The Competition and Fair Trading Commission (CFTC) Thursday ordered the Malawi Bureau of Standards (MBS) and the Department of Road Traffic and Safety Services (DTRSS) to pay K500,000 each for engaging in anti-competitive conduct in the handling of a number plate deal with Movesa.
In a determination Thursday, CFTC acting Executive Director Apoche Itimu says her institution has recommended that the matter be referred to the Anti-Corruption Bureau (ACB) to investigate if there was any corruption that took place in the granting of the waiver to Movesa in the supply of number plates.
MBS and DTRSS were found guilty of applying double standards in favour of Movesa when they rejected number plates from other players for their non-compliance with standards but, at the same time, accepted those of Movesa, despite them falling in the same category.
According to Itimu, the matter dates back to April 14 2016, when CFTC found that a company called Bulldog was granted a licence by DRTSS to import number plate blanks from Yiwu Traffic Signs Ltd only.
She said Bulldog proceeded to import 6,000 number plates on the strength of approval from DRTSS and the pre-shipment sample approval from MBS. The consignment arrived on December 1 2016.
According to the determination, on December 13 2016, MBS issued an imports monitoring report to Bulldog, which declared that the pre-shipment sample received on December 1 2016 had failed the test under MS639-1.
Although Bulldog alleged that the pre-shipment sample submitted in 2011 was the same as the consignment in 2016, CFTC found that they were different as they failed on different parameters.
CFTC, however, discovered that even though Bulldog, Movesa and other competitors all failed conformance tests under the MS639-1 Standard during the same period, only Movesa was allowed to import a consignment that had failed a conformance test.
CFTC found that the reasons given for having granted a waiver to Movesa to do so were unlawful and unjustifiable, resulting in Movesa being granted an unfair advantage against its competitors.
“The commission found that DRTSS engaged in anticompetitive conduct by taking steps to seek a waiver from MBS on Movesa’s behalf on the alleged grounds that if the waiver was not given there would be a shortage of number plates in the country and, yet, all the other competitors who had also failed the conformance tests could have also done so (though not lawfully as they had also failed the conformance test).
“Further, the commission found that the reason for seeking a waiver on Movesa’s behalf was simply to allow Movesa not to incur losses for 65,000 number plates that had already been bought and whose pre-shipment sample had failed,” the determination reads.
Itimu says MBS engaged in anti-competitive conduct in granting the waiver to Movesa because it did so simply because DRTSS requested it to do so without any other reasons.
Itimu says both MBS and DRTSS contravened Section 32(1) of the CFTA.
“The commission also noted with concern that, for many years, Movesa had been the sole provider of number plate blanks in the country and it is only in recent times that another supplier was also engaged,” Itimu said.
CFTC has since ordered that MBS and DRTSS should cease and desist from engaging in anti-competitive conduct in the enforcement of standards regarding the importation of blank number plates in Malawi.
ACB spokesperson Egritta Ndala asked for a questionnaire when contacted Thursday.
DRTSS spokesperson Angellina Makwecha was not immediately available for a comment while MBS spokesperson Monica Khombe asked for more time.