The South African Competition Commission has referred to the Tribunal a collusion case it has filed against 13 South African scrap metal recyclers. According to the commission, the scrap dealers face allegations that they colluded to set prices, divide the markets and fix trading conditions in South Africa through agreements, arrangements and understandings among the respondents.
The charges follow a four-year investigation by the commission that tracked allegations of exclusive dealing, price fixing, fixing of trade conditions, market allocation and collusive tendering in relation to ferrous and non-ferrous scrap metal, according to a statement made by the Competition Commission.
The 13 scrap dealers named are SA Metal and Machinery Ltd. (SAM), National Scrap Metal Ltd. (NSM), Ben Jacobs Metals Ltd., Power Metals Recyclers Ltd., Universal Recycling Ltd., Ton Scrap Ltd., Scaw South Africa Ltd., Scaw Metals Group Ltd., Amalgamated Scrap Metals Recycling CC., Abbedac Metals Ltd., Ben Jacobs Iron and Steel Ltd., Cape Town Iron and Steel Works Ltd. and The New Reclamation Group Ltd. (Reclam).
In a release announcing the decision, the Commission noted that an agreement between three companies resulted in dividing up the market and fixing trading conditions for ferrous and nonferrous scrap metal for five years, which was then renewable for a further five-year period. Through the agreement, the participants in the plan, SAM, NSM and Recam, allocated customers, suppliers, territories and type of goods.
In another instance, Reclam, Universal, Ton Scrap, Ben Jacobs Iron and Steel and Rand Scrap agreed to fix prices by developing a pricing formula and agreeing on adjustments with large scrap consumers. In addition, the companies divided markets by allocating suppliers and agreeing not to compete with each others’ suppliers and scrap generators.
In another agreement Reclam, PMR and/or Ben Jacobs Metals and SAM agreed to fix prices and divide the market in respect of non-ferrous scrap metal.
The Commission has asked the Tribunal to impose an administrative penalty of 10 percent of annual sales on each of the firms involved, except PMR, Cisco, Scaw, Rand Scrap and Reclam. Scaw and Rand Scrap were granted conditional immunity from prosecution by the Commission provided that they cooperated in the Commission’s investigation and prosecution of this case.
Reclam and PMR settled with the Commission prior to the referral.
No relief is sought against CISCO in the proceedings as it is implicated in the restrictive supply agreement concluded with NSM.
The South African Tribunal has jurisdiction throughout the country. It is a tribunal of record and independent from the other competition institutions. The Tribunals main functions are to grant exemptions, authorize or prohibit large mergers or prohibit a merger, adjudicate in relation to any conduct prohibited.
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