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PAKISTAN: CCP issues show cause notices to jute mills

ISLAMABAD: The Compe-tition Commission of Pakistan (CCP) has issued show cause notices to 10 jute mills, all members of Pakistan Jute Mills Association (PJMA), for alleged cartelisation in supply of gunny bags to government departments including Pakistan Agriculture Storage and Supply Corporation Limited (PASSCO) in violation of Section 4 of the Competition Act, 2010. 

The show cause notices have been issued to these jute mills and the case has been fixed for hearing on November 6, 2010.

In order to detect cases of collusive tendering or bidding in the public procurement, CCP contacted various government agencies including PASSCO to provide information on the procurements made by them during last three years. 

The data provided by PASSCO raised suspicion about bid rigging - a type of collusive behavior among the jute manufacturing mills prohibited under Section 4 (2) (e) of the Act. 

Based on the information available with it and on recommendation of the Enquiry Committee the Commission deemed it appropriate to search and inspect the office of PJMA located in Lahore under the power granted to it by Section 34 of the Act in order to collect any evidence regarding the suspected violations of section 4 of the Act. 

The Commission on its own decided to initiate a formal enquiry under Section 37(1) of Act and appointed an enquiry committee comprising of Ms Shaista Bano (Director Cartel, Monoplies and Trade Abuses) and Ms Nadia Nabi (Joint Director, Cartels, Monopolies and Trade Abuses). 

The duly authorized officers of CCP conducted the search on July 8, 2010 and impounded valuable materials and documents from the offices of PJMA.

The impounded documents provided information about the collusive activities going on between the jute mills. It was found out by the enquiry committee that there is, prima facie, cartelisation in the market of jute bags in violation of certain sections.

Members of PJMA appear to have deliberately devised a mechanism in an agreement to allocate quota for jute bags tenders invited by different government departments and have, prima facie, violated Section 4(1) read with Section 4(2) (b) and (e) of the Act. staff report

Source: daily times • News Courtesy: BharatTextile.com