Project Title

Improving the Capacity of Competition Authorities of Developing Economies in Competition Policy Assessment and Advocacy 

Project Year

2013   

Project Number

EC 01 2013A 

Project Session

Session 1   

Project Type

Standard 

Project Status

Completed Project   
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Project No.

EC 01 2013A 

Project Title

Improving the Capacity of Competition Authorities of Developing Economies in Competition Policy Assessment and Advocacy 

Project Status

Completed Project 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: APEC's New Strategy on Structural Reform (ANSSR) 

Project Year

2013 

Project Session

Session 1 

APEC Funding

200,000 

Co-funding Amount

Total Project Value

200,000 

Sponsoring Forum

Economic Committee (EC) 

Topics

Structural Reform 

Committee

Economic Committee (EC) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Philippines 

Co-Sponsoring Economies

Australia; Chinese Taipei; Indonesia; New Zealand; Japan 

Expected Start Date

01/05/2013 

Expected Completion Date

30/04/2014 

Project Proponent Name 1

Heiddi Venecia R Barrozo 

Job Title 1

Director 

Organization 1

Office for Competition, Department of Justice 

Postal Address 1

Padre Faura Street, Ermita, Manila, Philippines 1000 

Telephone 1

63-2 521 8345, 523 8481 local 222 

Fax 1

Not Applicable 

Email 1

hvrbarrozo@doj.gov.ph; competition@doj.gov.ph  

Project Proponent Name 2

Not Applicable 

Job Title 2

Not Applicable 

Organization 2

Not Applicable 

Postal Address 2

Not Applicable 

Telephone 2

Not Applicable 

Fax 2

Not Applicable 

Email 2

Not Applicable 

Declaration

Heiddi Venecia R Barrozo 

Project Summary

The project aligns with APEC’s New Strategy for Structural Reform (ANSSR), particularly by helping to facilitate more open, well-functioning, transparent and competitive markets. An effective and centralized domestic government authority that administers and implements laws and policies that promote competition in the market positively contributes to this ANSSR objective. Many developing economies, however, are either rill-equipped with the tools necessary to run an effective competition authority, or do not have such an office. The proposed project aims to strengthen the capacities of domestic competition authorities of developing economies particularly the proposing APEC economy, in close collaboration with international experts to: develop a competition checklist for developing economy markets; conduct training on competition assessment using the checklist; prepare competition assessment and regulatory impact assessment reports; and design a framework for competition advocacy and prepare an advocacy plan.

Relevance

It is now universally accepted that efficient, well-functioning markets are indispensable for economic growth, trade and investment liberalization and facilitation, and development. Competition law and policy represent an essential component of the structural reform mechanisms that contribute to balanced and inclusive economic growth. Given the structural changes arising from liberalization, privatization, and deregulation, it is argued that economies should have the appropriate regulatory and competition policy framework in order to ensure improved economic performance.


Although the current discourse and economy experience on formulating and implementing competition policy have reached a certain level of maturity, most developing countries still have not fully accepted competition policy as an economic tool to achieve a more balanced and equitable growth. Institutional measures by domestic competition authorities in the APEC region to promote competition policy have achieved uneven levels of progress. According to the 2012 Report on Measures of Competition Development in APEC, a survey of institutional measures on competition policy in APEC reveals two (2) main groups: (1) those APEC economies that have developed comprehensive legislation and experience with its usage, and (2) those APEC economies where its institutional measures are still a work-in-progress.


The Philippines falls under the 2nd category of APEC member-economies. Pending the enactment of a comprehensive competition law, the Office for Competition (OFC) of the Department of Justice (DOJ) was designated as the Competition Authority. The Philippines’ legal and regulatory landscape, however, is pockmarked with over 60 sector regulators implementing a number of competition-related and sector-specific laws, rules and regulations.


Developing economies such as the Philippines have varying levels of enforcement capacity, and are thus not expected to adopt the full range of potentially complex enforcement measures at the disposal of competition authorities in developed economies. Especially where general competition laws interplay with regulatory policies and especially the particular mandates of sector regulators, careful analysis of measures to be taken and policy coordination is warranted. There is, however, a dearth of studies providing sector or market analysis to determine which sectors are highly concentrated and will serve as guide for the competition authorities and the sector regulators to undertake priority reforms, hence, the need for capacity building on sector analysis to assess the level of competition especially in sectors with major impact on the consumers. In many competition agencies worldwide, economic studies are used as potent tool to determine the level of competition and may be used to support case investigation. This aspect is likewise seen to strengthen case enforcement dimension of competition.


APEC is an excellent platform from which to launch this project, and can contribute immensely to the success of the project to competition authorities of developing economies. As early as 1995, competition policy has been an important part of APEC’s work, specifically recognizing the development divide between developed and developing economies on competition policy.


In 1999 endorsed the APEC Principles to Enhance Competition and Regulatory Reform and approved a "road map" which established the basis for subsequent work on strengthening markets in the region. APEC consistently engages in substantive cooperation with OECD, the World Bank, ADB, and other international organizations and institutions that have developed expertise in competition policy. Through the Competition Policy and Law Group set up in 2008, APEC has established a network of competition experts and policymakers from the region to discuss the latest developments in competition policy, collectively address new challenges, and share information that would be useful to developing economies such as the Philippines.

This project directly addresses a critical institutional gap among developing economy domestic competition authorities as exemplified by the OFC. Domestic competition agencies must be enabled and fully equipped with the analytical tools and disciplines necessary to remove or at least reduce impediments to competition in markets, to properly identify areas where competition is unduly restricted and propose policy alternatives accordingly, and to design a framework for meaningful and long-term competition advocacy.

Objectives

The primary objective of the project is to strengthen the capacity of developing economies, particularly the proponent, to enforce competition laws and policies by enhancing analytical tools of their competition authorities, especially for those jurisdictions with a diverse set of sector-specific regulators such as telecommunications and transportation.  This would entail providing a tailor-fit, institutional capacity-building model programme on the fundamental analytical tools of 21stcentury competition authorities that will be shared with developing economies belonging to category 2 indicated in the 2012 Report on Measures of Competition Development in APEC.

In enhancing the capacity of the domestic competition authorities of developing economies, competition assessment and advocacy will be undertaken by:

·     Developing a competition checklist for APEC developing member-economy markets

This checklist will guide competition authorities in APEC developing member-economies to identify and assess current and projected government-imposed barriers (laws, regulations and policies) and to verify whether they unnecessarily hinder competition. Where harmful impact is discovered, the checklist will help in the development of other ways to achieve the same objectives with marginal harm to competition.

·     Conducting training on competition assessment using the checklist with an objective of imparting the participants with high level methodology to evaluate existing laws and regulations, and identify barriers to competition not only for particular sectors but for the economy as a whole. ·     Development and review of laws, policies and materials for the proponent economy. In the course of development of checklist, existing laws and regulations will be reviewed, specific analyses on competitive impact on these laws will reveal gaps and challenges, and ultimately develop recommendations for necessary interventions that will address these challenges. ·     Preparing competition assessment and regulatory impact assessment reports as part of a Regulatory Impact  Analysis process for new laws and regulations.

.     Preparing a framework for competition advocacy plan to structure and rationalize its advocacy efforts with an end view of building interest and educating consumers and businesses, and to encourage compliance with competition laws.

Alignment

This project directly contributes to the 1st priority under the APEC New Strategy on Structural Reform (“ANSSR”)—more open, well-functioning, transparent and competitive markets. It also directly contributes to the competition policy priority area under the ANSSR’s predecessor, the Leader’s Agenda to Implement Structural Reform (“LAISR”). In further advancing progress on promoting competitive markets, the project directly and broadly contributes to structural reform, a key component of APEC Leaders’ Growth Strategy with the overall objective of achieving strong, inclusive, and balanced growth in the Asia-Pacific region.

The project aligns with:

·     APEC 2013Project Rank 1: Implementation of the APEC New Strategy for Structural Reform (ANSSR);

.     ANSSR priority area on promoting more open, well-functioning, transparent and competitive markets

TILF/ASF Justification

Developing economies do not have the same institutional endowments and should not necessarily be expected to adopt the full panoply of tools that are used by developed jurisdictions in the enforcement of competition law.

The project is specifically designed precisely to benefit developing economies, specifically the domestic competition authorities of developing economy governments. The ANSSR subfund which will provide funding for the project, also specifically aims to benefit developing economies by positively contributing to each developing economies’ effort to achieve their structural reform objectives.

Beneficiaries and Outputs

A competition checklist will be developed using methodologies and processes that are broadly applicable to developing economies. The formulation of the competition checklist will be tailored to the peculiar conditions of the proponent, considering the standards and prevailing concerns common among developing economy markets and their regulatory framework for sharing of best practices and networking. In doing so, the consultant will consider competition policies and related tools from other economies where relevant.


A comprehensive advocacy program will be prepared with specific activities such as the publication and distribution of IEC materials, series of forums with business and consumer groups nationwide. The conduct of appropriate capacity building activities with assistance from international organizations for this purpose would be very helpful.


The proposal builds on (but does not duplicate) several existing initiatives by ASEAN, the World Bank and donor organizations, which are more broadly focused, facilitating exchange of experiences and best practices on competition law enforcement among economies. There still remains a need to develop the specific analytical competencies and outputs covered by this proposal. The existing proposal will provide guidance material and other assistance that is specifically tailored to the specific needs and context of developing economies.


The immediate beneficiaries include the domestic competition authority, sector regulators and related institutions involved in the implementation of competition policy. In the longer term, broader benefits are likely to accrue to a wider group of stakeholders including consumers and businesses. Other APEC
economies could also derive significant benefits from drawing lessons on the experiences and outputs arising from the current proposal.


As the Philippines will be the first test subject of the project, the Philippines Office of Competition (OFC) is the primary beneficiary of the project. The OFC was recently established in 2011 to address issues on monopolistic practices and all forms of trust and their combination in restraint of trade or free competition. Given its broad mandate to coordinate, guide, and enhance the work of the 60-odd sector-regulators in investigating violations of competition laws, protecting consumers from abusive, fraudulent, or corrupt business practices, implementing measures to promote competition, transparency, and accountability in markets, it needs all the capacity to effectively dispose its functions as the economy’s competition authority. As with other domestic competition authorities of developing economies, the OFC lacks the economic expertise to (1) develop a framework for competition assessment suitable to the existing regulatory regime, (2) design a competition checklist that applies to different types of regulations in industries and markets, (3) conduct competition assessment in coordination with sector regulators, and (4) undertake regulatory impact assessment (RIA) to ensure that the benefits of adopting laws, rules and regulations outweigh the costs of the anticompetitive impact.


The other direct beneficiaries as far as the Philippines is concerned comprise the broad number of sector regulators that have specific mandates over a diverse range of economic activity, such as telecoms, infrastructure, energy, corporations, and so on. Their regulators will benefit from the analytical tools and training on competition policy, which would in turn raise awareness and assist the central competition authority in coordinating the enforcement of competition laws and policy.


Other APEC economies would benefit from the project, particularly those developing economies that are also in the early stages of developing competition laws.
While there is no “one-size-fits-all” solution and that economies are not obliged to adopt or endorse any particular model, this project outlines a basic capacity-building structure that gives a developing economy freedom to tailor its competition law to its own specific set of needs and conditions.


Initially, a good platform for information exchange of the lessons learned and best practices drawn from this project will be the ASEAN Member States (AMSs).The proponent, which is currently the Chair of the ASEAN Experts Group on Competition (AEGC), envisions to share with AMSs the outputs of this project. Along this line, future bilateral/multilateral trade agreements that the proponent economy may enter into will likewise incorporate the best practices derived from this undertaking.

Dissemination

The domestic competition authority is expected to publish and disseminate reports on competition assessment and regulatory impact assessment to sector regulators, lawmakers, consumer groups and other stakeholders including relevant APEC economies, including through an advocacy plan outlining activities to educate consumers, business groups and the general public on competition. The outcomes from the project will be presented and discussed at APEC’s Economic Committee, through the CPLG.

Gender

Under Philippine law, Republic Act 9710 or the Magna Carta of Women mandates non-discriminatory and pro-gender equality and equity measures to enable women’s participation in the formulation, implementation, and evaluation of policies, plans, and programs for domestic development.

Work Plan

Timeline:

Output 1:  Competition checklist for developing economy markets (May –July 2013)

a.  A competitive tendering process will be used to select an international consultant/expert on competition policy and/or a domestic economic research or  academic institute to undertake consultancy and at the same time research for the  proponent.


b.  The target developing economy (for 2013, the Philippines) will brief the consultant on the state of its competition policy, how it is being implemented and enforced, the markets regulated, and functions, experiences, and challenges facing the centralized government authority. As backdrop for the project, the consultant will  undertake an audit of relevant trade laws, completion policies, rules and regulations  that are anti-trust or promote anti-competitive practices.

c.  The international consultant supported by a domestic-based consultant will develop a competition checklist using methodologies and processes that are broadly applicable to developing economies. The formulation of the competition checklist will be tailored to the peculiar conditions of developing economy markets and their regulatory framework. In doing so the consultant will consider competition policies and related tools from other economies where relevant.

d.  The consultant, supported by the local counterpart, and the domestic competition authority will consult and validate with sector regulators and relevant stakeholders
the proposed checklist through forums and roundtable discussions.


e.  The consultant, supported by the local counterpart, shall conduct a peer review of the checklist among relevant domestic stakeholders.

f.  The consultant, assisted by the domestic-based consultant, and the domestic competition authority to finalize the checklist. 

Output 2:  Training on the conduct of competition assessment using the competition checklist (August  –September 2013)

a.  Consultant will conduct and facilitate training on competition assessment and regulatory impact assessment for technical staff of the domestic competition  authority and sector regulators


b.  The domestic competition authority to work with the consultant sharing information and collaborating on competition policy issues (a mentoring role) 

Output  3: Competition assessment and regulatory impact assessment reports (October 2013 –March 2014)

a.     With assistance from the local consultant, the domestic competition authority will develop indicators of effectiveness of the checklist,   conduct competition assessment and prepare the report.

b.      The domestic competition authority to identify which sectors to undertake regulatory impact assessment 

c.   The domestic competition authority to implement regulatory impact assessment (RIA) and prepare the report on the output.

d.     The consultant and the local consultant shall develop a process to verify findings of the assessment as a credibility check. This will serve as the baseline for a subsequent impact evaluation to be conducted by the proponent after a year of finalization of the report. 

Output  4:  Advocacy Plan (November 2013– April 2014)

a.      Consultant to conduct mentoring sessions with the domestic competition authority


b.      With assistance from the consultant, the domestic competition authority to develop a framework for competition advocacy


c.  
The domestic competition authority to prepare and implement advocacy plan.

Risks

Risks

Prevention

Insufficient response from competition policy experts from APEC economies and related international organizations could reduce the quality of the expected results.

Early closer coordination, through existing networks and linkages, to ensure harmonization of schedules

Repetition and redundancy

More nuanced and tailor-fit formulation of specific objectives at each stage of the project. Identify early on, through a thorough and narrower literature review specifically focused on developing and least developed economies.

Recommendations and viable solutions proposed in other literature from veritable institutions such as OECD, World Bank, etc., shall be used as a take-off point for a more in-depth, economy- and sector-specific analysis.

Insufficient data

The consultant will be asked to delve deeper by gathering data through a combination of desk and field research, on-site interviews, actual participation in APEC meetings, and communication via email or phone.

If the insufficient data is indicative of a lack of competitive analysis on a particular sector, a separate study may be recommended.

Inadequate participation of sectoral agencies or regulators

Design the interaction with regulators to give them ownership over the aspect of the project that is specifically applicable to their mandate

Organizational risks

All the organizational and technical issues will be settled beforehand, at least a month before the event.

Workshop - training attendance

The information regarding the workshop – training and the invitations to the potential delegates will be sent beforehand with all the details regarding the venue, visa support, logistic issues, agenda, topics for discussion, and so on.

Monitoring and Evaluation

A project timetable will be developed by the organizer to keep track of the development of the proposed project and ensure its successful and smooth implementation.

After the competition checklist is formulated, it will be reviewed and evaluated regularly, comparing it with latest developments in competition policy and antitrust. The project proponents shall apprise themselves of developments in other more advanced jurisdictions such as the US, Japan, and the EU.

The main indicators of the successful project implementation are:

§ Competition checklist developed, validated and consulted with relevant
    stakeholders;
§ Initial Competition assessment and regulatory impact assessment reports
    conducted;
§ Experiences and lessons learned shared through roundtable discussions, and
    related forums;
§ Advocacy Plan completed and implemented; § Trainings conducted for participants from the domestic competition authority of
    the Philippines;
§ Trainings conducted for other sectoral regulatory agencies; § Peer review conducted among local stakeholders; § Pilot trainings conducted on the checklist;

§ Achievements and project output to be reported at the Committee level (EC,
    CPLG, ANSSR) meeting.

Linkages

Aside from the Economic Committee, other APEC fora with an involvement in the project include the Competition Policy and Law Group (CPLG), the Committee on Trade and Investment (CTI), and the Senior Officials Meeting (SOM).


The CPLG is engaged as the primary APEC experts group involved in competition policy in APEC. The work of the CPLG gives guidance to the formulation of the substance of the capacity-building in the project and the latest developments and trends in competition policy informs the substantive direction of the project. For instance, the CPLG’s work on competition policy as applied to state-owned enterprises (SOEs) could be very useful as an input to updating the project participants especially since some developing economies are still dominated by SOEs.


The SOM is also involved on the monitoring side. As the Philippines’ first ANSSR initiative, the project aims to provide tailor-fit solutions for the Philippines’ primary competition authority to achieve one of the Philippines’ structural reform goals of promoting competitive markets. As an APEC project in general, APEC’s fundamental pillar of Economic and Technical Cooperation (ECOTECH) also underpins the project, which is why the SOM Steering Committee on ECOTECH is also involved on the monitoring side.


The project is perhaps one-of-its-kind in APEC, simply because it is the first competition policy-related capacity-building ANSSR project. The results of other competition policy projects, such as the Survey on Measures of Competition Development conducted by Russia in 2012, the Training Course on Effective Mechanisms against Cartel Offences organized by Malaysia in 2011, the Competition Policy & Law Database maintained by Chinese Taipei, could also feed into the project as useful inputs.


The project will also benefit from linkages with other international organizations, inter-governmental fora, and other institutions that contribute to the expanding disciplines on competition policy and antitrust. The Philippines is the 2014 Chair of the ASEAN Experts Group on Competition (AEGC) and the project directly and positively impacts the Philippine chairmanship. Other international groupings include the OECD Global Competition Forum, UNCTAD Intergovernmental Group of Experts, and the International Competition Network. Notwithstanding the direct linkages with these groups and international networks on competition policy, APEC can contribute significantly to the discourse given its public-private nature and because competition policy is a part of a means to an end, i.e. a level-playing field for a liberalized international trade environment in the APEC region.

Sustainability

The project will continue to have impact after APEC funding is finished because the knowledge gained from the capacity building can be further developed through other, more specialized programs. The project employs approaches that are relatively easy to implement and have a track-record of being effective and are economically sound, in addition to a strong emphasis on progressive learning and institution-building to enable strengthened application of relevant policies over time. The process is specifically designed to gain and upgrade skills necessary for a competition authority of a developing economy. Although far from being a “cure-all” for all the human resource capacity gaps of competition authorities and regulators, the project provides the fundamental skills that would form the basis for future, more advanced, specialized and sector-specific competition policy capacity-building. It could also enrich the discussions and exchanges of developing economies in coming up with long-term strategies beneficial to all.


As the project benefits a specific institution rather than a disparate group of beneficiaries from different agencies, the possible benefits of the training and capacity-building will have immediate and lasting effect. Once the funding runs out, the program can be replicated within the institution for new hires or transferees from other government institutions, with the possibility of government funding. The principles can also be passed on to the different sector regulators who may then apply it to their respective mandates.


The output of the project (e.g. competition checklist, competition assessment) can be used as basis for policy development which shall be institutionalized into the internal policies of the proponent, regulatory bodies and other relevant agencies. The findings and reports can be inputted as reference for legislative actions as well as increase awareness and advocate with policy and decision makers in advancing efforts for competition and fair trade.

Project Overseers

The Project Overseers:

 
Name: Geronimo L. Sy
Title: Assistant Secretary
Organization:  Department of Justice – Office for Competition
Postal address:  Padre Faura Street, Ermita, Manila, Philippines 1000
Tel: (632) 521 8345, (632) 523 8481 local 222
E-mail:  glsy@doj.gov.ph, competition@doj.gov.ph


Name: 
Ruth U. Tan

Title:  State Counsel II

Organization:  Department of Justice – Office for Competition

Postal address:  Padre Faura Street, Ermita, Manila, Philippines 1000

Tel: (632) 521 8345, (632) 523 8481 local 222

E-mail:  rutan@doj.gov.ph

Cost Efficiency

The Project Overseers shall ensure the close monitoring of fund utilization and that no deviation shall be permitted in the implementation of the project. This is to ensure that the project can be completed within the approved budget and timelines. Internal measures that deliberately create efficiencies shall be put in place such as elimination of irrelevant cost and reduction of operational expenses by way of utilizing existing personnel of the project proponent to provide administrative support for all project-related activities. Additionally, the proponent shall employ available technology to keep track of the progress of the project implementation and to ensure that the schedules are met. While the Office for Competition is a relatively young organization, it has acquired the required experience and capacity, with the support of its partners, to undertake the completion of the project.

Drawdown Timetable

Not Applicable

Direct Labour

Should this project be approved, we plan to engage the services of an international expert on competition and a local-based consultant who will work in tandem with the former in all the relevant deliverables of the project. The consultants’ responsibilities include:

1.     Conduct research; consult and validate with sector regulators and  relevant stakeholders; and facilitate forums and roundtable discussions in connection with the development of competition checklist;

2.     Develop and finalize competition checklist;

3.     Conduct and facilitate  training/workshops on competition assessment and regulatory impact assessment  for technical staff of the domestic competition authority and sector regulators;

4.     Mentor the domestic competition authority on information sharing and collaborating on competition policy issues;

5.     Assist the domestic competition authority in the conduct of competition assessment and the preparation of report;

6.    Develop indicators and process to verify findings of the assessment as a credibility check which will serve as the benchmark for subsequent impact evaluation on certain sectors to be conducted after a year of checklist implementation, to be shouldered by OFC as counterpart expense;

7.  Conduct of peer review of the checklist among relevant domestic stakeholders;

8.     Conduct mentoring sessions with the domestic competition authority on advocacy plan; 9.     Assist the domestic competition authority to design a framework for competition advocacy.

The duration of the contract will be for two (2) person months.

Waivers

If approved, DOJ-OFC would like to request that APEC remits directly the funds needed for hosting  given the intricacies of the Commission on Audit’s policy relating to fund handling and release, if coursed through the DOJ-OFC, which may affect the implementation schedule of the project.

Are there any supporting document attached?

No 
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Version HistoryVersion History

Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

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Originating Sub-Forum

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