| Hakim Hayat |
BUSINESS representatives registered with the Ministry of Health (MoH) were urged to adhere to fair business practices as outlined in the Competition Order 2015 to ensure a conducive business environment that will drive economic growth.
This was highlighted during an engagement session yesterday led by the Department of Competition and Consumer Affairs in the Department of Economic Planning and Development (JPKE), Ministry of Finance and Economy (MoFE) in collaboration with the MoH.
More than 80 business representatives took part in the session that was part of an ongoing effort to prevent collusive tendering in public procurement and cartel conduct, through raising awareness amongst the business community and procurement officials.
During the session, businesses were advised to compete fairly for the benefit of their business growth and also compete in line with the international best practices and legal framework, which endeavour to drive domestic economic efficiency, consumer welfare and economic growth.
The Competition Order 2015 is a law that prohibits cartel conducts including collusive tendering (bid rigging), which can potentially put fair, honest and well-run companies out of business and harm long-term consumer welfare.
The Acting Director at the Department of Competition and Consumer Affairs explained the various forms of harmful anti-competitive agreements including collusive tendering, price fixing, market controlling and limiting supply of goods to create artificial shortage.
“These are made illegal with the enactment and introduction of the Competition Order 2015. Competition law has been introduced all around the world including the ASEAN member states, as one of the key economic policies towards market efficiency, consumer welfare and economic growth,” the acting director said while reminding the session’s participants that governments and businesses are also consumers.
A cartel exists when businesses agree to act together instead of competing against one another.
These agreements are designed to drive up the profits of cartel members while maintaining the illusion of competition among them or a fair market.
The Department of Competition and Consumer Affairs also elaborated that by controlling markets and restricting goods and services, cartels can put honest and well-run companies out of business while suppressing innovation and protecting their own inefficient members.
Businesses are advised to protect themselves from unfair and unethical conducts for their survival and growth.
The session focussed at great length on the risk of collusive tendering or bid rigging.
“In a tender process, bidders are expected to compete against one another and the one offering terms best suited to the procurer’s requirements wins the bid. Bid-rigging or collusive tendering occurs when two or more bidders agree secretly not to compete with one another and collude to pre-determine the tender outcome,” an official from the Department of Competition and Consumer Affairs explained.
“Under the Competition Order 2015, bid rigging is one of the key serious anti-competitive conducts,” the official added.
Participants were also provided insights on the various forms of collusive tendering.
For example, one or more bidders may agree that they will not submit a bid or will withdraw a bid that had already been submitted.
In some cases, the bidders will take turns at winning the bids on a series of contracts or agree to submit higher bid prices or less attractive terms so that the designated winner could win.
Some companies may agree that the winning bidder will offer lucrative subcontracts to compensate the ‘losing’ bidders.
Officials from the Department of Competition and Consumer Affairs also shared that one of the key tools in the Competition Order 2015, also used by competition authorities around the world to detect cartels – including bid-rigging – is a leniency programme providing immunity or protection from the law for the first party who notifies the competition authority of the cartel conduct, provided that the member also meets all other requirements of the leniency programme.
Attendees were also informed that some collusive conducts were performed out of ignorance of the law.
The session concluded with an interactive question and answer session for the business community to share their concerns and obtain clarification regarding the conducts prohibited in the law.
The advocacy session encouraged business community to further their understanding of the law ahead of its enforcement in the near future to promote self-compliance.
With the objective of promoting economic efficiency as well as consumer welfare, the law has benefits that permeate all levels of the community.
By nurturing healthy competition, businesses can grow by competing on a level playing field to offer more choices, better quality products and services at better prices for consumers, including the government and other businesses.
The Competition Commission of Brunei Darussalam was established on August 1, 2017, as an independent body that is mandated to promote business competition in Brunei Darussalam economic landscape through the enforcement of the Competition Order 2015.
The Department of Competition and Consumer Affairs was established on the same day to act as the secretariat, administrative and investigative arms of the said commission.