More than 80 business representatives registered with the Ministry of Health took part in an engagement session on the introduction of the Competition Order 2015 in Brunei Darussalam, in line with international best practices and legal framework which endeavours to drive domestic economic efficiency, consumer welfare and economic growth. The Competition Order 2015 is a law that prohibits cartel conducts including collusive tendering (bid rigging), which can potentially put fair, honest and well-run companies out of business and harm long-term consumer welfare.
The Department of Competition and Consumer Affairs in the Department of Economic Planning and Development, Ministry of Finance and Economy led the engagement session, in collaboration with the Ministry of Health. The session was part of an on-going effort to prevent collusive tendering in public procurement and cartel conduct, through raising awareness amongst the business community and procurement officials.
The vendors were advised to compete fairly for the benefit of their business growth. The Acting Director of the Department of Competition and Consumer Affairs explained the various forms of harmful anti-competitive agreements including collusive tendering, price fixing, controlling market and limiting supply of goods to create artificial shortage. These are made illegal with enactment and introduction of the Competition Order 2015. Competition law has been introduced all around the world including the ASEAN member states, as one of the key economic policies towards market efficiency, consumer welfare and economic growth. Participants were reminded that governments and businesses are also consumers.
A cartel exists when businesses agree to act together instead of competing against one another. These agreements are designed to drive up the profits of cartel members while maintaining the illusion of competition among them or a fair market. The Department of Competition and Consumer Affairs also elaborated that, by controlling markets and restricting goods and services, cartels can put honest and well-run companies out of business while suppressing innovation and protecting their own inefficient members. Businesses are advised to protect themselves from unfair and unethical business conducts for their business survival and growth.
The session focused at great length on the risk of collusive tendering or bid rigging. “In a tender process, bidders are expected to compete against one another and the one offering terms best suited to the procurer’s requirements wins the bid. Bid-rigging or collusive tendering occurs when two or more bidders agree secretly not to compete with one another and collude to pre-determine the tender outcome. Under the Competition Order 2015, bid rigging is one of the key serious anti-competitive conducts”, an official from the Department of Competition and Consumer Affairs explained.
Participants were also provided insights on the various forms of collusive tendering. For example, one or more bidders may agree that they will not submit a bid or will withdraw a bid submitted already. In some cases, the bidders will take turns at winning the bids on a series of contracts or agree to submit higher bid prices or less attractive terms so that the designated winner could win. Some companies may agree that the winning bidder will offer lucrative subcontracts to compensate the “losing” bidders.
Official from the Department of Competition and Consumer Affairs also shared that one of the key tools in the Competition Order 2015, also used by competition authorities around the world to detect cartels, including bid-rigging, is a leniency programme providing immunity or protection from the law for the first party who notifies the competition authority of the cartel conduct, provided that the member also meets all other requirements of the leniency programme.
Attendees were also informed that some collusive conducts were performed out of ignorance of the law and through awareness help to protect themselves from being unwittingly involved in illegal activities. The session concluded with an interactive question and answer session for the business community to share their concerns and obtain clarification regarding the conducts prohibited in the law.
The talk was aimed at spreading awareness on the key harmful anti-competitive conducts prohibited by the Competition Order 2015, including collusive tendering and cartel conducts. The advocacy session encouraged business community to further their understanding of the law ahead of its enforcement in the near future to promote self-compliance. With the objective of promoting economic efficiency as well as consumer welfare, the law has benefits that permeate throughout all levels of the community. By nurturing healthy competition, businesses can grow by competing on a level playing field to offer more choices, better quality products and services at better prices for consumers, including the government and other businesses.
The Competition Commission of Brunei Darussalam was established on the 1 August 2017, as an independent body that is mandated to promote business competition in Brunei Darussalam economic landscape through the enforcement of the Competition Order 2015. The Department of Competition and Consumer Affairs was established on the same day to act as the secretariat, administrative and investigative arms of the said Commission.
For any inquiries and request for briefings on the Competition Order 2015, please contact the Department of Competition and Consumer Affairs in the Department of Economic Planning and Development, Ministry of Finance and Economy through email at brunei.competition@jpke.gov.bn or call 2233344 extension 341 or 643.