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[2010] ZACT 56
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Competition Commission v Aveng (Africa) Ltd t/a Duraset (65/CR/Sep09) [2010] ZACT 56; [2010] 2 CPLR 258 (CT) (25 August 2010)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 65/CR/Sep09
In
the matter between:
The
Competition Commission
…..............................................................................
Applicant
and
Aveng
(Africa) Ltd t/a Duraset
…..............................................................................
Respondent
Panel
A Wessels (Presiding Member), M Mokuena (Tribunal
Member),
and T Orleyn (Tribunal Member)
Heard
on : 25 August 2010
Decided
on : 25 August 2010
Order
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the respondent, annexed hereto
marked "A".
A
Wessels
Presiding
Member
Concurring:
M Mokuena and T Orleyn
BEFORE
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD IN PRETORIA)
CTCASE
NO: 65/CR/SEP09
CC
CASE MO:
2009JAN4243
In
the
matter between:
COMPETITION
COMMISSION
…............................................................................................
Applicant
and
AVENG
(AFRICA) LTD T/A DURASET
…............................................................................
Respondent
SETTLEMENT
AGREEMENT BETWEEN
THE
COMPETITION AVENG
(AFRICA)
LTD
T
/A
DURASET
IN
RESPECT
OF
CONTRAVENTION
OF SECTION(4)(1)(b) OF
THE
COMPETITION ACT
NO
89
OF
1998
The
Competition Commission and Aveng (Africa) t/a Duraset hereby agree
that application be made to the Competition Tribunal for
confirmation of this Settlement Agreement as an order of the
Tribunal in terms of
sections 58(1)(a)(iii)
and
59
(1)(a) of the
Competition Act No.89 of 1998
, as amended, on the terms set out
below:
1,
Definitions
In
this Settlement Agreement, unless the context indicates otherwise,
the following definitions shall apply:
1.1.
"the
Act'
means
the
Competition Act No. 89 of 1998
, as amended;
1.2.
"CLP"
means
the Corporate Leniency Policy issued by the Commission in terms of
the Act to clarify the Commission's policy approach on
matters
fatting within its jurisdiction in terms of the Act;
1.3.
"Commission"
means
the Competition Commission of South Africa, a statutory body
established in terms of
section 19
of the Act as a juristic person,
with its principal place of business at Building C, Mulayo
Building,- DTi Campus, 77 Meintjies
Street, Sunnyside, Pretoria.
South Africa;
1.4.
'
Commissioned
means
the Commissioner of the Commission appointed in terms of
section 22
of the Act;
1.5.
"Complaint
means
the complaint initiated by the Commissioner in terms of
section 49
B
of the Act against RSC, Duraset, DSI and Videx for alleged
contravention of
section 4(1)(b)
of the Act under case number
2009Jan4243;
1.6.
"DSf means Dywidag-Systems International (Pty) Ltd, a company
duly incorporated and registered in terms of the company
laws of the
Republic of South Africa with registration number 2000/025943/07,
with its principal place of business at 30 North
Reef Road,
Elandsfontein, Gauteng;
1.7.
“
Duras
et”
means
Aveng (Africa) Ltd t/a Duraset a company duly incorporated and
registered in terms of the company iaws of the Republic of
South
Africa, with its principal place of business at Steetedaie House,
670 Power Street, Germiston;
1.8,
"Mining
roof bolts'
1
means
a mining support product which provides roof and wail support in
mines to enhance a mine's structural stability and to reduce
the
risk of cave-ins or other mine failures;
1.9.
"M
&
R Steel
means
Murray and Roberts Steel (Pty) Ltd a company duly incorporated and
registered in terms of the company laws of the Republic
of South
Africa with registration number; 1995/011191/07, with its principal
place of business at 30 Industry Road, Clayviile
Ext 4,
Oiifarrtsfontein (Gauteng);
1.10.
"RSC
means
RSC Ekusasa Mining (Pty) Ltd ("RSC")
t
a
company duly incorporated and registered in terms of the laws of the
Republic of South Africa, with its principal place of business
at 2
Osbom Road, Wadevilie, Germiston;
1.11.
"Tribunal
means
the Competition Tribunal of South Africa, a statutory body
established in terms of
section 26
of the Act as a Tribunal of
record, with its principal place of business at Building C, Mulayo
Building, DTI Campus, 77 Meinfes
Street, Sunnyside, Pretoria;
1.12.
"Wcfex" means Videx Wire Products (Pty) Ltd {'Videx"),
a company duly registered in terms of the company
laws of the
Republic of South Africa with registration number: 1984/009466/07,
with its principal place of business at comer
Lantern and Bream
Roads, Wadeviife, Gauteng;
1.13.
"Settlement
Agreement'
means
this consent and settlement agreement duly signed and concluded
between the Commission and Duraset;
2
Complaint investigation
and
findings
2.1.
On
8 September 2008, the Commission
granted
a
Marker to RSC, a subsidiary of M & R Steel, in terms of the
Commission's CLP following an application for a Marker made
by
U
&
R Steel on behalf of RSC. Subsequently, on 26 September 2008,
M
&
R Steel, acting on behalf of RSC, submitted an application for
corporate leniency in terms of the Commission's CLP. In the
CLP
application, M & R Steel submitted information and documents to
the Commission indicating,
inter
alia,
that
RSC, and its competitors - Duraset, DSI and Videx – held
meetings and discussions as a result of which they, inter
alia,
agreed
to:
2.1.1.
divide the market for mining roof bolts in contravention of
section
4(1)(b)Cii)oftheAct
; and
1in;
margin-top: 0.09in; margin-bottom: 0in; line-height: 0.38in">
2.1.2.
engage in collusive tendering for tenders for the supply of mining
roof bolts in contravention of
section 4(l){b)(iii)
of the Act.
2.2.
As
a result of M & R Steel's application for corporate leniency, on
26 January 2009 the Commissioner initiated
a
complaint
in
terms
of
section 49B(1)
of the Act. The Commission duly conducted an
investigation
into the complaint, as a result of which it found that RSC, Duraset,
DS! and Videx had entered into agreements,
arrangements and
understandings involving:
2.2.1.
dividing the market for mining roof bolts in contravention of
section 4(1)(b)(ii)
of the Act; and
2.2.2.
coliustve tendering for mining roof bolts tenders in contravention
of
section 4(1
}(b)(iii) of the Act.
3.
Settlement discussions
3.1.
On 18 September 2008 Duraset applied for a Marker in terms of the
Commission's CLP in respect of contravention of
section 4(1)(b)(ii)
and (iii) of the Act in the market for mining roof bolts, but
Duraset's Marker application was not granted by the Commission
on
account of the fact that RSC was the first company to apply for a
Marker.
3.2.
Duraset co-operated with the Commission's investigation of the
complaint by,
infer
alia,
providing
additional information including extracts of diary entries; a
spreadsheet reflecting allocation of mining roof bolts
tenders;
e-mail communication; details of meetings and facifttated interviews
between the Commission and its ex-employees.
3.3.
Shortly
before the referral of the complaint to the Tribunal, Duraset met
with the Commission with a view of settling the matter.
As a sequel
to this meeting, Duraset made a settlement proposal to the
Commission in a letter dated 16 September 2009. Consequently,
the
Commission and Duraset engaged in settlement discussions, the
outcome of which is this Settlement Agreement
4,
Admissions
4.1.
Duraset admits that that it has entered into agreements,
arrangements and understandings with RSC, DSI and/or Videx:
4.1.1.
dividing the market for mining roof bolts in contravention
section
4(1}(b)(ii)
of the Act; and
4.1.2.
involving collusive tendering for mining roof bolts tenders in
contravention of
section 4(1}(b)(iii)
of the Act
5.
Agreement
concerning future conduct
Duraset agrees and undertakes:
5.1.
to prepare and circulate a statement summarising the content of this
Settlement Agreement to its employees who are managers
and to its
directors and relevant corporate governance structures within 30
days of the date of confirmation of this Settlement
Agreement as an
order of the Tribunal;
5.2.
refrain from engaging in market allocation and collusive tendering
in contravention of
sections 4(1)(b)(H)
and (Hi) of the Act; and
5.3.
continue implementing the compliance programme developed and
implemented pursuant to the consent agreement entered into between
the Commission and Aveng (Africa) in relation to its infraset
business unit, under
case
number
24/CR/Feb09.
6.
Co-operation
6.1.
Duraset undertakes to co-operate fully with the Commission in its
prosecution of the remaining respondents in the complaint
referral.
6.2.
This co-operation includes, but is not iimited to:
providing
the Commission with alt relevant evidence available to it that
might assist the Commission in its prosecution of the
remaining
respondents in the complaint referral;
ensuring
that all Duraset's current employees, and to the extent possible,
former employees, who have knowledge of the meetings
and
discussions between RSC, Duraset, DSI and Videx, referred to above,
are available to and co-operate with the Commission,
both for
purposes of consultation and to give evidence in proceedings before
the Tribunal.
7.
Administrative
penalty
7.1.
Duraset is liable for an administrative penalty in terms of
sections
58(1){a)(iii)
,
59
(2) and (3) of the Act in the amount of R 21 900
000. The administrative penalty represents 5% of Duraset's total
annua! turnover
for the financial year ending 2008.
a
7.2.
The administrative penalty will be paid by Duraset to the Commission
within ninety (90) days after the date of confirmation
of this
Settlement Agreement as an order of the Tribunal. The penalty will be
paid over by the Commission to the National Revenue
Fund in
accordance with the provisions of
section 59(4)
of the Act.
8.
Full and final settlement
This
Settlement Agreement, upon confirmation thereof as a consent order by
the Tribunal, concludes all proceedings between the Commission
and
Duraset in relation to the contravention of
section 4(1)(b)(ii)
and
(iii) of the Act, investigated under the Commission's case number:
2009Jan4243.
DATED
at
Morningsi
de
o
n
this the
4
th
day
of
August
2010.
Duly
Authorised signatory of Duraset
DATED
at
Pretoria
o
n
this the
5
th
day
of
August
2010.
Shan
Ramburuth
Commissioner,
Competition Commission