Submitted by the OAS Trade Unit to the FTAA Working Group on Competition Policies

Jamaica: Report on Developments and Enforcement of Competition Policy and Laws (1993 - 1996) (Continued)

III. Regulatory and Trade Policy Matters

Section 54 of the FCA states, inter alia, that "his Act binds the Crown." However, the Commission has interpreted this to mean that its power does not extend to government when the latter acts in its executive capacity. Conversely, the Commission holds the view that government is regulated to the extent that it engages in trade.

For the most part, the Commission has enjoyed amicable working relationships with other statutory organizations. However, there have been instances where some regulatory bodies resist the Commission's intervention as it is viewed as an encroachment on their turf.

The Commission offers a facility where by any person or organization, business or enterprise may request advisory opinion. Predominantly, the general public takes advantage of this service but lately more and more regulatory agencies and other governmental agencies have been requesting the FTC's opinion on how the FCA will impact on their proposed venture. Most recently, the committee charged with the mandate of creating the preliminary draft for the Freedom of Information Act in Jamaica, contacted the FTC to solicit its advice.

This discussion raises core issues as to the extent to which the FTC can exercise jurisdiction vis-a-vis another regulatory body. In other jurisdictions, a competition tribunal may have concurrent jurisdiction with another regulatory body. Ultimately it is a matter of statutory interpretation as to whether there is room for both bodies to play a regulatory role, or whether only one regulatory agency has jurisdiction. There have been numerous instances where our particular specialization has been utilized. The entities listed below are a sampling:

a. Office of Utility Regulations (OUR)

The staff of the Commission is currently involved in extensive discussions with the OUR regarding formulating their draft legislation. Specifically, the OUR has sought the FTC's input so as to ensure that the regulatory framework of the proposed legislation takes into account competition policy and objectives.

b. Customs & Excise Department

The staff of the Commission, along with senior representatives of the Customs Department, the Ministry of Finance, the Revenue Protection Division and the Customs Brokers' Association of Jamaica, discussed the mandatory use of the services of customs brokers by consumers for goods valued at US$1,000 and upwards. The staff of the FTC, after a thorough consideration of the competition implications, and following discussions with the above organizations, was able to provide the relevant governmental body with an advisory position and recommendations. In sum, the staff recommended that the threshold be raised to US$3,000, so that there would be less hardship for the consumer while protecting the government's right to collect revenue and protect its borders. This body has agreed to take the FTC's position into account, (notwithstanding its autonomy to regulate the area of revenue collection), when drafting legislation for the aforementioned area.

c. National Water Commission (NWC)

The Commission investigated this state monopoly with a view to determining whether the company was abusing its dominant position by passing off its inefficiencies to the consumers in the form of increased rates. After prolonged studies and economic analysis, the staff found evidence of abuse. In a meeting wherein the Commission's staff discussed its findings, the company agreed to cooperate with the staff whereby the Commission would continue to monitor the company, and the company would, in turn, provide the Commission with on-going status reports regarding the implementation and progress of certain programmes in the areas of weaknesses that had been identified.

d. Port & Airports Authority of Jamaica

The staff of the Commission has held continuing discussions with authorities for the air and sea ports of the island. Specifically, the staff has informed these authorities of the competition implications which impact on the current deregulation exercise being conducted by both entities. The Airports Authority has actively sought the FTC's input in this area. With respect to the sea ports, the Commission's staff has consulted with the relevant Ministry and the Port Authority, with a view to dealing with the issue of ensuring equal access to the ports for all players in the tourism transport market. This authority has now referred the body responsible for this deregulation exercise to the FTC so that the Commission may advise on competition implications that may arise.

e. Jamaica Public Service Company Limited (JPSCo)

The staff has conducted intensive reviews of the complaints received against this state monopoly. These complaints relate to pricing, meter reading, and selective tendering of contracts. In some instances, it has been found that the FTC does not have jurisdiction, and thus the matters are referred to the Ombudsman for Public Utilities. However, this does not alter the fact that the JPSCo does engage in trade and is therefore subject to the FTC's jurisdiction.

f. Jamaica Bureau of Standards (JBS)

A deregulated economy has resulted in a wider variety of items offered for sale in the market. These items were previously not available for purchase by consumers. However, arising from this situation is an increase in the number of substandard goods entering the Jamaican marketplace, since some importers choose low unit price over acceptable quality. The above-mentioned scenario has brought the FTC and the JBS into a very close working relationship. In fact, the FTC's mandate of consumer protection and the JBS's responsibility of ensuring that goods offered for sale comply with basic international standards, appear to converge at this point. The FTC has, from time to time, called upon the expertise of the JBS in areas where the Commission requires a determination based on technical analysis and assessment. One common area of co-operation is that of the JBS performing standards testing in the laboratory and giving its opinion and/or report in matters relating to electronic appliances.

The co-operation between both agencies has also seen the passing of information from one agency to the other. For example, the FTC, on the basis of numerous complaints received concerning a particular product, may request the intervention of the JBS which will then undertake an empirical investigation and make a decision regarding the item in question. Very often, the decision results in the banning of that particular product.

The JBS, for its part, informs the FTC of any discovery of substandard products which have been imported and are being offered for sale in the market. The FTC then may recommend that individuals who have been injured be offered some form of redress. Additionally, other statutory departments and agencies, such as the Broadcasting Commission and the Ministry of Construction, have sought the FTC's assistance regarding their tendering process and practices in an effort to ensure that the laws regarding competition are not breached.

It can, therefore, be said that in exercising its mandate to regulate competition in a new liberalized economy and to ensure the observance of the provisions of the FCA, the Commission has had to build close relationships with other statutory agencies, the actions of which impact on the operation of the free-market economy. In many instances, those agencies are now actively seeking the FTC's input in shaping their own policy.

As was stated above, some statutory bodies have been less than enthusiastic concerning the Commission's intervention. The General Legal Council is one entity which took issue with the FTC's intervention and took the Commission to Court.

g. General Legal Council v. Fair Trading Commission

The General Legal Council (GLC) established under the Legal Profession Act (LPA) sought to determine whether the FTC could exercise its jurisdiction over that body. The Supreme Court held that the GLC is not amenable or subject to the jurisdiction of the FTC. It is the Commission's position that the Court ousted the jurisdiction of the FTC, because there was specific legislation which governed particular practices and the court was loathe to imply repeal of those existing laws.

With respect to other professional bodies, such as the medical profession etc., the Commission has taken the position that generally it can exercise concurrent jurisdiction. However, it has no right to intervene where there is no particular legislation that requires these bodies to act in a certain manner.

The Commission is currently seeking to amend the FCA, so that all professional services fall within its jurisdiction, notwithstanding the existence of specific legislation. However, the Commission does not intend to disturb any profession's authority to regulate standards of competence.

IV. International Affairs

Jamaica is the only Caribbean island with competition legislation. That has not gone unnoticed by certain multinational entities such as the Caribbean Telecommunications Union (CTU); Free Trade Area of the Americas Task Force (FTAA); and the United Nations Conference on Trade and Development (UNCTAD). Those bodies have requested Jamaica's input in drafting legislation for those member countries which do not already have such legislation. Additionally, through our participation in various conferences and seminars, we have provided assistance in the preparation of regional legislation which will have universal application.

The expertise of the Fair Trading Commission has also been sought as to the practical application of competition law, so that other nations can learn from Jamaica's successes as well as those areas where we have had to make adjustments for the idiosyncrasies of our very unique economy.

V. Other Consultations/Information and Enforcement Initiatives

A practice integral to the enforcement of Jamaica's domestic laws and regulation but, not yet mentioned, is the practice of issuing Authorizations. Authorization provides a system whereby an entity's anticompetitive behaviour may be allowed if the Commission is satisfied that the particular behaviour provides some overwhelming social benefit.

In the Commission's three-year existence, it has granted only one Authorization. In that instance, the FTC authorized the Futures Group to recommend the range of prices at which certain contraceptive products may be sold by certain suppliers. Ordinarily, this recommended price range would constitute a breach of section 34 of the FCA which proscribes Price Fixing. The FTC found that the public benefit of allowing affordable contraception is promoted by the proposed arrangement even though such arrangement is facially anticompetitive.

Currently, the Commission is investigating a number of agricultural Commodity Boards to see if Authorization of their behaviour is feasible at this time. If the FTC finds that this is indeed the case, they will be invited to apply for Authorization. Usually, companies request Authorization from the FTC before an Authorization Investigation is commenced. However, the Commission took a more pro-active stance in this instance in light of the Minister's exemption of one Commodity Board, namely, the Coffee Industry Board, from the FCA's purview. The Minister has that power by virtue of Section 3(h) of the FCA. The Commission has publicly stated that this power should be exercised sparingly as to grant political Authorizations wily-nily could undermine the very notion of a free-market system.