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[2016] ZACT 108
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Competition Commission v Pelchem Soc Limited (CO150Oct16) [2016] ZACT 108; [2016] 2 CPLR 659 (CT) (7 December 2016)
competition
trib
u
nal
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: C01500ct16
ln
the
matter
between:
The
Competition
Commission
Appl
i
cant
And
Pelchem
SOC
Limited
Respondent
Panel
: M Mazwai
(Presiding
Member)
A Ndoni(Tribunal
Member)
M Mazwai (Tribunal
Member)
Heard
on
: 07 December 2016
Decided
on
: 07 December 2016
Consent
Agreement
The
Tribunal hereby confirms the consent
agreement as agreed to by the
Competition Commission and Pelchem SOC Limited annexed hereto marked
"A".
07
December
20
1
6
Date
__________________
Presiding
Member
Ms
Mondo Mazwai
Concurring:
M
s
And
i
swa
Ndoni
and
Prof
.
I
Valod
i
a
I
N
THE
COMPETITION
T
R
I
BUNAL
OF
SOUTH
AFRICA
H
EL
D
I
N
PRETORIA
CT
CASE
NO:
_____________
CC
CASE NO: 2013DEC0615
I
n
the matter between:
THE
COMPETI
T
I
ON
COM
M
I
SSION
Applicant
AND
PELCHEM
SOC
L
I
M
I
TED
Respondent
CONSENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND
PELCHEM
(SOC) L
I
M
I
TED
The
Competition
Commiss
i
on
and
Pe
l
chem
(SOC)
Limited
i
n
the
above
matter
hereby agree that
application be made to the Competition
Tr
i
bunal
for an order
I
n
terms of section 490
read with
section 58(1
)
(b)
of
the
Competition
Ac
t
no
.
89
of
1
998,
as amended
{"the Act"), on
the
terms
set
out
more
ful
l
y
below.
1
D
E
F
I
N
I
T
I
ONS
For
the purposes
of
th
i
s
consent
agreement
the
following
defi
n
i
tions
shall apply
:
1.1
"
Act
"
m
eans the
Compet
it
i
on
Act
,
1998
(Act
N
o
.
89
of
1
998)
,
as amended.
1.2
“
Co
m
m
i
ssion
"
mea
n
s the
Competition Comm
i
ss
i
on
of South Africa, a statutory
body
establi
s
hed
i
n terms
of
section
1
9 of
the
Act,
with
i
ts
principal
p
l
ace
of
b
u
s
i
ness
at
1
st
F
l
oor,
Mulayo B
u
i
l
ding
(Block C),
the DTI Campus, 77 Meintjies Street,
Sunny
s
i
de
,
Pretoria, Gau
t
eng.
1
.
3
"
Complaint
"
means
the
co
m
p
l
a
i
nt
sub
m
i
tted
by Colvic
Petroleum Products
(Pty)
Ltd
and
Colvic
Marketing
&
E
ng
i
neering
(Pty)
Ltd
in
terms
of
section
498(2)(b)
under
case
n
umber
2013Dec0615.
1.4
“
Consent
Agreement
"
m
eans
this agreement d
u
l
y
signed and concluded between
the
Co
m
m
i
ssion
and
P
e
l
chem
.
1.5
"
HOPE
"
means h
i
gh
dens
i
ty
polyethylene.
1.6
"
J
o
i
nt
Development Agreement
”
means the agreement s
i
gned
between Pe
l
chem
(SOC)
L
i
m
i
ted
a
n
d
M
arley
P
i
pe
Systems
(
Pty)
Limited whereby Pelchem
(SOC)
Limited
will
exclusively
supply
surface
fluorination
services for po
l
yethylene
pipes and fit
t
i
ngs
to Marley P
i
pe
Systems (Pty) Li
m
i
ted
who
will
p
u
rchase
such
ser
v
i
ces
on
an
exclus
i
ve
ba
s
i
s
from Pelchem and not use any
competing
products from
alternate suppliers.
1.7
“
Marley
"
means Marley P
i
pe
Systems
(Pty)
L
i
m
i
ted
,
a company
i
ncorporated
I
n
terms of the
l
aws
of South
Africa, with
i
ts
principal
place
of
b
usiness
at No. 1Bickley Road, N
i
ge
l
,
Gauteng
.
1
.
8
"
Part
i
es
"
means the
Com
m
i
ssion
and Pelchem.
1.9
"
Pelchem
"
means
Pe
l
chem
(SOC) L
i
mited,
a
state-owned
company
i
ncorpora
t
ed
un
der
the
l
aws
of
the
Rep
u
b
l
i
c
of
South
Africa
w
i
th
its
principal p
l
ace
of b
u
siness
at
Pelindaba,
Church Street West
Extension
i
n
Brits, N
o
rth
West.
1.10
"
PP
"
means Polypropylene.
1.11
"
Trib
u
na
l
"
means
the
Competition
Tribunal of
South
Africa,
a
statutory body establ shed
i
n
terms of section 26 of the Act, with
i
ts
principal p
l
ace
of
b
u
siness
at
3
rd
F
l
oor,
Mulayo
buildi
n
g
(Block
C},
the
dti
Campus,
77
M
e
intjies
Street, Sunnyside, Pretoria, Gauteng.
2
T
H
E
COMPLAINT
AND
COMPLAIN
T
I
NVES
T
I
GATION
2.1
On
1
8
December
2013,
the
Commission
received
the
Comp
l
aint
and decided to
i
n
vestigate
the
Complaint
i
n
terms of section 498(3) of the Act.
2.2
The
Complainant alleged
that
Pelchem
and
M
arley
have e
n
tered
i
nto
a Joint Development
Agreement
i
n terms
of wh
i
ch
Pelchem
i
s
requ
i
red
to only
surface
fluorinate
Marley
'
s
HOPE
fuel
p
i
pes
i
n
South
Africa
.
As
a result of this Joint
Development
Agreement
between
Pelchem and
Marley,
Co
l
vic
alleges
that
i
t
cannot
enter the
ma
r
ket
for
the
supply
of
fluorinated
H
OPE
fuel p
i
pes
.
2.3
The
Commission
assessed
the alleged
conduct
in
terms
of
the Act.
Following
i
ts
i
nvestigation,
the Comm
i
ssion
found
the
following:
2
.
3.1
Pelchem
is
the
sole
supplier of surface fluorination services
i
n
South
Africa.
Flu
o
rinat
i
on
i
s
the process
whereby fluorine
i
s
used to
treat
various
prod
u
cts
i
n order
to
mod
i
fy
and
i
m
p
rove
the
i
r
permeation and adhesion characteristics.
2.3.2
Marley
is
a manufact
u
rer
of
H
OPE
p
i
pes
for various applications, such
as
pumping
systems
at
fuel fill
i
ng
stations
.
Such
p
i
pes
needs to
be
fluorinated
to prevent
the
fuel
from
l
eaking
through
t
h
e
walls of the pipes.
2.3.3
On or
about
1
0 Dece
m
b
e
r
2013
Pe
l
chem
concl
u
ded
an ever green
J
o
i
n
t
Develo
p
m
ent
Agreement
with
Martey
i
n
terms
of
which
Pe
l
chem
wo
u
l
d
exc
l
u
s
i
vely
supply
i
ts
surface
fluorination services
i
n
respect of HOPE fuel
pipes to
Mar
l
ey
i
n South
Africa.
2.3.4
Pelchem
also
entered
i
nto
similar
exclusive
J
o
i
nt
Development Agreements with
third
par
t
i
es
i
n terms
of which Pel
c
hem
would exclu
s
i
vely
supply
i
ts
surface
fluorination
services
for
(i) fuel tanks;
(ii)
H
O
PE
and
PP
pai
l
s/bucket;
and
(iii)
e
l
ectric
cables
respectively.
3
CO-OPERATION
3.1
Pelchem has
:
3.1.1
Provided
the
Commission
with truthful
and
timely
disclosure,
i
ncludi
n
g
i
nformation
and documents
i
n
i
ts
possess
i
on
or u
n
der
i
ts
control, relating to the alleged proh
i
bited
practices
.
3.1.2
Provided
full
and
expeditious
co-operation
to
the
Commission
concerning the alleged proh
i
b
i
ted
practices.
3
.
1
.
3
Ceased
to
engage
i
n,
and
will
not
i
n
future en
g
age
i
n
,
any
form
of
alleged
prohi
b
i
ted
practice.
3.1.4
Co
n
firmed
that
i
t
has
not
destroyed,
fal
s
ified
or
concealed
i
nformation,
evidence
and
documents
re
l
ating
to
the
alleged
prohi
b
i
ted
p
ra
c
tices.
3.1.5
Confirmed that
it has not misrepresented
or made
a
wilful
or
n
egl
i
gent
m
i
srepresentation
concern
i
ng
the material facts or otherwise acted
d
i
shonestly.
4
U
NDERTAKINGS
4.1
Pelchem
undertakes
that
i
t
will r
e
move
all
c
l
auses
r
e
l
ating
to exclu
s
i
vity
and evergreen duration from
i
ts
ex
i
s
t
i
ng
Joi
n
t
D
e
velopment
Agreeme
n
ts
that
i
nvolve
the prov
i
s
i
on
of sur
f
ace
fl
u
or
in
at
i
on
services
i
n
respect of (i) HOPE pipes; (ii) fuel
ta
n
ks;
(iii)
HOPE
and PP
pai
l
s/buckets
;
and (iv) electric
cables.
4.2
Pe
l
chem
u
ndertakes
that
i
t
will
not,
I
n
the
future,
e
n
ter
i
nto
any ex
c
l
u
s
i
ve
supply agreements
for
the provis
i
on
of surfa
c
e
fluo
r
i
nation
services
for,
i
nc
l
u
d
i
ng
but not
l
i
m
i
ted
to,
H
D
PE
fuel pipes
,
fuel
ta
n
ks, HOPE
and PP pai
l
s/buckets
and
electric
cables.
5
GENERAL
5.1
P
e
l
chem
makes
n
o
admission of l
i
ability
of any k
i
nd
whatsoever
fo
r
any proh
i
b
i
ted
conduct
u
nder
the
Act on
i
ts part
.
5.2
This
agreement,
upon
confirmat
i
on
as
an
order
by
the
Tri
b
unal,
i
s
i
n
settlement of and concludes the Complaint between the Commission and
P
e
l
chem
relating to the alleged contraventi
o
n
by Pe
l
chem
of sections 5(1) and 8(c) of
the
Act
that
i
s
the
s
u
b
j
ect
of
or was
i
nvestigated
u
nder the
Com
m
i
ssion
case
number
2013DEC0615
.
For
Pelchem
(SOC) L
i
m
i
ted
Dated
and signed at
Pretoria
on the
21
st
day of
October
2016
______________________________
RAJEN
N
AIDOO
(D
u
l
y
Authorized)
ACTING
MANAGING DIRECTOR - PELCHEM (SOC) LTD
For
the
Com
m
i
ssion
D
ated
and sig
n
ed
at
Pretoria
on the
21
st
day of
October
2016
_____________________
THEMBINKOSI
BONAKELE
COMMISSIONER
- THE COMPETITION COMMISSION