A body representing US soda ash producers, which has effectively admitted that its members operate as an export cartel in South Africa, has launched a bid to secure exemption from competition legislat…
A body representing US soda ash producers, which has effectively admitted that its members operate as an export cartel in South Africa, has launched a bid to secure exemption from competition legislation in the South African market. The American Natural Soda Ash Corporation (Ansac) has applied to South Africa“s trade and industry department for its industry to be exempted from provisions in the Competition Act. The application is the latest development in a case that has dogged the competition authorities for 10 years. In the week ending 8 November 2008, Ansac effectively admitted it was fixing prices on soda ash in South Africa and in a settlement with the Competition Commission agreed to withdraw from the southern African market and pay a fine of ZAR 9.7 million. However, Ansac seems intent on maintaining its presence in SA. While the settlement with competition authorities over its market abuse seemed to have finally closed the case, Ansac has resorted to the Competition Act, calling on a provision in the act which allows for exemptions from compliance to preserve the economic stability of an industry. In a recently published Government Gazette, Ansac applied to the trade and industry department to have the soda ash industry “designated”, which, if granted by the trade and industry minister, would qualify it for exemption from the Competition Act. In its application Ansac said the purpose of the designation would be “to ensure stability and sustainability of soda ash supply in SA, given the global shortage of soda ash”. Asked whether Ansac intended to proceed with the designation application following the settlement, Ansac“s legal representative, Charles Critchlow of New York-based law firm Baker & McKenzie, said the body was willing to “work with the trade and industry department and consumers in determining the opportunity a designation would present”. The complaint against Ansac was originally brought by soda ash producer Botswana Ash (Botash), which is the only major producer of soda ash in southern Africa. Ansac, which also operates in other markets, co-ordinates the marketing and sales functions of a number of American soda ash producers, in what it terms a joint venture. The controversial collaborative arrangement exists in terms of the US Web Pomerene Act, which allows for such export arrangements, but prohibits companies from operating in concert in the US market. Botash representative Martin Versfeld, of Webber Wentzel Bowens, said the company was aware of Ansac“s application and would oppose it. But the Competition Commission and Botash are yet to make submissions to the minister. Glass manufacturer Consol was still reviewing its position.