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[2013] ZACT 47
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Competition Commission v Primkop Airport Management (Pty) Ltd (016691) [2013] ZACT 47 (7 June 2013)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 016691
In
the matter between:
The
Competition Commission
...................................................................................
Applicant
and
Primkop
Airport Management (Pty) Ltd
................................................................
Respondent
Panel:
N Manoim (Presiding Member), M Mazwai (Tribunal Member) and A Ndoni
(Tribunal Member)
Heard
on: 05 June 2013
Decided
on: 07 June 2013
Order
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the respondent, annexed hereto
marked “A”
and the addendum thereto marked “B”.
Presiding
Member
N
Manoim
Concurring:
M Mazwai and N Ndoni
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD
IN PRETORIA)
CT
CASE NO.:
CC
CASE NO: 201OSEP5367
In
the matter between:
THE
COMPETITION COMMISSION
.............................................................................
Applicant
and
PRIMKOP
AIRPORT MANAGEMENT (PTY) LTD
..................................................
Respondent
CONSENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION
AND PRIMKOP AIRPORT MANAGEMENT (PTY)
LTD IN RESPECT OF
AN
ALLEGED CONTRAVENTION OF
SECTION 4(1)(b)(ii)
OF THE
COMPETITION ACT
89 OF 1998
, AS AMENDED
The
Competition Commission and Primkop Airport Management (Pty) Ltd
hereby agree that an application be made to the Competition
Tribunal
for confirmation of this Consent Agreement as an order of the
Competition Tribunal in terms of
sections 58
(1)(a)(iii) and
59
(1)
(a) of the
Competition Act 89 of 1998
, as amended, on the terms set
out below.
1.
DEFINITIONS
For
the purposes of this Consent Agreement the following definitions
shall apply:
1.1.
“Act” means the Competition Act, 1998 (Act No,89 of
1998) as amended;
1.2.
“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,
South Africa;
1.3.
“Commissioner" means the Commissioner of the Competition
Commission appointed in terms of section of 22 of the
Act;
1.4.
“CLP” means the Commission's Corporate Leniency Policy
issued in terms of Government Gazette 31064 under Notice
628 of
2008.
1.5.
“SanParks” means South African National Parks, a
statutory organisation governed by the
National Environmental
Management Protected Areas Act No. 57 of 2003
, with its principal
place of business at 643 Leyds Street, Muckleneuk, Pretoria, South
Africa;
1.6.
“Consent Agreement” means this consent agreement duly
signed and concluded between the Commission and PAM;
1.7.
“KMIA” means Kruger Mpumalanga International Airport,
which was commonly known by its developer, during its development,
as Primkop Airport;
1.8.
"MOU” means the Memorandum of Understanding concluded
between SanParks and PAM on 21 April 2001;
1.9.
“Parties” means the Commission and PAM;
1.10.
“PAM” means Primkop Airport Management (Pty) Ltd, a
private company registered in accordance with company laws
of the
Republic of South Africa, with its registered office, alternatively
principal place of business at R538 Karina Road, Nelspmit,
South
Africa;
1.11.
“Skukuza Airport” means the Skukuza Airport located at
Skukuza in the Kruger National Park, which is controlled
by
SanParks; and
1.12.
“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 Meinijies Street, Sunnyside,
Pretoria,
South Africa.
2.
COMPLAINT INVESTIGATION AND
COMMISSION'S
FINDINGS
2.1.
On 23 June 2010, SanParks applied for a marker in terms of clause 2
of the Commission’s CLP concerning the MOU, in
terms of which
SanParks agreed to refrain from competing with PAM in the market for
certain public commercial airport services
in Mpumalanga. In return
for so doing, SanParks would receive monetary compensation from PAM.
The marker was followed by a leniency
application submitted to the
Commission on 10 August 2010, which, upon compliance with the
provisions of the CLP, resulted in
granting of conditional immunity
from prosecution to SanParks.
2.2.
Following receipt of SanParks' leniency application, the
Commissioner initiated an investigation into the alleged cartel
conduct under case number 2010Sept5367.
2.3.
The Commission’s investigations revealed that:
2.3.1.
The MOU provided for an undertaking from SAN Parks to not compete
with PAM in the market for certain public commercial
airport
services, with a corresponding obligation of PAM to compensate San
Parks by way of a payment of R5 million to mitigate
any ioss of
income occasioned by the downgrade of the Skukuza.
2.3.2.
Prior to conclusion of the MOU, SanParks was the operator of Skukuza
Airport and PAM was involved in the construction of
the KM IA near
Nelspruit in the Mpumalanga Province as a public commercial airport
for the entire Mpumalanga Province.
2.3.3.
Approximately ten (10) months prior to the MOU’s execution,
SanParks had closed Skukuza, as a result of flood damage
that had
occurred at Skukuza in 2000. As a consequence of the damage and the
resultant closure, Skukuza Airport had a significant
negative
financial impact on SanParks, and, therefore, SanParks independently
closed Skukuza Airport. Furthermore, on 16 January
2001, the Civil
Aviation Authority terminated Skukuza’s commercial licence due
to non-compliance with the Licence Conditions.
2.3.4.
Subsequently, in March 2001, representatives of ABB Equity Ventures
B.V. (
U
EV
M
),
a Dutch company that established PAM as a special purpose vehicle
for purposes of building and operating KM I A, approached
representatives of SanParks with a proposal to ensure the viability
of KM IA by not having Skukuza Airport reopen to a certain
category
of public commercial air traffic.
2.3.5.These
discussions between SanParks and EV culminated
in
the conclusion
of the arrangements as set out in the MOU.
2.3.6.
In terms of the MOU, SanParks and PAM agreed that SanParks would
cease to provide a certain category of public commercial
air traffic
services. In order to do so, SanParks agreed to downgrade Skukuza
Airport from a public to a private airport when
KM IA became
operational. Clause 1, which is the relevant clause of the MOU,
reads as follows:
“
The
parties have reached an understanding that:
1
.
SANParks shall
downgrade Skukuza Airport [i.e. Skukuza] from a public to a private
airport as envisaged
below
with the result that Skukuza Airport will be closed to certain
categories of commercial air traffic when the Primkop Airport
[i.e.
KMIA] becomes operational. This is expected to occur in September
2002"
2.3.7.
SanParks and PAM further agreed that
SanParks would be compensated for the reduction in revenues that it
would experience as a
result of the downgrade of Skukuza to a
private airport, in terms of Clause 3 erf the MOU PAM agreed to pay
the SanParks a sum
of R5 million. The relevant clause reads as
follows:
3.
The Parties acknowledge that the closing of Skukuza Airport for
certain categories of commercial air traffic as envisaged herein
,
and the development
and operation of Primkop Airport, will have a financial impact on
the operations of SAN Parks. To mitigate
the possible negative
financial impacts on SANParks during the initial phase of operating
Primkop Airport, PAM shall make payments
to SANParks as described
below.
3.1.
PAM irrevocably agrees and undertakes, subject to the closure of the
Skukuza Airport as envisaged above, to pay SANParks
the following:
3.1.1.
R1 000 000, 00 (one Million Rand) on 12 May 2001.
3.1.2.
R2 000 000, 00 (two Million Rand) by 15 July 2001; and
3.1.2.
R2 000 000, 00 (two Million Rand) by 15 January 2002. ”
3.2.
Based on the above, the Commission found that SanParks and PAM had
agreed, as set out in the MOU, to divide markets by allocating
services in contravention of section 4(1) (b) (ii) of the Act
3.3.
Furthermore, the Commission also found that, the establishment of
KMIA by PAM was supported by both the National and Mpumalanga
Provincial governments.
4.
ADMISSION
PAM
admits only that it was a party to the MOU.
5.
ADMINISTRATIVE
PENALTY
5.1.
Having regard to the provisions of section
58(1)
(a) (ill), read with sections
59(1) (a), 59(2) and (3) of the Act, PAM agrees to pay an
administrative penalty.
5.2.
The parties have agreed that PAM will pay an administrative penalty
in the sum of R2 million rands being 4% of
RAM’s
total turnover in the 2009
financial year.
5.3.
PAM will pay the penalty amount to the Commission within 30 days of
confirmation of this Settlement Agreement as an order
of
the Tribunal
into the following account:
NAME:
COMPETITION COMMISSION FEE ACCOUNT
BANK:
ABSA BANK, PRETORIA
ACCOUNT
NO: 405 077 8576
BRANCH
CODE: 323 345
5.4.
The Commission will pay these sums to the National Revenue Fund in
terms of section 59 (4) of the Act.
6.
FULL AND FINAL RESOLUTION
This
Consent Agreement is entered into in full and final settlement and,
upon confirmation as an order by the Tribunal* concludes
all
proceedings between the Commission and PAM relating to any alleged
contraventions by PAM (or its shareholders), and any of
its
subsidiaries and/or divisions to an alleged contravention of section
4 (1 )(b) of the Act that are the subject of the Commission’s
investigation under case number 2010Sept5367.
Date
and signed at NELSPRUIT on this the 10th day of MAY 2013
Marius
Nel
Managing
Director: Primkop Airport Management (Pty) Ltd
Date
and signed at PRETORIA on this the 6th day of MAY 2013
Shan
Ramburuth
The
Commissioner, Competition Commission
IN THE
COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD IN
PRETORIA)
CASE NO.: 016691
CASE NO:
2010SEP5367
In the matter
between:
THE COMPETITION
COMMISSION Applicant
and
PRIMKOP AIRPORTS
MANAGEMENT (PTY) LTD Respondent
ADDENDUM TO THE
CONSENT AGREEMENT BETWEEN THE COMPETITION COMMISSION AND PRIMKOP
AIRPORTS MANAGEMENT (PTY) LTD IN RESPECT OF ALLEGED
CONTRAVENTIONS
OF
SECTION 4
(l)(ii) OF THE
COMPETITION ACT 89 OF 1998
, AS AMENDED
1. PARTIES
1.1. The Parties
to this Addendum are –
1.1.1. The
Competition Commission of South Africa (“the Commission”);
and
1.1.2. Primkop
Airport Management Proprietary Limited (“PAM”).
1.2. The Parties
agree as set out below.
2.
INTERPRETATION
In this Addendum
–
2.1. words and
phrases defined in the Consent Agreement will bear the same meanings
herein;
2.2. ’’Addendum"
means this addendum to the Consent Agreement;
2.3. "Consent
Agreement" means the Consent Agreement entered into between the
Commission and Primkop Airport Management,
dated 10 May 2013, in
respect of alleged contraventions of sections of the
Competition Act
No 89 of 1998
, as amended;
2.4. “MOU”
means the Memorandum of Understanding concluded between South
African National Parks and PAM on 21 April
2001;
2.5. "Parties"
means the parties to this Addendum; and
2.6.
"Signature Date" means 10 May 201
%
being
die date of signature of the Consent Agreement by the Parties.
3. RE CORDAL
3.1. During the
course of the hearing for the confirmation of the Consent Agreement
as a Consent Order on 5 June 2013, the Tribunal
requested the
Parties to address one further issue in the Consent Agreement by way
of an addendum to the Consent Agreement Accordingly,
the Parties
have entered into this Addendum to address the query raised by the
Tribunal.
4. ADDENDUM TO
THE AGREEMENT
PAM hereby confirms
that -
4.1. The MOU is of
no further force and effect.
4.2.. South African
National Parks has further confirmed on oath that it is of the view
that the MOU lapsed in 2003.
Date
and signed at NELSPRUIT on this the 7th day of JUNE 2013
Marius
Nel
Managing
Director: Primkop Airport Management (Pty) Ltd
Date
and signed at PRETORIA on this the 7th day of JUNE 2013
Shan
Ramburuth
The
Commissioner, Competition Commission