THEE - Outcome of Competition Tribunal Hearings

THEE - Outcome of Competition Tribunal Hearings                                 
OUTCOME OF COMPETITION TRIBUNAL HEARINGS                                        
(Following is a guideline for journalists. The information can be used but      
please do not quote Nandi Mokoena or the Tribunal)                              
Tribunal confirms amended settlement agreement between the Commission and       
Sasol                                                                           
On Friday the Competition Tribunal confirmed an amended settlement agreement    
between the Commission and Sasol Chemical Industries regarding the conduct of   
one of its divisions, Sasol Polymers. In the agreement, Sasol admits to having  
contravened the Competition Act, by engaging in indirect price fixing, and      
agrees to pay a penalty of R111, 6 million within 60 days of the confirmation   
date.                                                                           
During Thursday`s hearing into the proposed settlement the Tribunal asked for   
certain changes to the consent agreement including the insertion of a           
mechanism to ensure that the Commission monitors the implementation of the      
terms of the settlement.                                                        
Settlement agreements must be confirmed by the Tribunal in order to be          
enforceable.                                                                    
Background                                                                      
In December 2010, the Competition Commission reached a settlement with Sasol    
Polymers in which Sasol admitted that the supply agreement between it and       
Safripol (Pty) Ltd ("Safripol") resulted in indirect price fixing. In its       
investigation the Commission found that Sasol and Safripol engaged in           
collusive conduct as a result of the implementation of the supply agreement     
including the operation of the pricing formula and the exchange of information  
relating to the pricing of polypropylene.                                       
Sasol Polymers agreed to pay a penalty of R111 690 000 which represents 3% of   
its 2009 total annual turnover derived from polypropylene products.             
The Commission referred a case of collusion and excessive pricing against       
Sasol Chemical Industries Limited and Safripol to the Tribunal for              
adjudication on 12 August 2010. This settlement agreement resolves the          
collusion aspect of the case.                                                   
In terms of the settlement, Sasol agreed to stop sharing competitively          
sensitive information including prices and volumes of polypropylene sold. It    
will also amend problematic provisions of the supply agreement to ensure that   
price is set independently.                                                     
Following the conclusion of the agreement, the Commission filed an application  
for the confirmation of this settlement agreement with the Tribunal.            
The Commission previously concluded a consent agreement with Safripol in which  
it admitted contravention of the Competition Act and agreed to pay a penalty    
of R16, 5 million, representing 1,5% of its total annual (2009) turnover        
derived from polypropylene products. This consent agreement has since been      
confirmed by the Tribunal.                                                      
At the conclusion of its investigation, the Commission found that Sasol had     
charged excessive prices for polypropylene and propylene to its local           
customers in line with import parity pricing. The Commission`s findings and     
allegations of excessive pricing are being contested by Sasol and are still to  
be heard by the Tribunal.                                                       
This case was initiated in 2007 following concerns raised by the Department of  
Trade and Industry (dti) about polymer pricing and its negative effect on       
diversified growth and employment in manufacturing. Sasol is the dominant       
supplier of polypropylene for its own use and that of Safripol. It is also the  
major supplier of polypropylene to the South African market.                    
Polypropylene is a plastics polymer used by plastics converters to manufacture  
a wide range of products.                                                       
Issued By:                                                                      
Nandi Mokoena                                                                   
PR Consultant: Competition Tribunal                                             
Cell: +27 (0) 82 399 1328                                                       
E-mail: NandisileM@live.co.za                                                   
On Behalf Of:                                                                   
Lerato Motaung                                                                  
Registrar: Competition Tribunal                                                 
Tel: (012) 394 3355                                                             
Cell: +27 (0) 82 556 3221                                                       
E-Mail: LeratoM@comptrib.co.za                                                  
Date: 28/02/2011 12:05:01 Supplied by www.sharenet.co.za                     
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