Busting collusion

Johannesburg - A driver for social justice is the brains behind the push to punish powerful local conglomerates that seek to cheat unsuspecting customers.

In the past few weeks, the country has been shocked by allegations of collusion between international and local banks, where currency traders allegedly fixed prices and divided the market.

The commissioner for the Competition Commission, Tembinkosi Bonakele (40), this week told City Press that he was born in Mtyolo village, near King William’s Town in the Eastern Cape, to a family of modest means.

“I was largely raised by my maternal grandmother, who remains my moral compass even in death,” he says.

He attended primary school in Qweqwe village near Mthatha. His grandmother and other villagers built a high school there by themselves – taking turns to make bricks and pay for the construction.

He was then sent to SMB Tapa High School in Mdantsane in East London, which was later renamed as Solomon Mahlangu High School.

Bonakele says that, from a young age, he’s loved history and enjoyed politics. He was inspired by the late Oliver Tambo and Steve Biko.

He studied at the University of Fort Hare, where he became a student leader and president of the Student Representative Council (SRC), and was also the vice-president of the University of SA’s SRC, where he coordinated SRC activities across the country.

“I played a huge role in the transformation of higher education in post-apartheid South Africa,” Bonakele says.

He joined the commission in 2004, and has worked in virtually every core division.

“I joined the management quite early, in 2006. I am driven by the sense of social justice – it permeates everything I do. I grew up in apartheid South Africa, and am determined to make my own contribution to destroy its vestiges.

"I hate inequality. I believe that change requires strong and empathetic leadership. I love South Africa and its people.”

Bonakele is an attorney and previously worked at Cheadle Thompson & Haysom in Johannesburg, largely in the areas of labour law, regulation, and health and safety.

He also spent a year working in corporate finance with antitrust groups at multinational law firm Clifford Chance’s office in New York.

He occasionally teaches competition law at the University of Fort Hare and Wits University, and is a fellow of the University of Johannesburg’s Centre for Competition, Regulation and Economic Development.

He holds a BJuris and an LLB from the University of Fort Hare, and an MBA from the Gordon Institute of Business Science.

Bonakele is a member of the International Competition Network Steering Group.

He was appointed as deputy commissioner of the Competition Commission in 2008. Before that, he worked as head of mergers, head of compliance and senior legal counsel.

Bonakele established the commission’s cartels division and has worked on all of the commission’s major cases over the past 10 years, including the bread and construction bid-rigging cartel cases, and a number of high-profile mergers.

He has been involved in negotiating most of the commission’s ground-breaking settlements and helped develop the commission’s Corporate Leniency Policy, as well as the Construction Fast Track Settlement Policy.

Dealing with so many different things makes his job tough.

“Right now, for example, many people are not aware of this, but the food value chains are about to be changed forever with consolidation of seed suppliers at a global level.

"We have to understand the technical detail of this so that we can understand the implications of the mergers,” he says.

“At the same time, we have recently had to deal with large mergers in our telecommunications space, which have changed the landscape significantly.

"While doing that, I also need to be on top of our enforcement agenda against cartels and abuse of dominance. All of them are highly technical, with consequences for markets and consumers.

“The reward is this deep understanding of markets – often more than you could find even from market participants. We learn every day, often from scratch, that this is where the excitement comes from, in addition to being this force for positive change,” he says.

A proposed merger between Sasol and Engen is the most challenging job he has had to deal with so far.

“During the investigation of the proposed merger between Sasol and Engen some years ago, I was a young lead counsel for the commission team. I was inexperienced, and the fuel industry and its logistics are complex.

"We made some mistakes, but we recovered and the merger was successfully blocked. Multinational investigations such as the banking one are also complex, especially if you are not a currency trader yourself.

“Healthcare is also not easy, but I have learnt that if things are too easy and straightforward, those markets would probably have a self-correcting mechanism. Enduring competition problems are often in complex markets, except for a few dump cartels,” Bonakele says.

According to him, the biggest success of the commission by far has been its work against cartels.

“The commission’s work against cartels has made it the darling of the people and many stakeholders. Think about the bread cartel. Those close to the action also know that we have done a lot to prevent mergers that would have harmed competition in South Africa.

“My personal favourite was when we blocked the merger between Pick n Pay and Fruit & Veg City. It would have led to higher prices, but look at what Fruit and Veg has been able to do since then – it has grown and its new brand, Food Lover’s Market, is giving competitors a run for their money.”

The biggest challenge for the commission has been inadequate resources.

“We deal with the private sector with deep pockets, and they can throw everything at us. We also need to pay our people better so that we can retain them and also attract skills,” Bonakele says.

He wants the commission to have its own economics and legal experts so that it can reduce reliance on external consultants.

“We are working on all these areas and are making good progress. We have young people who are exceptionally bright, but we need to encourage and support them to reaffirm that the public sector can be a centre of excellence, and people can be intellectually stimulated while also serving a higher purpose; a public good.

"That is our challenge.”

He says another challenge is that universities do not offer students the ability to study for the skills required by the commission.

“Our lawyers do not get economics training, and our economists don’t get legal training.

"Our universities are not strong on industrial economics, and business schools do not teach competition,” he says, adding that the commission has made a great contribution by holding businesses accountable and the economy inclusive.

When asked why he thinks his job is necessary, Bonakele says: “Given our high concentration of markets, the commission is a strategic body to drive change and monitor conduct in markets.

"We are motivated by the change we see when we intervene in markets, by breaking up cartels, protecting jobs and opening up markets for greater participation, including by small, medium and micro enterprises.”