Transcript Zambia Legal Framework on Bid Rigging

Bid Rigging Legal Framework in
Zambia
Natalie Nakazwe
Research Analyst
PRESENTATION OUTLINE
Introduction
 Definition of Bid Rigging
 Provisions on CCP Act on Bid Rigging
 Relevant Penalties for Legal Contraventions
 CCP Act in Relation to Tender Fraud Provisions
in Jurisdiction
 MOU with Procurement Agencies

INTRODUCTION
Zambia’s Competition Commission has been in
existence since 1997 following the enactment of
the Competition and Fair Trading Act (CFTA) in
1994
 The CFTA was repealed and replaced with the
Competition and Consumer Protection Act No. 24
of 2010 (CCPA). The CCPA unlike the CFTA is
more comprehensive and gives the Commission
more enforcement powers.
 The Commission investigate and assess both
Competition and Consumer related cases

DEFINITION
Bid rigging as defined under Section 2 of the CCP
Act is a “horizontal agreement between enterprises
where(a)
one or more parties to the agreement
agrees not to submit a bid in response
to a call for bids; or
(b) the parties to the agreement agree upon the
price, terms or conditions of a bid to be
submitted in response to a call for bids.”

BID RIGGING PROVISIONS IN THE CCP
ACT
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The Competition and Consumer Protection Commission
(CCPC) captures provisions dealing with bid rigging in Part
III of the CCP Act specifically sections 8 and 9.
Section 8 states that: Any category of agreement, decision or
concerted practice which has as its object or effect, the
prevention, restriction or distortion of competition to an
appreciable extent in Zambia is anti-competitive and
prohibited.
Section 9 states that; A horizontal agreement between
enterprises is prohibited per se, and void, if the agreementC) “involves bid rigging, unless the person requesting
the bid is
informed of the terms of the
agreement prior to the making of
the
bid.”
RELEVANT PENALTIES FOR LEGAL
CONTRAVENTIONS

Section 9 (2) states that; “a person who
contravenes subsection (1) commits an offence and
is liable, upon conviction, to a fine not exceeding
five hundred thousand penalty units or to
imprisonment for a period not exceeding five
years, or to both. (3) an enterprise that
contravenes subsection (1) is liable to pay the
Commission a fine not exceeding ten percent of its
annual turnover.”
INTERFACE BETWEEN BID RIGGING PROVISIONS
IN CCP ACT AND TENDER FRAUD PROVISIONS IN
ZAMBIA’S JURISDICTION
 The
Public Procurement Act of 2008 is a
comprehensive Act that gives the ZPPA the
powers to regulate public and private
procurement in Zambia.
 Part VII of the Act has provisions that relate
to tender fraud, specifically section 65 to 68
and sections 74,75,77 to 80 has provisions
and remedies dealing with conduct of
procuring entities and bidders or suppliers.
 Remedies for the provisions include
suspension for minor misdemeanours,
permanent barring, hefty fines and
maximum of 5 years imprisonment.
CONT’D…
Illegal conduct stipulated in the PP Act is;
 66-false information and conniving with bidders
 67-corrupt or coercive practices, price fixing,
criminal conviction related to business
 68-inducement by bidder/supplier etc
 Just like the PP Act, the CCP Act place stiff
penalties (Heavy financial penalties or 5 years
imprisonment or both) on parties that
contravenes the Act

MOU’S WITH PROCUREMENT AGENCIES
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Section 43 of the CCP Act allows the Commission to
enter into MoUs with sector regulators with the view
of enhancing the enforcement of competition law
The Commission does not have any current MOU’s
with the ZPPA. ZPPA has been the governments
purchasing body historically. The role of ZPPA has
changed in the recent past with them transitioning
into an authority or a regulator and tendering now
lies with the individual ministries of government.
CCPC has pursued a formal agreement with ZPPA
but it has been challenging to establish a working
relationship with the authority. Recent bid rigging
case created a delicate relationship that needs to be
nurtured.
ZIPS and CCPC have a working MOU and a joint
working committee.
MOU WITH ZIPS
Signed on 10th November 2011
 Joint processing of complaints
 Establishment of JWC
 Sharing of Resources
 Exchange of Information
 Confidentiality
 Investigations
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EXAMPLES OF CASES OF BID RIGGING
INVESTIGATED UNDER CCPA

Fertiliser cartel case
Evidence of Bid rigging noted in the bidding of tender
for supply of fertiliser under FISP
 Government lost over USD 20 million due to price
fixing and bid rigging related conducts by bidders
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THANK YOU FOR YOUR ATTENTION