1. Towards a fair and efficient economy for all Annual Report 2009/2010 Presentation to Parliament’s Portfolio Committee on Economic Development Commissioner Shan Ramburuth 14 October 2010

2. The work of the Commission Prioritisation  Impact on low income consumers  Alignment with government’s economic policy  Likelihood of anticompetitive conduct Mandate: Competition Act  Prosecution of anti-competitive behaviour  Prevent concentration through merger control  Advocacy for pro-competitive conduct and regulations Operational support  HR, Finance, IT, Security Governance:  PFMA, Treasury regulations and other legislation Towards a fair and efficient economy for all 2

3. Priority sector: Food and agro-processing Pioneer penalty of R195m for collusion in the bread cartel. Appeal heard in September 2010. Negotiating settlement in milling Keystone Milling penalty of R6,7m for participation in the milling cartel. Negotiations currently underway with other respondents Sasol Chemical Industries penalty of R250,7m for collusion in fertiliser products. Omnia and Yara are defending case. Interlocutory challenge of Commission’s pleadings in Competition Appeal Court Senwes’ appeal against finding of exclusionary conduct was dismissed by the Competition Appeal Court. Matter is pending before Supreme Court of Appeal Towards a fair and efficient economy for all 3

4. Priority sector: Infrastructure and construction Collusive tendering by construction companies increases the costs of government investment in new and improved infrastructure Investigations into cement, bricks and piling markets Raids in cement industry resulted in leniency application Referrals and settlements on cast concrete, plastic pipes, bitumen and reinforcing steel Towards a fair and efficient economy for all 4

5. Priority sector: Intermediate industrial products Pricing practices impacts on downstream, labour-absorbing industries Focus on steel and polymers 4 cartel cases referred to the Tribunal involving:  Manufacturing and supply of long steel products  Supply of wire and wire products  Supply of mining roof bolts  Supply of reinforcing wire mesh Towards a fair and efficient economy for all 5

6. Financial Services (Banking) To increase competition in retail banking to the benefit of the consumer Continued focus on implementing 28 recommendations of Banking Enquiry Panel Steering Committee established – dti, Treasury and the Commission, in consultation with the South African Reserve Bank 6 discussion papers: ATM pricing; penalty fees relating to debit orders; improving consumer experience; competition in the national payment system, payment cards and electronic payments Towards a fair and efficient economy for all 6

7. Enforcement cases under investigation Towards a fair and efficient economy for all 7

8. Enforcement cases initiated in 2009/10 (classified by sector) Towards a fair and efficient economy for all 8

9. Corporate leniency applications received Towards a fair and efficient economy for all 9

10. Total cases148 Mergers41 Enforcement107 Complaints referred to Tribunal16 (9 cartel cases) Before the Competition Appeal Court5 Before the Supreme Court of Appeal1 Consent and settlement agreements5 Towards a fair and efficient economy for all 10 Prosecutions

11. Referral of complaints to the Tribunal against corresponding sections of the Act Towards a fair and efficient economy for all 11

12. Towards a fair and efficient economy for all 12 Penalties in 2009/10 RespondentMarket/sectorPenalty amounts (R million) Cobro Concrete (Pty) LtdConstructionR4,023 Marley Pipe Systems (Pty) LtdSteel tubes and pipesR31,078 Sasol Chemical Industries LimitedGasR250,680 Concrete UnitsConstructionR5,764 PioneerBreadR195,718 TOTALR 487,263

13. Mergers notified 2007/08 to 2009/10 Towards a fair and efficient economy for all 13

14. Outcome of merger reviews 2007/08 to 2009/10 Towards a fair and efficient economy for all 14

15. Fewer merger notifications Approximately 8% claimed financial distress Approximately 2000 job losses from 19 transactions: conditions imposed to minimize the impact of job losses Prohibition of Massmart and Finro merger was subsequently approved by the Tribunal after evidence provided at hearing Approval of Aspen/GlaxoSmithKline merger - Commission’s concerns resulted in GSK extending voluntary licences for Abacavir (an antiretroviral product) to generic manufacturers Towards a fair and efficient economy for all 15 Mergers

16. Bid-rigging brochure developed and various workshops held with government and business National Treasury issued practice note in terms of PFMA on Certificate of Independent Bid Determination Comments on procurement policy and legislation Training of procurement officials on prevention, detection and reporting of bid-rigging Towards a fair and efficient economy for all 16 Advocacy: Focus on bid-rigging

17. Participation in international forums:  Competition Committee of OECD (papers on bid-rigging in public procurement, procedural fairness and standard setting)  Annual Conference of International Competition Network  UNCTAD’s Intergovernmental expert meeting on competition law Collaboration with African agencies  Commissioner is vice –chair of the steering committee tasked with setting up an African Competition Forum  Chaired meeting of SADC’s competition committee  Joint Food Project with Zambia and Egypt on edible oils, milling and fertiliser  Opening address at the launch of Namibia’s competition authority  Provided technical assistance to Mauritius’ competition authority  Hosted delegates from Tanzania, the Gambia, and Botswana Towards a fair and efficient economy for all 17 International relations

18. Communications Internal communications  22 discussion forums  13 staff meeting  12 issues of the internal newsletter External communications  19 media releases  Total media coverage: 3425 print and 3878 broadcast media  Website visits: 106,738 times by 45,619 visitors  Media coverage advertising value equivalent: R145,787,617 Towards a fair and efficient economy for all 18

19. Deloitte’s Best Company to work for in the public sector Total staff complement including graduate trainees: 138 Graduate trainees 11 Management development programmes attended by 20 senior staff members Implementation of results of salary benchmarking exercise to align the Commission’s salary bands with the public sector Towards a fair and efficient economy for all 19 Human resources

20. Employment equity (race) Towards a fair and efficient economy for all 20

21. Employment equity (gender) Towards a fair and efficient economy for all 21

22. Knowledge sharing and retention is a strategic priority Knowledge management system designed to integrate with case management system Improved collaboration, accessibility and reporting Will be completed in 2010/11 Towards a fair and efficient economy for all 22 IT and knowledge management

23. 4 audit committee meetings Internal audits conducted on Legal Services, Enforcement and Office of the Commissioner No material breakdown in the functioning of internal financial controls and systems Implementation of revised risk management strategy Compliance with legislation:  PFMA – quarterly reports, monthly expenditure reports, strategic and business plans  Annual training report and workplace skills plan  Contribution to skills levy fund was R562,959 Unqualified audit report - 5 th successive year AG report - 23% of performance targets were not “SMART” Towards a fair and efficient economy for all 23 Planning and reporting

24. Towards a fair and efficient economy for all 24 Financial performance review

25. Towards a fair and efficient economy for all 25 Expenditure for 2009/10

26. Thank you! Tel: 0123943332 Fax:0123944332 email: shanr@compcom.co.zashanr@compcom.co.za Towards a fair and efficient economy for all 26