1. The Application of Leniency Policy on Individuals in South Africa By Tembinkosi Bonakele Deputy Commissioner Competition Commission South Africa 23 January 2013

2. Table of Contents ADMINISTRATIVE REGIMEADMINISTRATIVE REGIME CRIMINAL REGIMECRIMINAL REGIME PROSECUTION OF INDIVIDUALSPROSECUTION OF INDIVIDUALS PROSECUTION OF CRIMINAL OFFENCESPROSECUTION OF CRIMINAL OFFENCES LENIENCY TO INDIVIDUALSLENIENCY TO INDIVIDUALS EVIDENCE OF ENGAGING IN CARTEL CONDUCTEVIDENCE OF ENGAGING IN CARTEL CONDUCT PENALTYPENALTY CHALLANGESCHALLANGES

3. Administrative Regime Cartel conduct in South Africa is prohibited in terms of Section 4(1)(b) of the Competition Act.Cartel conduct in South Africa is prohibited in terms of Section 4(1)(b) of the Competition Act. It is a per se prohibition toIt is a per se prohibition to Fix pricesFix prices Divide marketsDivide markets Tender collusivelyTender collusively The penalty for firms found guilty of cartel conduct can be up to 10% of annual turnoverThe penalty for firms found guilty of cartel conduct can be up to 10% of annual turnover

4. Criminal Regime Competition Amendment Act 1 of 2009 criminalises cartel conductCompetition Amendment Act 1 of 2009 criminalises cartel conduct The Amendment Act is not yet operationalThe Amendment Act is not yet operational Section 73A criminalises cartel conductSection 73A criminalises cartel conduct

5. Criminal Regime (cont…) Section 73A makes it a per se offence for a director of a firm or person having management authority within a firmSection 73A makes it a per se offence for a director of a firm or person having management authority within a firm ­To cause the firm to engage in cartel conduct ­Knowingly acquiesce in the firm engaging in cartel conduct

6. Prosecution of Individuals Persons who cause the firm to engage in cartel conduct may be prosecuted only if:Persons who cause the firm to engage in cartel conduct may be prosecuted only if: ­The relevant firm has acknowledge in a consent agreement that it engaged in cartel conduct ­The Competition Tribunal or Competition Appeal Court has made findings that the firm has engaged in cartel conduct

7. Prosecution of Criminal Offences The prosecution of criminal offence is the responsibility of the National Prosecuting Authority (NPA)The prosecution of criminal offence is the responsibility of the National Prosecuting Authority (NPA)

8. Where the Commission is satisfied that a person is deserving of leniency, the Commission mayWhere the Commission is satisfied that a person is deserving of leniency, the Commission may not seek or request the prosecution of the person who caused the firm to engage in cartel conductnot seek or request the prosecution of the person who caused the firm to engage in cartel conduct make submissions to the NPA in support of leniency for any person prosecuted for cartel conductmake submissions to the NPA in support of leniency for any person prosecuted for cartel conduct Leniency on Individuals

9. Evidence of Engaging in Cartel In a court proceedings against the person, the following are prima facie proof that a firm is engaged in a cartel:In a court proceedings against the person, the following are prima facie proof that a firm is engaged in a cartel: An acknowledgement by the firm in a consent orderAn acknowledgement by the firm in a consent order Findings by the Competition Tribunal or Competition Appeal CourtFindings by the Competition Tribunal or Competition Appeal Court

10. Penalty The firm may not directly or indirectlyThe firm may not directly or indirectly Pay a penalty imposed on the person found guilty of causing the firm to engage in cartelPay a penalty imposed on the person found guilty of causing the firm to engage in cartel Indemnify, reimburse, compensate or defray the expenses of a person incurred in defending against prosecutionIndemnify, reimburse, compensate or defray the expenses of a person incurred in defending against prosecution

11. Penalty (cont…) Any person convicted of causing a firm to engage in cartel conduct is liable toAny person convicted of causing a firm to engage in cartel conduct is liable to Fine not exceeding R500 000.00Fine not exceeding R500 000.00 Imprisonment for a period not exceeding 10 yearsImprisonment for a period not exceeding 10 years OR both fine and imprisonmentOR both fine and imprisonment

12. Challenges Coordination between criminal prosecution authorities and competition authoritiesCoordination between criminal prosecution authorities and competition authorities Impact on the efficacy of the CLPImpact on the efficacy of the CLP Investigation and standard of proof in criminal investigationsInvestigation and standard of proof in criminal investigations