EnviroServ hit with R10m fine

CONTROVERSY continues to follow EnviroServ, a waste management service, as it has again come under the spotlight after it was fined R10 209 519 by the Competition Tribunal for collusion.

Last week the Competition Tribunal released its non-confidential finding in the collusion case against EnviroServ.

In the finding, the tribunal established that EnviroServ colluded with Wasteman to set the downstream price in the market for waste transportation services, in which both firms compete.

The Competition Tribunal’s acting communications officer, Nandi Mokoena, said, “Waste transportation companies such as these respondents collect waste from their customers and transport it to landfill sites to be disposed of. Landfill sites operate in a vertical relationship with waste transportation companies. The tribunal found that the two firms used their upstream joint venture, Vissershok – a landfill site in the Western Cape – as a forum to reach agreement.”
ALSO READ: Shongweni Landfill reopened after court lifts interdict

Mokoena described the relationship between the two companies as acrimonious, and believed this to be the reason that led to Wasteman’s decision to approach the commission to seek leniency for its part in the collusion.

The commission referred its complaint to the tribunal on 14 February 2017 and alleged that EnviroServ and Wasteman had fixed prices for waste transportation services from 1998 until November 2013 as well as divide markets by allocating customers between 2005 and 2012.

“While the tribunal largely found in favour of the commission regarding its price fixing allegation, the commission’s complaint in respect of market allocation was dismissed,” said Mokoena.

The tribunal found that Vissershok would charge third party waste transportation companies approximately 43 per cent more that EnviroServ and Wasteman to receive their waste.

“This meant that third party waste transportation firms were placed at a significant disadvantage to their competitors, EnviroServ and Wasteman,” said Mokoena.

“EnviroServ put up various arguments for the existence of this downstream price, one of which was that it was functional to the joint venture as it incentivised the firms to compete downstream. The tribunal disagreed and was of the view that at all times the decision to fix the downstream price was not the behaviour of firms in a vertical relationship, but was rather the conduct of two firms competing directly with each other,” concluded Mokoena.

The tribunal found that EnviroServ contravened the Competition Act and imposed an administrative penalty of R10 209 519.

Despite numerous attempts for comment from EnviroServ, none was given by the time of publication.

Do you want to receive alerts regarding this and other Highway community news via WhatsApp? Send us a WhatsApp message (not an sms) with your name and surname (ONLY) to 060 532 5409.