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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: CR086AUG19
In the matter between:
COMPETITION COMMISSION OF SOUTH AFRICA
Applicant
and
AUTOMATIC SPRINKLER INSPECTION BUREAU
(PTY) LTD
First Respondent
BELFA SOLUTIONS (PTY) LTD Second Respondent
BUBHESI FIRE PROJECTS (PTY) LTD Third Respondent
CENTA KZN SPRINKLERS CC Fourth Respondent
NATIONAL SECURITY & FIRE (PTY) LTD Fifth Respondent
COUNTRY CONTRACTS CC Sixth Respondent
CROSS FIRE MANAGEMENT (PTY) LTD Seventh Respondent
FIRE CHECK CC Eighth Respondent
EAST COAST DISTRIBUTORS CC T/A FIRE KING Ninth Respondent
FIRECO (PTY) LTD Tenth Respondent
IBR FIRE PROTECTION CC Eleventh Respondent
JASCO SECURITY AND FIRE SOLUTIONS (PTY) LTD Twelfth Respondent
MULTI-NET SOLUTIONS (PTY) LTD Thirteenth Respondent
SPECIFIRE (PTY) LTD Fourteenth Respondent
SYLVESTER FIRE AND PIPING SERVICES (PTY) LTD Fifteenth Respondent
TFMC (PTY) LTD Sixteenth Respondent
TSHWANE FIRE SPRINKLERS CC Seventeenth Respondent
WHIP FIRE PROJECTS (PTY) LTD Eighteenth Respondent
Panel: Ms M Mazwai (Presiding Member)
Mr A Wessels (Tribunal Member)
Prof L Mncube (Tribunal Member)
~
competitiontri bu nal
SOUTH AFRICA
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Heard on: 16, 17, 23, 24, 25, 26 May, 19, 20, 21 September, 26
and 28 October 2022
Order Issued on: 22 August 2025
Reasons Issued on:
22 August 2025
ORDER AND REASONS FOR DECISION
INTRODUCTION
1. Fires threaten lives and property . Statistics show that thousands of homes and
businesses are affected yearly, resulting in loss of life, property damage, and financial
burdens. Fire s prinkler systems are more accessible in commercial buildings and
affluent homes, but it is essential to expand their availability, especially with the
growing number of buildings for home and business use emerging across the country.
2. As far back as the 1970’s t he short -term fire insurance industry established the
Automatic Sprinkler Inspection Bu reau (Pty) Ltd (“ASIB”), the first respondent in the
matter to develop a standard for the certification of fire sprinkler installations in the
absence of a government standard regulating the fire protection industry. Since then,
ASIB has filled this regulatory gap with the result that, to date, ASIB is still the de facto
regulator of the fire protection industry. A number of parties in the fire protection
industry raised complaints with the Competition Commission (“Commission”) , which
culminated in the referral of this complaint.
3. The fire protection industry includes two types of service providers: (i) sprinkler system
installers (referred to as “installers”); and (ii) fire sprinkler system inspectors (referred
to as “inspectors”). There is a vertical relationship between these services.
4. The case referred by the Commission to the Competition Tribunal (“Tribunal”)
concerns 18 Respondents, that allegedly entered into an agreement, or engaged in a
concerted practice , to divide markets by allocating specific types of services and
geographic territories in contravention of section 4(1)(b)(ii) of the Competition Act, No.
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89 of 1998 as amended (“the Act”).1 According to the ASIB played a ce ntral role in
these alleged market divisions.
5. The Commission withdrew its referral against the Sixteenth Respondent, TFMC (Pty)
Ltd. The Twelfth Respondent, Jasco Security & Fire Solutions (Pty) Ltd, entered into
a consent agreement with the Commission and the Tribunal confirmed the co nsent
agreement on 7 September 2021 .2 At the start of the hearing , certain other
Respondents indicated that they would enter into settleme nt discussions with the
Commission. Nine of t hese Respondents settled with the Commission, and their
settlement agreements were confirmed as orders of the Tribunal.3
6. This left seven remaining Respondents in the proceedings namely: (i) ASIB; (ii) the
Fifth Respondent, National Security & Fire (Pty) Ltd (“National”) ; (iii) the Tenth
Respondent, Fireco (Pty) Ltd (“Fireco”); (iv) the Eleventh Respondent, IBR Fire
Protection CC (“IBR”) ; (v) the Thirteenth Respondent, Multi-Net Solutions (Pty) Ltd
(“Multi-Net”); (vi) the Fourteenth Respondent, Specifire (Pty) Ltd (“Specifire”); and (vii)
the Seventeenth Respondent, Tshwane Fire Sprinklers CC (“Tshwane Fire”).
7. These reasons deal with the remaining seven Respondents against whom the
Commission sought relief.
8. The Commission in its referral alleged that the Respondents divided the market in two
ways:
8.1. Firstly, the Commission alleged that the Respondents reached an agreement in
terms of which ASIB conducted fire sprinkler inspections, while the Second to
Eighteenth Respondents (collectively the “installer respondents”) will exclusively
1 Founding Affidavit at para 29.
2 Case no: CR086Aug19/SA044Jul21.
3 The Respondents who settled were (i) Whip Fire Projects , case no: CR086Aug19/SA015Apr22 ,
consent order dated 20 May 2022 ; (ii) Sylvester Fire & Piping Services , case no:
CR086Aug19/SA021May22, consent order dated 20 May 2022; (iii) East Coast Distributors t/a Fire King,
case no: CR086Aug19/SA027May22 , consent order dated 20 May 2022 ; ( iv) Fire Check , case no:
CR086Aug19/SA028May22, consent order dated 20 May 2022 ; (v) Cross Fire Management ,
CR086Aug19/SA026May22, consent order dated 20 May 2022 ; (vi) Centa KZN Sprinklers ,
CR086Aug19/SA029May22, consent order dated 20 May 2022 ; (vii) Bhubesi Fire Projects , Case No:
CR086Aug19/SA025May22, consent order dated 20 May 2022 ; ( viii) Belfa Solutions , case no:
CR086Aug19/SA020May22, consent order dated 20 May 2022 ; and (ix) Country
ContractsCR086Aug19/SA031May22, consent order dated 24 May 2022.
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provide fire sprinkler installations 4 and not provide fire sprinkler inspection
services. The Commission argues that ASIB’s dominance in the upstream market
for inspection services is deliberate, with the installer respondents operating
downstream providing installation services. It contends that after Mr John Goring
(“Mr Goring”) acquired ASIB in 1995, the installers and ASIB agreed that ASIB
would exclusively provide inspection services while the installer respondents
would focus on installation services.5 By registering with ASIB and by signing the
rules of ASIB ("ASIB rules"), the installer respondents agree to abide by the terms
of the alleged agreement which include that they will not compete with ASIB in the
provision of inspection services. This conduct is referred to as the “ services
market complaint”.
8.2. Secondly, the Commission alleges that the installer respondents, upon registering
with ASIB, have agreed that each of them will do business in the geographic
area(s) for which they are registered with ASIB and agreed to the ASIB rules that
enabled the ASIB-listed installers to divide the market geographically between
them by allocating territories .6 This is referred to as " the geographic market
complaint".
9. The Commission alleges that ASIB's geographic listing of installers in provinces is a
so-called “hub and spoke” cartel arrangement, discouraging the installer respondents
from operating in multiple provinces.7
10. According to the Commission, ASIB functions as the “hub” of the alleged cartel, with
the installer respondents as the spokes, allegedly creating an environment that
contravenes section 4(1)(b)(ii) of the Act.8 The installer respondents are “discouraged”
from working outside their ASIB-assigned geographic territories and must have
facilities to be registered in a region.
4 Commission’s Heads of Argument (“HOA”) at para 1.4.
5 Founding Affidavit at paras 32-33.
6 Commission’s HOA at para 1.5.
7 Commission’s HOA at paras 8.2.21-8.2.22.
6 Commission’s HOA at para 1.5.
7 Commission’s HOA at paras 8.2.21-8.2.22.
8 Competition Commission v South African Breweries Limited and others [2014] 1 CPLR 265 (CT) (“SAB”)
at para 74.
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11. Below we shall ass ess (i) the services market complaint ; and (ii) the geographic
market complaint and consider the overall evidence, as well as evidence in relation to
each of the remaining seven Respondents specifically.
FACTUAL BACKGROUND
The formation of ASIB
12. Before 1970, South Africa did not have a standard or certification for fire sprinkler
installations, leaving insurers, fire departments and clients without a way to assess
the installers’ capabilities. The only reference was the outdated Ninth Edition Rules,
based on British standards from 1954 ,9 produced by the Council of Fire Insurance
Companies in South Africa. This led to inconsistencies, as each insurer had its own
requirements, which resulted in repeated inspections and created an inefficient,
unreliable process.10
13. There was a need within the industry to have an independent and skilled body that
would certify the installation of automatic sprinkler systems in South Africa according
to an updated domestic standard. A further, related, reason was to protect the end -
user, i.e. the owner or occupier of the building, by ensuring that they received an
automatic sprinkler installation that was safe and reliable. To address this, 35 short -
term fire insurers in 1970 established ASIB to independently inspect sprinkler
installations before insurance was issued to building owners.
14. ASIB introduced accreditation criteria, developed the Tenth Edition Rules and
provided training to standardise assessments and improve compliance .11 The Tenth
Edition Rules were updated periodically thereafter by reference to other internationally
acceptable standards , such as British Standard EN, National Fire Protection
Association (“NFPA”), Factory Mutual Global ("FM") and Loss Prevention Certification
Board ("LPCB") – to accommodate modern technology and the unique South African
market environment.
9 ASIB's witness statement at paras 2.1 - 2.3; ASIB, Fireco and Specifire’s HOA at para 12.
9 ASIB's witness statement at paras 2.1 - 2.3; ASIB, Fireco and Specifire’s HOA at para 12.
10 ASIB, Fireco and Specifire’s HOA at paras 13 -14.
11 Ibid at paras 17-19.
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ASIB sold to Mr Goring
15. According to ASIB, although ASIB was owned by short -term insurers, they provided
no capital to ASIB but retained control over its operations.12 ASIB frequently struggled
financially and was eventually declared insolvent. In 1995, it was sold to Mr Goring for
a nominal sum.13 Mr Goring, a former insurance company general manager, brought
in several directors who previously held executive roles in the industry. Following the
sale, ASIB underwent significant changes, which will be discussed later . Mr Goring
occupied the role of managing director of ASIB until October 2017, when Ms Natasha
Goring (“Ms Goring”) took over.
Tenth to Twelfth Edition Rules and the Development of SABS standards
16. It is common cause that between 1970 and 2009, the Tenth Edition Rules served as
the primary standard for fire sprinkler installations in South Africa.14
17. In 1987, the South African Bureau of Standards (“SABS”) , the statutory body for
developing, promoting and maintaining standards in South Africa , introduced SABS
0400-1988, allowing alternative fire protection methods for buildings that fell outside
the National Building Regulations Act, 103 of 1977. These alternatives were known
as rational design and required supporting rules, codes or standards.15
18. In 1990, SABS developed the SABS 0287 code, halting updates to the Tenth Edition
Rules. However, due to challenges with rational design and the lack of a national fire
sprinkler standard, Munich Re and ASIB urged SABS to create one .16 Finalised in
1996, but only released in 2000, SABS 0287 was outdated by publication, prompting
ASIB to introduce the Eleventh Edition Rules in 2009.
19. SABS later requested ASIB to draft a new fire sprinkler standard, SANS 10287, but it
was never published. ASIB continued applying the Eleventh Edition Rules until 2016
12 Ibid at para 18.
13 Ibid at para 18.
14 Ibid at para 19. See also the Commission’s HOA at para 2.2.
15 Ibid at paras 20-21.
14 Ibid at para 19. See also the Commission’s HOA at para 2.2.
15 Ibid at paras 20-21.
16 Ibid at paras 19-27.
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before introducing the Twelfth Edition Rules in 2017, which remain the current
standard for new buildings.17
ASIB after 1995
20. According to the Commission, ASIB’s business model changed after Mr Goring
acquired it.18 Recall that the insurers wanted an independent inspector of sprinkler
installations. Previously, according to the Commission, the fire protection service
providers conducted inspections, but after the sale of the business , the installers
allegedly agreed that ASIB would have exclusive rights to sprinkler inspections while
the other service providers focused solely on installations.19 By registering with ASIB,
the installers accepted these rules and the amended Rules for Automatic Sprinkler
Installations, effectively agreeing not to compete with ASIB in the provision of
installation services. These rules were formalised in the Second Amendment of the
Tenth Edition Rules.
21. It is common cause that ASIB maintains a voluntary listing of installers who meet its
standards for advising, designing, and installing sprinkler systems.20 Firms listed with
ASIB must adhere to recognised installation standards, submit project lists to ASIB,
uphold workmanship quality, and refrain from conducting inspections on their own or
competitors’ (i.e. installers’) work.
22. Installers are categorised by ASIB as follows: (i) supervising installers21 (employing
certified and competent staff) ; (ii) installers22 (meeting basic competency
17 Ibid at para 27.
18 Founding Affidavit at para 32.
19 Ibid at para 32.
20 ASIB, Fireco and Specifire’s HOA at para 32.
21 This category of installer is the most substantial in terms of capacity requirements. A supervising installer
has sufficient competent staff to approve sprinkler system drawings, and to subcontract services when
necessary. A supervising installer must, inter alia: employ two or more people who hold a certificate of
competency from ASIB, and two or more other draughtspersons capable of designing sprinkler
competency from ASIB, and two or more other draughtspersons capable of designing sprinkler
installations to an approved and recognised standard.
22 This type of company complies in all respects with the requirements to be listed as a supervising installer,
but is slightly smaller in terms of qualified personnel. This category of installer must, amongst other things:
employ one Competent Person and one other draughtsperson capable of designing sprinkler installations
to an approved and recognised standard. A "Competent Person", as defined by ASIB, is a person who
has written and passed the ASIB examination of competency, and who holds a certificate of competency
from ASIB.
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requirements); (iii) conditional installers23 (lacking certified staff but demonstrating
capability); and (iv) provisional installers24 (new or unverified companies).25
COMPLAINT BACKGROUND
23. Between 2014 and 2017, the Commission received multiple complaints alleging
ASIB’s involvement in collusive conduct within the fire protection industry. On 5
July 2017, the Commissioner initiated a complaint against ASIB , and all fire
protection service providers registered with it for a possible violation of section
4(1)(b)(ii) of the Act.26
24. As part of its investigation, the Commission conducted dawn raids in August 2017
on ASIB and 24 fire protection companies.
25. The matter was referred to the Tribunal on 16 August 2019. As mentioned above,
certain Respondents settled their matters. The hearing in relation to the remaining
seven Respondents commenced on 16 May 2022 and was concluded on 28
October 2022.
26. The Commission seeks an order against the seven remaining Respondents declaring
that:
26.1. The Respondents , being parties in a horizontal relationship, engaged in
market division and have contravened section 4(1)(b)(ii) of the Act;
26.2. The Respondents be liable for the payment of an administrative penalty
equal to 10% of their turnover in terms of section 58(1)(a)(iii), read with section
59(2) of the Act; and
23 This type of company complies in all respects with the requirements to be listed as an installer with the
following exception: it is a company that does not employ any Competent Person but has proven through
installations that have been inspected and approved, or through examinations or course attendances, that
it is capable of installing sprinkler systems to a minimum proven standard. Often this level of installer
subcontracts its design and calculation to a third party.
24 This category is reserved for newly -listed companies and companies that have failed to submit any
substantive work for inspection to ASIB for a reasonable period, and have therefore failed to meet the
requirements set out for their level of registration. U ntil such time as a proven track record is achieved,
the company remains in this category. Any company listed as a provisional installer is under review by
ASIB, based on the fact that it is newly listed or has failed to meet the relevant listing requirements.
25 Ibid at paras 38-46.
26 Founding Affidavit at para 28.
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26.3. Granting the Commission such further and/or alternative relief.
WITNESSES
27. We heard evidence from a total of 10 factual witnesses called by the Commission and
the remaining seven Respondents. The Commission led three factual witnesses, while
the Respondents each called one factual witness.
Commission’s witnesses
28. The Commission's first witness, Mr Des Rielander (“Mr Rielander”), previously worked
for the fire department before joining ASIB as a contractor around 2003/2004,
conducting fire protection system inspections for 13 years.
29. He later became the technical director of the South African Inspectorate for Fire
Protection (“SAIFP”), an independent fire inspection service provider established in
2016. SAIFP operates without a membership list, conducting project -based
inspections. SAIF’s role remains limited as insurers continue to require inspection
services by ASIB.27 SAIFP, therefore is a competitor of ASIB in relation to fire
protection inspection services.
30. The Commission’s second witness, Mr Wynand Engelbrecht (“Mr Engelbrecht”), is an
industry veteran with over 40 years ’ experience in the fire protection industry . Mr
Engelbrecht now runs the only privately-owned fire brigade. While he played a role in
establishing SAIFP, he has since resigned from the organisation.28
31. The Commission’s third witness was Mr Clyde Becker (“Mr Becker”), is a co-owner of
Firebrand (Pty) Ltd (“Firebrand”), a company established in 2014 that conducts
business in the fire protection services market.29
27 Transcript at p 178.
28 Transcript at p 320.
29 Transcript at p 505-506.
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Respondents’ witnesses
32. For the Respondents, the following witnesses were called:
32.1. Ms Goring, ASIB’s former Managing Director from September 2017 to
February 2020;
32.2. Mr Yagalingum Nanthakumaran Valloo Nair (“Mr Nair”), National’s Chief
Operating Officer from August 2017;
32.3. Mr Atish Shanker Shiba (“Mr Shiba”), Fireco’s Chief Financial Officer since
May 2015;
32.4. Mr Ivan Radmore (“Mr Radmore”), a member of IBR from 1990;
32.5. Mr Johan Jacobus Smith (“Mr Smith”), Multi-Net’s Managing Director;
32.6. Mr Martin Holmes (“Mr Homes”), Specifire’s Managing Director since 1995;
and
32.7. Mr Adriaan Barend Jacobus Olivier (“Mr Olivier”), Tshwane Fire’s Contracts
Manager since 2009.
Legal principles
33. Section 4(1) of the Act states that: “an agreement between, or concerted practice by,
firms, or a decision by an association of firms, is prohibited if it is between parties in a
horizontal relationship and if-
(a) ….
(b) it involves any of the following restrictive horizontal practices:
(i) ….;
(ii) dividing markets by allocating market shares, customers, suppliers, territories
or specific types of goods or services; or
(iii) ….”
34. Section 1(1) of the Act defines "horizontal relationship " as a relationship between
competitors.
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35. The Act defines an “agreement” as including “ a contract, arrangement or
understanding, whether or not legally enforceable”.30
EVIDENCE AND ANALYSIS
ASIB and its membership
36. According to ASIB, it maintains, on its website, a list of sprinkler installers who have
demonstrated the ability to interpret the rules and correctly advise on, design,
calculate, fabricate and maintain sprinkler systems according to approved standards,
and who seek listing as such.
37. The primary purpose, and benefit of the listing service , according to ASIB, is that it
indicates to customers that (i) ASIB recognises, and recommends, the relevant firm
as having the capability in the field in which it is listed : and (ii) such installer's work
will, on completion, be inspected by ASIB for compliance with the requisite standard
in order to ensure the quality of the installation and protect the client's interests (and
that, in the event of non -compliance, the instal ler will carry out the necessary
rectification work).
38. In order to be listed as an installer, ASIB will initially consider whether the company
employs staff that (i) have on-site sprinkler experience, and (ii) are capable of advising
on the risk and requirements of sprinkler systems in accordance with internat ionally
acceptable and proven standards.
39. ASIB submits that t here are many installation companies in the sprinkler installation
industry that it does not list. If a firm does not wish to be an ASIB -approved provider
of installation services, it is not required to register with ASIB and may still request to
have its installations inspected by ASIB.
40. In order to be listed as an approved installer, an applicant must submit a registration
form and a company curriculum vitae outlining the sprinkler installation experience of
its staff. If the curriculum vitae of a company indicates that the company has ca pable
30 Section 1(ii) of the Act.
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and qualified staff, an entrance test is required to be written. The test, a 90 -minute,
twenty-five question open-book test on the Ninth, Tenth, Eleventh and Twelfth Edition
Rules, is held approximately once every three months. If the required pass mark is
achieved, then the cost of the test per person is credited to their company's a ccount
and deducted from the listing fee.
41. ASIB's conditions of listing require that installers, if they wish to be listed as ASIB -
approved providers of installation services, comply with the minimum installation
requirements set by ASIB and submit that work for inspection by ASIB. In particular,
the general conditions of listing include that the listed company shall, inter alia:
41.1. Install sprinkler systems in accordance with known and proven rules or
standards which would be acceptable to any international independent third-party
inspection authority;
41.2. Submit to ASIB, for approval purposes, a complete list of all installation
work undertaken by that installer . Where an installation is performed in
accordance with the FM or NFPA31 standard, that work may also be inspected by
FM and NFPA32 inspectors, as the case may be. This enables ASIB to ensure that
the installation services have been performed in accordance with the relevant
minimum standards, and to certify the services as such for the benefit of the end-
customer;
41.3. Ensure that ASIB and/or the sprinkler trade will not be brought into disrepute
through poor advice, workmanship, failure to complete contractual obligations,
failure to apply correct minimum standards, or for any other reason; and
41.4. Not undertake inspections for approval purposes, or sign off or certify (for
compliance purposes) its own or a competitor's work . (underlying indicates ASIB
rules that are the subject of dispute in this matter)
42. The Commission’s witnesses attested to the fact that joining ASIB is voluntary .33 For
42. The Commission’s witnesses attested to the fact that joining ASIB is voluntary .33 For
example, Mr Becker, the Commission’s third witness, who is a co-owner of Firebrand,
31 FM and NFPA are internationally recognised fire protection standards.
32 Ibid.
33 Transcript p 186-7.
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stated that Firebrand was not ASIB listed.34 However, it is the Commission’s case that
coercive market forces compel installers to join ASIB.
43. Witnesses consistently submitted that it is either the insurance companies, customers
issuing tenders or engineers who require adherence to the ASIB standards - this was
confirmed by several witnesses.35 The Commission’s witness Mr Becker stated:36
“ADV WILSON SC: I take your point, and it’s a useful correction that it’s in
most instances not the function of the installer to get a third-party inspection
service. If one is required that would be the prerogative of the client or the
insurer, whoever is calling the shots on a particular installation, is that right?
MR BECKER: Correct, ja”.
44. Multi-Net, for example testified that , it is registered with various institutions and
associations to meet customer requirements and secure tender opportunities,
necessitating affiliation with ASIB for bidding success.37 According to Multi-Net, most
tenders from government and parastatal agencies also required fire protection
installations to comply with ASIB standards, with inspections mandated by ASIB.
45. Multi-Net further submitted that it did not dictate these standards or inspectorates,
either independently or in collaboration with ASIB or other installer respondents. Its
registrations were standard business responses to market conditions and customer
requests for quotations (“RFQs”). The RFQ specifies the recognised accreditation
institution that the Respondent must adhere to if third-party inspections are required.38
ASIB’s market position in inspection services
46. Given the history of the sector as set out above, ASIB currently enjoys a position of
pre-eminence in the fire sprinkler inspection segment, where the evidence suggests
that it dominates the inspection services segment.
34 Transcript p 552.
35 Mr Rielander Transcript at p 178-9, p 186-7; Mr Engelbrecht Transcript at p 333; Ms Goring at p 758, p
760; Mr Smith at p 981-2. Mr Homes at p 1105-6.
36 Transcript at p 553.
37 Multi-Net HOA at para 7.1.
38 Multi-Net HOA at para 7.4.
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47. It is common cause that ASIB conducts the majority of inspections in the South African
fire protection services market. It is common cause, also, that the majority of insurers
(and consequently building owners) continue to require ASIB inspections as a
prerequisite for their provision of insurance.39
Relationship between inspection and installation services
48. According to ASIB, c ompliance inspection services operate as a form of quality
control. There is value to insurers and end-clients in having an independent third-party
compliance inspectorate interpret the requirements of fixed fire protection, inspect
installations, evaluate designs, and confirm the accuracy of calculations. This also
assists the end -user to identify non -conformities in an installation for the ins taller to
rectify or attend to.
49. Inspection and installation servi ces are in a vertica l relationship to each other. The
installers must have their installations inspected. This is a requirement in order to ,
inter alia, get fire insurance for a particular building/premise.
50. We now turn to deal with the service market complaint.
The services market complaint
51. It is common cause that at the time the installers applied to be listed as approved
installers by ASIB , ASIB was not active in the installation market, and none of the
installer respondents were active in the compliance inspection market.
52. As indicated, the Commission alleges that by registering with ASIB, the installers
accepted ASIB’s rules, thereby effectively agreeing not to compete with ASIB in the
provision of inspection services.
53. In support of its claim of what the Commission cal ls a structured division between
installation and inspection ,40 the Commission referred, inter alia , to e-mail
39 Commission’s HOA paras 2.1, 2.5 and 2.6.
40 Emails between Mr. Goring and Myra Kotze: Tiger Brands Sprinkler Inspection Report (Evidence
Bundle Item 30). Commission’s HOA at para 8.3.1. Evidence Bundle 681, Transcript 694 – 696.
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correspondence to Myra Kotze of Ogon Fire Services (Pty) Ltd (“OFS”), an installer,
in which Mr Goring stated, “The agreement is clear, ASIB conducts inspections, does
not install sprinklers, and doesn’t create rectification requirements.”
54. Ms Goring was also taken to e -mails41 where, in one instance, ASIB was confirming
the deregistration of an installer who had performed inspections , and in another
instance, an e-mail42 confirming to an installation company that-
“[w]hen a company lists with the ASIB as an installer the installing company
signs a contract stating all work will be submitted to the ASIB for inspection.
This is a contract between the ASIB and the listed companies and a breach
of this Clause will result in the removal of the ASIB list. This Clause has
been in force for the last 44 years”.43
55. It is also common cause that ASIB does not permit ASIB -listed installers to perform
compliance inspection services. ASIB submits that this is so for three main reasons:
55.1. to protect the standing and credibility of the ASIB standard as well as ASIB's
reputation in the compliance inspection services market;
55.2. to avoid the potential conflict of interest that is inherent in installers
conducting compliance inspection services for other installers with whom they are
in competition; and
55.3. it would not make commercial sense for ASIB to perform a listing service
for installers if listed installers were then permitted to provide compliance
inspection services themselves.
56. ASIB further submits that the reputational association that exists between it and the
installers it recommends is one of the key reasons for its requirement that ASIB-listed
installers do not themselves perform compliance inspection services. ASIB explained
that its reputation is inextricably linked to that of the installers.
57. For example, if the listed company installs work to an unacceptable standard, the
57. For example, if the listed company installs work to an unacceptable standard, the
reputation of ASIB is directly affected. Consequently, ASIB spends a substantial
41 Evidence Bundle p 655 and 657, Transcript p 691- 694.
42 Email from Natasha Adams to John Netherlands: ASIB Conditions of listing (Evidence Bundle Item 90) ,
Commission’s HOA at para 6.11, Evidence Bundle p 1731 - 2, Transcript p 682-685.
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amount of time evaluating, vetting, and monitoring listed installers, and their staff
capabilities and work, for the duration of their listing.
58. If ASIB permitted other parties to perform compliance inspection services in respect
of the ASIB standard (which ASIB developed and in which it owns the intellectual
property), any failures by such other inspectors would undoubtedly harm the
reputation that ASIB has built, and the standard it has developed, over many years.
59. As noted above, other independent companies and bodies other than ASIB also
provide compliance inspection services.
Were the parties in a potential horizontal relationship in the provision of inspection
services?
60. The Commission argues that that installers face no switching costs to enter the
inspection market. The work entails a visual inspection against the applicable
technical standard, requiring only adequate knowledge of fire sprinkler systems.44
61. The Commission argues that in a market division context the mere potential for
competition is enough to create anti -competitive effects. This is because firms may
divide markets to prevent actual competition in a relevant market , and the resulting
harm remains significant regardless of prior competition.
62. The Commission points to Nedschroef 45, where it was held that market division does
not require that both firms be competitors before the act of division. If they are potential
competitors this will suffice .46 Frequently, firms will divide a market before they
become de facto competitors precisely to avoid that outcome.47
63. In respect of the geographic market allegation, t he Commission relied on the
Competition Commission of South Africa and others v United South African
44 Commission’s HOA at para 8.2.5.
45 Nedschroef Johannesburg (Pty) Ltd and Teamcor Ltd Waco International Ltd CBC Fasteners (Pty) Ltd
and Avlock International (Pty) Ltd Case No: IR070Oct05 (“Nedschroef”) at para 44.
and Avlock International (Pty) Ltd Case No: IR070Oct05 (“Nedschroef”) at para 44.
46 Nedschroef Johannesburg (Pty) Ltd and Teamcor Ltd Waco International Ltd CBC Fasteners (Pty) Ltd
and Avlock International (Pty) Ltd Case No: IR070Oct05 (“Nedschroef”) at para 44.
47 Ibid.
17
Pharmacies and others, where the Tribunal confirmed: “[w]hat the Act requires by the
notion that parties are in a horizontal relationship is an allegation that they are in the
same line of business. Neither the language of the Act nor the logic of how the section
works requires that there be allegations that the respondents operate in the same
geographical market in order to be considered competitors . Take, for instance, the
prohibition on dividing markets by allocating territories, set out in section 4(1)(b). If the
respondent’s argument is correct, such a practice could never be instituted against
those who divided markets before they were ever in one another’s markets. By
definition, having divided territories, they are not in the same geographic market, and
indeed may never have been. It is ludicrous to suggest that for this reason they would
not be competitors.”48
64. In their pleadings, all seven respondents deny the allegations in relation to the
services market complaint. ASIB, Fireco, Specifire, National and Multi-Net argue that
because their conduct falls within a vertical framework it is not automatically prohibited
under section 4(1)(b)(ii). Inter alia, ASIB, Fireco and Specifire argue that ASIB’s rules
restricting listed installers from offering compliance inspections is a vertical
requirement, not a horizontal agreement.49
65. They claim that as installers , ASIB is not their competitor , and ASIB being an
inspector. They claim that the rule protects ASIB’s reputation, manages conflicts of
interest, and ensures the availability of its listing service to customers. They maintain
there is no evidence that they competed with ASIB when agreeing to the ASIB rules.
66. Further, National contends its conduct does not meet the criteria for automatic
prohibition, while Multi-Net asserts that its ASIB accreditation was a standard market
response to meet clients’ requirements , with no evidence of market division or
geographic restriction in its operations.
geographic restriction in its operations.
48 Competition Commission of South Africa and others v United South African Pharmacies and others [2003]
1 CPLR 172 (CT) at p 7 and 8.
49 ASIB, Fireco and Specifire’s HOA at para 4.1. We note that these three Respondents were represented
by the same legal counsel and filed a joint HOA.
18
Our assessment
67. What we have to decide in respect of the “ services market” complaint is whether the
installer respondents were actual or potential competitors of ASIB at the time of the
installers signing up to ASIB rules.
68. We note that in the context of an alleged market division case, the parties would not
be actual competitors in the relevant product and/or geographic market, as that would
mean that there is no market division to speak of in the first place.
69. The evidence indicates that prior to 1995, when Mr Goring acquired ASIB (and even
prior to the establishment of ASIB in 1970) , installers did not provide compliance
inspection services.50
70. Prior to the establishment of ASIB, it was the insurers themselves, not installers, who
provided compliance inspection services in respect of sprinkler systems installed on
their respective insured premises. As explained above, one of the very reasons for
the establishment of ASIB was to transfer this function from the individual insurers to
an independent third-party inspectorate.
71. In his evidence, Mr Rielander seemed to suggest that installers have done
inspections previously.
72. The evidence of Mr Rielander was:51
…“Adv Modisa: Ja, Mr Rielander, are the Listed ASIB Installers, are they
capable of conducting inspections, through your experience?
Mr Rielander: The listed installers on many occasions did go and issue
installation certificates. In some cases the wording was more an inspection
of the installation. And the supervising installer would obviously inspect
sometimes the work done by a conditional in staller, especially where they
were taking responsibility for that installation.”
50 ASIB’s witness statement, paras 2.1 - 2.3, ASIB, Fireco and Specifire’s HOA at para 12.
51 Transcript p 117.
19
73. Later, he clarified that any inspection done by a supervising installer (signing off on
the work of a conditional installer) was an inspection; however, ‘sign-off’ on work was
different from having the ability to issue a compliance certificate.52
74. As indicated, the Commission submitted , r egardless of whether installers have
conducted inspections before, installers have the technical ability to conduct
inspections.
75. Mr Rielander was cross-examined on this and he said the following:53
“ADV BLUMENTHAL: … almost all of these witnesses specifically state that
in fact the work of being an installer is completely different to the function
and work of an inspector and that in fact they have no competency or desire
or qualification to as installers do the work of an inspector. What do you
have to say to that?
MR RIELANDER: I disagree with that, because there were inspectors
employed at ASIB that came from the ranks of clients. Mike Redgate used
to be a safety officer at SA Breweries and he became an inspector at ASIB.
He didn’t have the qualifications,
didn’t have the experience of being an inspector and so did other inspectors
come into the fold of ASIB without formal qualifications, had experience with
being an installer and they became inspectors.”
76. Mr Rielander accepted that there were differences in the skills required for an installer
and an inspector . He said : “…an installer can inspect they technically know what is
going on”, but “...there are masses of information out there in inspection management
systems”, and depending on experience , training and various assessments , an
installer could do inspections.54
77. Mr Engelbrecht testified that it used to be the case that supervising installers could
inspect the work of installers . However, when further pressed on this, he could not
provide details.55
52 Transcript p 131.
53 Transcript p 205.
54 Transcript p 207.
55 Transcript p 441- 442.
20
78. Ms Goring admitted that installers, particularly those with competent staff and
designers, would be technically capable of performing sprinkler inspections. In this
regard, she said:56
“ADV NXUMALO: So, from what you have just said, is an installer then in
a position to perform an inspection?
MS GORING: I... [intervention]
ADV NXUMALO: Is it capable of performing an inspection?
MS GORING: If they – are they capable?
ADV NXUMALO: Yes.
MS GORING: Technically of them performing an inspection? Yes, I
believe that they are capable, especially installers that have competent
people on their staff, designers on their staff. They do have the capabilities
of performing a sprinkler inspection”.
79. The evidence indicates that, categorically, prior to the sale of ASIB, installers did not
conduct inspections. After the sale, Ms Goring was adamant that this practice still did
not occur. Mr Rielander and Mr Engelbrecht maintained that supervising installers
could perform inspections.
80. We considered whether, even if certain installers may have had the technical expertise
to conduct inspections, they could be regarded as potential co mpetitors in providing
inspection services. However, Mr Rielander testified that SAIF itself prohibits installers
from conducting inspections, which undermines that possibility.57
81. In assessing potential competition the European Court of Justice (“ECJ”) in Generics
(UK) and Others (Case C-307/18) found that in determining whether an undertaking
that is not present in the market is a potential competitor of one or more other firms
that are already in the market, it must be determined whether there are “real and
concrete possibilities” of that firm joining the market and competing with one or more
firms in that market.
82. Furthermore, it found that there can be no potential competitive relationship as an
inference merely from the pure hypothetical possibility of entry.58 In this regard, Dunne
56 Transcript p 696-697; see also p 710.
56 Transcript p 696-697; see also p 710.
57 Transcript p 205.
58 Colino et al. (2017), The Lundbeck Case and the Concept of Potential Competition,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2931411.
21
suggests that “entry must therefore be an economically viable strategy ”,59 not a
theoretical possibility.
83. The ECJ further found whether a potential competitor had “a firm intention and an
inherent ability to enter the market ” and whether “the firm does not face
insurmountable barriers ” were relevant considerations in assessing potential
competition.
84. An OECD Potential Competition Background Note 202160 (“OECD Note”) on potential
competition suggests some key parameters to confirm the relevance of a potential
competitive constraint : i) the relevance of barriers to ent ry; ii) the likelihood and
strength of potential competition; and iii) the time frame in which potential competition
could emerge. The OECD Note recommends that when assessing barriers to entry in
the context of potential competition, “competition authorities should assess the
likelihood of entry, not whether barriers are high or low in any given case. ”.
85. In assessing potential competition, we examined the barriers faced by both installers
and ASIB which, absent the agreement, might have prevented them from entering
each other’s markets, as well as the likelihood of either actually entering the other’s
market (installation and inspection, respectively).
Barriers to entry
86. Barriers to entry vary and must be assessed per relevant market.
87. The OECD Note suggests that for competition enforcement purposes, the labelling of
barriers to entry is often not informative and that the focus should be on the likelihood
and timing of entry.
59 Ibid.
60 Organisation for Economic Co-operation and Development (OECD) (2021), Roundtable on the Concept
of Potential Competition – Background Note, DAF/COMP(2021)3, OECD, Paris, 7 May 2021.
22
88. In this case, a business valuation report prepared on ASIB’s behalf , which assessed
the state of the industry at the time of Mr Goring’s acquisition of ASIB , states the
following about barriers:61
“The barrier to entry appears on the face of it to be significant, and the comfort the insurance
industry feels with the business certainly makes it difficult for any new competitor to enter the
market. By the same token, a significant weakening of the business, possibly due to employee
exposure, could result in the industry commissioning a competitor undertaking . This would
possibly be the view of any potential purchaser and needs to be dealt with.”
89. When asked to explain the barriers to entry, Ms Goring responded by saying this was
a reputation issue.62
“Mr Wessels: “Can you explain to us what the context of that is, and why that is a
barrier to entry in the inspection service?
Ms Goring: It really comes down to the ASIB reputation . And this is what I have
been stressing throughout my entire testimony. When the ASIB issues a clearance
certificate isASIB saying that that sprinkler system will work to control a fire to a
certain area in that building with the fire load. In the 53 years, I think , that we’ve
got now that the ASIB has been formed we have not lost a single building to fire
that has a valid clearance certificate. That is reputation. And that is what insurers
take comfort with is that when you have got an inspection company that d[o]esdoes
approximately 6000 inspections per annum and issues clearance certificates and
sticks by their word of the clearance certificate …New companies coming up that
simply don’t have that reputation will struggle to compete.”
90. This appears to evade the question. The protection of ASIB’s reputation is, however
consistent with ASIB’s reasons for the listing conditions. While reputation can be
considered a barrier in some instances, it is not an insurmountable barrier.
61 Transcript at p 759.
61 Transcript at p 759.
62 Transcript at p 759-760.
23
91. A further barrier that is generic to all the Respondents is that of a potential conflict of
interest should installers perform inspection services, and vice versa . The conflict of
interest issue, in our view, is significant.63
92. ASIB and the other Respondents argue that if installers performed sprinkler inspection
services, this would involve a conflict of interest. For example, there is a risk that
installers within the industry would not be sufficiently or overly rigorous in their
evaluations of other installers' work. An installer may be too lenient in inspecting
another installer's work, understanding that this may act as a quid pro quo when the
roles are reversed.
93. This concern is all the more pronounced if installers inspect their own installations
and, in so doing, effectively "mark their own homework." Conversely, there is a real
risk that competitors could be overly harsh in their evaluation of competitors'
installation, in order to win customers away from their competitors. This conflict of
interest was raised by several of the installer witnesses.64
94. The South African National Standards (“SANS”) are technical standards developed
by the South African Bureau of Standards (“SABS”), the statutory body responsible
for developing, promoting and maintaining standards in South Africa.
95. According to the evidence , SANS specifies the cri teria for products, services and
systems to ensure quality, safety and inter operability. SANS recognises the
importance of having an independent inspection body that is not subject to any
potential conflict of interest.
96. For example, SANS provides that an inspection body should, amongst other aspects,
be independent of all parties; not gain financially from a report; and not engage in any
activities that may conflict with their independence of judgment and integrity in relation
to their compliance inspection activities. (own emphasis).65
to their compliance inspection activities. (own emphasis).65
63 We note however that (Brand) reputation can constitute barrier to entry – see for example Akzo Nobel
/Plascon
64Fireco’s witness statement at para 4.2 ; Transcript Mr Shiba p 863; IBR’s witness statement at para 20 ;
Transcript Mr Radmore p 921, 943 and 945; Transcript Mr Smith (Thirteenth Respondent) p 1010;
Specifire’s witness statement at para 3.2; Transcript Mr Holmes p 1057; 1076 and 1077.
65 ASIB, Fireco and Specifire’s HOA at para 68.
24
97. According to Ms Goring, SANS also requires that compliance with that standard can
only be verified by " an independent third -party inspection " and signed off by a
competent person. In addition, clause 29.1.3 expressly prohibits any installers from
issuing certificates of compliance in respect of SANS 10287, whether in respect of
their own work or in respect of any other installer's work.66
98. The abovementioned conflict of interest , in our view , is not an easily surmountable
barrier. If one is currently an installer, then entering the market for inspection services
presents an inherent conflict of interest , which is a significant barrier that would be
difficult to overcome since the regulation mandates independence between the
respective activities of installers and inspectors , and prevents one from conducting
the services of the other.
99. For example, the evidence shows SANAS (the national body responsible for
accrediting organisations involved in testing, calibration, certification, and inspection
services) squarely addressing a conflict of interest that arose in an instance where
SAIFP as an inspectorate body also engaged in activities that were in conflict with
commercial activities downstream. SANAS was concerned with the conflict of interest
and the lack of independence when an inspectorate body also operates in the same
market that it regulates.67
100. In our view, the conflict issue is a significant barrier to entry.
101. A further overarching characteristic raised by some respondents as a barrier to
entry into the inspection market is that the provision of services in the compliance
inspection market carries significant risk and liability, which would need to be covered
by professional indemnity insurance.68
102. We next turn to the evidence in relation to each of the remaining Respondents to
determine if each is in a potential horizontal relationship with ASIB in relation to
determine if each is in a potential horizontal relationship with ASIB in relation to
inspection services. We consider each respondent’s arguments regarding its ability to
66 Ibid at para 69.
67 Transcript p 406 - 408
68 Fireco's witness statement at para 4.1. Specifire’s witness statement at para 3.4. Transcript Mr Holmes
(Fourteenth Respondent) p 1057.
25
enter, barriers to entry that it faces, as well as i ntent. We give weight to ability and
barriers since intent may change over time.
First Respondent – ASIB
103. ASIB's evidence was undisputed that it had no intention and no ability to enter the
installation market, not least because there would be a clear conflict of interest
between providing independent inspection services to third party installers, on the one
hand, and ASIB itself performing installation services on the other and this constitutes
a significant barrier to entry .69 This suggests that entry does not therefore represent
an ‘economically viable strategy’ for ASIB as a would-be competitor in installation
services.
104. We conclude that there is no cogent evidence to find that ASIB has ever been an
actual or could be a potential competitor in the sprinkler installation market. Thus,
there is a lack of a horizontal relationship as required by section 4(1)(b) to find a
contravention.
Fifth Respondent – National
105. It is common cause that National does not currently render any fire inspection
services.
106. National argued that the true economic nature of the relationship between it and
ASIB is purely vertical. But for a contractual arrangement with ASIB for the inspection
of its installations no other relationship between the parties exist.
107. National raised the issue that if installers would provide inspe ction services that
would give rise to conflicts of interest and refers to Mr Rielander conceding th is, as
per the following exchange between Adv Modisa and Mr Rielander:70
69 Transcript p 657.
70 Transcript p 130.
26
“Adv Modisa - Is there a conflict of interest, Mr Rielander, if an installer
inspect work of another installer?
Mr Rielander – Yes”.
108. Mr Nair of National further explain ed why National would not perform inspection
services:
“Mr Modisa: You can proceed in arguing. So, is it another term – is it part of
the terms and condition of listing with ASIB that a listed installer will not
perform inspections?
Mr Nair - I just answered that question as well. We have no reason to mark
our own homework. We will not, as a listed installer go on and do
inspections on our work. The inspections must be done by the Regulatory
Body who we pay to do the inspection and learn the code and know the
code like I need anybody that the Regulated Body.”71
and
“… I said it earlier, we don’t inspect other people’s work for the simple
reason that we’re installers and we need qualified people to come and
inspect the work. So therefore I agree exactly with what you are saying and
whether it’s ASIB, whether it’s the Government, whether it’s another
organisation, people who understand the code can come in and inspect the
work and give us a tick in the box. We’re very happy with that.”
and
“… as a businessman, as a company, I’m not interested in inspections that
somebody else must come and inspect my work. I do the work. I do the
installation. …”.72
109. We conclude that there is a lack of evidence that National would be in a horizontal
relationship with ASIB in relation to the provision of inspection services absent any
alleged agreement between it and ASIB.
71 Transcript p 811.
72 Transcript p 812 - 813.
27
The Eleventh Respondent - IBR
110. IBR submitted that sprinkler systems can be installed in accordance with a number
of recognised standards, and the ASIB standard is but one of those recognised
standards; these standards are encapsulated in ASIB’s various Editions of ‘Rules for
Automatic Sprinkler Installations’, the latest being the Twelfth Edition Rules.
111. IBR further submitted that the ‘person’ who determines or chooses what standard
a sprinkler system is to be installed in accordance with, is the installer’s client (building
owners etc).73
112. All of the witnesses were largely ad idem that the ultimate and recurrent decision
makers in respect of what standard is to be used for a sprinkler system, are insurance
companies; and that these insurance companies (local and foreign) often insist on
ASIB-compliant sprinkler systems as a prerequ isite for insurance cover to be
granted.74
113. By being listed with ASIB, the respondents are not precluded from doing
installations in accordance with the ASIB standard only, but could install a system in
accordance with any standard the client required (if they had the skill set to do so).
114. IBR submitted that it has no interest, capacity or qualifications to perform the
inspectorate function and IBR has no intention of entering the market for inspection
and certification of sprinkler systems.
115. IBR, similar to National, raise d the issue of conflict s of interest, should it provide
inspection services. It explains that customers would likely be sceptical of an installer
who also performs inspection and certification services for other installers because of
the likely conflict s of interest in offering both services. In other words, a reasonable
perception would be that if one installer granted lenience to a competitor installer in
the inspection and certification process, that lenience would be expected in return
73 Inter alia Transcript p 412 - 413 (Mr Engelbrecht).
73 Inter alia Transcript p 412 - 413 (Mr Engelbrecht).
74 Inter alia Transcript p 410 (Mr Engelbrecht); Mr Radmore’s witness statement at paras 14 - 15.
28
if/when the roles were reversed. It contends that the integrity of the entire independent
process would be undermined.
116. As indicated above, we find the conflict of interest argument, as conceded by Mr
Rielander, to be a compelling argument in this sector.
117. IBR also raises the issue of risk to the firm associated with providing inspection
services. It explains that there is both a commercial and reputational risk in offering
inspection and certification services because a customer may seek recourse against
IBR if it produces a certificate and the property subsequently suffers fire damage. This
is a risk IBR is not prepared to take. There is no evidence to contradict that these risks
exist.
118. From a commercial perspective, IBR submitted that it simply does not perceive the
inspection and certification market to be particularly lucrative market for it in
comparison to the installation market. There is no evidence to contradict this.
119. We conclude that there is a lack of evidence that IBR would be in a horizontal
relationship with ASIB in relation to the provision of inspection services , absent any
alleged agreement between it and ASIB.
Thirteenth Respondent - Multi-Net
120. Multi-Net argued that it is registered with several institutions and associations, as
required and requested by its customers, as end -users. In fact, it was at all relevant
times a prerequisite for Multi-Net to be affiliated with ASIB in order for it to be a
successful bidder in obtaining tenders.
121. It submit ted further that t he tender requirements of most parastatals and
government agencies and departments required fire protection installers to conduct
such installations in line with the so -called ASIB standards and that the inspections
were to be conducted for it to be inspected by ASIB. The tender document so compiled
by the customers thus provided the standard and inspectorate authority.75
75 Multi-Net’s Answering Affidavit of paras 22 – 30.
29
122. Multi-Net registered with ASIB as well as other accreditation institutions as a
normal commercial response to conditions prevailing in the market to which it had to
comply with subject to and in accordance with the tender or Request For Quotation
(“RFQ”) so issued by its customers or end users.76 The RFQ shall determine to which
recognised accreditation institution the Multi-Net should be affiliated with and adhere
to (from an inspection point of view), should the tender require the fire protection
installation to be subjected to inspection by a third party.77
123. It also submitted that it mainly conducts business in other sectors, other than the
fire sprinkler system sector, which makes up a minute contribution to its average
annual turnover.78 Inter alia due to its size in the overall fire sprinkler market, it does
not have the skills and know-how on how to conduct such inspections, given its limited
capacity and limitations to its own operational capability.79
124. The Commission ’s witnesses did not dispute Multi-Net’s version regarding its
limited capacities in the area of inspections.
125. Mr Smith testified as follows regarding Multi-Net’s ability to do inspections:
“ADV NXUMALO: The evidence has been presented before the Tribunal
and it is the Commission’s contention that a firm that does have such
competent persons who are experienced is on a technical basis capable of
conducting an inspection, do you agree with this?
MR SMITH: No, not on sprinklers. Or what makes it very difficult is, to do
the inspection you should be able to do the hydraulic calculations, the
position of the sprinklers, and all that. So, although my team on site knows
what the spacing is, the physica l installation spacing, and all that, they will
not be able to do the hydraulic calculation to determine your pipe sizes and
your flows, and things like that. So, limited competency with the installation,
but not with the design or the approval thereof.”80
but not with the design or the approval thereof.”80
76 Multi-Net’s witness statement at para 4.1; Multi-Net’s Answering Affidavit at para 29.
77 Multi-Net’s Answering Affidavit at para 28; Multi-Net’s witness statement at para 41.
78 Transcript p 974 - 975; Mr Smith witness statement at para 1.6.
79 Transcript p 975, 989, 996 and 1015 - 1016; Mr Smith witness statement at para 5.4.
80 Transcript p 1027 1028.
30
126. Furthermore, Multi-Net’s fire sprinkler installations were mostly inspected by
engineering consultants of the specific project in question; 81 and ASIB only once
inspected an installation of Multi-Net during the years and years of installations so
administered by Multi-Net when it executed an installation for the Department of Public
Works.82
127. None of the Commission’s witnesses disputed that a significant part of the fire
sprinkler installations conducted by Multi-Net was inspected by consulting engineers
under a different standard, other than the ASIB industry standard, namely under the
SANS standard.
128. We conclude that there is a lack of evidence that Multi-Net would be in a horizontal
relationship with ASIB in relation to the provision of inspection services absent the
alleged agreement between it and ASIB.
Tenth Respondent – Fireco; and Fourteenth Respondent – Specifire
129. The above Respondents submitted that there are various third parties other than
ASIB who provide compliance inspection services in South Africa. These include
SAIFP, Independent Sprinkler Inspection Company ( “ISIC”), Risk Management
Solutions, Colin Edwards and Associates (now deceased), Fire Management and
Design Services, FM, NFPA as well as many other rational design companies and
individuals who are registered with the Engineering Council of South Africa ("ECSA")
as Fire Protection Systems Practitioners.
130. Furthermore, they submit that the i nstallers perceive that insurers and clients
generally require inspection services to be provided by an independent third party ,
such as ASIB, rather than by a competing installer.
81 Transcript p 998 - 999; Mr Smith’s witness statement at para 5.3.
82 Transcript p 1000.
31
131. They submitted that c ompliance inspection services are different in nature from
installation services, and installers do not necessarily have the capacity or experience
to provide such services in addition to their installation activities.83
132. These Respondents also raise conflict s of interest issues, as already explained
above and explained that they had no intention to enter the compliance inspection
market.84
133. They also raise the significant risk and liability associated with the provision of
services in the compliance inspection market, as already explained above.85
134. We conclude that there is a lack of evidence that Fireco or Specifire would be in a
horizontal relationship with ASIB in relation to the provision of inspection services ,
absent any alleged agreement between it and ASIB.
Seventeenth Respondent - Tshwane Fire
135. Tshwane Fire argued that an installer cannot inspect its own work or the work of
its peers, competitors, and colleagues due to inter alia conflicts of interest. It relies on
the following testimony of the Commission’s witnesses:
“MR RIELANDER: I would imagine there would be a conflict of interest or I
can definitely say that there would be a conflict of interest because one
installer dealing with one client would obviously have confidential
agreements in place with that one client. So, there’s not, in my opinion, you
can’t have two installers or three installers entertaining conditions of the so-
called work with them that they were installing a system...”86
and
83 Transcript of Mr Shiba for Fireco p 890. Specifire’s witness statement at para 3.4; Transcript of Mr
Holmes for Specifire p 1080.
84 Fireco's witness statement at para 4.1; Transcript of Mr Shiba for Fireco p 889 and 890. Specifire’s
witness statement at para 3.4; Transcript of Mr Holmes for Specifire p 1056, 1077 and 1078.
85 Fireco’s witness statement at para 4.1. Specifire’s witness statement at para 3.4; Transcript of Mr
Holmes for Specifire p 1057.
86 Transcript p 129.
32
“ADV MODISA SC: …Is there a conflict of interest, Mr Rielander, if an
installer inspects the work of another installer?
MR RIELANDER: Yes, it is a conflict of interest.”
and
“MR RIELANDER: On a technical basis if one installer inspects another
installer’s work there’s obviously – it’s an internal issue. But when that starts
becoming a certified inspection there’s a massive problem with that.
ADV BLUMENTHAL: Okay. Why?
MR RIELANDER: If one installer inspects the work of another installer and
certifies another installer’s work, you know where’s the competency lying in
terms of the – who takes responsibility and liability of that installation? Is the
one inspecting or the one installing taking liability? There are massive
liability issues when it comes to somebody – one person installing and
inspecting another’s work.”87
136. Mr Engelbrecht testified that there are only two inspection bodies in the country at
the moment inspecting sprinkler systems. That being ASIB and SAIFP and indicates
that he is in competition with ASIB. He further confirm ed that he was part of SAIFP
and had to resign for good governance reasons but uses them for his inspections.88
137. Tshwane Fire submitted that the use of ASIB’s services is at the instruction of their
clients (building owners or managers) and is in line with the industry standards to
ensure quality service in the industry and compliance with current standards. It argued
that ASIB was the industry norm/standard and it had no alternative than to use ASIB.89
87 Transcript p 216.
88 Transcript p 402, The basis for Mr Engelbrecht’s resignation from SAIFP was that SANAS required him
to step away to maintain an arm’s -length relationship and uphold governance principles of impartiality,
independence, and fair oversight. He was involved in both inspection activities (the “referee” role) and
downstream commercial or operational activities in the same sector (the “player” role), a dual position
SANAS deemed incompatible.
SANAS deemed incompatible.
89 Transcript p 386.
33
138. It has however made us e of the services of Mr Rielander, who confirmed that he
has been appointed by Tshwane Fire and that an inspection on Tshwane Fire’s
request had been completed by himself.
139. Tshwane Fire also relie d on Mr Engelbrecht ’s evidence confirming that clients
dictate the code to be used as well as the inspection required having regard to their
risk exposure. 90 Mr Becker in his testimony also confirm ed that the inspection
arrangement or appointment is the task of the owner or facility manager.91
140. Mr Olivier of Tshwane Fire testified that the company neither conducts inspections
of other installers’ work nor permits others to inspect its own, as inspections are
outside its business scope and it holds no insurance for such activities.92
141. Tshwane Fire further asked the Tribunal to draw a very negative inference about
Mr Engelbrecht’s alleged axe that he has to grind with Mr Goring as opposed to his
real interest in the fire protection industry.93 There is no need for us to deal with these
issues in these reasons.
142. We conclude that there is a lack of evidence that Tshwane Fire would be in a
horizontal relation ship with ASIB in relation to the provision of inspection services ,
absent any alleged agreement between it and ASIB.
Conclusion on whether Respondents were Potential Competitors
143. In conclusion, section 4(1) applies to an agreement between, or concerted practice
by, firms, or a decision by an association of firms, if it is between parties in a horizontal
relationship. In a market division context, if parties are not potential competitors in the
relevant market(s) that is the end of the enquiry.
144. At best for the Commission, it may be theoretically possible for (some) installers to
perform compliance inspection services. However, the Commission has not placed
sufficient evidence before for us to conclude that the parties are in a horizontal
90 Transcript p 482.
91 Transcript p 553.
90 Transcript p 482.
91 Transcript p 553.
92 Transcript p 1110 - 1111.
93 Tshwane Fire’s HOA at para 9.4. - 9.13.
34
relationship, i.e., are potential competitors of each other in either the compliance
inspection market or the sprinkler installation market on a balance of probabilities.
Mere technical ability does not suffice as evidence of potential competition.
145. During the hearing, ASIB and the installer Respondents provided that the listing
requirements do not prevent installers from sourcing inspection services from
competing firms. ASIB indicated its willingness to clarify its conditions of listing in this
regard.94
146. We note that should any installer in South Africa on its own determine that it could
and wishes to (in future) enter the market for the provision of inspection services, it
should be able to pursue that regardless of any ASIB rule.
147. Installers may also consider the sourcing of inspection services from any service
provider in South Africa, provided it is commercially feasible and viable for it to do so.
148. We now turn to the geographic market complaint.
The geographic market complaint
149. It is common cause that (at least some of) the listed installers were actual or
potential competitors of each other when they applied to ASIB to be ASIB -approved
installers.95
150. Putting aside for the time being the geographic scope of the activities of the six
installer respondents, it is common ca use that the y are in a horizontal relationship
since they are all active in the provision of fire sprinkler installation services. They are
the so-called “spokes” that are in a horizontal relationship to each other, in the alleged
cartel.
151. It is also common cause that ASIB , as a provider of inspection services , is in a
vertical relationship with the six installer respondents.
94 Transcript p 1263 and 1311.
95 ASIB, Fireco and Specifire’s HOA at para 105.
35
152. The allegation is that the installer respondents, who are in a horizontal relationship,
divided the installation market geographically through ASIB, specifically through
agreeing to ASIB’s listing of installers per province and the ASIB rules.
153. We note that t here is no evidence that any of the installer respondents had any
agreement or understanding between themselves, separately from ASIB's practice s,
only to operate in specified provinces. The Commission was not advancing a case
that the installer respondents had an agreement, at a horizontal level, amongst
themselves, separately from ASIB.
ASIB listing by provincial area
154. The Commission explained that at the core of the territorial allocation allegation is
a table in an ASIB document listing operational areas for each installer .96 This
document outlines listing areas and their corresponding operations. The Commission
interprets this table as defining territorial limits on competition, restricting listed
installers from operating beyond their designated geographic area.
155. The Commission referred witnesses to the 2009 ASIB Listing document, which
states the position regarding the alleged geographic market allocation:97
“We do not believe a contractor can adequately service the requirements of a client outside
their basic area of operation. When a company registers with ASIB it does so to conduct work
in the area they originated and where they have facilities that meet acc epted requirements.
This is not having to employ external resources and where the company is able to comply
with the requirements of the ASIB. The practice of using an installing company outside the
main provinces is to be discouraged.” (own emphasis)
156. Ms Goring in her witness statement states that: “ASIB recommends that ASIB -
approved installers limit the provision of the installation services to the areas where
they have registered offices and which they can readily service.98
96 Evidence Bundle at p 386.
97 Ibid.
96 Evidence Bundle at p 386.
97 Ibid.
98 ASIB’s witness statement at para 7.4
36
157. She further explains that installers may obtain a listing in more than one provincial
area if their offices in each relevant area have been inspected. Furthermore, that ASIB
charges a fee for recognising a company on its website per area , as there are
administrative costs associated with the inspection of a registered office.
158. The Commission submitted that the requirement for an installer to have facilities in
a region in order to be listed creates (another) barrier to entry agreed upon with
ASIB.99 Without this agreement, installers could freely compete across South
Africa.100
159. The Commission submitted that the listing fees per geographic area by an installer
disincentivises multiple listings by installers; and amounts to a geographic market
division in a so -called “hub and spokes” cartel , and discourage installers from
operating in more than one provincial area.101
160. We note that Ms Goring’s witness statement speaks of the listing being a
‘recommendation’ while the document itself ‘discourages’ installers from doing work
outside the main provinces.
161. The Commission’s witnesses stated that , in practice , installers who did work
outside their listed areas of operation would be reprimanded or face a sanction.
162. The Commission relies on the fact that agreements under section 4(1) can take
various forms. In Competition Commission v South African Breweries Limited and
others (“SAB”)102, the Tribunal recognised a “hub and spoke” arrangement as a type
of agreement covered by section 4(1), where multiple firms coordinate their conduct
through a central point.103
163. Further, the Commission states that section 4(1)(b)(ii) applies broadly, as it does
not require a complete prohibition of competition, any agreement that restricts
99 Commission’s HOA at para 8.4.35.
100 Commission’s HOA at para 8.4.42.
101 Transcript p 23.
102 Competition Commission v South African Breweries Limited and others [2014] 1 CPLR 265 (CT) at para
74.
74.
103 Commission’s HOA at para 7.2.4.
37
competition, even partially, falls within its scope .104 Mere involvement in market
division is sufficient to trigger this provision, regardless of whether competition is
entirely or partially constrained. Even if exceptions exist, as long as the agreement
imposes any limitation on competition, it remains prohibited under section 4(1)(b)(ii).
164. ASIB argued that the geographic market listing conditions are not an agreed-upon
negotiation but a listing condition to protect its reputation and maintain commercial
viability.105 It further explained that an installer’s listing in a specific area signals to
clients that they have local offices equipped to meet ASIB’s installation standards,
allowing informed decision-making.106
165. ASIB further argued that l ocal presence is an especially important consideration
for clients because they are dealing with life safety and property protection where
timing may be critical. According to ASIB, this is necessary because the ability of an
installation company to service clients in a particular area is materially assisted by
having offices that have the necessary functionality to provide such services in that
area.
166. As a result, the listing of an installer in a particular area indicates to clients that the
relevant installer has offices in that area that have been accepted by ASIB, and that
have the necessary functionality to perform installation services to the level required
for ASIB approval.
167. Further, ASIB submitted that customers have the prerogative, if they so wish, to
appoint an installer to provide installation services outside a provincial area in which
that installer has registered offices, and as noted by certain installers, national clients,
in fact, do.
168. ASIB further submitted that there was no evidence that it had ever refused to do
an inspection for a company on the basis that it carried out an installation outside of
its registered area.
104 Commission’s HOA at para 7.5.8.
105 Transcript p 672.
its registered area.
104 Commission’s HOA at para 7.5.8.
105 Transcript p 672.
106 ASIB’s HOA at para 73.
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169. As indicated, t he Commission’s witnesses stated that in practice , installers who
did work outside their listed areas of operation would be reprimanded or face a
sanction.
Our assessment
170. We concur with the Commission that an agreement contemplated by section 4(1)
may take many forms. For instance, the Tribunal has in the past recognised a “hub
and spoke” arrangement as a form of agreement that would fall within the ambit of
section 4(1), where firms that are in a horizontal relationship co-ordinate their conduct
through a central point.107
171. It is common cause that the installers are in a horizontal relationship to each other.
The question that we have to answer is if they reached an agreement to
geographically divide the market through a central point, i.e . ASIB as the hub of the
alleged cartel arrangement.
172. The Commission also took witnesses to the listing condition , which provides; “If a
company conducts work in a region outside of the original registration and has failed
to inform the ASIB, that company will be invoiced accordingly”.108
173. Mr Engelbrecht testified that while the listing does not preclude a n installer from
doing work outside their area, this was “frowned upon” and an installer would have to
get special permission to do work outside of their listed geographic area or face a
reprimand and the possibility of being delisted by ASIB. 109
174. Mr Engelbrecht, when asked under cross-examination to name instances where
an installer was reprimanded, he referred to an instance involving an installer,
Itereleng.110
107 Competition Commission v South African Breweries Limited and others [2014] 1 CPLR 265 (CT) para
74
108 Transcript p 735.
109 Transcript p 448.
110 Transcript p 445 -446.
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175. Mr Rielander insisted that there were consequences to doing work outside of one’s
listed geographical location , stating that, as an inspector when he was working for
ASIB, he was often questioned on why installers could not work outside of their listed
geographical location. However, when pressed on this during cross -examination, he
provided that it was “ a common practice that they [installers] did work in other
provinces”, thus contradicting his evidence.111
176. Mr Rielander however, cited OFS, an ASIB -listed installation company , as a
company that was reprimanded for doing work outside of their listed geographic
location in the Free State. He said he was informed by the CEO of OFS that OFS was
not allowed to perform services in Johannesburg, even if OFS had a client whose
head office was based in the Free State, and the client insisted that OFS work in
Johannesburg. He was not permitted to do so.
177. Ms Goring explained the issue with this in her evidence. She said OFS was using
the ASIB logo for listing and was advertising that all members of OFS were ASIB
approved when OFS only had one listing but was performing services throughout the
country through only one listing. This was the misrepresentation which ASIB was
sanctioning.
178. Ms Goring maintained that “all companies work outside of their jurisdiction one way
or another”112 and where an installer performs work outside their listed area , ASIB
invoices the customer for the inspection work it does on that installation. 113 Several
installers confirmed this.114
179. Although the practice of installers doing work outside the geographic area where
they are listed with ASIB was discouraged, it appear s that many of the Respondents
had experience performing work outside of their listed areas:
111 Transcript p 213.
112 Transcript p 736.
113 Transcript p 731 – 732.
40
179.1. Mr Shiba testified that Fireco will still service a client located outside of its
area of listing, particularly if there is an existing relationship with the client and it
has never been prevented or penalised by ASIB for doing so.
179.2. Mr Holmes of Specifire provided evidence that he had done work all over
the country despite not being registered nationally, and he would fly personnel to
the extra-territorial location to perform maintenance works.
179.3. Mr Radmore provided that IBR did work outside its area of listing as
“exceptions to the rule.”
179.4. Mr Smith of Multi-Net testified that he did undertake work nationwide when
requested by clients.
180. Respondents, who do not perform work outside their listed areas , explained that
this is not due to any restriction from ASIB, but rather reflects their own commercial
considerations regarding the viability of expanding beyond their scope.
180.1. Mr. Nair of National explained that ASIB does not restrict members from
operating in only one province.
180.2. Mr Olivier of Tshwane stated that he would not tender for work in areas
where he lacks the capacity or is unable to operate.
181. We next turn to the submissions of and evidence regarding each of the seven
Respondents.
First Respondent – ASIB
182. As indicated above, ASIB contests that its listing conditions are a “hub and spoke”
agreement between it and the installers, as the Commission suggests.
183. ASIB submitted that the mere awareness of ASIB’s provincial listing practice does
not prove such an agreement.
41
184. ASIB further submitted that t here was no evidence that installers agreed to
operate only in specific provinces, as they were allowed to register in multiple
provinces and often worked outside their listed areas without penalty from ASIB or
each other.
185. ASIB further submitted that t here was no evidence that it had ever refused to do
an inspection for a company on the basis that it carried out an installation outside of
its registered area. On the contrary, certain witnesses testified to submitting work
outside of their listed areas to ASIB for inspection without censure.115
Fifth Respondent – National
186. Mr Nair of National confirmed that he chose to register only in KZN and
emphasised that no restrictions are preventing National from working in other
provinces such as Limpopo Province, Gauteng and Cape Town116 He added that there
was no restrictions for National to only work in one province.
The Eleventh Respondent - IBR
187. IBR submitted that it has never agreed with ASIB or any other installers of sprinkler
systems to do business only in the region in which it is registered with ASIB.
Furthermore, being listed with ASIB does not have the result that an installer is
restricted as to the region in which it may operate, as ASIB does not prevent installers
from registering in as many regions as they wish.
188. IBR has done work in areas other than Gauteng, being the area in which it is
registered with ASIB. ASIB has never refused to certify these installations or insisted
that IBR register in the relevant region before ASIB would certify the system.
115 Transcript of Mr. Holmes for Specifire p1088; Fireco’s witness statement at para 5.1; Transcript of Mr.
Shiba for Fireco at p867 and p868. Specifire’s witness statement at para 4.3
116 Transcript p 831.
42
189. Mr Radmore of IBR has no knowledge of an occurrence where an ASIB -listed
installer has been sanctioned for servicing an area outside of its address as registered
with ASIB.117
190. From a commercial perspective, IBR argues that having offices outside of an area
in which a system has been installed is simply not commercially sensible. Not only is
it inconvenient for IBR to conduct work outside of the area in which its offices are
situated, but sprinkler systems are high risk, and in the event that IBR needs to provide
ongoing maintenance or service or attend to an issue with a system, response time is
of the utmost importance in order to limit water damage and return the system to a
fully operational state.
Thirteenth Respondent - Multi-Net
191. Multi-Net submitted that it never regarded it self bound nor did it implement any
system, regime or tacit, implied or express conduct within which it limited its business
activities only to the region in which it had its principal place of business.
192. Multi-Net provided fire sprinkler installation services countrywide.118 It emphasises
that it has branches in multiple provinces, operates countrywide and was accredited
by ASIB due to customer requirements, not any territorial restrictions.
Tenth Respondent – Fireco and Fourteenth Respondent – Specifire
193. The abovementioned Respondents refer to the fact that (i) installers were
permitted to apply for registration in more than one province; and (ii) certain “installer”
Respondents provide installation services outside their listed areas of operation where
this is requested by their clients, and that they do so without censure from ASIB. 119
This, they say, is clear evidence that there was no agreement to divide the installation
market geographically.
117 Transcript p 932; IBR’s HOA at para 27.17.2.
118 Mr Smith’s witness statement at para 6.1; Transcript p 980.
119 Inter alia the evidence of Mr Shiba for Fireco Transcript p 893.
43
Seventeenth Respondent - Tshwane Fire
194. Tshwane Fire submitted that t he Commission did not prove that any of the firms
agreed to allocate geographical areas to avoid overlaps in the supply of services and
neither did they agree not to compete in geographic markets for Tshwane Fire.
195. It submitted that it is merely advised that installers, instead of spreading
themselves too thin and not being able to deliver a proper service countrywide, should
consider the circumstances before accepting work where they are not based or in the
situation to deliver a proper and complete installation.
196. Tshwane Fire operates across multiple areas, with ASIB being aware of this.120
Conclusion
197. The evidence has shown that installers were permitted to apply for registration in
more than one province and did so. Moreover, certain installers operated in provinces
in which they were not listed without sanction from each other or from ASIB. This is
inconsistent with the Commission’s alleged “hub and spoke” cartel arrangement.
198. We conclude that there is insufficient evidence to conclude that the six installer
respondents divided the market geographically through ASIB as the “hub”.
199. We note that both the Commission and the Respondents sought to characterise
the geographic market allocation complaint, relying on various cases, including
Dawn121, SAB122 and Tourvest123.
200. It is trite that characterisation is a part of our law. It is also trite that our Act
distinguishes competitor conduct that is per se prohibited and conduct that is subject
120 Transcript p 1112 to 1113.
121Dawn Consolidated Holdings (Pty) Ltd & Others v The Competition Commission 55/CACOct2017
[2018] ZACAC 6 (4 May 2018) (“Dawn”).
122 Competition Commission v South African Breweries Limited and others [2014] 1 CPLR 265 (CT)
123 Tourvest Holding (Pty) Ltd v Competition Commission and Another (195/CAC/Oct21) ZACAC 1 (30
June 2022). (“Tourvest”).
44
to the rule of reason. The reasons for this are well established and we do not repeat
them in these reasons.124
201. In our view, the characterisation cases relied on by the parties appear to be
misplaced on the facts of this case. On the evidence discussed above, there is no
evidence of an agreement to geographically divide markets . Since there is no
agreement, we see no need to assess, as the parties do, whether the listing
restrictions are objectionable from a competition law perspective, if so, whether the
restraint is reasonably necessary, and if so, whether it is proportionate to achieve the
intended purpose.
202. During the hearing , ASIB insisted that its listing conditions on the geographic
market are recommended and that it does not penalise installers who operate outside
their listed areas. We note therefore that the installers that operate in this sector in
South Africa should not because of any ASIB rule , consider themselves being
precluded from operating in any geographic region of the country.
Advocacy
203. It is clear from the evidence that there is a regulatory lacuna in the fire protection
industry.
204. We have referred to the history of ASIB’s establishment in the 1970s above.
205. In short, prior to the establishment of ASIB, there was no third -party independent
body that could provide compliance inspection services in the industry. According to
ASIB, the Ninth Edition Rules for Automatic Sprinkler Installation (produced by the
Council for Fire Insurance Companies of South Africa) were the applicable standard,
and were already outdated then in 1970, since they were still based on rules
established in 1954.
206. As a result, fire protection insurers were each using their individual requirements
for compliance inspection. The short-term fire insurance industry then established
124 American Natural Soda Ash Corporation and Another v Competition Commission of South Africa
(554/2003) ZASCA 42; 2005 (6) SA 158 (SCA) (13 May 2005).
45
ASIB as an independent body to provide third-party compliance inspection services.
Since then, ASIB has filled the regulatory gap by setting compliance standards in the
absence of effective government oversight.
207. To date, the standard applicable in the industry is the one developed by ASIB,
apparently at the request of the SABS in 2017, being the Twelfth Edition Rules. The
Twelfth Edition Rules are generally applied to new buildings.125
208. ASIB’s dual role as both a standard-setting body and a compliance inspector126 is
not desirable. The Commission points out that legitimate industry bodies rather than
ASIB, should set standards in the fire protection sector in South Africa . Various
standards, including the SANS 17020: 2012 Standard ("SANS Standard"), recognise
the importance of having an independent inspection body that is not subject to any
potential conflict of interest.
209. Although it appears from the evidence that other compliance inspection bodies
exist, such as SAIFP , ISIC, Risk Management Solutions, Colin Edwards and
Associates, Fire Management and Design Services, FM, NFPA , they are either not
preferred or known by insurers, engineers, government or parastatals who require
inspection services.
210. For example, the SANS Standard provides that an inspection body should,
amongst other aspects, be independent of all parties; not gain financially from a report;
and not engage in any activities that may conflict with their independence of judgment
and integrity in relation to their compliance inspection activities. ASIB’s self-regulating
and dual role as both a standard -setting body and a dominant compliance inspector
is thus not desirable.
211. While we found no compelling evidence of market division as alleged by the
Commission, it appears in the circumstances that an appropriate intervention is an
advocacy role for the Commission in this sector given the importance of fire safety. As
we have indicated, fires threaten lives and property.
we have indicated, fires threaten lives and property.
125 ASIB’s witness statement at para 2.19
126 National Transcript at p 833.
46
212. The evidence suggests that ASIB is both a player and a re feree in the fire
protection industry. It determines the rules for downstream sprinkler services
(including installation) and conducts inspection services. As mentioned, the SANAS
found similar conduct by SAIFP to be a conflict. Some witnesses indicated that the
fire protection industry should be regulated by government127.
213. Advocacy by the Commission to improve regulation of the industry could include,
but not limited to engaging with the relevant body or bodies responsible for the issuing
of safety standards in the fire protection industry to inter alia expedite the issue of the
relevant updated standard. In this regard; ASIB states in the rules applicable to date,
being the SANS10287, that its rule has been submitted and accepted for use and
accepted and is currently being transitioned into SANS the promotion of competition
in the sector including in relation to inspectorate bodies and any related regulation of
the industry.
214. As also indicated, the relationship between ASIB and installers is continuing, and
on the evidence , it appears that in practice the listing conditions are not adhered
to/enforced. To align the conditions with the practice in the market, during the hearing,
ASIB undertook to clarify its listing conditions in two respects:
214.1. The first was to clarify that by choosing a geographic area in which an
installer intends to operate on listing, the installer is not precluded from performing
work in another area where they are not listed.
214.2. The second is in relation to inspection services where the listing is clear that
installers are restricted from providing inspection services. Th e listing restriction
remains the case for the reasons mentioned, more especially to avoid a conflict
of interest. Certain installer Respondents indicated that this did not preclude the
client – be they engineers, insurance companies, or parastatals choosing a
client – be they engineers, insurance companies, or parastatals choosing a
different inspectorate body to ASIB. ASIB undertook to clarify this condition of
listing.
127 Stated by Mr Nair Transcript p 784, 805 and 833; Mr Mayet Transcript p 1284.
47
215. Finally, both the Commission and Respondents were of the view that given that
the alleged contravention is market division (which on the evidence has not been
proven), an appropriate intervention would also include informing customers such as
engineers of other inspectorate bodies other than ASIB.
216. These interventions would serve to clarify the listing conditions which ASIB and
the Respondents allege are already the practice in the m arket. Further the
interventions would promote competition in the compliance inspection services market
as well as regionally in the installations market.
Order
217. We make the following order:
217.1. The Applicant’s case aga inst ASIB; National; Fireco; IBR; Multi -Net;
Specifire; and Tshwane Fire is dismissed.
217.2. There is no order as to costs.
22 August 2025
Ms Mondo Mazwai
Date
Mr Andreas Wessels and Prof. Liberty Mncube concurring.
Tribunal case managers: Moleboheng Mhlati and Mpumi Tshabalala
For the Applicant: Adv Oupa Modisa SC, assisted by Adv Mehluli
Nxumalo and Adv Nkomotane Motsepe,
instructed by Mogaswa & Associates Attorneys.
For the First, Second, Tenth,
and Fourteenth Respondents:
Adv Jerome Wilson SC, instructed by Webber
Wentzel Attorneys
For the Third Respondent: Adv Ziyaad Minty, instructed by Ooteman
Attorneys
48
For the Fourth Respondent: Adv Tsakane Marolen, instructed by Daly Morris
Fuller Inc
For the Fifth and Ninth
Respondents:
Aadil Mayet of Mayet Attorneys Incorporated
For the Sixth Respondent: Chris Salmon of CGS Attorneys
For the Seventh Respondent: Adv Antony Gotz, assisted by Adv Shannon
Quinn, instructed by Thomson Wilks Inc
For the Eighth Respondent: Michael Hulley of Hulley & Associates, Inc
For the Eleventh Respondent: Adv Roxanne Blumenthal, instructed by Nicholas
Van Der Berg, Attorneys
For the Thirteenth
Respondent:
Johann Jacobs of JJR Inc. Attorneys
For the Fifteenth Respondent: Adv Leigh Franck, instructed by Adams and
Adams Attorneys
For the Seventeenth
Respondent:
Wynanda Coetzee of Geyser And Coetzee
Attorneys
For the Eighteenth
Respondent:
Adv. Engelbrecht SC, instructed by Moodie &
Robertson Attorneys