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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

COMPETITION TRIBUNAL

REPUBLIC OF SOUTH AFRICA

Case No: 018846

In the matter between:

The Competition Commission........................................................................................Applicant

and

Harding Allison Close Corporation...........................................................................Respondent

Panel: A Roskam (Presiding Member)

I Valodia (Tribunal Member)

F Tregenna (Tribunal Member)

Heard on : 18 June 2014

Decided on: 18 June 2014

Order

The Tribunal hereby confirms the order as agreed to and proposed by the Competition Commission and the respondent, annexed hereto marked “A”.

18 June 2014

Date

Presiding Member

A Roskam

Concurring: I Valodia and F Tregenna

IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA

(HELD IN PRETORIA)

CT CASE NO:_____

CC CASE NO: 2009SeD4641

In the matter between:

THE COMPETITION COMMISSION...........................................................Applicant

and

HARDING ALLISON CLOSE CORPORATION.......................................Respondent

FILING NOTICE

BE PLEASED TO TAKE NOTICE that the Applicant herewith files the following documents:

1. CT 6 Notice of Motion; and

2. Consent Agreement between the Competition Commission and Harding Allison Close Corporation.

DATED AT PRETORIA ON THIS 14 DAY OF MAY 2014

COMPETITION COMMISSION

DTI Campus

77 Meintjies Street

Sunnyside

Pretoria

Tel: 012 394 3231

Fax: 012 394 4231

Ref: N. Sakata/ K. Maputla

E-mail address:

Nellvs@compcom.co.za/

kamooelom@com pcom .co.za

To: THE REGISTRAR

Competition Tribunal

3rd Floor, Mulayo

The DTI Campus

77 Meintjies Street

Sunnyside

Pretoria

Tel: (012) 394-3300/55

Fax: (012) 394-0169

E-mail address; Leratom@comptrib.co,za

And to: HARDING ALLISON CLOSE CORPORATION

43 Hillclimb Road,

Westmead Pinetown,

KwaZulu-Natal,

Ref: Peter Allison

Tel: (046) 624 8689/ 083 626 3841

E-mail address: peterallison@hardinqallison.co.za

IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA

(HELD IN PRETORIA)

CT CASE NO:______

CC CASE NO: 2009Sep4641

In the matter between:

THE COMPETITION COMISSION..............................................................................Applicant

and

HARDING ALLISON CLOSE CORPORATION.......................................................Respondent

CONSENT AGREEMENT IN TERMS OF SECTION 49D AS READ WITH SECTIONS 58(1)(a)(ifi) and 58(1) (b) OF THE COMPETITION ACT, NO. 89 OF 1998, AS AMENDED, BETWEEN THE COMPETITION COMMISSION AND HARDING ALLISON CC, IN RESPECT OF CONTRAVENTIONS OF SECTION 4(1)(b)(ffl) OF THE COMPETITION ACT, 1998

The Competition Commission- (‘'Commission”) and Harding Allison CG (“Harding Allison") hereby agree that application be made to the Competition Tribunal (“Tribunal”}: for the confirmation of this Consent Agreement as an order of the Tribunal in terms of section 49D as read with sections 58(1)|a)(iii) and 58(1 )(b) of-the! Competition Act no. 89 of 1998, as amended (“the Act³’), in respect of contraventions of section 4(1 )(b)(iii) of the Act.

1. DEFINITIONS

For the purposes of this consent agreement the following definitions shall, apply

1.1 “Act” means the Competition Act 1998 (Act No. 89 of 1998), as: amended;

1.2 "CLP” means the Commission’s Corporate Leniency Policy (Government Notice No. 628 of 23 May 2008, published in Government Gazette No. 31084 of 23 May 2008);

1.3 “Commission ’ means the Competition Commission of South Africa, a statutory body established in terms of section 19 of the Act, with its principal place of business at 1^et Floor, Mulayo Building (Block C), the dtj Campus, 77 Meintjies Street, Sunnyside, Pretoria, Gauteng;

1.4 “Commissioner" means the Commissioner of the Competition Commission, appointed in terms of section 22 of the Act;

1.5 “Complaint” means the complaint initiated by the Commissioner of the Competition Commission in terms of section 49B of the Act under case number 20Q9Sep4641;

1.6 “Consent Agreement” means this agreement duly signed and concluded between the Commission and Harding Allison;

1.7 “Cover Price” means generally, a price that is provided by a firm that wishes to win a tender to a firm that does not wish to do so, in order that the firm that does not wish to win the tender may submit a higher price; or alternatively a price that is provided by a firm that does not wish to win a tender to a firm that does wish to win that tender in order that the firm that wishes to win the tender may submit a lower price.

1.8 “Group Five” means Group Five Construction (Proprietary) Limited, a company incorporated under the laws of the Republic of South Africa with its principal place of business at No. 9 Country Estate Drive, Waterfall Business Estate, Jukskei View, Johannesburg, Gauteng, South Africa. Group Five provides integrated construction services focused on building, infrastructure and engineering sectors

1.9 “Harding Allison” means Harding Allison DC, a close corporation incorporated under the laws of the Republic of South Africa with its principal place of business at 43 Hiliciimb Road, Westmead, Pinetown, KwaZulu- Natal It is a multi-disciplinary construction and engineering group focused on building and civil engineering services.

1.10 “Invitation” means the Invitation to Firms in the Construction Industry to Engage in Settlement of Contraventions of the Competition Act, as published on the website of the Commission on 1 February 2011;

1.11 "Non-prescribed prohibited practices" refers to prohibited restrictive horizontal practices relating to the construction industry that are contemplated in section 4(1)(b) of the Act and that are on-going or had not ceased three years before the comp la ini was initiated, as contemplated in section 67 of the Act;

1.12 “Parties” means the Commission and Harding Allison;

1.13 “Prescribed prohibited practices’’ refers to prohibited restrictive horizontal practices relating to the construction industry that are contemplated in section 4(1 )(b) of the Act and that ceased after 30 November 1998, but more than three years before the complaint was initiated;

1.14 “Respondent” means and Harding Allison;

1.15 “Tribunal” means the Competition Tribunal of South Africa, a statutory body established in terms of section 26 of the Act, with its principal place of business at 3^rd Floor, Mulayo building (Block C), the dti Campus, 77 Meintjies Street, Sunnyside_rPretoria, Gauteng;

2 BACKGROUND

2.1 On 01 September 2009, following the receipt of applications for immunity in terms of the CLP, the Commission initiated á complaint in terms of section 49B(1) of the. Act under case number 2009Sep4641 into particular prohibited practices relating to conduct in construction projects, by the firms listed below.

2.2 The complaint concerned alleged contraventions of section 4(1)(b) of the Act as regards price fixing, market allocation and collusive tendering. The investigation was initiated against the following firms: Grinaker LTA , Aveng (Africa) Ltd, Stefanutti Stocks Holdings Ltd, Group Five Ltd, Murray & Roberts, Cpncor Ltd, G. Liviero & Son Building (Pty) Ltd, Giuricich Coastal Projects (Pty) Ltd, Hochtief Construction AG, Dura Soletanche-Bachy (Pty) Ltd, Nishimatsu Construction Go Ltd, Esorfranki Ltd, VNA Pilings CC, Rodio Geotechnics (Pty) Ltd, Dlabor Ltd, Gauteng Piling (Pty) Lid, Fairbrother Geotechnical CC, Geomechanïcs CC, Wilson Bayly Holmes-Ovcon Ltd and other construction firms, including joint ventures.

2.3 Subsequent to the initiation of the complaint, the Commission received numerous applications for leniency under the CLP; which implicated several construction firms in collusive practices-

2.4 The Commission’s investigation, of the above complaint, as well as several others in the construction industry, led the Commission to believe that there was widespread collusion in the construction sector in contravention of section 4(1)(b)(iii) of the Act. Accordingly, in line with the purpose of the Act as well as the Commission’s functions, the Commission decided to. invite construction firms that were involved in collusive conduct to apply to engage in settlement on favourable terms. The Invitation was launched and published on the Commission’s website on 1 February 2011. This was also done in the interests of transparency, efficiency, adaptability and development of the construction Industry, the provision of competitive prices, as well as in order to expedite finalisation of the investigations, under a fast track process.

2.5 The Invitation required firms to apply for settlement by disclosing all construction projects that were the subject of prescribed and nonprescribed prohibited practices. The closing date to apply for settlement in terms of the Invitation was 15 April 2011.

2.6 The Commission received settlement applications from 21 firms that disclosed a total number of 300 projects which were the subject of collusive conduct. Of the 300 projects disclosed, 160 projects involved prescribed prohibited practices and 140 non-prescribed prohibited practices.

2.7 The 21 firms that responded to the invitation implicated 25 firms which did not respond to the Invitation. Of the 21 firms, fifteen concluded consent agreements with the Commission, which agreements were confirmed as. orders of the Tribunal on 22 and 23 July 2013,

2.8 The Commission thereafter continued with Its investigation of the 25 firms that did not respond to the Invitation and were implicated by those that applied. Harding Allison is one of the 25 implicated firms. Harding Allison has agreed to settle the project It is implicated in.

3 CONDUCT IN CONTRAVENTION OF THE ACT

Renault Motor Company, Meridian Drive, Umhlanga Contract

Harding Allison reached an agreement with Group Five on or about 14 November 2005 in that they agreed on a cover price in respect of the Renault Motor Company, Meridian Drive, Umhlanga project.

In terms of the agreement Harding Allison requested and received a cover price from Group Five to ensure that Harding Allison would not win the tender. This conduct is collusive tendering in contravention of section 4(1) (b) (iii) of the Act.

The project was for the building of premises for Renault Motor Company, at Meridian Drive in Umhlanga. The project started on 01 July 2006 and was completed on 31 October 2007.

4 ADMISSION

Harding Allison admits that it entered into the agreement detailed in paragraph 3 above with its competitor, Group Five, in contravention of section 4(1 )(b) (iii) of the Act..

5 CO-OPERATION

In so far as the Commission is aware, Harding Aliison:

5.1. has provided the Commission with truthful and timely disclosure, including information and documents in its possession or under its control; relating to the prohibited practice;

5.2. has provided full and expeditious .co-operation to the Commission concerning the prohibited practice;

5.3. has provided á written undertaking that it has immediately ceased to engage in, and will not in future engagë in, any form of prohibited practice;

5.4. has confirmed that it has not destroyed, falsified or concealed information, evidence and documents relating to the prohibited practice;

5.5. has confirmed that it has not misrepresented or made a wilful or negligent misrepresentation concerning the material, facts of any prohibited practice or otherwise acted dishonestly.

6 FUTURE CONDUCT

Harding Allison agrees to:

6.1 prepare and circulate a statement summarising the content of this agreement to its employees;, managers and directors within fourteen (14) days of the date of confirmation of this Consent Agreement as an order of the Tribunal;

6.2 refrain from engaging in collusive tendering in contravention of section 4 (1)(b)((ii) of the Act, and from engaging in any prohibited practice in future;

6.3 develop, implement and monitor a competition law compliance programme as part of its corporate governance policy, which is designed to ensure that its employees, management, directors and agents do not engage in future contraventions of the Act, In particular, such compliance programme should include mechanisms for the identification, prevention, detection and monitoring of any contravention of the Act;

6.4. submit a copy of such compliance programme to the Commission within 60 days of the date of confirmation of the Consent Agreement as an order by the Tribunal; and

6.5 undertake henceforth to engage in competitive bidding,

7 ADM1NSTRATIYE PENALTY

7.1 Having regard to the provisions of sections 58(1)(a)(iii) as read with sections 59(1 j(a), 59(2) and 59(3) of the Act, Harding Allison agrees that if is liable to pay an administrative penalty in the sum of R78 821-94 [Seventy eight thousand eight hundred and twenty one rand and ninety four cents], which penalty represents 2% of Harding Allison’s annual turnover for the financial year ended 2009.

7.2. Harding Allison shall pay the amount set out above in paragraph 7.1 to the Commission within 30 days from the date of confirmation of this Consent Agreement as an order of the Tribunal.

7.3. This payment shall be made into the Commission’s bank account, details of which are as Mows:

Bank name: Absa Bank

Branch.name: Pretoria

Account holder: Competition Commission Fees Account

Account number: [...]

Account type: Current Account

Branch Code: 323 345

Reference: Case number 2009Sep4841 & Harding Allison

7.4. The penalty will be paid over by the Commission to the National Revenue Fund in accordance with section 59(4) of the Act

8. Full and Final Settlement

This agreement is entered into in full and final settlement of the specific conduct set out in paragraph 3 of this consent agreement and, upon confirmation as an order by the Tribunal, concludes all proceedings between the Commission and Harding Allison in respect of this conduct only.

For Harding Allison CC

Dated and signed at Port Alfred on the 5^th day of May 2014

Name: P.C.J. ALLISON

Managing Director

For the Commission

Dated and signed at Pretoria on the 8^th day of May 2014

TEMBINKOSI BONAKELE

COMMISSIONER

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