COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 81/X/Jul07
In the matter between:
The New Reclamation Group (Pty) Ltd Applicant
And
The Competition Commission Respondent
Panel : D Lewis (Presiding Member), N Manoim (Tribunal Member)
and Y Carrim (Tribunal Member)
Heard on : 31 July 2007
Order issued : 1 August 2007
Reasons Issued: 1 August 2007
Reasons for Decision
Introduction
1] This is an urgent application in which the applicant, The New Reclamation
Group (Pty) Ltd, (“Reclamation”) seeks an order against the respondent, the
Competition Commission (“Commission”) relating to information which
Reclamation has provided to the Commission, subject to a claim of
confidentiality. Reclamation seeks relief to protect the confidentiality claim.
Background
2] In 2006 the Commission initiated a prohibited practice investigation against
various firms including Reclamation. In the course of the investigation the
Commission served a summons on Reclamation, in terms of section 49A of the
Competition Act (“the Act”), requiring it to produce various documents. Pursuant
to this summons, Reclamation submitted a number of files of documents to the
Commission. All the documents were submitted under a claim of confidentiality.
3] Among these documents were emails between employees of Reclamation,
which is Annexure “GW2” to the founding affidavit. In the Commission’s opinion
the contents of these emails, inter alia, purport to demonstrate Reclamation’s
involvement in a scheme that is unlawful in terms of the Act. The contents of
this email became the basis on which the Commission obtained search
warrants from various divisions of the High Court to search Reclamation’s
premises in Johannesburg, Durban and Port Elizabeth. The search warrants
were granted and the searches all took place on 20 July 2007 at all three
premises.
4] Following the searches, on 22 July 2007, the Commission issued a press
statement, which is published on its website, in which it describes its “ raids on
Reclam”. In the course of the press release, the Commission describes the
evidence that led to its decision to conduct the raids. It is common cause that
the evidence cited in the press release is quoted from “GW2”.
5] On 26 July, Reclamation’s attorneys wrote to the Commission and requested
that it:
[5.1] remove the press release from its website;
[5.2] refrain from disclosing any confidential information to third parties; and
[5.3 instruct its public relations consultant not to make any further disclosures to any
third party of the confidential information.
6] On 26 July, the State Attorney, acting for the Commission, denied any
wrongdoing and declined to make any undertaking.
7] The net result was this application, in which Reclamation seeks the following
relief:
1. That this application be heard as one of urgency and that the applicant’s
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non compliance with the Rules of the Tribunal relating to service and time
periods be condoned;
2. The respondents be ordered to:
2.1. Remove the press release, annexure “GW4” to the founding affidavit,
from its website and refrain from any further conduct that would
disclose in the public domain the contents of the documents in respect
of which confidentiality has been claimed by the applicant;
2.2. Treat as confidential all documents provided by the applicant to the
respondent, and in respect of which confidentiality has been claimed
by the applicant;
2.3. Pay the cost of this application including the costs of two counsel,
should the application be opposed;
2.4. Further and/or alternative relief.
The Argument
8] Reclamations’ case is that the Commission was not entitled to make public
information submitted to it under a claim of confidentiality. This is because in
terms of section 44(2) of the Act it is bound by a claim of confidentiality until the
Tribunal has ruled otherwise. It is also common cause that the Commission
was aware of the claim of confidentiality. Reclamation argues that it was not the
Commission’s function to determine the validity of its claim; it was obliged once
made, to act in accordance with them and by publicising portions of the content
of “GW2” in the press release it had breached its statutory duties. Reclamation
claims that it has suffered reputational harm as a result of the publication and
that as the press release has not been removed from the website at the time of
this application, it is suffering ongoing harm.
9] Reclamation is further concerned, that beyond “GW2”, the Commission may
make other documents it submitted under a claim of confidentiality public, as
the Commission does not seem to regard its confidentiality claim as valid.
10] The Commission, however, claims that it was not bound to respect the
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confidentiality claim as it was made invalidly. Accordingly it not only opposed
the application, but also brought a counter application seeking an order that the
entire confidentiality claim made by Reclamation be declared invalid. Central to
the Commission’s defence to the application and the counter application is the
contention that the claim for confidentiality is invalid on two grounds:
[10.1] The claim had not met the prerequisites of the Act;
[10.2] In respect of “GW2”, that the claim related to a document whose contents
“evidences unlawful activity or was used in communicating information aimed
at unlawful activity”, and hence, for that reason, loses its character as
confidential information.
Procedure for claiming confidentiality
11] Section 44 of the Act provides:
“Right to informants to claim confidentiality
44 (1) (a) A person, when submitting information to the Competition
Commission or the Competition Tribunal, may identify
information that the person claims to be confidential
information.
(b) Any claim contemplated in paragraph (a) must be supported by
a written statement in the prescribed form, explaining why the
information is confidential.” 1
12] A form is provided in the rules for doing so; this is form CC7. It is common
cause that Reclamation has submitted a form CC7, annexure “GW1” to the
Notice of Motion, which purports to comply with the Act. The document in
question “GW2”, forms part of a series of files which are identified in the CC7
as Item 9 in the following manner:
[12.1] under the column headed “Name of document / Category of document” is
inserted “ Files titled Reclam Eastern Cape Electronic documents”;
1 The words in bold are defined in the Act.
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[12.2] under the column headed “Name of file and page number at which information
begins and ends” is inserted “For each document referred to in column 1, the
entire document”;
[12.3] under the column headed “Owner of the information” is inserted “The New
Reclamation Group (Proprietary) Limited”;
[12.4] under the column headed “Nature of the economic value” is inserted “The
information constitutes trade and business information belonging to Reclam,
has an economic value and is not generally available to others. The nature of
the economic value lies in the value of the information to Reclam and the
economic loss that Reclam may suffer if the information is disclosed to
unauthorised persons”; and
[12.5] under the column headed “Existing restrictions on access to information” is
inserted “The existing restrictions are those in respect of all confidential
information of Reclam, whereby disclosure of the information is restricted to
employees of Reclam and authorised third persons” .
13] The Commission argues that the claim is invalid in that it does not meet the
requirement on the form CC7 which obliges the claimant to state the page and
line number at which the confidential information begins and ends. In its form
CC7 Reclamation has claimed the entire contents of each file submitted as
constituting the confidential information. Furthermore, that Reclamation does
not, in the language of the CC7 form as it appears in the Commission’s rules,
“…set out the facts and contentions supporting that your claim that the
identified information is confidential”
14] Also of relevance is section 44(1)(b) which requires the claimant to submit a
written statement in the prescribed form “explaining why the information is
confidential.”
confidential.”
15] The Commission argues that in purporting to comply with this requirement
Reclamation has in its CC7 not applied its mind. It has simply parroted the
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language of the Act and asserted this as an explanation. In short what the
Commission is saying is that compliance with the Act requires the rendering of
a reason substantiating a claim of confidentiality, and not a mere conclusion,
before there can be proper compliance with the prerequisites of the Act.
16] Reclamation argues that whilst its description may be succinct, it meets the
requirements of the Act, and once claimed in this way, the Commission is not
entitled to take its own view on its formal validity. The Commission has no
jurisdiction to determine the validity of a CC7 form; it is bound by it, and its
remedy to spurious claims is to be found in section 44(2) of the Act which
states:
44(2) “The Competition Commission is bound by that a claim
contemplated in subsection (1), but may at any time during its
proceedings refer the claim to the Competition Tribunal to
determine whether or not the information is confidential
information”.
17] Reclamation is further aggrieved by the fact that at no time has the Commission
queried the propriety of its CC7 form and the first time it made this challenge
has been in these proceedings after the alleged breach of confidence had
occurred.
18] According to Reclamation, and the Commission does not dispute this,
confidentiality claims of this succinct nature have been accepted by the
Commission in the past, and not having any reason on this occasion to
apprehend that they would not be accepted now, it proceeded to formulate
them in the time honoured way.
19] We have some sympathy with this latter point. We will not decide today whether
the claims for confidentiality have been validly made out in “GW1”. However as
the claims for confidentiality have been validly made out in “GW1”. However as
a public body engaged in law enforcement, elementary fairness requires the
Commission to at least advise the party concerned that its claims were
considered inadequate and allow them to rectify the situation or debate it with
the Commission, before it made them public. 2 Given that no jurisprudence
2 We have not burdened this decision with authority on this point, as we have been asked to
make this decision expeditiously, given the circumstances.
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exists yet on what constitutes compliance with section 44(1) of the Act and the
Commission’s past practice, it is unfair for it, having sought documents as part
of its enforcement regime, not to respect the validity of the claim until it had
challenged them by a proper process. If the Commission wants to discourage
the practice of parties claiming confidentiality in note form, then its response
must be to bring applications challenging the practice, or issue a practice note
for guidance. If it does not, and remains passive in the face of a practice it
disapproves of, it cannot be surprised that parties claiming confidentiality repeat
old habits.
Order
20] We have limited our order to prayer 2.2 contained in the notice of motion.
Granting prayer 2.1 may have exceeded our jurisdiction, but we do not have to
consider that further, given the Commission’s undertaking that it would abide by
the decision of the Tribunal in respect of the future treatment of the documents,
and both parties express wish, that the Tribunal deal with the problem before it,
and not wish it away to another forum.
21] It is not our practice to award costs between the Commission and respondents
in interlocutory matters and this case does not justify a departure from that
approach.
22] We make the following order:
[22.1] The Competition Commission must treat as confidential all documents provided
to it by The New Reclamation Group (Pty) Ltd, and in respect of which
confidentiality has been claimed by The New Reclamation Group (Pty) Ltd, until
ordered otherwise by the Tribunal in terms of section 44(2) of the Competition
Act, 1998, as amended.
[22.2] The counter application is dismissed
[22.3] No order is made as to costs.
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________________ 1 August 2007
N Manoim DATE
Tribunal Member
D Lewis and Y Carrim concur in the judgment of N Manoim
Tribunal Researcher : R Kariga
For the Applicant : D Unterhalter S.C., instructed by Bowman Gilfillan
Attorneys
For the Respondent : P Ellis S.C., assisted by J Motepe, instructed by the
State Attorney
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