For the time being it seems that reason reigns within the hallowed halls of the Fair Trading Commission (FTC). The media reports that the application relating to the sale of the Barbados National Oil Terminal Company Limited, BNOTCL, from the Government of Barbados to SOL has been denied, at least preliminarily. A bit of cold water was poured over my excitement by the haste of the FTC to point out that it was only a preliminary ruling and that the decision had only been communicated to the applicants. This quite frankly is a matter of public interest, and as the persons to be directly impacted, it is submitted that the public has a right to know.
The offending portions of the application relate to a demand for a 35 per cent increase in charges even before the sale goes through and a 15-year moratorium on the establishment of any competing fuel storage operation. The latter is the very definition of anti-competition, while the former is a private citizen demanding that Government taxes the rest of us so that they can fill their coffers with profit.
Having been critical of the FTC in the past, they get a pat on the back for seeing these terms for what they are and they will get a pat on the other shoulder when a final ruling is made without selling out successive generations of Barbadians.
Section 13 of our Act prohibits “all agreements between enterprises, trade practices or decisions of enterprises or organizations that are likely to have the effect of preventing, restricting or distorting competition in a market”. Examples of such practices include price fixing, limiting production or technical development and applying dissimilar conditions to the same type of transactions with persons in the same trade, thus placing them at a competitive disadvantage.
Abuse of one’s dominant position by restricting new entrants into a particular market, eliminating competitors, or exclusively dealing with one entity or tying the sale of one product to that of another also breaches the provisions of Section 16 of the Act. This is the section which specifically addresses the 15-year moratorium. A private citizen cannot dictate that they should not have any competitors and, frankly, Government should recognize that in agreeing to such a clause, it is undermining its own Acts of Parliament.
I hope that the final decision also addresses the question of Sol’s monopoly in the marketplace and, if not, then one hopes that the Supreme Court in its infinite wisdom will explain to Government and to Sol why these things are patently wrong in its judgment on the case filed by Rubis.
Other questions which need to be addressed and which were previously raised in this column a year ago (almost to the day) relate to who are or will be the directors of these companies? Will there be common directors between them? Section 23 of the Act provides that “[w]here a director serves on a board of directors of two or more companies that are significant competitors and the director’s conduct has the effect of welding together the policies of those companies in such a way as to significantly reduce competition between them or to eliminate such competition the Commission shall direct that the director serve on not more than one board of the relevant companies”.
For once the regulator appears worth its salt. And if Government wishes this deal to go through Section 3 of the Fair Competition Act allows the Minister of Commerce and Consumer Affairs, by order, to exempt this transaction from the provisions of the Act. If that route is taken though one should reasonably expect to be pilloried in the press, the rumshop and elsewhere.