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[2012] ZACT 96
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Competition Commission v Bosun Brick Midrand (Pty) Ltd (30/CR/Mar12) [2012] ZACT 96 (21 November 2012)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 30/CR/Mar12 015966
In
the matter between:
The
Competition Commission
..................................................................................................
Applicant
and
Bosun
Brick Midrand (Pty) Ltd
.............................................................................................
Respondent
Panel:
Y Carrim (Presiding Member), M Mokuena (Tribunal Member) and T Madima
(Tribunal Member)
Heard
on: 21 November 2012
Decided
on: 21 November 2012
Order
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the respondent, annexed hereto
marked “A”.
Presiding
Member
Y
Carrim
Concurring:
M Mokuena and T Madima
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD
IN PRETORIA)
CT
Case No: 30/CR/Mar12 CC Case No: 2009May4419
In
the matter between:
THE
COMPETITION COMMISSION
.......................................................................................
Applicant
and
BOSUN
BRICK MIDRAND (PTY) LIMITED
........................................................................
Respondent
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND BOSUN BRICK MIDRAND
(PTY) LIMITED IN REGARD TO A CONTRAVENTION OF SECTION
4{1)(b)(i) OF
THE COMPETITION ACT, NO. 89 OF 1998 (AS AMENDED)
The
Competition Commission (“Commission”) and Bosun Brick
Midrand (Pty) Limited ("Bosun Brick”) hereby agree
that an
application be made to the Competition Tribunal (“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
For
the purposes of this Settlement Agreement the following definitions
shall apply -
1.1.
“
Bosun
Brick
” means Bosun Brick
Midrand (Pty) Ltd, a company duly registered and incorporated in
terms of the company jaws of the Republic
of South Africa, with its
principal place of business at corner Cresset and Musket Roads,
Midrand industrial Park, Midrand;
1.2.
“
Cast Industries
"
means Cast Industries (Pty) Ltd, a company duly registered and
incorporated in terms of the company laws of the Republic
of South
Africa, with its principal place of business at 38 Spanner Road,
Clayville Industrial, Midrand;
1.3.
“CLP”
means the
corporate leniency policy of the Commission published in the
Government Notice No. 628 of 23 May 2008, in Government
Gazette No.
31064 of 23 May 2008.
1.4.
“Commission”
means
the Competition Commission of South Africa, a statutory body,
established in terms of section 19 of the Act, with its principal
place of business at Building C, Mulayo Building, dti Campus, 77
Meintjies Street, Sunnyside, Pretoria, Gauteng;
1.5.
“
Commissioner
3
'
means the Commissioner of the Competition Commission, appointed in
terms of section 22 of the Act;
1.6.
“
Concor Technicrete
”
means Murray & Roberts Building Products (Pty) Ltd t/a Concor
Technicrete a company duly incorporated in terms of the
company laws
of the Republic of South Africa, with its principal place of business
at corner Main Reef and Houtkapper Street, Rooderpoort
Johannesburg;
1.7.
“Complaint*
means the
complaint initiated by the Commissioner on 07 May 2009 in terms of
section 49B(1) of the Act under case number 2009May4419
against the
respondents for alleged contravention of section 4(1)(b)(i) of the
Act;
1.8.
"
Generic paving blocks
”
means paving blocks which include interlocking and bevelled paving
blocks used in the industrial, commercial and residential
markets in
South Africa;
1.9.
“
Infraset
’
means Aveng (Africa) Limited t/a Infraset, a company duly registered
and incorporated in terms of the company laws of the
Republic of
South Africa, with its principal place of business at 204 Rivonia
Road, Morningside, Sandton;
1.10.
“MVA Bricks'"
means
MVA Bricks (Pty) Limited, a company duly registered and incorporated
in terms of the company laws of the Republic of South
Africa, with it
principal place of business at Roger Dyson Road, Pretoria West
Industrial, Pretoria.
1.11.
“
Respondents
”
means Infraset, Bosun Brick, Cast Industries, Concor Technicrete,
Vibro Bricks and MVA Bricks.
1.12.
“
Settlement Agreement’
means this agreement duly signed and concluded between the Commission
and Bosun Brick;
1.13.
“The Act’
means the
Competition Act, No. 89 of 1998
, as amended;
1.14.
“Tribunal”
means the
Competition Tribunal of South Africa, a statutory body, established
in terms of section 26 of the Act, with its principal
place of
business at Building C, Mulayo Building, DTI Campus, 77 Meintjies
Street, Sunnyside, Pretoria, Gauteng;
1.15.
“Vibro Bricks
” means
Vibro Bricks (Pty) Ltd, a company duly registered and incorporated in
terms of the company laws of the Republic of
South Africa, with it
principal place of business at Schurweburg Street/ Mooiplaas,
Laudium, Pretoria.
2.
Complaint investigation and the Commission's findings
2.1.
On 22 October 2008
Infraset
applied for corporate leniency in terms of the
CLP
regarding its involvement in a cartel in the market for the
manufacture and supply of
generic
paving blocks
in South Africa. In
the
CLP
application,
infraset
submitted information and documents to the
Commission
indicating,
infer alia,
the
respondents
held meetings and discussions as a result of which they,
inter
a//a, agreed to fix the selling price of
generic
paving blocks
in contravention of
section 4(1 )(b)(i) of
the Act
2.2.
Following
Infraset’s
application for corporate leniency, on 07 May 2009 the
Commissioner
initiated a
complaint
in terms of section 49B(1) of
the Act
against the
respondents.
The
Commission
duly investigated the
complaint
and found that the
respondents
had entered into an agreement, arrangement and understanding
involving the fixing of the selling price of
generic
paving blocks
in contravention of
section 4(1 )(b)(i) of
the Act.
The fixing of the selling price included an agreement among the
respondents
on,
inter alia,
minimum prices, transport costs and price increases of
generic
paving blocks.
The
Commission's
investigation established that the aforementioned conduct of the
respondents
commenced in or about 2001 and continued until at least 2008.
3.
Settlement Discussions
3.1.
On 17 March 2010
Bosun Brick
applied for a marker in terms of the
CLP
in respect of contravention of
section 4(1)(b)(i) of
the Act
in the market for the manufacture and supply of
generic
paving blocks.
Subsequently, on 06
April 2010
Bosun Brick
applied for corporate leniency.
Bosun
Brick’s
application for
corporate leniency was not granted by the
Commission
on account of the fact that
Infraset
was the first company to apply for a marker and corporate leniency.
3.2.
Bosun Brick
co-operated with the
Commission's
investigation of the
complaint
by,
inter alia,
providing additional information on the cartel including details of
meetings and additional evidence.
3.3.
After the unsuccessful corporate leniency application,
Bosun
Brick
initiated settlement
discussions with the
Commission
,
Consequently, the
Commission
and
Bosun Brick
engaged in settlement discussions, the outcome of which is this
Settlement Agreement.
4.
Admission
Bosun
Brick
admits that it has entered
into an agreement with the
Vibro
Bricks,
Cast
Industries
,
MVA Bricks,
and
Concor Technicrete
which
contravened section
4(1
)(b)(i) of
the Act
.
5.
Agreement concerning future conduct
Bosun
Brick
agrees and undertakes to:
5.1.
prepare and circulate a statement summarising the content of this
Settlement Agreement
to its employees who are managers and to its directors and relevant
cosporate governance structures within one (1) month after
the date
of confirmation of this
Settlement
Agreement
as an order of the
Tribunal;
5.2.
refrain from engaging in price fixing in contravention of section 4(1
)(b)(i) of
the Act
;
and
5.3.
develop and implement a compliance programme in order to ensure that
its employees, management and directors do not engage in any
conduct
which constitutes a prohibited practice in terms of
the
Act.
5.4.
A copy of the compliance programme shall be submitted to the
Commission
within three (3) months after the date of confirmation of this
Settlement Agreement
as an order of the
Tribunal.
6.
Co-operation
6.1.
Bosun Brick
agrees and undertakes to cooperate fully with the
Commission
in its prosecution of the remaining
respondents
in the
complaint referral.
6.2.
This cooperation includes, but is not limited to:
6.2.1.
providing the
Commission
with ail relevant evidence available to it that may assist the
Commission
in its prosecution of the remaining
respondents
in
the
complaint
referral; and
6.2.2.
ensuring that all
Bosun Brick’s
current employees, and to the extent possible, former employees, who
have knowledge of the meetings and discussions among the
respondents
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.
Bosun Brick
is liable to pay an administrative penalty in terms of section
58(1)(a)(iii), read with sections 59(1 )(a), 59(2) and (3) of
the
Act
in the amount of R1 320 700,36
(ONE MILLION THREE HUNDRED AND TWENTY THOUSAND AND SEVEN HUNDRED RAND
AND THIRTY SIX CENT) representing
2.5% of
Bosun
Brick’s
affected turnover for
the financial year ended in February 2011.
7.2.
Bosun Brick
will pay the administrative penalty to the
Commission
within six (6) months after the date of the confirmation of this
Settlement Agreement
as an order of the
Tribunal
;
7.3.
Bosun Brick
shall remit payment of the administrative penalty into the following
bank account:
Name
of account holder: COMPETITION COMMISSION
Bank
name: A8SA BANK PRETORIA
Account
number: 4050778576
Branch
code: 323345
7.3.
The
Commission
will pay the administrative penalty into the National Revenue Fund in
terms of section 59(4) of
the Act.
8.
Full and final settlement
This
Settlement Agreement
,
upon confirmation thereof as an order by the
Tribunal
concludes ail proceedings between the
Commission
and
Bosun Brick
in relation to the contravention of section 4(1 )(b)(i) of
the
Act,
referred to the
Tribunal
under case number; CT Case No: 30/CR/Mar12.
SIGNED
at Midrand on this the 25th day of October 2012
Duly
authorised signatory
Bosun
Brick Midrand (Pty) Ltd
SIGNED
at Pretoria on this the 6th day of October 2012
Shan
Ramburuth
The
Commissioner, Competition Commission