Risk/reward of Zambia’s competition amnesty programme needs clarification
On 1 September 2019, the Competition and Consumer Protection Commission (CCPC), the Zambian competition authority, announced a six month amnesty programme for businesses to come forward with information on anti-competitive conduct in exchange for immunity from fines and possible prosecution. However, as the CCPC has only released a short press release on the programme, the amnesty terms are far from clear. As a result, while the amnesty programme could offer valuable risk mitigation, it needs to be properly understood before businesses come forward with incriminatory evidence.
The amnesty programme applies to all conduct falling within Part III of Competition and Consumer Protection (CCP) Act, namely cartels and other horizontal agreements, vertical agreements (such as minimum resale price maintenance) and abuse of dominance. The programme does not however cover other infringements such as the failure to notify a merger or unfair trading practices contrary to the consumer protection provisions of the CCP Act.
The CCPC has stated that the amnesty programme provides immunity from fines and possible prosecution. Businesses infringing Part III of the CCP Act are liable for fines up to 10% of annual turnover. In relation to cartels only, individuals face fines not exceeding ZMW 150,000 (approx. USD 11,000) and/or imprisonment for up to five years.
Despite the potential significance of the amnesty programme, the CCPC has only published a short press release with relatively few details. The CCPC has stated that the programme intends to encourage the provision of "… information that helps to demonstrate the existence of a prohibited agreement …" The CCPC then adds that this
"… information should be of such quality and degree of detail that it increases the chances of proving the existence of the prohibited agreement which the Commission would ideally have not been privy or have access to all without investigation." [emphasis added]
This wording suggests that immunity is only granted if sufficiently incriminatory evidence is provided. This interpretation is supported by a subsequent statement that the programme offers the opportunity for business to ‘apply’ for amnesty. Although the CCPC will require the conduct to have been terminated, it is far from clear whether other conditions are applicable.
Clarity on this point would allow businesses to understand how the programme interacts with the CCPC’s leniency programme, which already offers immunity for all conduct under Part III of the CCP Act. Under the leniency programme, an applicant has to satisfy a number of conditions, such as being the first to come forward regarding the conduct in question, ongoing co-operation with the CCPC throughout the investigation and not having coerced others to join the cartel. At the very least, the amnesty programme seems to relax the conditions of the leniency programme for six months.
Given the lack of clarity, while the CCPC is clearly contemplating unearthing new conduct, the amnesty programme might play a role in ongoing investigations. For example, a respondent to an existing investigation might be tempted to apply for amnesty to avoid fines.
It could also be asked whether the CCPC is over-promising with the amnesty programme as the CCP Act only provides for ‘a’ leniency programme to be adopted. While the amnesty programme arguably constitutes a second concurrent leniency programme, it does not satisfy the formal requirement of the CCP Act for a leniency programme, namely that there should be published guidelines. Also, the CCPC does not have a mandate to offer immunity for sanctions against individuals, which lie within the domain of the National Prosecution Authority (NPA). While the NPA has entered into a memorandum of understanding (MOU) with the CCPC on the leniency programme, there is no indication that this coordination extends to the amnesty programme.
While the amnesty programme could offer valuable risk mitigation, its material uncertainty needs to be addressed before businesses should be willing to incriminate themselves. As with any immunity programme, the risk/reward needs to be transparent in order to incentivise participation. The CCPC would be well advised to expand further on how the amnesty programme will work in practice.