Cartel culture rampant in South Africa

Corruption and collusion in business are part of the culture in South Africa, and the Competition Commission says it will take more anger and action from the public to help break these cartels.

Competition commissioner Shan Ramburuth told an informal seminar in Durban yesterday that despite the excellent strides by the commission in reaction to issues like bread price fixing, the anti-competitive cartels were firmly embedded in many sectors of the economy.

"Name any major sector and you will find it is controlled by two, three or maybe four firms," said Ramburuth.

"This is very conducive to the exchange of information and cartel behaviour.

"This leads me to believe the problem is widespread. When we clamp down, these bodies say 'What's the problem? We've been doing this for years'."

Ramburuth said because of their financial might, big firms often frustrated the commission's inquiries and legal processes by prolonging court cases on technical points.

He urged consumers and the media to play a far more proactive role in voicing their dissatisfaction at overpricing and corruption.

"Anyone can make a complaint to the commission and we will pursue it if we find hard evidence to substantiate the claim," he said.

"Everything we do relates to an end consumer and impacts on his or her life."

However, said Ramburuth, South African consumers tended to be exceptionally complacent, with a "let someone else fix it" attitude.

"One of our problems as an organisation is that the more we do, the more people want us to do," he said.

"We are a statutory organisation. We can only do what the law allows us to do. Other players can pick up and take it further.

"We can't initiate boycotts; that is up to consumer organisations and the public. We invite them to kick in, to lever their muscle and power and assist us to get things working properly."

Nandi Mokoena, manager of strategy and stakeholder relations for the Competition Commission, explained that cartels were deeply secretive, and therefore it was difficult to expose them.

"For that reason the Corporate Leniency Policy was instituted in 2004," she said.

"It encourages complete disclosure. Simply put, the first person through the door is guaranteed full leniency from prosecution provided that they make a detailed confession of the cartel's activities. It provides an incentive for people to come forward."