SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this
document in compliance with the law and SAFLII Policy
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: C0026May15
In the matter between:
The Competition Commission Applicant
and
BLG Leads Logistics of South Africa (Pty) Ltd Respondent
Panel Mr. A Wessels (Presiding Member)
Mr. A Roskam (Tribunal Member)
Ms. A Ndoni (Tribunal Member)
Heard on : 12 August 2015
Addendum received on : 27 August 2015
Decided on : 31 August 2015
Order
The Tribunal hereby confirms the consent agreement as agreed to and proposed by the
Competition Commission and BLG Leads Logistics of South Africa (Pty) Ltd, annexed
hereto marked Wand addendum annexed hereto marked “B”.
31 August 2015
Tribunal Member Date
Mr. A Wesels
Concurring: Mr A Roskam and Ms A Ndoni
IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD IN PRETORIA
CT Case No.
CC Case No. 2013AUG0364
In the matter between:
THE COMPETITION COMMISSION
and
BLG LEADS LOGISTICS OF SOUTH AFRICA
(PTY) LTD
CONSENT AGREEMENT BETWEEN THE COMPETITION COMMISSION AND BLG
LEADS LOGISTICS OF SOUTH AFRICA (PTY) LTD IN RESPECT OF A
CONTRAVENTION OF SECTION 4(1)(b)(ii) OF THE COMPETITION ACT 89 OF 1998, AS
AMENDED
PREAMBLE
The Competition Commission (“Commission") and BLG Leads Logistics of South Africa
(Pty) Ltd ('‘BLG") hereby agree that application be made to the Competition Tribunal
(“Tribunal35) for the confirmation of this Consent Agreement as an order of the Tribunal in
terms of section 49D as read with sections 58(1)(a)(iii), 58(1 )(b) and 59(l)(a) of the
Competition Act 89 of 1998, as amended (“the Act”) on the terms set out below.
1. DEFINITIONS
For the purposes of this Consent Agreement the following definitions shall apply:
1.1 "the Act” means the Competition Act No, 89 of 1998, as amended;
1.2 “BLG” means BLG Leads Logistics of South Africa (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 Ground Floor, Walmer Park House, 16
th Avenue, Walmer,
Port Elizabeth. BLG holds 49% of the shares in NYK Logistics;
1.3 “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
Mulayo Building (Block C), the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria;
1.4 “Commissioner” means the Commissioner of the Competition Commission, appointed in
terms of section 22 of the Act;
1.5 “Complaint” means the complaint initiated by the Commissioner in terms of section 49B
of the Act under case number 2013Aug0364;
1.6 “JV Agreement” means the shareholders1 agreement entered into by NYK and BLG on
25 March 2005 in terms of which the joint venture NYK Logistics was established;
1.7 “Logistics Services” means the inland transportation of motor vehicle production parts;
the warehousing of motor vehicle production parts; the crossdocking of motor vehicle
production parts; customs brokerage and clearance services in respect of imported
motor vehicle production parts within South Africa; and forwarding services for the
export of completely knocked-down motor vehicles,
1.8 “NYK” means Nippon Yusen Kabushiki Kaisha, a Japanese company with its principal
place of business at 3 -2 Marunouchi 2 Chome, Chiyoda-Ku, Tokyo, 100 - 0005, Japan.
NYK holds 51% of the shares in NYK Logistics;
1.9 “NYK Logistics” means NYK Logistics & BLL (NLB) of South Africa (Pty) Ltd, a company
duly registered and incorporated in terms of the company laws of South Africa, with its
principal place of business at Ground Floor, Waimer Park House, 16th Avenue, Waimer,
Port Elizabeth, NYK Logistics is a joint venture established by NYK and BLG. NYK holds
51% and BLG holds 49% of the shares in NYK Logistics;
1.10 “Parties” means the Commission and BLG;
1.11 “Respondents” means NYK, BLG and NYK Logistics;
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 3rd
Floor, Mulayo Building (Block C), the dti Campus, 77 Meintjies Street,
Sunnyside, Pretoria.
2. THE COMMISSION’S INVESTIGATION AND FINDINGS
Sunnyside, Pretoria.
2. THE COMMISSION’S INVESTIGATION AND FINDINGS
2.1 Pursuant to a marker application received by the Commission on 01 August 2013, the
Commission initiated a complaint in terms of section 49B(1) of the Act against the
Respondents.
2.2 NYK and BLG agreed, in terms of clauses 20 and 21 of the JV Agreement, to divide
markets by allocating customers and territories in the market for the supply of logistics
services to German and Japanese motor vehicle and motor vehicle parts manufacturing
industry, through NYK Logistics, in contravention of section 4(1 )(b)(ii) of the Act.
2.3 The case was investigated under Commission case number 2013Aug0364.
2.4 The Commission’s investigation found that clause 20.1.2 of the JV Agreement provides
that NYK shall not compete, directly or indirectly, with BLG in providing Logistics
Services to German automotive manufacturers in South Africa, without obtaining BLG’s
prior written consent.
2.5 The Commission further found that clause 20.1.3 of the JV Agreement provides that
BLG shall not compete, directly or indirectly, with NYK in providing Logistics Services to
Japanese automotive manufacturers in South Africa, without obtaining NYK’s prior
written consent.
2.6 Accordingly, clause 20.12 of the JV Agreement precludes NYK from competing with BLG
in the provision of Logistics Services to German Automotive Manufacturers in South
Africa, while clause 20.1.3 precludes BLG from competing with NYK in the provision of
Logistics Services to Japanese Automotive Manufacturers in South Africa.
2.7 The Commission found that the inclusion of clauses 20.1.2 and 20.1.3 in the JV
Agreement constituted a collusion between NYK and BLG, through the Joint Venture.
2.8 The Commission found that the inclusion of clauses 21.2.1, 21.2.2 and 21.2.3 preclude
NYK and BLG from competing with NYK Logistics in South Africa.
2.9 The Commission also found that NYK and BLG have access to each other’s
commercially sensitive information as a resuit of the cross-shareholding and/or common
directorships in NYK Logistics.
2.10 Following its investigation, the Commission concluded that the abovementioned
conduct constitutes a contravention of section 4(1 )(b)(ii) of the Act in that NYK, BLG and
NYK Logistics agreed, through clauses 20.1.2, 20.1.3, 21.2.1, 21.2.2 and 21.2.3 of the
NYK Logistics agreed, through clauses 20.1.2, 20.1.3, 21.2.1, 21.2.2 and 21.2.3 of the
JV Agreement to divide markets by allocating customers through NYK Logistics.
2.11 As a result of the Commission’s findings, on ‘5 September 2013, the Respondents
approached the Commission to enter into a Consent Agreement.
3.1 ADMISSION
BLG admits that it contravened section 4(1 )(b)(ii) of the Act in the manner set out in clause
2 above.
3.2 FUTURE CONDUCT
BLG agrees to:
3.2.1 refrain from entering into any agreements which may lead to possible contraventions
of the Act;
3.2.2 prepare and circulate a statement summarizing the content of this Consent Agreement
to its employees, managers and directors within fourteen (14) days of the date of
confirmation of this Consent Agreement as an order of the Tribunal;
3.2.3procure the deletion of clauses 20, 21.2.1, 21.2.2 and 21.2.3 of the JV Agreement:
3.2.4 procure the resignation of any director, employee, or shareholder of BLG that is a
board member of or sits in the board of directors of NYK Logistics, it being the intention
of the parties and Respondents that no director, employee, shareholder or member of
the board of directors of NYK Logistics may be a member of or sit on the board of
directors of BLG, and vice versa;
3.2.5 ensure that no employee, director or shareholder who serves on the board of directors
of BLG attends any board meetings of NYK Logistics and/or holds any management
position or directorship in NYK Logistics, it being the intention of the parties and the
Respondents that no employee, director or shareholder of BLG shall attend any board
meetings of the directors of NYK Logistics, and vice versa;
3.2.6 develop, implement and monitor a competition law compliance programme as part of
its corporate governance policy, to ensure that its employees, management, directors
and agents do not engage in future contraventions of the Act. In particular, such
compliance programme shall include mechanisms for the identification, prevention,
detection and monitoring of any contravention of the Act;
3.2.7submit a copy of such compliance programme to the Commission within sixty (60) days
of the date of confirmation of the Consent Agreement as an Order of the Tribunal; and
3.2.8 conduct business in a competitive manner in future.
4. ADMINISTRATIVE PENALTY
4.1 In accordance with the provisions of section 58(1 )(a)(iii) read with sections 59(1 )(a),
4.1 In accordance with the provisions of section 58(1 )(a)(iii) read with sections 59(1 )(a),
59(2) and 59(3) of the Act, BLG agrees to pay an administrative penalty in the amount of
R928 306.28 (Nine Hundred and Twenty EightThousand Three Hundred and Six Rands
and Twenty Eight Cents).
4.2 The abovementioned amount represents 49% of R1 894 502.61 (One million Eight
Hundred and Ninety Four Thousand Five Hundred and Two Rands and Sixty One
Cents). The 49% is proportionate to BLG’s shareholding in NYK Logistics and the
amount of R1 894 502.61 (One Million Eight Hundred and Ninety Four Thousand Five
Hundred and Two Rands and Sixty One Cents) constitutes 3.5% of the annual turnover
of NYK Logistics for the financial year ending December 2012.
5. TERMS OF PAYMENT
5.1 BLG shall pay the amount set out in paragraph 4.1 above to the Commission within thirty
(30) days from the date of confirmation of this Consent Agreement as an order of the
Tribunal.
5.2 This payment shall be made into the Commission’s bank account, details of which are as
follows:
Bank name: Absa Bank
Branch name: Pretoria
Account holder: Competition Commission Fees Account
Account number: […]
Account type: Current Account
Branch Code: 323 345
Reference: 2G13Aug0364 BLG
5.3 The penalty will be paid over by the Commission to the National Revenue Fund in
accordance with section 59(4) of the Act.
6. Full and Final Settlement
This Consent Agreement is in full and final settlement and upon confirmation as an order by
the Tribunal, concludes all proceedings between the parties, relating to the contravention by
BLG of section 4(1)(b)(ii) of the Act, that is the subject of the Commission’s investigation
under Commission Case No: 2013Aug0364.
For BLG Leads Logistics of South Africa (Pty) Ltd
________________________
Authorised signatory for
BLG Leads Logistics of South Africa (Pty) Ltd
________________________
SHANE GERBER - MANAGING DIRECTOR
Dated and signed at __Port Elizabeth__ on the 27th day of.____May_____2015.
For the Competition Commission
_______________________
Tembinkosi Bonakele
Competition Commissioner
Dated and signed at Pretoria on the 28th day of May 2015.
IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD IN PRETORIA)
CT Case No.
CC Case No: 2013Aug0364
In the matter between
THE COMPETITION COMMISSION Applicant
And
BLG LEADS LOGISTICS OF SOUTH AFRICA (PTY) LTD Respondent
FIRST ADDENDUM TO THE CONSENT AGREEMENT CONCLUDED IN TERMS OF
SECTION 49D AS READ WITH SECTIONS 58(1)(a)(iii) and 58(1) (b) OF THE COMPETITION
ACT} NO, AS OF 1998s AS AMENDED, BETWEEN THE COMPETITION COMMISSION: AND
"BLG LEADS LOGISTICS OF SOUTH AFRICA (PTY) LTD, IN RESPECT OF
CONTRAVENTIONS OF SECTION 4(1)(b)(I), (II) AND run OF THE COMPETITION ACT. NO 89
OF 1998 AS AMENDED
This amendment to the consent agreement, which was concluded between the Competition
Commission and BLG Leads Logistics of South Africa (Pty) Ltd signed on 27 and 28 May
2015 and presented for confirmation by the Competition Tribunal on 12 August 2015, sets out
the terms on which the parties to the consent agreement have agreed to amend the consent
agreement:
Clause 3.2.3 of the Consent Agreement is deleted and replaced with the following clause:
"3.2.3 procure the deletion of clauses 20, 21.2.1, 21.2.2, 21,2.3 and 21.2.6 of the JV agreement11
Dated and signed at Port Elizabeth on the 17th day of August 2015
For and on behalf of BLG Leads Logistics of South Africa (Pty) Ltd who warrants that he is
duly authorised to sign as such.
_________________________
SHANE GERBER - MANAGING DIRECTOR
Dated and signed at PRETORIA on the 24th day of August 2015
For and on behalf of the Competition Commission
_________________________
TEMBINKOSl BONAKELE
Competition Commissioner