Anti-competition body deepens probe on cement industry

MANILA, Philippines - The Philippine Competition Commission (PCC) is set to go full blast on its investigation of alleged violations of competitive practices in the local cement industry.

The country’s anti-trust authority said it found reasonable grounds to proceed to a full administrative investigation on the cement industry for possible violations of Sections 14 and 15 of the Philippine Competition Act.

The investigation is in response to the affidavit-complaint filed before the commission by Victorio Dimagiba, a former trade undersecretary who now serves as president of consumer advocacy group Laban Konsyumer Inc.

“The commission conducted a preliminary inquiry of the allegations in your affidavit-complaint. It found reasonable grounds to proceed to a full administrative investigation on the cement industry for possible violations of Sections 14 and 15 of the Philippine Competition Act. We hope for your continued cooperation in the investigation,” the PCC said in response to Dimagiba’s complaint filed in August last year.

In his affidavit–complaint, Dimagiba said the Cement Manufacturers Association of the Philippines (CeMAP), led by its president Ernesto Ordonez, LaFarge Holcim Philippines Inc. and Republic Cement and Building Materials Inc. violated the provisions of the Philippine Competition Act by engaging in anti-competitive agreements.

Such anti-competitive agreements include “restricting competition as to price or components thereof or other terms of trade, abusing their dominant position by engaging in conduct that substantially prevent, restrict, or lessen competition, imposing barriers to entry, or committing acts that prevent competitors from growing within the market.”

Among Dimagiba’s other allegations include Ordonez using the trade association (CeMAP) and pseudo consumer groups to justify the violation of the Philippine Competition Act, as well as maintaining prices of domestic cement in the retail market unreasonably high.

Dimagiba has asked the PCC to enjoin respondents from continuing in their anti-competitive actions, remove Ordonez from CeMAP, require the cement association to conduct, hold, and disseminate information to consumers on cement that comply with standards and are sold at reasonable prices, order the Board of Investments to remove and blacklist Ordonez in the crafting of the Philippine cement industry roadmap, and allow the participation of traders and importers in the stakeholders forum and other consultations.

Sought for comments, Ordonez said yesterday he is puzzled about the PCC’s decision, noting he was not informed about a preliminary inquiry and his side was not heard.

“Having been the only private member of the Congressional committee that drafted this bill, and being the head of the competition law in the Federation of Philippine Industries, I am sure we have not violated anything,” he said.

“I know that in preliminary inquiries, you try to look at all sides. They not only did not get my side, they did not even inform me what it’s about so how can I respond? I gave them a formal letter last January asking what is it all about and I never got any reply. I will now look at all legal procedures and I welcome this and I am sure this will result into nothing,” Ordonez added.