findings might have shown. He thought that one of its possible weaknesses was that its role seemed to be not strongly enough defined.

Ms Carrim said that it was difficult to say exactly what the impact of the infrastructure was, since this depended on the answers to a lot of questions. However, perhaps its greatest impact was that it constantly tried to advocate that whenever a business tried to engage in cut-throat  activities, it had to be blacklisted.

Mr Hoosen asked who the customers of the Tribunal were, and also who tended to poach its staff.

The question was not answered.

She answered that they’ve been participating on as DECD level. She said budget had  to be reworked since that  was  just a projection.
Mr Hoosen asked how many cases had been handled in the previous year.

Ms Carrim noted that the Tribunal had handled, up to the 3rd quarter of 2012/13, cases that resulted in 122 orders being handed down, of which 120 were accompanied with reasons. It had spent 94 days  on hearings. The Tribunal would have the final audited figures in its annual report.

Mr M Hlengwa (IFP) wanted to know the nature of the interaction the Tribunal had with universities, and how this related to the internships.

Ms Carrim responded that the Tribunal had formed relationships with the various universities, for example by approaching their Law  or Economics faculty, to get assistance in recruiting interns.

Ms D Tsotetsi (ANC) also asked about internships, and in particular wanted to know what the age of the interns was. There were many unemployed graduates who might have been under 25 years old when they graduated, but now were above that age because they could not previously find employment and now were not eligible to be considered for internship opportunities.

Mr Mabasa was interested to hear how ready the interns were to enter other work environments when they left the Tribunal.

Ms Carrim confirmed that there was no age policy in relation to the internships. In relation to learnerships, however, she confirmed that because the Tribunal was such a small organisation, it was likely that it could not assist many of the applicants. However, it had developed links with the Department of Trade and Industry and other related departments who wanted specifically to take in people from a broad range of experience, from school leavers to those who may be relying on recognition of prior learning or were wanting to engage again in the learning process, having left school early. The Tribunal was sensitive to and tried to ensure a mix of age and gender.

Ms Tsotetsi later quipped, in her closing remarks, that the fact that the delegation was entirely female seemed to show that the Tribunal itself had transformed.

Ms de Klerk added that since the Tribunal was so small, it could not spend that much time or resources on learnerships as it had to focus on the core business. The programme for internship and learnerships was not that well developed; it would provide opportunities for others but it tried to outsource skills to another institution. The Tribunal had only 13 staff members itself.

She added that, in regard to general training of professionals at all levels in the organisation, there was a levy payable. This would ensure that external people could be trained.

Mr Hoosen asked how the Tribunal made the public aware of how it supported smaller organisations through its business, and whether it actively educated the public to grow their businesses.

Mr Hlengwa asked if the Tribunal was accessible to the small man on the street and helped to protect this sector’s interests.

The Acting Chairperson asked what other methods the Tribunal employed to raise community awareness. Not everybody had access to a website that could assist the small businesses.

Ms Carrim noted that most of the decisions of the Tribunal were handed down after smaller entities had expressed fears about the behaviour, or proposed mergers of large companies. The complaints would be lodged initially with the Competition Commission, but decisions on conditions would be made by the Tribunal.

Mr Hlengwa asked if the Tribunal had any connection to other institutions, such as Small Enterprise Finance Agency (SEFA) and if it measured how many jobs it might have saved.

Mr Hlengwa wanted to know if the electronic systems had had any impact in terms of creating jobs. He pointed out that technology was on the increase.

Ms Tsotetsi asked about the experiences in the past, and if it was found that people were retrenched as a result of the fines imposed for competition breaches.

Ms de Klerk noted that the Tribunal could not say with certainty that it had saved x number of jobs, but it could only note that it had put certain transactions under scrutiny and had been able to prevent developments that may have led to the demise of other companies. It had been doubling its scrutiny on jobs, and it tried to impose terms to ensure that suppliers were assisted in keeping or growing their businesses.

The Acting Chairperson interjected to note that this point had been covered before, but the Tribunal had noted that it was considering instituting a tracking system, so the question was whether it had done so.

The Acting Chairperson asked abut the impact of cartels, such as the bread price cartel.

Mr X Mabasa (ANC) asked what concerns had been raised that the Tribunal specifically needed to address.

Mr Mabasa asked how relevant the work of the Tribunal was for the poor and if it had any way to speak to their needs.

Mr K Mubu (DA) referred to slide 35 of the documents, which indicated that there was not a consistent growth in the level of the grant from the Department of Economic Development (EDD). For 2016, there was no figure mentioned, and he asked if that meant that the Tribunal would receive nothing. He also questioned whether it was correct that exactly the same fees were projected, for each of the three years covered in the financial projection.

Mr Hoosen wanted more detail on the procurement process, and what percentage of the 18% allocated for “professional services” actually related to consultancies. He also enquired whether it was correct

Ms Carrim noted that the Tribunal had been working on budget and financial matters with the EDD, and the figures were, at this stage, still a projection.

Ms Tsotetsi asked if the budget of the Tribunal was adequate for the training of professionals and recruitment, and wondered if any other incentives could be given, as the salaries tended to be on the low side. She also wanted to know how quickly the Tribunal was able to recruit.

The Acting Chairperson congratulated the Tribunal for the management tracking system and asked if it could recommend it to other similar institutions.

Ms Carrim noted that it was essentially a case management system, comprising a case folder feature, where everything relevant to a person’s case could be filed together, with tracking features.

The Acting Chairperson enquired if there was a likelihood that the Tribunal would require more full-time members as it grew. He also questioned whether there was any legislation planned to cover mentorships, and if so, how far this had gone.

Ms Carrim said that there was a defined process regarding the composition with full and part-time members, and that had been embarked upon.

The Acting Chairperson asked if the Tribunal participated in skills and development with the higher education institutions. He asked what kind of training the Tribunal gave to its lawyers and if it would train any international students.

Ms Carrim noted that in relation to the education and training, it had been found that people used to give up days of work to come through for training and it was decided that the Tribunal would fund the accommodation and registration costs and provide a stipend. It would send one person a year overseas and the organisation could absorb the costs.

Ms Carrim noted that the training was based on defined subjects – such as how cartels would operate, what was appropriate when considering the penalties – and similar issues. There was also training being offered on recent developments, such as the Companies Act.

The Acting Chairperson noted that the Tribunal was paying its suppliers within 30 days and asked who they were, and if this included consultants.

Ms de Klerk responded that the procurement rules and procedures tried to follow what was demanded in the public sector. The Tribunal, for instance, had a three-year contract with a travel agency, and would constantly update the supplier base to rotate the suppliers. Suppliers were to be distinguished from consultants. They were paid from the operational expenses budget. The invoices were for items such as paper.

Mr Hoosen asked how the Tribunal gave its awards, and whether the costs per case were considered excessive.

The Acting Chairperson asked what was the impact of the construction industry enquiry.

Mr Hlengwa  asked if the Tribunal was coping with the volume of work, since there had been several references made to the staff component of only 13 members.

Ms Carrim confirmed that it was still a small organisation and was looking at increasing capacity by six extra staff members. A procurement person was being sought to look at those issues.

The Chairperson enquired what would be the ideal staff establishment.

Ms Carrim said that the Tribunal was still working on that, but said that the turnover rate was not that high at the moment. The Tribunal would be looking at bench-marking and would have to find some way to meet with the offers of competitors, so it would be intending to make adjustments.

The Acting Chairperson thanked the Tribunal.

Ms Tsotetsi, in closing, thanked the presenters for a job well done, even if so many questions had been asked and said that the Committee appreciated its work and had expectations that it would succeed.

Ms Y Carrim asked if the Committee would be interested in attending a Tribunal hearing, and suggested that the date and venue would be sent through to the Committee.

The meeting was adjourned.  


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