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Exciting Times Ahead For FCCC

The Fijian Competition and Con­sumer Commission (FCCC) has come a long way since its estab­lishment from the merger of three separate agencies in 2010. Over the years we have grown
26 Mar 2018 11:00
Exciting Times Ahead For FCCC
Joel Abraham, Fiji Commerce Commission chief executive

The Fijian Competition and Con­sumer Commission (FCCC) has come a long way since its estab­lishment from the merger of three separate agencies in 2010. Over the years we have grown in confidence and the capability which paves the path for the achievement of our set targets.

There is no looking back for us and as we venture into our five-year plan with the expectation to achieve a lot more.

FCCC’S STRATEGIC PLAN – 2018-2023

For the first time, FCCC has a Stra­tegic document in place which entails the key objectives and goals to be achieved by us from 2018 to 2023.

Being Fiji’s national regulatory and competition agency, our purpose is to achieve the best possible outcomes in competitive and regulated markets for the long-term benefits of all Fijians.

Our Strategic Plan incorporates significant features of the National Development Plan (NDP), (2017 – 2021 and 2017 – 2036) to enable inclusive socio-economic development.

We are working in congruence to actively contribute towards the re­alisation of the development goals, conclusive of the progress of the pri­vate sector, civil society, community groups, the government and all Fiji­ans.

Our progressive and forward think­ing Strategic Plan embraces the fun­damental principles of our National Development Plan and will promote greater self-regulation, voluntary compliance, and contributes towards ‘Transforming Fiji’.

Strategic Goal 1 – Markets for goods and services in Fiji are competitive

When firms compete, they seek to deliver goods and services at better prices and superior quality and con­sumers benefit from these better pric­es and the economy gains from having more productive firms.

Setting the right conditions to en­courage competition can also drive in­novation as firms compete to improve their market share.

It is the role of the FCCC to promote compliance with the Fijian Competi­tion and Consumer Commission Act 2010, including, by enforcing the law against those who infringe it.

In order to assist it in performing this role, FCCC will seek various changes to the Act, including to allow it to accept enforceable undertakings from businesses and to strengthen its powers to gather information during investigations.

These changes will help FCCC achieve results that have market-wide benefits for businesses and consum­ers.

FCCC’s objectives for competitive markets are:

  • Businesses understand and comply with their obligations under the Fi­jian Competition and Consumer Com­mission Act.
  • Competition among businesses is effective and fair.
  • Changes to market structure do not substantially increase market power unless any likely detriment is out­weighed by the overall benefit to the public.
  • Barriers to entry and exit are mini­mised.
  • Terms of purchase are fair and businesses do not use market power to tilt the terms of trade in their favour to the detriment of their customers.

Strategic Goal 2 – Consumers in Fiji are offered goods and services that are safe and are provided with adequate and accurate information about goods and services.

A fundamental aspect of competitive markets is that consumers can be con­fident that they understand what they are purchasing and what price they will pay.

Equally, businesses and traders who act with integrity must be confident that they will not be undermined by unethical traders who do not provide accurate information to consumers.

It is important that consumers are able to make informed choices.

FCCC’s objectives for consumer pro­tection are to ensure that:

  • Businesses understand the consum­er protection rules and abide by them.
  • Information provided to consumers by traders is accurate, complete and true.
  • Consumers understand the full terms of their purchases.
  • Terms of purchase are fair and busi­nesses do not use bargaining power to tilt the terms of trade in their favour to the detriment of consumers.

Strategic Goal 3 – Regulation, includ­ing price control, is applied where competition is not effective, and effi­cient outcomes can be achieved with­out imposing excessive administra­tive or compliance costs

The Fijian economy is characterised by differing opportunities for con­sumers and businesses depending on whether they are based in rural areas or urban areas.

These differences are aggravated by adverse events such as cyclones or other natural disasters.

For this reason, FCCC is responsible for setting the prices of a range of consumer products.

In addition, there are natural mo­nopolies where effective competition is unable to be relied upon to deliver efficient prices for consumers.

In such cases, these industries are regulated.

FCCC’s regulatory functions can be separated into two different categories:

Price and rent control: FCCC has responsibility for setting the prices of a wide range of consumer goods at wholesale and retail levels.

It also monitors compliance with the rent freeze on residential properties market.

To set the prices of controlled con­sumer goods, FCCC adds a wholesale and retail margin to the landed cost of goods.

This margin reflects the distribution costs of the goods as well as a fair prof­it for the wholesaler and retailer.

FCCC believes that it is appropriate to investigate possible changes to the process of setting the prices of con­sumer goods to reduce the cost for all parties, aid compliance, and protect consumers.

Regulated industries: The method­ology used by FCCC to determine the prices of services provided by regu­lated industries also takes a cost-plus-margin approach.

It is challenging to identify the cor­rect costs of a regulated entity.

If the costs accepted by FCCC are too low, the entity faces no incentive to invest and consumers will not re­ceive the right amount and quality of the service; if costs are too high, the entity earns a monopoly profit, which again harms consumers.

In order to identify economically ef­ficient costs, FCCC will investigate the use of alternative regulatory models for setting regulated prices.

Although no single regulatory model can be used for all regulated indus­tries, there are some common regula­tory principles and approaches that would allow FCCC to set economically efficient prices and quality standards.

FCCC’s objectives for the pricing of consumer goods, rents and regulated industries are that:

  • Where effective competition is un­able to be sustained, the price of con­sumer goods reflects the costs of the goods including distribution costs and a fair margin.
  • Residential rents are fair for the tenant and the landlord.
  • Regulatory decisions set prices and quality standards that reflect efficient costs, remove monopoly prices and provide an incentive to invest.
  • Regulated businesses should have regulatory certainty and smooth price paths.

Strategic Goal 4 – FCCC is regarded as an independent and expert body by the public, the Government and busi­nesses

Achieving our Strategic Goals will require FCCC to develop its capability and make changes to its own internal processes and management frame­work.

FCCC’s objectives for its manage­ment framework are that:

  • FCCC is respected as an independ­ent and competent economic regula­tor and enforcement agency.
  • FCCC has staff that is engaged, pro­fessional and has the capability to de­liver FCCC’s Strategic Goals.
  • FCCC’s resources are used efficient­ly and are allocated to achieve FCCC’s Strategic Goals.
  • FCCC is funded to an adequate lev­el, from an appropriate combination of sources, to perform its roles.
  • FCCC manages risk and meets all of its accountability reporting dead­lines.

Competent workforce

In order to realise our goals and ob­jectives, FCCC is committed to ensur­ing a competent workforce.

Every department has qualified of­ficers to look into the respective func­tions of Economic Regulation, Price Control and Monitoring, Competition and Compliance and not forgetting the much-needed support function of the Corporate division.

We will continue to provide capacity building to enable our staff to admin­ister removal of restrictive and unfair trade practices from Fijian markets and boost confidence in achieving our vision to create a dynamic and com­petitive market in Fiji.

FCCC has recently incorporated two new positions into its hierarchy which will be instrumental in providing core support to the work undertaken by us.

One key recruitment made was that of the Internal Auditor to ensure ac­countability and transparency of the organisation.

This is the first time ever that an internal audit function has been set-up and it was imperative to do so to promote good governance, be in syn­chronisation with the Public Service values, government mandate, 2013 Constitution, and promote anti-cor­ruption.

The internal auditor has already begun work on streamlining the pro­cesses and structures implemented by the board towards the achievement of FCCC’s overall objectives.

Extensive staff training will be done to ensure they are aware of what is ex­pected of them.

Further, a Communications Officer has been recruited who can ensure timely dissemination of information to the media, stakeholders and mem­bers of the public.

The outcomes of the extensive activi­ties undertaken by FCCC needs to be made known and communications are key in creating awareness.

Fostering partnership

FCCC we will be actively pursuing a trusted collaborative working rela­tionship with the industries and our strategic partners.

This will enable effective good gov­ernance, risk management, detection and disruption of restrictive and un­fair trade practices.

Our effective regulation of markets will continue to play an important role in Fiji’s economic growth.

FCCC is committed to fostering a competitive, efficient, fair and in­formed market with initiatives to modernise the regulatory environ­ment through a culture of excellence while growing our presence at a na­tional and regional level.

These are exciting times for the FCCC and I am excited to lead the or­ganisation with its committed profes­sionals towards constructing endur­ing foundations for our future.

Source: Fijian Competition and Consumer Commission

Feedback: jyotip@fijisun.com.fj

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