9h00- 16h30
Friday, 20 July 2007
Conference room IX.
Palais des Nations, Geneva. Switzerland

The session was opened by Mrs. Lakshmi Puri, Director of the Division of International Trade of Goods and Commodities (DITC) at UNCTAD, who referred to the importance of the COMPAL Programme for UNCTAD, which benefits to Bolivia, Costa Rica, El Salvador, Nicaragua and Peru.  Mrs. Puri thanked the national project coordinators (NPCs) of all beneficiary countries and to the representatives of the Swiss cooperation for participating in the Programme and expressed her best wishes for the success in the deliberations.  Mr. Hans-Peter Egler, Head of the Division of Trade Promotion at the Direction of Cooperation and Economic Development of the State Secretary for Economic Affairs (SECO), addressed the NPCs  wishing them the best for the deliberations of the meeting. Mr. Hassan Qaqaya, Head of the Competition and Consumer Protection Branch at UNCTAD, thanked  all the NPCs for their participation. Likewise, Mr. Hans-Peter Egler, Director of the Cooperation in Trade and Technology of SECO, addressed them by wishing them successful deliberations. Subsequently, Mr. Patrick Krauskopf, Vice-Director of COMCO , also thanked the coordinators for their participation and referred to the participation of coordinators in the meeting held in El Salvador on July 2006.

Mrs. Ana Maria Alvarez, Programme  Manager of the COMPAL Programme at UNCTAD, presented the overall progress registered up to July 2007.  During the deliberations, Mr. Patrick Krauskopf, moderated the presentations of delegates of each beneficiary country.  The  key elements of each of these presentations is presented below by order of appearance, followed by comments from UNCTAD, donors and the other beneficiary countries.

SECO was represented by Ms. Deborah Schmidiger. Mr Blaise Carron, international consultant, was also present.

In general terms, two aspects of key importance for the COMPAL Programme were observed in the meeting: on one hand, the progress at country level; on the other hand, the motivation to share experiences and replicate the more successful ones, as can be appreciated from the presentations given by each representative.

COSTA RICA

The Delegation of Costa Rica was composed by Cynthia Zapata, Alan Thompson, Harold Hütt, and Hazel Orozco, who presented the progress of the COMPAL Programme in Costa Rica from the Second Annual Monitoring Meting, organized in March 2007, until July 2007. 

Consumer protection

Regarding the “Manual of Good Practices of Consumer Protection”, the delegation expressed that, thanks to the institutional engagement in the area of consumer protection (Área de Apoyo al Consumidor –AAC) the activity has continued to be implemented. In this regard, the AAC ensures the monitoring and sustainability of the COMPAL activities, Similarly, the good reception of this activity by the private sector was stressed, a fact that motivated the possibility to extend it to the other beneficiary countries to COMPAL, as well as to other countries in Central America trough the forum of consumer protection agencies, named Central American Council to the Consumer Protection (Consejo Centroamericano de Protección al Consumidor- CONCADECO).
 
Additionally, the delegate informed that the project to reform the law 7472 (Law of Competition Promotion and Effective Consumer Defence) was satisfactorily concluded and expressed the engagement to present it to the  legislative body in the next days.

The scope of activities to be executed during the second semester of 2007 was presented, which will include the following: the elaboration of a project oriented to analyse the financial and e-commerce sectors, the development of an specific  project to quantify and analyse “miraculous products”, as well as the elaboration of specific activities designed to broaden the scope of consumer protection issues in schools through an “e-learning” methodology. The latter represents an original and new tool of knowledge transfer.

Competition promotion

The national coordination referred to the project aimed at modifying the Competition Law and to the “Manual of Horiizontal Practices”.

Concerning the first point, they referred to the successful presentation of the project to modify the chapter on competition from Law 7472, which has raised interest in different sectors related to the competition norm.  Similarly, they commented on the importance of the booklet that explains the benefits of competition in regulated markets, given that Costa Rica is in the process of opening its telecommunications and insurance markets, which are currently State monopolies.

Finally, the delegation explained the importance of using working tools, continuation and  sustainability to the COMPAL Programme.

Participants’ Comments

UNCTAD enquired on the Manual of good practices, which is currently under implementation. In that  sense, the possibility of sharing the experience regarding the validation of the Manual with other COMPAL beneficiary countries and CONDADECO (at Central American level) was raised.  The Costa Rican delegation pointed out that the COMPAL experiences were indeed shared in the forum of consumer protection agencies.

Similarly, the representative from SECO raised questions about the usefulness of the manuals in other beneficiary countries to COMPAL. This falls into the need to promote an  exchange of experiences between COMPAL beneficiaries and other Latin American countries.

The representative from COMCO enquired about the possibility of completing activity CR.1.7.1 over the period July-December 2007. Costa Rica replied that a successful completion of the assignment within the established period will depend on the coordination with Simon Evenett, Advisor to COMPAL.  The representative from  COMCO asked for clarification on the term “vulnerable situations”. Costa Rica explained that this term is related to the fact that the manual of good practices requires a process of training and guidance with the purposed of preventing problems that may arise with the companies involved. The implementation has been designed with the aim to ensure sustainability of the project.. The Costa Rica coordination team explained that the implementation process of the manual of good practices may last at least one year, provided that the impact on the companies is achieved. The representative from COMCO enquired on the number of companies having used this manual. The Costa Rican delegation replied that there are ten (10) companies “studying to graduate”.They added that there is  a waiting list with twenty (20) SMEs and four 4 large companies. Among the large companies, the North American chain “WALMART”, which normally do not subscribe to any manual of good practices, is part of the waiting list. Indeed, the companies interested in the manual have approached AAC.

As regards the reaction from other beneficiaries, the delegate of PERU referred to the design of the course addressed to university professors. It stressed the necessity of a larger multiplying effect of this type of  courses in order to reach a wider audience from the academia. The Costa Rican delegate pointed out that it has been possible to work closely with local universities, such as the University of Costa Rica. All this strategy is available to COMPAL countries. A concrete result of the academic programs is that graduates can have an  specialization on Competition Law at the faculty of Law. Peru drew the attention to the activity on “miraculous products”. In that sense, it was said that INDECOPI had experience on this area from the point of view of the consumer protection and competition. This experience can be easily shared with Costa Rica. There is also the programme “INDECOPI educa”  (INDECOPI teaches) which regularly publishes electronic bulletins that can be updated and shared with other interested countries.  Costa Rica requested the relevant information.

The delegation of El Salvador (consumer protection area) referred to the “regionalization of products”, a fundamental aspect of the COMPAL Programme. Indeed, the representatives of El Salvador mentioned that the outputs  of the COMPAL programme have been turned into “regional products”. They asked two questions to the delegates of Costa Rica. The first one was related to the interactive programme in educational centers and whether it receives support from the Ministry of Education. The Costa Rican delegate informed that they have signed an agreement with the Ministry in 1998 which has been reformed two years ago. They pointed out that this e-learning programme reinforced previous actions, ensuring the sustainability of the project.  The second question dealt with SMEs and the importance of the governmental certification of the manual.  Two questions were raised: Why this process is private? Is there a possibility to implement an auto-regulated system?. The Costa Ricans replied that if the process is not endorsed by the consumer protection agency, it would not have the expected efficiency.. The certification is provided by the State. A private company can not provide it; It is only the State that provides it trough the consumer protection agency.

The representative of COMCO concluded this round of questions by asking the delegation of Costa Rica whether there would be any reason to change their activities. The delegation confirmed that the activities are expected to be implemented as planned, with the only exception of keeping activity CR.2.8 for a later period. With respect to the time schedule, the delegation affirmed that it was realistic and that it could fulfill it according to the agreed terms.

PERU

The delegation of Peru was composed by Jose Tavera, Manager of Economic Studies at INDECOPI and Odette Herbozo, Head of the International Cooperation Branch the of the same institution. The presentation of the advancement on Peruvian activities was made by Mrs. Herbozo with the support from Mr. Tavera. The presentation also included an important aspect referred to the future actions in a would – be COMPAL II. 

The questions raised by UNCTAD focused on the priority of COMPAL activities with respect to consumers’ responsiveness. The importance of the exchange of experiences was another topic raised. The representative of UNCTAD is confident that Peru will conduct further action aiming to complement its activities with those of other countries. It was also noticed that Peru has more activities related to consumer protection than to competition which  responds to the strategy of INDECOPI to strengthen this component within the Programme.

The representative of SECO found that the explanation of the activities related to P.2.5, which were debated at  the Annual meeting in Costa Rica (March 2007), were satisfactory. However, the delegate from SECO indicated that there were a considerable number of activities to be carried out during the second semester of 2007. As such, it asked the Peruvian delegation whether it was possible to implement them. Peru responded that activity P.2.1 is probably the one that required greater work and dedication. The delegates of Peru affirmed that the execution of activity P.2.4 might require re-assessment. In addition, they affirmed that it may be difficult to find a suitable consultant with the right profile to carry out activity P.2.6.  To circumvent this problem, a shortlist with two candidates, instead of three candidates, would be proposed.

The representative of COMCO expressed her interest on the activity dedicated to the production of a game for law activities of INDECOPI. With respect to future actions, COMCO affirmed to have the same opinion than SECO.  In fact, there were many activities and there was certain “pessimism” on the accomplishment of all of them during the period of the POA 2007. COMCO considers that a specific discussion with UNCTAD is essential to identify the activities to be postponed, since it would not be feasible to complete all of them during the established period.  It would be preferred to redefine some of the activities in order to have more concrete results within six months .  COMCO talked about the situation of former interns in Bern.  In that sense, it was emphasized the necessity of employing all professional skills acquired during this important experience. For that reason, COMCO suggested to redefine the terms of reference of the internships program to guarantee the transference of knowledge and experience in a post-internship period.

Costa Rica also stressed the importance of undertaking surveys within the financial sector, as part of the reinforcement of activities relied to consumer protection and competition (activities P.2.3 and P.1.1, respectively).  The Costa Rican delegation also commented on the involvement of autonomous municipalities in the defence of consumer rights at the national level. Peru responded that INDECOPI prefers to avoid decentralization of functions and chose to fortify the “institutionality” of their decentralized offices at the national level.

Likewise, Bolivia asked for support to Peru regarding the exchange of experiences and capacity building.  El Salvador commented on the strategy to the municipalities discussed with Peru in the annual meeting of COMPAL that took place in March 2007.

As the moderator of the session, the representative of COMCO concluded by suggesting to Peru to make changes in coordination with UNCTAD at level of the Committee of Management of the Program COMPAL-Project for Peru. The delegates of Peru concluded their intervention by expressing their will to continue with the programmed activities with exception of activity P.2.4, which can be postponed for a later period. With regards to the proposed chronogram, Peru judged as sufficient the time assigned to carry out the activities and finalize the POA 2007.

BOLIVIA

Bolivia was highly represented by the Vice-minister of Trade and Exports, Mr. Pablo Rabczuk of the Ministry of Production and Micro-enterprise of the Government of Bolivia.  It should be stressed that Mr. Luis Valda was designated by this authority as the national coordinator for COMPAL in Bolivia. In general terms, Mr. Rabczuk’s presentation of the activities of Bolivia approved by the POA and the advances established from March to July 2007 was concrete and clear, particularly with respect to the approval of the manual of organization and functions (MOF) for the Reference Group, the terms of reference for the assistant of operations, who will support the Reference Group, as well as the implementation of the activities approved in the POA 2007.

Then, the representative of UNCTAD emitted its comments, particularly regarding the approval of the terms of reference for the assistant of operations. The importance of counting rapidly on this staff, in order to carry out the activities of the POA 2007 and to prepare the mission of UNCTAD in Bolivia, was stressed. Furthermore, it was stressed the necessity of establishing the Reference Group. For that reason, it was hoped that the “Superintendencia de Empresas”, as member invited by the Government of Bolivia, would begin to participate actively on the implementation of COMPAL in Bolivia.  Finally, UNCTAD expressed concern on the process of hiring consultants for Bolivia. It was hoped that the national coordination would accelerate its efforts to find suitable consultants for the planned activities.

Afterwards, SECO raised attention to the activities of dissemination of a competition law and the importance of establishing specific monitoring of these activities.  Then, SECO expressed its interest in the definition of the Reference Group, particularly with respect to the definition of its tasks and responsibilities.  Bolivia declared that such tasks and responsibilities are very well defined in the MOF that was recently approved.  In this sense, the national or international consultant should solve any future problem that can ensue.

The representative of COMCO raised attention to the progress of the Reference Group during the last four months and mentioned the possible difficulties caused by the implementation of this Group, such as a greater bureaucracy. In this respect, Bolivia confirmed the shortage of employees in the Ministry, specially the lack of employees to carry out the daily activities of the COMPAL Program.
For that reason, hiring an employee to work full-time with COMPAL was crucial. Bolivia promised to undertake all necessary steps to reach this objective.

Additionally, the representative of COMCO discussed the usefulness of sectoral studies (such as the proposed sectoral study of the sugar market) to demonstrate the necessity of a Competition Law (Anti-trust Law) in Bolivia. Reference was made to the term “competition”, which can be more understandable in terms of concrete and concise conclusions of sectoral studies, particularly with respect to the damage that anticompetitive practices cause in the absence of legislation on competition.  Bolivia took notice of this recommendation and reaffirmed the commitment taken at the beginning of the Programme for undertaking research aiming to sustain and motivate the need of legislation in the interest of the country.

Costa Rica expressed its readiness to share its work on consumer protection awareness.  Along this line, it affirmed that there were many problems along the road leading to the adoption of consumer protection legislation that were circumvented by a try-and-error process. The delegates of Costa Rica also expressed that political support was fundamental in the process of hiring an assistant of operations. Bolivia affirmed its willingness to use the professional “talent” existing in the country, such as within regulatory systems, in case of a change in the political organization of the Bolivian State, in order to strengthen the structure of the future agency of competition and consumer defense, and against disloyal competition.

The delegation of Peru affirmed its readiness to share the experience of INDECOPI with respect to the ISO 9000 certification, particularly the treatment of the cases and resolutions that may serve as a reference for the activities initiated in Bolivia, especially in the preparation of the norms of anti-trust and consumer protection (Activities B.2.1 and B.2.3 of POA 2007).

Finally, the delegates of El Salvador coincided with the comments made by Costa Rica, referred to the political support fundamental to implement a culture of competition in Bolivia. They also referred to the work of the Management Committee of COMPAL in Geneva and the recent implementation of SKYPE, an internet-based call system, which has been a fundamental tool to follow the activities of COMPAL.  In other words, work is being carried out aiming to capacity building, even through SKYPE.

The representative of COMCO concluded this section by asking Bolivia if they agreed with all activities programmed for the second half of 2007. In this respect, Bolivia confirmed its total commitment to the activities of the POA 2007. When COMCO asked whether such activities could be culminated until the end of 2007, Bolivia expressed its conformity to the execution of COMPAL activities designated by the Annual Operational Plan.

EL SALVADOR

El Salvador was represented by the two national coordinators of the Program. On the one hand, the Superintendent of Competition, Mrs. Celina Escolán, presented the progress of COMPAL in El Salvador. On the other hand, Mrs. Martha Alicia De Canales, Director of Citizen Participation of the Consumer Defense Agency presented the advances in the area of consumer protection.

Then, the representative of UNCTAD’s comments focused on the work of the Central American Group of Competition. In this sense, the representative of UNCTAD affirmed that UNCTAD could have an important contribution, if Central American countries considered it by consensus.  Then it was referred to the confidentiality of sectoral studies in the particular case of El Salvador.

In this regard, the representative of El Salvador affirmed the existence of a norm within the Law that regulates the manipulation of confidential information by the competition authority. When effectively concluded, all studies are generally published in the web page by the “Superintendencia” of Competition. Regarding the academic program in El Salvador, some concerns were raised regarding the reasons of organizing the academic programs of competition and consumer protection, separately. In this respect, the national coordinators replied that each area enjoyed budgetary and functional autonomy within the State. Local universities preferred to teach these subjects separately, even if there are cross-sectional topics between consumer protection and/or competition. They affirmed that these subjects were organized in a strategic form as required by the universities involved in these programmes. International events were scheduled for October and for the first week of December of 2007. In addition, a strategy was designed with three local universities. 

COMCO expressed three concerns with respect to Celina Escolán’s presentation: the first one related to sectoral studies and the derived confidential information; the second one referred to the feasibility of completing the study of medicaments (2nd phase) at the end of the year; and the third one referred to the academic programs to be implement in El Salvador.

With respect to confidentiality, the first point, a reference was made in the previous presentation.  Regarding the second point, El Salvador replied that the study on medicaments had three stages. The first stage referred to the conditions of competition in the sector, the second stage focused on analyzing the structure of these markets of Medicaments for Cardiovascular, Respiratory and Gastrointestinal diseases and on understanding the scheme of price formation in the market of the three medicaments in the first stage.  In the third stage, a third study focusing on the competitive bidding of these medicaments in hospitals would be desirable, given that all public hospitals comply with the Law of Contracts and Acquisitions of Public Administration that obliges them to organize competitive bidding to purchase these medicaments. It was also expected to rely on information about prices in Central America and the U.S.  Finally, concerning the third point, there is a module addressed to lawyers and another one to economists within the program and some lessons were drawn from the Academic Program of Costa Rica.  The importance of having lecturers speaking Spanish was stressed, as well as the importance of combining theoretical and practical aspects of competition law.

The representative of El Salvador in the area of consumer protection emphasized that the proposition of teaching consumer protection law and competition law, separately, is applied in other jurisdictions, such as the Spanish one.  She stressed, however, that it does not invalidate the work carried out in Costa Rica to combine both topics. El Salvador affirmed that it would not be convenient to totally separate both topics, since it is difficult to explain concretely the benefits of competition without explaining the benefits of competition to the consumer. Along this line, the representative of COMCO affirmed that “it was easier to explain the benefits to the consumer than explaining the benefits derived from competition”. Finally, the representative mentioned the eleven (11) consumer associations created under the assistance of COMPAL at the end of 2006. She affirms that the consumer associations are in an evolution process.

Then, the delegate of Costa Rica commented on the study of medicaments.  Indeed, there is a study of medicaments showing that the highest prices are recorded in Costa Rica. Therefore, the topic can bring together competition and consumer protection agencies in the whole region to exchange information on prices. It will lead to evaluate the idea of organizing sectoral studies at the regional level.  The exchange of information is fundamental, as there are many sectors where the conclusions can be valid at a regional level. This is a pertinent time to think in terms of the region and the idea of the Central American Group and Panama is appropriate. Currently, some regional studies on air transport are being planned.

The delegation of Peru agreed with Costa Rica. Indeed, it was suggested that the next step for COMPAL is to undertake cross-sectoral studies.  Along this line, INDECOPI examines the price formation for a selected group of medicaments.  This information can be shared with other beneficiary countries to COMPAL.  Within INDECOPI (Management of Economic Studies), restriction as regards to confidentiality is not a big issue, since public information is used in the analysis.   A link between academic programs was mentioned:  INDECOPI organizes nine (9) summer courses that last one month and are addressed to students in the last year of university.  At the beginning, the public targeted were exclusively economists. Then, there was a common module for lawyers and economists, so that a later stage the specialization would be respected.  Nevertheless, it is fundamental to examine with detail the selection process of students.  Given that they are differences in the quality of education in the public and private universities, the selection method is expected to change in order to guarantee some degree of fairness and “democratic access to knowledge”, so that IQ tests and psychological tests would be retained. A question on the sustainability of academic programs was raised. The clear answer is that sustainability can be guaranteed through agreements with universities, so that they will include these programs in their curriculum.

The representative of COMCO concluded this section by asking El Salvador whether all the activities of the POA 2007 can be completed. El Salvador replied positively.

NICARAGUA

The Permanent Mission of the Republic of Nicaragua in Geneva, represented by Mrs. Judit Guerrero, presented the advances in Nicaragua from March to July 2007. This presentation was based on the six-month report prepared by the national coordination in charge of Dr Julio Bendaña.

After her presentation, the representative of UNCTAD made some comments on the presentation of Nicaragua, leaving certainty of the work carried out by the national coordination of Nicaragua, particularly during the renewal of the Main directorate of Competition and Transparency of Markets (DGCTM), since the culture of competition in Nicaragua is an asset obtained thanks to the work of COMPAL in Nicaragua. A reference was made to the competition law, framed within the Nicaraguan legal system, so that the “institutionality” of the competition agency (PROCOMPETENCIA) will continue working under the support of COMPAL.

The representative of COMCO thanked Mrs. Guerrero for her exhaustive presentation and referred to the perspectives of sectoral studies on Cement and Agrochemicals, as well as to its concrete results. Additionally, the duration of the internship related to activity N.1.2.1 was observed. It was recommended to retain a one-week period instead of the previous duration of one or two days.  Similarly, the transfer of knowledge should be a key aspect to be considered, especially during the post-internship period. Finally, in view of the absence of the national coordinator, COMCO asked to clearly designate the governmental civil employee in charge of the national coordination.

The delegation of Costa Rica stressed the importance to defining and delimitating the goals of internships in order to raise its effectiveness. The delegation of El Salvador pointed out the importance of creating a “critical mass” in Nicaragua. They highlighted the outstanding work of the National Nicaraguan Coordinator in the field of the culture of the competition; he counted on a number of competent professionals who have supported the promotion of a competition culture in Nicaragua during the last years. Likewise, the representative of El Salvador in the area of Consumer Protection affirmed that the institutional framework was stronger enough to be self-sustained without the people that drove it, as economic agents are aware about the topic. In that sense, it was suggested that COMPAL sets out a mechanism to systematize the experiences so that new professionals entering into COMPAL can easily adhere to it.

After commentaries made by participants to the meeting, the delegate of  Nicaragua expressed the political will of her government to keep working in the fields of competition and consumer protection, given that the newly approved competition law contributed to the creation of a General Direction of Competition and Market Transparency within the Ministry of Promotion, Industry and Trade.

Additionally, Nicaragua proposed changes to the POA 2007 with regard to the sectoral studies.
Thus, it demanded the elaboration of only two studies a year, which is a study on electricity generation and on public transport, since these sectors are key to development. In relation to the activity to training for civil employees of the future agency of competition, the delegated of Nicaragua affirmed that its completion will effectively depend on the creation of the Agency, which in turn will depend on the budgetary assignation, as expressed by the Ambassador of Nicaragua at the beginning of the session.  The delegated expressed the desire of her country to have flexibility in the use of funds saved when other activities are not executed (such as activity N.1.1.1.3). Indeed, these funds could be allocated to new activities or to activities having been programmed.  She expressed the will of her country to carry out activities in the area of Consumer Protection. In relation to the consultation on consumption preferences and campaigns of promotion, she expressed that their wish to keep one of them pending for the time being in order to give the new authorities the time to incorporate their priorities.  For these reasons, she said that the possibility of carrying out these activities would be confirmed by the National Coordination at a later stage.  Finally, she thanked the gratifying comments of El Salvador to the Direction of General Competition and Market Transparency teams and the progresses achieved by COMPAL.

The representative of COMCO expressed its will to take into account the priorities of the new authorities into the activities. It concluded the session for Nicaragua by insisting that the beneficiary country should confirm the accomplishment of the pending activities of the POA 2007 and formally make the changes indicated in the present meeting. The deadline for the Committee of the Programme Management Committee (PMC) to inform about these changes to the donor was set to the end of August 2007.