Unfair Competition and Antitrust Help for South African Companies

*** UPDATED *** 9th December 2005
Sasol Appeal Judgment 13th December 09:30am at Cape High Court.

9th December 2005: We heard that the judgment in the Sasol Appeal against the findings of the Tribunal is to take place at the Cape High Court on 13th December 2005. The speed of the response by the Appeal Court is greatly appreciated. This sentiment applies whatever their decision. Time is of the essence in competition matters and the clear message of the Appea Court in hastening its decision is a good thing. WELL DONE.

I will be present for that decision and will stand proud no matter the outcome. We only hope that the decision will promote competition and the ability of this Nation to compete with the rest of the world in the long run. For our part we believe that a robust small business presence is essential in this process.

For those that have sought help, I ask patience, I have a full time job, as well as a family and commute to work during the week. I can only help on weekends due to my current circumstances. I will do my best but cannot speedily respond to all the queries, given my current circumstances. Proper preparation prior to sending me information greatly facilitates the process. It also permits me to have a better picture of the problems at hand. Thanks for all your support. Jim

4th December 2005. The point we feared has finally appeared. The money has run out, perhaps an inevitability of trying to save an un-salveagable position. We now need to breach the issue with our staff and will do so as soon as possible. Brian Oxley and I had discussions this evening and can see no way forward. There is no more we can do. Even if the Appeal Court decision is in our favour, the delays and interminable wait have meant that we have no bargaining position to even attempt to seek loans to permit the survival of the business. It must now close. We will attempt to salvage what we can from the business although we will suffer substantial losses.

The combined pressures of the creosote pricing and the inability to access wood supply contracts have placed the business in a position where no good can come from continuing operations. Each of these alone was sufficient in the long run to have caused our downfall. Let alone the combined effect of the two together. We have had no access to wood since 10th November, and production has been substantially compromised. MTO can't make up their minds as to what to do and this has not helped.

Having now had time to reflect on the Appeal process, and the possible outcomes, we are now substantially more positive. For the record, we did not want to have the business close prior to the outcome of the hearings. This would have been easy to have done and was certainly the best business action, but we felt obliged to try and save the jobs for as long as possible, and not influence the process by effectively proving the point. Regrettably, we are unable to to continue with the level of losses we have faced for the last two years or so. The recent lay-offs that we implemented have now been referred to the CCMA and this will be heard early in December. So things are really in a mess right now.

November 2005: We are waiting for the Appeal judgment. There is no final date for the decision, so we go on the best we can. The recent fires in the Eastern Cape have been a disaster for the entire wood industry. The effects on employment will be far felt and major job losses are inevitable. For our part, it seems that we will have a few months of wood left and thereafter, it is unlikely that we will be able to continue.

The utter hopelessness we feel cannot be described. When we went to the Tribunal, it was in anticipation of a fall in pricing occasioned by market forces, which would have made our survival impossible in the long run. Without wood, there is no chance of recovering our position.

Subsequent to the fires, there is now no hope of any long term future for the business and its staff. This is an unmitigated hell for all of us. The staff particularly. We do not yet know the full impact on our business, so these comments may be premature. But from what we have experienced and the extent of the damage as we best understand the situation now, there is little that MTO can now do. They too will have suffered greatly. Our empathy and best wishes to all involved.

Whoever started the spate of fires did a foolish thing. The effects on the many people that are employed in the industry will be long felt, and we fear that many will starve as a consequence. For our part, we will do whatever we can to find the person/s responsible. The misery that will be faced cannot be underestimated. It is not unknown that we and MTO have had many disagreements in the past, but this is something that we share, both our businesses are severely threatened. We wish them well in recovering from the fires.

To compound the issue, the specialised and endangered species specific to Longmore have been threatened. Whether they will survive as a viable breeding population is a matter that will be revealed in time. We pray they will.

ANSAC Decision 13th May 2005 :- on the word effect and the requirements for leave to appeal to the Supreme Court of Appeals. 23 September 2005 - Also, have a look at the SAA decision reached by the Tribunal on their web site.

We were really dissappointed at the way we presented to the Appeal Court. This forum is not ideally suited to the small business attempting to put its case. We have no one to blame but ourselves, but it is a very intimidating arena. Judge President Davis tried to make us feel at home, and our appreciation is recorded. I simply froze, a bit like an actor forgetting the words, so we left feeling very dissapointed in our presentation. To those that have been following the case, we apologise, we had hoped to do a lot better.

It seems that the area left in dispute is that which involves the question of "the likely effect of substantially lessening or preventing competition". There may also be some question as to quite what "equivalent transactions" means. The question of costs was also discussed as well. Finally, JP Davis had a bit to say about the performance of the Commission.

But having said that, all is not lost, and the written submissions must be considered. The questions raised are ones that require a great deal of careful consideration. This case deals with very difficult matters of principle, and of power, and the facts and testimony are long and complex, and inter-related. Judge Davis and the panel are probably not very happy with having to go through everything, if that is what they will do. If it was a shortcut to a simple decision that was sought, then we probably did not assist to that end. Apologies.

Whatever the decision that is reached, we know that we have done the right thing in going forward. We and those that have offered us encouragement must now wait. Our grateful thanks to them, they know who they are. Special thanks to

Prof. Simon Roberts & Grant Saggers of Wits School for Economic and Business Studies

for their time and support. This small advertisement is the only way we can ever repay them for their time and efforts.

The survival of Nationwide has been on a knife-edge for some time now. We no longer have the resources to continue this fight and try to keep the business alive. For this reason alone, we must ultimately fail in our hope to achieve an equitable dispensation for small businesses in the economy.

If it is so that we have brought the attentions of the Commission to the plight of small businesses, then we have done well, and do not consider our efforts to have been wasted. We are proud and humbled by what we have achieved, no matter the outcome. At least the authorities have been made aware of the underlying principles involved and that a major re-think in this area is required.

Personally, I must now get on with my life. The last two years have humbled us, having heard from the many small businesses that have offered encouragement to the cause of equity. We know that there are many others that experience even greater problems than we ourselves face and have faced. To them I do not know what to say. If we have let you down, then it was not for want of trying, this much I can promise. Sooner or later the voice of small businesses will be heard.

The real tragedy is not for us as owners of the business, we have a chance perhaps to begin again. We do not know what will happen to our employees and their families. Their chances of re-employment in the face of the local conditions are remote at best. And what of those already sick with Aids and still employed by us when they can work, and their children? We feel that we have failed them all, and we will have to live with this on our conscience. And for their contribution, our antagonists will recall their part.

Sasol have written to all their customers teling them that they intend to exit the creosote market by latest 1 July 2006. This we anticipated, given i) the increased prices of crude oil, ii) the entrance of FFS onto the wax additive creosote market and iii) the additional creosote capacity expected to come on stream through Mittal-Iscor next year. We cannot for a moment believe that they ever intended to keep their plant open. The good news is that creosote prices look set to reduce to more economic levels, given surplus capacity in this market. Hopefully.

We have done our best, but it may not have been good enough, or the outcome quick enough. We can but wait on the decision of the Court.

Nationwide Poles has been succesful in its Tribunal hearing concerning prohibited price discrimination effected by Sasol Oil. Sasol have appealed the whole of the decision of the Tribunal. It is expected that the appeal will be heard sometime around September 2005.

We offer our views and experience freely to anyone that may wish to make use of them. If anyone wants to take advantage of this site for commercial gain, please do so, but we ask that appropriate acknowlegment and a reference to this site be made.

Help is at hand if you are struggling with South African and even International competition issues. Download (small & fast) or view the files on the left.

Many small businesses have contacted us for assistance following the case against Sasol. I hope that this will offer some guidance. I also hope that others will contribute to the aim of this site, namely free and relevent information about competition matters. Please feel free to contribute anything you may have to offer.

For the time being, this site discusses general matters relating to competitions law in South Africa and specifically the practice of price discrimination. It takes the form of a series of comment on various aspects of competitions matters, as we see them.

These comments are intended to facilitate the process for those that suffer competitive abuse. And for those that just want to know more about competition law and the processes.

The outcome of the Sasol case has now been published. The link on the left labelled The Decision will bring up the results of the hearings.

We know that the outcome is of interest to those that have contacted us for help so far. We thank them for their good wishes. We know who they are and appreciate all their support. Having others believe in our conviction has been invaluable in keeping our passion and determination alive.

The Soda Ash (ANSAC) appeal has now been published. In short, an appeal from the Competition Appeal Court will require leave to appeal from the Supreme Court of Appeals. A reasonable prospect for success and special circumstances will be required to be shown prior to leave being granted. Here it is, the original in part:

Leave to appeal from this court is required before an appeal may be prosecuted from the CAC on the matters set out in s 62(1), and special circumstances must exist before this court will grant leave.

As we observed in NUMSA (para 43), the procedures for applying for leave to appeal, and the factors relevant to obtaining special leave, are well-established. The criterion for the grant of special leave to appeal is not merely that there is a reasonable prospect that the decision of the CAC will be reversed – but that the applicants can establish ‘some additional factor or criterion’. One is where the matter, though depending mainly on factual issues, is of very great importance to the parties or of great public importance. In applying this criterion, this court must be satisfied, notwithstanding that there has already been an appeal to a specialist tribunal, and that the public interest demands that disputes about competition issues be resolved speedily, that the matter is objectively of such importance to the parties or the public that special leave should be granted.

We emphasise once more that the fact that applicants have already had a full appeal before the CAC will normally weigh heavily against the grant of leave. And the demands of expedition add further weight to that. 13th May 2005 Case No 554/03 SCA

In addition, the SCA advises us the word "effect" has an extremely broad meaning. This is important in the context of various elements of the Act and must be noted.