The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government's draft competition legislation appears to "conflict" with long-standing Bahamian agency and distributor relationships, the Chamber of Commerce's chair warned yesterday.

Michael Maura, pictured, told Tribune Business that legislation released just last week "needs to remain in a draft state" until wide private sector consultation was completed, as there was every likelihood it will generate "plenty" of feedback and concerns.

Having read the proposed bill, Mr Maura said he had cause to question "how it impacts the very transparent relationships" between foreign manufacturers and their local Bahamian agents, wholesalers and distributors.

Warning that The Bahamas could not afford to undermine long-established business practices that are widely used globally, the Chamber chairman added that the draft appeared "a little too heavily weighted" in favour of the proposed Competition Commission - the body that will enforce the law - and against the private sector.

The 57-page bill carries a date of August 1, 2007, indicating that the Minnis administration has dusted-off legislation that is almost 11 years-old as it bids to implement regulations required by rules-based trading regimes such as the World Trade Organisation (WTO).

The Bill, entitled "An Act to promote, maintain and encourage competition", was likely first crafted to fulfill The Bahamas' obligations under the Economic Partnership Agreement (EPA) with the European Union (EU) - the very first trade agreement it signed on to back in 2008.

Competition law, and the creation of a related watchdog, was supposed to have occurred some years back, thus putting The Bahamas' in violation of its EPA commitments although there appear to have been no adverse consequences for this.

Its re-emergence highlights how The Bahamas is being forced to modernise its economy, via new laws, regulations and watchdog bodies (some will argue extra bureaucracy that we must all pay for) as a result of its deepening integration into the world economy.

Calling for "healthy and constant" dialogue between the Government and private sector on all business and WTO-related issues, Mr Maura said the Bill's release also appeared to coincide with a competition 'workshop' that was staged by the Minnis administration last week.

"We appreciate the fact we had a workshop, but we need to make sure there's significant dialogue on competition legislation, not just one workshop," he told Tribune Business. "It will take the private sector some time to understand what this legislation means, and for the Government to appreciate the impact the legislation in its current state could have on business.

"I have some concerns as I read it. Our businesses, economy depend on agency representation - distributors, agents - and we need to make sure this legislation understands the way we do business in the Bahamas.

"We do business much like the rest of the world, right down to agency representation. It's about making sure the actual way we conduct business in the Bahamas is considered in this legislation, and the legislation itself does not conflict with business practices."

Mr Maura said the draft Bill had to be read several times "to understand what it's saying and not saying", adding that it needed to be distributed to the Bahamas' various industry groups -especially the likes of the retail and wholesale sectors.

He emphasised that manufacturers such as Proctor & Gamble and Kimberly Clark, along with high-end brands such as Gucci, wanted themselves and their products to be represented by particular agents and distributors in the Bahamas for very sound reasons.

These included having representatives with the necessary product knowledge to market and promote their wares, while also possessing the necessary health, safety and compliance awareness.

"We appreciate the intent," Mr Maura added of the draft Bill. "The intent is competition, and it's in the interest of everyone that the consumer receives the most value.

"When these manufacturers choose agents they're looking out for the consumer's interest as much as their company's interest, which is why they align themselves with reputable agents and distributors around the world.

"We need to maintain those relationships. As I read the draft competition legislation, I question how it impacts these very transparent relationships."

The Chamber chairman continued: "It comes right down to intellectual property rights in terms of making sure brands are protected; that these items are being sold appropriately, and the consumer understands the factors and benefits of line items.

"That's why manufacturers have to rely on agents, licensees to make sure communications around the product are accurate. As I read the draft, I began to wonder whether this draft legislation was conflicting with these long-standing, widely-established relationships and widely-accepted global business practices."

The Bill also proposals the creation of a Competition Commission "vested with wide powers", and Mr Maura suggested these might need to be curbed to redress the balance between regulation and private enterprise.

"I think there needs to be more balance there," he told Tribune Business. "We need to ensure the commercial business community has rights as well, and that those rights are balanced with the authority of the Competition Commission.

"As I read the draft, it seemed it was a little heavily weighted more to the Commission side, in my opinion. I understand what they're trying to achieve, but this legislation needs to remain in a draft state until it receives private sector consultation, feedback and recommendations. There will be plenty of them."