Competition law in brunei

UNIVERSITI KEBANGSAAN MALAYSIA SEMESTER I SESI 2014/2015

IJAZAH SARJANA UNDANG-UNDANG

Competition Law – UK 6285

Competition Law in ASEAN Countries:-Brunei Darussalam

Prepared by: Siti Fairuz Nor Azhar (P73969)

CONTENTS

1. Introduction

2. Background of Brunei

3. Competition Law in Brunei

4. Conclusion

5. Sources

CONTENTS

1. Introduction



4. Conclusion

5. Sources

1. In August 2007 :- the ASEAN Economic Ministers endorsed the establishment of the ASEAN ExpertsGroup on Competition (AEGC) as a regional forum to discuss and cooperate in Competition Policyand Law;

2. The AEGC is an official body consist of representatives from the competition authorities andagencies responsible for competition policies in the ASEAN Member States (AMSs);

3. Amongst its responsibilities , to implement the tasks and activities relating to competition policy astargeted for delivery under the Asean Economic Community Blueprint. (AEC Blueprint);

4. In the AEC Blueprint, the ASEAN Leaders agreed that:- “...the AEC Blueprint which each ASEANMember Country shall abide and implement the AEC by 2015. The AEC Blueprint will transformASEAN into a single market and production base, a highly competitive economic region, a regionof equitable economic development and a region fully integrated into the global economy...”

5. In moving towards the goal, the AEGC had completed the ASEAN Regional Guidelines on

Competition Policy and Handbook on Competition Policy and Law in ASEAN for Business 2013.

INTRODUCTION ON AEC BLUEPRINT

LAOS

Competition Law implement

THAILAND

Competition Law implementVIETNAM


MALAYSIA


SINGAPORE


INDONESIA


PHILIPINES


CURRENT STATUS OF COMPETITION LAW IMPLEMENTATION IN ASEAN MEMBERS

Let’s see the competition law implementation and development in Brunei Darussalam

MYANMARCompetition Law not yet

implement

CAMBODIA

Competition Law not yet implement

BRUNEI

Competition Law not yet implement

CONTENTS

1. Introduction



4. Conclusion

5. Sources

BRIEF BACKGROUND ABOUT BRUNEI DARUSSALAM Historical:-

1. Brunei is an independent sultanate on the Northwest coast ofthe island of Borneo in the South China Sea.

2. The Sultanate of Brunei’s influence peaked between the 15th &17th centuries when its control extended over coastal areas ofnorthwest Borneo and the Southern Philippines. However,subsequently Brunei entered a period of decline caused byinternal strife over royal succession, colonial expansion ofEuropean powers and piracy.

3. Since 1888, Brunei had been a British protectorate andbecame an independent sovereign Sultanate on 1 January1984. Brunei is governed by a written constitution which cameinto effect in 1959.

Economy:-

1. Basically Brunei is wealthy economy comprises of a mixture offoreign and domestic entrepreneurship, governmentregulation, welfare measures and village traditions. The crudeoil and natural gas production account for nearly half of theGDP.

2. Although is rich in the above, the main problem in its economyproblem is its lack of diversity in the economy, such as heavyreliance on the volatile oil and natural gas sectors, huge statesubsidies, a civil service which employs over half of Bruneiworkforce, extensive state economic controls, a small tax base(the country has no personal income tax and a low tariffregime) and slow movement towards privatizations.

Source: Structural Policy Country Notes – Brunei Darussalam:-http://dx.doi.org/10.1787/saeo-2014-en.

3. In 1998, Brunei economy suffered internal and externalshocks. In addition, AMEDEO Corporation (Brunei’s largestconstruction firm whose project fuel the domestic economy)collapse and caused the country to fall into mild recession.

http://dx.doi.org/10.1787/saeo-2014-en

CONTENTS

1. Introduction



4. Conclusion

5. Sources

COMPETITION LAW IN BRUNEI: Comparison with other ASEAN members

Brunei is still in the process of drafting a national competition law. Source: Handbook on Competition Law Policy and Law in ASEAN for Business 2013.

COMPETITION LAW IN BRUNEI: General Information

Q: WHAT IS THE CURRENT APPLICATION OF COMPETTTION LAW IN BRUNEI?1. Unlike other ASEAN countries such as Malaysia, Singapore, Thailand, there is no specific legislation pertaining to the regulation of

competition issues.2. However, although there is no nation policy about competition law, the economy in Brunei is open and market oriented.3. Although there are no national policy or law relating to all aspects of competition, there exists a law namely the Monopolies Act Cap 73

of the Laws of Brunei. The said law was created since 1932 but has not been implemented so far. The said Act has never been amendedsince it was first created and is outdated and no longer could be applied to modern economies and economies flow.

4. With no effective competition related law, Brunei implements its competition policy objectives by regularly reviewing its regulatoryframework of each sectors, with the intention to boost the overall economics competitiveness.

5. At present, the most advanced competition related regulatory framework is in the telecommunications sector which comes under themandate of the Authority for Info-communications Technology Industry (AITI) and Consumer Protection (Fair Trading) order 2011.

Main Points

1. The Monopoly Act granted to the BruneiKing the power to grant license to anyperson or any company to carry outactivities set out in the First Schedule.

2. For examples: the exclusive rights tocollect and export the skins of crocodiles,pythons and monitor lizards and exclusiverights to manufacture, sell or purchasedefense equipment to the Govt of Brunei.

3. Basically the purpose of the Monopoly Actwas to protect some sectors that areallowed to do exclusive dealings.

Sectorial Legislation: Telecommunication 1/2

Q: What is AITI?In 2001, the Government of Brunei had initiated the restructuring of the Information and Communication Technology (ICT). To this effect,three new legislation were enacted:-

a. The Telecommunication Successor Company Order (2001):- This Order transfers all properties, rights and liabilities belonging to theJabatan Telekom (JTB) to Telekom Brunei Limited (TelBru) whereby TelBru will assume the role of service provider in place of JTB. This wasbecause JTB was undergoing the process of corporatization.

b. The Authority for Info-communications Technology Industry of Brunei Darussalam Order (AiTi) (2001):- This Order establishes theauthority for AiTi as an independent statutory body to regulate the local ICT industry and provides for its functions and duties.

c. The Telecommunications Order (2001):- This Order confers upon AiTi the exclusive privilege to operate and provide telecommunicationsystems and services in Brunei and allows AiTi to grant licenses for the same.

2. The AiTi and the Order apply to all commercial entity that has obtained the license to operate as a service and/or infrastructure provider inthe telecommunications industry.

3. The purpose of AiTi as provided under Section 6 (1) (c) of the Order:- is to “promote and maintain fair and efficient market conduct andeffective competition between persons engaged in commercial activities connected with the telecommunication activity in Brunei.”

4. While under Section 27 (1) (c):- AiTi may give directions to telecommunication licensees, amongst others, to ensure fair and efficientmarket conduct.

5. As provided above, AiTi may give directions to licensee to ensure fair and efficient market conduct. Although the order does notspecifically refer to anti-competitive agreements or abuse of dominant position, the AiTi may impose certain conditions for regulating thefollowing practices as provided under Section 5 (1) Part 2 of Telecommunication Order, such as:-

a. Unfair competitive practices;b. Undue preference and undue discrimination;c. Anti-competitive agreements;d. Exclusive arrangements;e. Contracts with Third Parties;f. Agreements that restricts competition;g. Pricing abuse & predatory network alteration;h. Abuse of market dominance in a foreign market

6. The AiTi was given regulatory authority in 2006. There are currently no specific provisions on the competition related investigations and onthe procedural steps and time frame of an Investigation.

7. Section 7 of the AiTi Order gives AiTi power to “carry on such activities as appear to be advantageous, necessary or convenient for it tocarry on for or in connection with the discharge of its functions and duties.”

8. About leniency program, the AiTi and the Telecommunication Order do not provide for any leniency program. The AiTi however follows a“case by case” approach in determining leniency whenever it can or should be applied for.

9. Section 8 (1) of the Telecommunication Order allows AiTi to take actions if the AiTi is satisfied that a person who has been granted thelicense under section 5 contravenes any conditions provided in the license.

10. Once satisfied that there has been a violation n the conditions impose under the granted license, AiTi may impose general sanctions.Examples of the general sanctions under the AiTi Order and the Telecommunications order are as follows:-

a. Issue written order to the person for the purpose of securing compliance;b. Require the payment of a penalty of an amount not exceeding BND 1 million as it thinks fits;c. In cases that AiTi is satisfied that there may be occurrence of contravention, AiTi may do any or all of the following:-

• Cancel the license or part thereof;• Suspend the license or part for such a period as it think fits;• Reduce the period for which the license is to be in force.

11. Under the Telecommunication Order, any telecommunication licensee not satisfied with the decision of the AiTi may appeal to theMinister, whose decision shall be final.

12. There is however, no provisions on private actions for anti-trust damages.

Sectorial Legislation: Telecommunication 2/2

Q: Is there any other sector that also have regulations pertaining to competition?

1. In Brunei, another sector that compliments competition law is the consumer protection, where the Governmentenforced the Consumer Protection (Fair Trading) Order 2011 which came into effect 2012.

2. The Order is implemented by the Department of Economic Planning and Development of the Prime Minister Officeand is intended to protect the consumer interests against any unfair practices by suppliers.

Sectorial Legislation : Consumer Protection (Fair Trading) Order 2011 1/2

• On 22 January 2012:- the Department of Economic Planning & Developmentannounced that His Majesty of Brunei has consented to a new order ieConsumer Protection (Fair Trading) Order 2011;

• The Order was intended to protect consumers’ interests and uphold theirrights against any unfair by suppliers. It also aims to boost foreign investors’confidence in Brunei which will contribute to economic growth anddiversification.

• The Order sets out in detail what constitutes unfair practices such asdeceiving or misleading consumers or making false claims regarding productsand services , and taking advantages of consumers who have no knowledgeabout products and services;

• The Order allows consumers aggrieved by unfair practice such as deceiving ormisleading consumers or making false claims regarding products and servicesand talking advantage of consumers who have no knowledge about productsand services.

Sectorial Legislation : Consumer Protection (Fair Trading) Order 2011 2/2

3. Relevant sections in the Order:-a) Section 3:- application of the Order:- in Brunei and outside Brunei (etc online transaction);b) Section 4 :- defines unfair practice ;c) Section 5:- provides circumstances surrounding unfair practice (assessment of unfair practice);d) Section 6:- provides Consumers right to sue for unfair practice;e) Section 7:- provides jurisdiction and powers of court;f) Section 8:- Voluntary compliance agreement;g) Second Schedule:- Specific Unfair Practices

4. The objective of the Order is to protect consumers against unfair practices. Unfair practice covered under this Orderis when:- a supplier in relation to a consumer transaction do something that as a result the consumer is deceived ormisled; supplier making a false claim and taking advantage of a consumer and also matters provided in the SecondSchedule.

5. Methods in assessing unfair practice (Section 5):- determination of the reasonableness of the actions.

6. Private action (Section 6):- consumers who have entered into a transaction that involves an unfair practice have theright to sue the supplier in court. Limitation of period to bring an action is 2 years.

7. Jurisdiction & powers of court (Section 7):- Authority body is the Small Claims Tribunal has the authority to hearcases and decide if the suppliers is found to be engaged in an unfair practice as follows:-

a) order restitution of any money given by the consumer;b) Award the consumer damages in the amount that the consumer has suffered;c) Make an order of specific performance against the supplier;d) Make an order directing the supplier to repair goods;e) Make an order varying the contract between the supplier and the consumer.

COMPETITION LAW IN BRUNEI : Competitiveness current situation

Facts: Although Brunei has in place in some of the sectors mentioned earlier, competition policies and regulations ,Brunei still needs to improve on its tasks in fostering greater business competition.

1. According to the World Economic Forum’s Global Competitiveness Report 2012-2013:- “the current level of business competition inBrunei Darussalam, needs to be improved – compared to other Southeast Asian countries. The competitiveness in Brunei is weaker thanin Malaysia, Singapore, the Philippines, Thailand and Vietnam. “

2. It is also suggested in the said report that Brunei should improveand foster competition in key sectors such as in thetelecommunication and banking.

3. According to another report i.e. World Bank’s Global FinancialDevelopment database, competition in the banking sector inBrunei has been less vigorous than in the more developedSoutheast Asian countries.

4. For example, in the telecommunication sector, its tariff rates fortelecommunication services are the highest in Southeast Asia.According to the Global Information Technology Report 2013,mobile cellular and fixed broadband internet tariffs are expensivein Brunei at around USD 0.45 a minute for hand phones andUSD81.2 per month for internet services. By contrast, the rates inThailand are respectively just USD0.09 and USD 36.8.

Let’s see Brunei’s progress towards achieving the AEC Blueprint target about the creation ofnational competition policy and law by 2015.

Source: Structural Policy Country Notes – Brunei Darussalam:- http://dx.doi.org/10.1787/saeo-2014-en.


COMPETITION LAW IN BRUNEI: The Development of Competition National Policy

1. Under Brunei long term development vision, there is the Tenth National Development Plan 2012-2017 (NDP10). It isthe second medium term development plan known as Wawasan Brunei 2035 or Vision Brunei 2035. It puts emphasisfirmly on “accelerating economic growth” through high productivity to achieve the target of 6% average annualeconomic growth.

2. In line with the NDP 10, the Brunei Govt. had set out 6 strategic development plans but 3 are particularly significant:-

3. Examples of challenges that Brunei is facing:-a. The dependence of Brunei economy on oil and gas resources has led to a larger government sector, which limited the

role of the private sector. The dominance of the public sector and the hydrocarbon industry is further strengthenedby the combination of high wages and low productivity which makes much of the private sector internationallyuncompetitive (Lawrey.2010.); and

b. Registering of a business in Brunei takes more than 101 days since it involves about 15 different procedures. See nextslide for example.

Development Plans

1. To create an environment conducive to business

2. To have an educated and highly skilled population

3. To have a productive economy based on knowledge & innovation.

Medium Long term challenges

1. To improve private sector to diversify beyond the hydrocarbon economy

2. Legislate and implement competition policy

3. To improve tertiary education attainment

1. From the graph, we can see that in Brunei, it took about 101days for a business to be registered , while in Malaysia it tookabout less than 15 days for registration of a business. The WorldBank ranks Brunei 79th out of 185 economies for ease of doingbusiness while regional peers such as Malaysia are ranked 12th

out of the 185 economies.

2. Nevertheless, according to World Bank report (2010a,2012, and2013a):- Brunei has made improvements to its businessenvironment, such as including electronic systems for nameresearch, an electronic customs systems, shorter waiting periodsfor excavation permits and reduced corporate income and profittax rates in order to invite private companies to invest in Bruneiand for making Brunei’s economy more diversified.

3. But, Brunei still needs to improve, and one of it is that the Govt.of Brunei needs to step up the regulatory reform. Take forexample, Malaysia.

4. Under the NEM Policies and startegis, Malaysia Govt. hasimplement the following to promote competition:-

a. Reduce the Govt. involvement in business in order to simulatethe private sector;

b. Removing barriers by establishing liberalization policy with theobjective to attract foreign investment;

c. Reforming the regulatory framework such as adopting principlesof good regulation, removing unnecessary regulatory burden,ensure an effective and efficient enforcement mechanism andstrengthen institutional support;

d. Swift and resolute implementation of the Competition Law, etcby engaging in competition advocacy to develop a competitionculture among the business community, consumers and otherregulators.

Compare with Malaysia


Q: What is Brunei actions towards reaching and implementing the ASEAN Economic CommunitiesBlueprint by 2015?1. In the Asia Pacific Economic Cooperation, Competition Policy and Law Group Meeting held in Ningbo, China on 21-22

February 2014,Brunei informed that since May 2012, Brunei has formally start the process to draft a nationalcompetition law.

2. Currently, the final draft has been reviewed, amended and checked by the AG chambers and pending the approval, theGovt. are carrying out preparatory work for implementation of Competition Order, including advocacy programsbefore formal establishment of the Competition Commission.

3. The development of draft law considers:-a. International and regional benchmarking;b. Expert assistances from UNCTAD,GIZ and ASEAN members;c. Multiple consultations with national stakeholders; andd. Taking into consideration needs of local economy and available resources.

The draft is now in final stages and waiting to be submitted for approval.

4. The draft of the Brunei Competition Order is to “enhance economic efficiency and to improve customer welfarethrough fostering an economy that is free from unfair and unhealthy competition.”

5. The Order will focus on the three main areas of anti-competitive conduct:-a. Anti-competitive agreements;b. Abuse of dominant positions;c. Anti-competitive mergers.

6. The Order also includes main elements on the establishment of a Competition Commission, scope for investigationsand enforcement as well as on the appeal process available. The Order also includes a phased implementationprovision to ensure readiness of businesses towards the implementation of the competition law.


COMPETITION LAW IN BRUNEI: Current Actions

7. Moving forward , Brunei Darussalam has declared in the Competition Policy and Law Group Meeting held in Ningbo,China on 21-22 February 2014 that Brunei will continue to :-

a. Review the regulatory frameworks governing individual industrial sectors with the view to boost overall economiccompetitiveness;

b. Publish and make available any competition laws enacted in the future;c. Participate in Competition Policy dialogues and training/seminar/workshops by APEC, ITO and other international

economic forum;d. Facilitate the establishment of a national consumer protection body.

8. Brunei is currently at the stage of considering how to properly implement the regulation of competition from thegrassroots level upwards. In that respect, Brunei Govt. have a very keen interest in how the competition was started,developed and maintained in various developing countries.

9. According to a study by the OECD 2013 in Economic Outlook for Southeast Asia, China & India 2014:Beyond theMiddle-Income Trap:- Brunei future competition policy needs to be shaped in such a way that the competitionauthority has adequate resources, political support and independence to act effectively. As the Brunei Govt. designsthe competition law, Brunei Govt. should take care not to place an excessive regulatory burden on the businesses.

10. The Brunei Govt. have also taken into account the various competition systems implemented and regulated from thecomprehensive single regulatory body type system practiced by Australia to the sectorial management implementedby economies like Singapore and Hong Kong.

11. The Brunei Govt. are deciding which type of system will best suit the needs of Brunei economy, given the small sizeof Brunei’s market in all sectors of the economy. In the meantime, the immediate actions taken by the Brunei Govt.are focused upon the role of competition advocacy and support that it needs from the public, private and academicsectors.

CONTENTS

1. Introduction



4. Conclusion

5. Sources

COMPETITION LAW IN BRUNEI: Conclusion

1. Currently, other than the sectorial competition regulation ie the AiTi Order and theConsumer Protection (Fair Trading) Order 2011, there are no other laws that hascompetition law elements. The AiTi is overseeing competition among the IT serviceproviders that are licensed with them in providing better services to the consumerswhile the Consumer Protection (Fair Trading) Order is more general and notspecific. It covers vertical relationship ie between supplier and consumer andprotect consumer from unfair practices by the suppliers.

2. Moving forward , Brunei Govt. is in the final stage of drafting the NationalCompetition Policy and are active in creating and advocating competition law tothe public and private sector and to the consumers.

3. In determining the suitable competition design for Brunei economy market, Bruneiis actively involving in numerous competition meetings and viewing other ASEANmembers states in their methods and approach on implementing the competitionpolicies in their respective countries.

CONTENTS

1. Introduction



4. Conclusion

5. Sources

COMPETITION LAW IN BRUNEI: Sources & References

1. Structural Policy Country Notes – Brunei Darussalam:- http://dx.doi.org/10.1787/saeo-2014-en.

2. Development of Competition Law in Brunei Darussalam, Competition Policy and Law GroupMeeting, APEC, China 2014.

3. Handbook on Competition Law Policy and Law in ASEAN for Business 2013.

4. ASEAN Regional Guidelines on Competition Policy.

5. New Economic Model for Malaysia – The Concluding Part


Competition law in brunei

Law

implementbruneicompetition

competition policy

competition aegc

competition policies

competition authorities

brunei darussalamprepared

asean members

asean countries