- South Africa’s Competition Tribunal (“Tribunal”) has confirmed, as an order, a consent agreement in which a Gauteng-based solar energy firm, Pacific Solar Technologies (Pty) Ltd (“Pacific Solar”), has agreed to pay a R200 000 administrative penalty after it was accused of collusion by the Competition Commission (“Commission”).
- The alleged collusion relates to two separate tenders involving the Council for Geoscience and the Department of Mineral Resources and Energy (DMRE), respectively.
The tender issued by the Council for Geoscience in 2021 was for the supply and delivery of multi-functional drill rigs with service and maintenance for a period of three years. The DMRE tender was for the appointment of a panel of non-grid service providers to supply, install and maintain solar home systems for a three-year period.
Terms of the consent agreement
In terms of the consent agreement, Pacific Solar agrees and undertakes to, among others, refrain from engaging in any conduct that may be in contravention of the Competition Act (“Act”) in the future. It also agrees to develop, implement and monitor a competition law compliance programme as part of its corporate governance policy.
No admission of liability
Although Pacific Solar agrees to the terms of the consent agreement (including paying the R200 000 administrative penalty), it does not admit that it contravened the Act, as alleged by the Commission. The Commission, in turn, agreed to conclude the consent agreement with Pacific Solar without an admission of liability based on, among others, the following factors, read with the remedies contained in the consent agreement:
- Pacific Solar is a small business and has not previously been found guilty of having contravened the Act; and
- Pacific Solar did not win the Council for Geoscience’s tender. While Pacific Solar was included in the panel of service providers in respect of the DMRE tender, it was subsequently removed from the panel and the DMRE stopped providing the firm with any work.
Following confirmation as an order by the Tribunal, the consent agreement concludes all proceedings between the Commission and Pacific Solar in relation to the two complaints.
The consent agreement stems from two separate complaints against Pacific Solar and another firm, Nert Technologies (Pty) Ltd (“Nert Technologies”), for alleged collusive tendering, in contravention of section 4(i)(b)(iii) of the Act.
In October 2021, the Council for Geoscience submitted a complaint to the Commission alleging that Pacific Solar and Nert Technologies agreed or engaged in a concerted practice to tender collusively when responding to its tender. The Commission’s investigation found that the firms assisted each other to prepare and price their bids and that their conduct amounts to collusive tendering.
In May 2022, the DMRE submitted a separate complaint to the Commission, alleging that the two firms tendered collusively in response to their tender. The Commission’s investigation concluded that they had assisted each other to prepare and price their bids in response to the DMRE tender – and that their conduct amounts to collusive tendering.
Author: Bryan Groenendaal