The IDC will be entitled to take all the steps necessary to participate and make the aforesaid representations, including questioning
witnesses, the inspection of documents (subject to the provisions of the Act relating to confidentiality), the questioning of witnesses
and the presentation of written and oral argument.
12.
The caveat about confidential information is ambiguous. Nevertheless I shall assume that the intervenor has not changed its stance since argument, and that it means that it seeks access
to all information including confidential information, but that it would abide by any restriction imposed to protect such confidentiality.
13.
The parties are correct that the intervenor is not a party with a case to meet or prove, as would be an ordinary litigant. They use
this as the basis for arguing that they are therefore not entitled to access to all documentation, as would be a litigant in a trial.
14.
Nevertheless, if a person is allowed to intervene in merger proceedings, the Tribunal must ensure that its intervention is meaningful.
An intervenor who has only got access to half the story does neither itself nor our proceedings any justice. We must not lose sight
of the fact that the intervenor, although there, to represent its own interest, is also there to assist the Tribunal in its truth
seeking function. If the intervenor cannot access documentation which may be vital in the consideration of its arguments it takes little imagination
to foresee that those representing an opposing view will argue that its views should be given little weight as it has formed its
views on an inadequate record.
15.
We have an interest in seeing that an intervenor can make representations that are meaningful and not “illusory” to adopt the language of Coleman J in Heatherdale Farms (Pty) Ltd and Others v Deputy Minister of Agriculture and Another .
16.
This is not to say that intervenors should always be allowed such information and no hard and fast rule should be laid down. In this
case the intervenor would not be able to make a meaningful contribution and hence assist our deliberations without such access. To
protect the interest of the parties I have restricted access to the legal representatives and the intervenor's two experts who will
be required to give confidentiality undertakings. The IDC itself will not have access.
17.
The order I have given is an attempt to achieve a balance between the intervernor’s right, the Tribunal’s interest in
their meaningful participation and the parties’ interest in preserving the confidential nature of their information.
Scope of Participation
18.
The parties referred me to several Canadian cases in which the Canadian Competition Tribunal had to rule on applications by firms
to intervene in merger proceedings to which they were not party. The parties sought to use those cases to show that the Canadian
Tribunal adopts a strict approach to identifying the scope of the intervenor’s interest.
19.
I need not decide whether the Canadian approach is the correct one that should always be followed in our proceedings. Nevertheless, a perusal of those decisions indicates that the methodology I have employed is consistent with theirs –viz. once
the interest has been identified the scope must be consistent with that interest. I have in my previous decision identified what
the intervenor's interest is, and in this decision I have determined its scope. It must be borne in mind that in our Act, unlike
the Canadian statute, public interest factors form part of the merger assessment. For this reason the scope of an intervenor’s
rights might be more widely crafted in our proceedings than in that of our Canadian counterpart’s.
20.
Both sides furnished me with their proposed draft orders on what the scope of the intervenor’s participation should be.
21.
My order is wider in scope than that proposed by the parties, but narrower than that proposed by the intervenor. I do not propose
to give reasons for each item in the order as I take most of its content to be common cause on the basis of the content of the two
draft orders. I will confine myself to explaining why I have widened the scope of the parties draft order and narrowed that of the
intervenor’s.
22.
The Competition Act provides in section 16(2), that when the Competition Tribunal considers a merger, it must do so in terms of the
factors set out in section 12 A. That section provides a three-stage process for merger consideration. First, we consider if the
merger will substantially lessen competition by applying inter-alia the factors listed in section 12 A (2), what I will call the
‘pure competition’ criteria. If that answer leads to a negative conclusion we then go on to determine if the anti-competitive effects are offset by
any efficiency gain as set out in section 12A(1)(ii) the so called ‘efficiency defense’. As a final step wherever the conclusion to these first two stages leads us we must consider the merger in terms of the public interest
criteria, which are specified in section 12A(3). The public interest test possesses a Janus-faced quality, as it can work to resurrect
a merger that is otherwise found anti-competitive, following the first two stages of the enquiry or to condemn a merger that has
survived the competitive assessment of the first two stages.
23.
It is for this reason that I first approached the order by differentiating between those issues relevant to ‘pure competition’
issues or the factors that we must look at in terms of section 12A (2) read with the efficiency defense and the public interest issues
located in 12A(3).
24.
In relation to the ‘pure’ competition issues I have largely followed the version of the order suggested by the merging
parties. These are located in section 1.1 of the order.
25.
Paragraph 1.1.4 of the order relates to the efficiency issues, which the parties are alleging as part of their submissions. In argument
counsel for the parties had no difficulty conceding this point, which was set out in the intervenor’s submission but not included
in the parties draft. For this reason I need not justify its inclusion any further.
26.
Paragraph 1.1.5 was included in the intervenor’ s notice, but not the parties. Since the efficiency considerations also involve
in large part the better use of the Oryx railway line, which connects the iron ore mines to Saldanha Bay, it seems a logical corollary
to such an enquiry to hear if the arrangements lead to any adverse effects and hence the inclusion of 1.1.5.
27.
Paragraph 1.1.6 serves to clarify issues of scope in the previous paragraphs and requires no further elaboration.
28.
In section 1.2, I set out the issues on which the intervenor may participate in relation to the public interest. Paragraph 1.2.1 again
was common to both draft versions so I will not elaborate on it any further.
29.
Paragraph 1.2.3 simply allows the intervenor to make any of its submissions, which it has made on the ‘pure competition’
grounds on public interest grounds as well. It would be artificial to classify them as purely one or the other as they could as easily
be raised in terms of either sub-section. By way of example the Oryx railway line issues could also be relevant in terms of section
12A(3)(a).
30.
However, if the length of submissions devoted to this issue in the heads of argument is anything to go by, then it is paragraph 1.2.2
that is the most contentious, and for this reason I have left it to last.
31.
The intervenor, in its notice in which it indicated the issues on which it wished to participate, alleges that it has concerns about
what it describes variously as Anglo’s ‘dominance’, ‘monopolization’ and further increase in the ‘concentration
of ownership and control’ in the mining industry. It states that these are in conflict with national minerals policy and the Industrial Development Act, which is the statute establishing
the intervenor. They then go on to raise these issues in much the same form in relation to the Competition Act, in paragraph 8, for
which purpose they rely on extracts from the preamble and section 2 of the Act, which they argue locate these issues as being relevant
to our merger consideration function.
32.
The parties argue that our merger proceedings are not concerned with the objectives of either minerals legislation or the IDC’s
statute, nor are the citations from the preamble and section 2 pertinent to our function in terms of section 12A. To see what we
have to consider in terms of merger considerations we must confine ourselves to the language of section 12A and, looked at from that
perspective these issues are not directly relevant and hence should not be part of the intervenor’s scope.
33.
I agree with the merging parties that we must consider the merger from the perspective of the Competition Act and not some other statute.
34.
I agree too, that we must confine our analysis to the framework of section 12A and that the preamble and the objectives cannot be
used to found some other consideration not expressly or by implication located in that section.
35.
Nevertheless section 12A is widely framed. The pure competition considerations although listed do not constitute a closed list, hence
the use of the word “..including.." that precedes the introduction of the list in section 12A(2).
36.
The public interest considerations whilst drafted in terse language are broad in scope. For instance the phrase “..effect on a particular industrial sector or region” opens up for consideration an enormous range of issues without doing any violence to the language. Given that 12A(2) contains a non-exhaustive
list, and the wide ambit of 12A(3), it is a legitimate exercise in statutory interpretation to look at other parts of the statute,
which set out its purpose and objectives, so as to create the lens through which we should view the interpretation of section 12A.
Indeed this is precisely the approach followed by Marais JA in his minority judgment in the Standard Bank case, which involved the interpretation of a section relating to the application of the Competition Act.
37.
Our courts have consistently held that in interpreting a provision of a statute one may consider the preamble of the Act (or any other
express indications in the Act as to the object that has to be achieved.)
38.
In Distillers Corporation (South Africa) Ltd v Bulmer (SA) Pty Ltd , Davis JP expressly invoked this principle of interpretation at page 358 paragraph A:
“ The applicable sections of the Act thus provide a clear indication of the purpose of chap 3, namely that transactions which are likely
substantially to prevent or lessen competition should be carefully examined by the competition authorities. This interpretation is
supported by the preamble to the Act which provides, inter alia, that the Act 'restrain(s) particular trade practices which undermine
a competitive economy and establish(es) independent institutions to monitor economic competition'. Section 2 of the Act provides
that the purpose of the Act is to promote competition in the Republic. It follows that the Act was designed to ensure that the competition
authorities examine the widest possible range of potential merger transactions to examine whether competition was impaired and this
purpose provides a strong pointer in favour of a broad interpretation to s 12 of the Act.”
39.
The Supreme Court of Appeal in Stopforth v Minister of Justice and Others , in interpreting the Promotion of National Unity and Reconciliation Act 34 of 1995 applied a purposive approach and held that the preamble of the Act clearly expressed the intention that amnesty was to be granted in respect of political act, which must have
been committed in the context of past conflicts between groups in South Africa.
40.
In Thoroughbred Breeders’ Association v Price Waterhouse , Olivier JA once again embraced this fundamental principle of interpretation in seeking to interpret the Apportionment of Damages
Act 34 of 1956.
41.
In Kellaway Principles of Legal Interpretation , the learned author deals with the determination of the purpose of an enactment and states that in seeking the purpose of an Act
the Court may:
1)
look at the preamble to the Act or at other express indications in the Act as to the object that has to be achieved;
2)
study the various sections wherein a purpose may be found;
3)
look at what led to the enactment (not to show the meaning, but to show the mischief the enactment was intended to deal with);
4)
draw logical inferences from the context of the enactment'.
42.
The above extract was expressly supported by the Transkei High Court in Konyn and Others v Special Investigating Unit.
43.
But even without this purposive interpretation, a mere textual interpretation of section 12A(3)(a) suggests that submissions on increased
concentrations in a sector, in this case mining, are relevant to a merger’s effect on an industrial sector. The legislature’s use of the word sector here as opposed to the use of the word market, the word used in section 12A(2), is instructive. Clearly the legislature intended that in undertaking the analysis of the public
interest, the competition authorities were to have regard to some sphere of economic activity, wider than the mere relevant market,
the traditional tool of analysis of pure competition law issues.
44.
Issues around the alleged concentration in the mining sector are thus relevant, as both a purposive and textual interpretation of
section 12A lead me to conclude, and hence the inclusion of paragraph 1.2.2 of my order, albeit in a more limited form than that
sought by the intervenor.
45.
I have excluded certain aspects from the intervenor’s draft order. Some are excluded as I consider them to be covered in the
order as I have reformulated it or were repetitive. Others such as the issue of corporate governance are not relevant to any consideration
that we have to consider in terms of section 12A, even on the broadest possible interpretation and hence have been excluded.
46.
Apart from the explanation I have offered above, the other departures from the respective draft orders are insignificant, mainly stylistic,
and hence require no further comment.
B. Expert Witness
47.
I indicated to the participants that I wish to call an economist, Dr. Simon Roberts, of the University of the Witwatersrand, as an
expert witness. Dr Roberts has been asked to prepare a report on the transaction in relation to the ‘pure competition’
issues and to submit the report prior to the proceedings. It is also possible that he may be called as a witness in relation to his report. The parties and the intervenor will be given copies
of the report prior to the commencement of the hearing. They will be given the opportunity to file submissions or to rebut any evidence
that the expert submits if they so wish.
48.
The brief that Dr Roberts has been given is an open one and is contained in the letter, which is Annexure A to my order. As the letter
indicates, Dr Roberts is free to come to his own conclusions in this regard. Beyond this he has been given no other brief.
49.
This means that it is conceivable that Dr Roberts may come to the conclusion that he:
1)
Agrees with the merger analysis and conclusions of the parties experts;
2)
Agrees with the conclusion of the parties experts that the merger raises no competition concerns, but does so for different reasons;
or
3)
Disagrees with the analysis of the parties experts and comes to the conclusion that the merger does substantially lessen or prevent
competition in the relevant markets.
50.
.RTF of original document