ICCC News

The Independent Consumer and Competition Commission (“ICCC”) has welcomed the ruling in the National Court against PNG Mainport Liner Services Limited, Steamships Trading Company Limited, Steamships Limited, Kambang Holdings Limited (Kambang) and Consort Express Lines Limited (Consort).

On 10th November 2011, the ICCC filed court proceedings against PNG Mainport Liner Services Limited, Steamships Trading Company Limited, Steamships Limited, Kambang and Consort after an investigation carried out by ICCC into the acquisition of the shares of Kambang in Consort by Mainport, concluded that the acquisition  was anti-competitive and detrimental of the public.

ICCC Commissioner and CEO, Paulus Ain said that the ICCC through its lawyers defended the motion and made submissions that the ICCC did have a substantive cause of action in bringing proceedings and that the cause of action was for a breach of Section 69 of the ICCC Act.

“A ruling on the motion was outstanding for 5 years and 6 months but after relentless follow-ups by the ICCC, a ruling was handed down on 27th March 2018.” Commissioner Ain said.

In summary, the ruling was made in favour of the ICCC in the following terms:

  1.     The parties’ concerning the acquisition  motion to dismiss the case instituted by the ICCC is refused.
  2.    The ICCC is granted leave to file its Statement of Claim within 21 days from the date of this order.
  3.     The parties concerning the acquisition  are required to file their Defence 21 days from the date they are served with the  Statement of Claim by the ICCC.
  4.    The ICCC shall list this matter for directions on the next available date in June 2018.
  5.    All parties bear their costs of the application.

Mainport, up to the time of the acquisition, was a subsidiary of Steamships Limited. On 12th November, 2009, Mainport entered into a share acquisition agreement (acquisition) with Kambang to acquire 17.6% of the 33.3% shares that Kambang held in Consort.

Prior to the acquisition, Kambang held 33.3% shares in Consort, Steamships Trading Company Limited held 33.3% shares in Consort and Anton Lee Transport Limited held the remaining 33.3% shares, comprising the total shares issued in and forming the issued capital of Consort.

On 31st August, 2009, before Mainport acquired the 17.6% shares from Kambang, Mainport was amalgamated into Steamships and legally ceased to exist.

By acquiring the 17.6% shares from Kambang (through its subsidiary Mainport) Steamships had the majority shareholding interest in Consort at 50.9%. Steamships had effectively gained control over its largest competitor Consort, across both the PNG coastal shipping services and the PNG stevedoring and handling services industry.

The ICCC formed the view that the three main markets affected by this acquisition were the coastal shipping services market, stevedoring and handling services market, and the wharfage market. Under these three main markets, 33 sub-markets were identified as being affected by the acquisition.

Commissioner Ain said that in accordance with the court ruling that was handed down on 27th March, 2018 the ICCC has filed its Statement of Claim within the 21 days from the date of this order and will list this matter for directions on the next available date in June 2018.

The Independent Consumer and Competition Commission (“ICCC”) is concerned about the large number of people in the rural and remote parts of Papua New Guinea who have yet to register their Subscriber Identity Module (SIM) cards.

ICCC Commissioner and CEO, Paulus Ain is concerned that the mobile network companies Digicel PNG Limited (Digicel PNG), Telikom Limited (Telikom) and BEmobile limited (Bemobile) are yet to register a substantial number SIM cards users).

ICCC has already had initial meetings with Digicel PNG and the National Information & Communications Technology Authority (NICTA) for an update on the status of the SIM card registration deadline which was initially scheduled for April 30th.

Commissioner Ain said: “I am concerned about the large number of consumers particularly in the rural and remote parts of PNG who will have their SIM cards deactivated. If their SIM cards get deactivated, how will they be able to have access to telecommunication services, electronic banking services, health service, including other essential services”. 

Since July of 2016, NICTA, with support from the Government, has been carrying out awareness to mobile service providers and consumers about the mandatory SIM card registration in the country. The ICCC has been monitoring the progress of this exercise and its concern is for the consumers not only in the major centers throughout the country but those that particularly live in rural and remote areas will be adversely affected because they, through no fault of their own, may have not been able to register their SIM cards to date.

Therefore, the ICCC is urging consumers to contact their mobile service providers to find out how they can register their SIM cards and urges NICTA, Telikom, Bmobile and Digicel to work together to decrease the number of unregistered SIM card especially in the rural areas and if possible further extend on the mandatory SIM card registration exercise by 3-6 months.

The Independent Consumer and Competition Commission (ICCC) is aware of a product recall for all vehicles with defective Takata airbags by Australian Government, following an Australian Consumer and Competition Commission (ACCC) safety investigation.

The recall was issued, based on extensive evidence provided by the ACCC, that vehicles with defective Takata airbags may cause injury to drivers and/or passengers, and one or more suppliers of vehicles with defective Takata airbags have not taken satisfactory action to prevent those vehicles causing injury to drivers and/or passengers.

Globally, ruptures of defective Takata airbags have been associated with at least 23 deaths and 230 injuries.

ICCC Commissioner and Chief Executive Officer, Paulus Ain said that the ICCC undertook enquiries with various car dealers in Papua New Guinea to identify car dealers selling motor vehicles with Affected Takata Airbag Inflators, to establish whether car dealers and suppliers of the motor vehicles are aware of the compulsory recall, and to enquire on the steps taken by them to manage the recall and concerns of consumers that may be affected throughout the country.

The ICCC noted that:

  1. Concerned Motor Vehicle Manufacturer/s including Takata Corporation have  formally advised its Distributors/Motor Dealers/Suppliers of its decision to voluntarily replace all defective Takata airbags in the listed motor vehicles of various makes and models sold to its consumers;
  2. Management of affected Motor Car Dealers/Distributors have since set up processes and Management systems to help identify their affected clients and proceed with replacing the defective Takata airbag inflator;
  3. Motor Car Dealerships concerned have set timelines to follow from the time of initial notification of recalls from their suppliers to actual repair work carried out and feedback; and
  4. The Product Safety recall program for “Safety Airbag Inflator” replacement will be at no charge to the consumer/customer. 

Commissioner Ain said ICCC understands that affected customers/clients who have purchased motor vehicles with faulty/ detective Takata airbags are required to contact their Motor Dealership/Distributor/Supplier or go in person without delay to book a date to have the service done.

“Customers are also required to provide the Vehicle Identification Number and registration number of their vehicle for verification.” Commissioner Ain said.

“Affected customers and clients who have purchase motor vehicles through third parties are required to contact their dealer. If you have not being contacted by your car dealership, distributor, or supplier, you can contact the ICCC for further information.” 

Commissioner Ain said that the ICCC will continue to monitor and will consider taking appropriate action based on adverse findings and or information provided by its contacts in the provinces. 

The Independent Consumer and Competition Commission (“ICCC”) announces the new retail fuel prices for this month which will take effect on Sunday, 8th April, 2018.

According to the ICCC’s calculations, retail fuel prices for petrol, diesel and kerosene will increase throughout PNG as of 8th April, 2018. The price increases for petrol and diesel are attributed to the increases in their respective Import Parity Prices (IPP) whilst the IPP for kerosene decreases for this month. The fluctuation in the IPP are attributed to the fluctuation in the Mean of Platts Singapore (“MOPS”) prices for petrol, diesel and kerosene which is linked to the crude oil prices during the month of March, 2018.

The domestic retail fuel price for petrol, diesel and kerosene is inclusive of the IPP, domestic sea and road freight rates for the second quarter of 2018, the 2018 wholesale and retail margins for petrol, diesel and kerosene; including excise duty for petrol and diesel, and the Goods and Services Tax (GST).

As a result of adding all the various cost components mentioned above, the maximum retail prices for fuel in Port Moresby are as follows:

 

Port Moresby Retail Prices (toea per litre)

 

Petrol (tpl)

Diesel (tpl)

Kerosene (tpl)

Retail Prices as of 8th April, 2018

351.61

 

316.68

 

291.05

 

Retail Prices as of 8th March, 2018

347.67

312.13

289.60

Price Variance (+/-) toea per litre

+3.94

+4.55

+1.45

 

For the month of April, the maximum retail fuel price for each fuel product in the country will increase on average as follows:

 

  • Petrol prices will increase by 3.49 toea per litre;
  • Diesel prices will increase by 3.85 toea per litre; and
  • Kerosene prices will increase by 0.51 toea per litre.

Retail prices in all other designated centres will change according to their approved in-country shipping and road freight rates (for the second quarter of 2018) that are charged by the fuel distributors.

As part of the ICCC’s enforcement and compliance of fuel prices, its Investigation Officers will conduct inspections at all service stations on Monday, 9th April, 2018, to ensure prices of petroleum products do not exceed the allowable maximum prices. The following ICCC officers will conduct compliance inspections in Lae, Goroka, Kokopo and Port Moresby. Inspections in other provinces will be supported by our contacts in those provinces. Please note:

  • Mr. Christopher Gabesoa, Mr. Seri Tau Vali and Mr. Bill Boiu will conduct compliance inspections to all service stations in the National Capital District. They can be reached on telephone number 325 2144;
  • Mr. Johnny Anderson, Ms. Pamela Ipambonj and Mr. Timothy Ponau will conduct compliance inspections in Lae. They can be reached on telephone number 472 2859;
  • Mr. Bobby Tei, Roman Rosting and Mrs. Dorcas Baining Julai will conduct compliance inspections in Kokopo, Rabaul, Kerevat, Warangoi and Toma. They can be reached on telephone number 982 9711; and
  • Mr. Kevin Kondo, Mr. Banmu Olivi and Mr. Jeffery Khar will conduct compliance inspections in Goroka, Kainantu, Kundiawa and Mt. Hagen. They can be reached on telephone number 532 1077.

The prices set by the ICCC are the indicative maximum retail prices, for which retailers may choose to sell below the maximum price. Again, the ICCC would like to remind retailers who sell fuel using pumps to set fuel prices to one decimal place while the ICCC will continue to set the maximum price to 2 decimal places.

No fuel pump operator should charge above the Indicative Retail Price for this month’s price regardless of the number of decimals. This is to ensure compliance with the Prices Regulation Act under which the maximum prices of refined petroleum products are set. Retailers who are displaying prices to 1 decimal place are urged by the ICCC to round the prices down to ensure prices are within the allowable indicative retail prices. The ICCC Inspectors will continue to conduct spot checks after 8thApril, 2018 to ensure on-going compliance by fuel operators.

Consumers are advised to report any instances of overcharging by retailers through the ICCC’s Consumer Protection Division on 325 2144, on toll free number: 180 3333 or by contacting our Regional Offices closest to you on the numbers provided above.

The Independent Consumer and Competition Commission (“ICCC”) advises that it has been in dialogue with Kumul Consolidated Holdings Limited (“KCHL”) on the proposed merger of Water PNG Limited (“Water PNG) and Eda Ranu Limited (“Eda Ranu”). KCHL is the trustee owner of all State Owned Entities, including Water PNG and Eda Ranu.

The ICCC Commissioner and Chief Executive Officer Mr. Paulus Ain said, “Section 69 of the Independent Consumer and Competition Act 2002 (“ICCC Act”) prohibits the acquisition of shares or assets of a business, if the acquisition would have, or would be likely to have the effect of substantially lessening competition in a market”.

“Given that the merger involves two of the largest water and sewage service providers in PNG, this may still raise competition concerns for potential competitors from providing similar services in the future. Therefore, a competition assessment is vital to ensure that the markets for the provision of water and sewage services are made accessible for potential service providers in the future.” Mr. Ain said.

Mr. Ain further explained that Sections 81 and 82 of the ICCC Act allows for the merging parties to seek Clearance or Authorization from the ICCC. An approval granted by the ICCC protects them from any future legal action that is brought under the ICCC Act on competition grounds.

Hence, the ICCC is working with KCHL to follow due process and submit its applications for ICCC’s assessment for clearance and/or authorization on the proposed merger.