El Salvador adopted a Competition Law (November 2004) and established the Competition Superintendence during the need assesment phase for COMPAL I. During the 1990s, El Salvador liberalized many sectors and privatized some state enterprises. Around the same time, discussions began on the adoption of a competition law. In recent years, the debate on the need for a competition law came to the fore. A Competition Promotion Commission was established within the Legislative Assembly to consider draft proposals for a competition law, and this concluded with the adoption of the Law.
During COMPAL I, two strategies were designed for the competition and consumer protection authorities.
Competition issues
During COMPAL I, the sectoral studies prepared by consultants with UNCTAD support have had a significant impact on areas of competition in El Salvador. The methodology established to carry out studies in strategically important sectors of the economy allowed for an in-depth analysis of the conditions of competition. Punctual recommendations on public policies formulated by these studies where adopted by the Directive Council of the Superintendence of Competition
The training activities for judges in El Salvador have also generated a significant impact. The building of capacities allowed judges and other government officials to understand and integrate the economic analysis of competition law in sanctions, as well as understanding better how to use investigative tools. Regular media coverage has increased significantly, thus further fostering a solid competition culture. Economic agents know the problems and remedies offered by the legal system. Concerning academic activities, the successful introduction of competition as a topic in university curricula generates a multiplier effect at local level. Training professors and students has led to a better understanding of the objectives and benefits of effectively applying competition law. As it has been mentioned in the external evaluation report, the Superintendence of Competition of El Salvador has become more dynamic and has even exceeded its original expectations.
One of the challenges for El Salvador is to address the issue of self-sustainability of the Superintendence and design a strategy on how to assure the financial and economic functioning of the institution. This will be necessary for long-term sustainability of the COMPAL Project for El Salvador. The impact of the upcoming elections in 2009 and a possible shift in political priorities cannot be assessed at present. The strategic choice of sectors to be studied proves to be of fundamental importance in the optimization of the impact of activities. However, the availability of data to carry out studies may pose a problem.
Based on its experience, the needs established by El Salvador for COMPAL II comprise of the following: 1. To foster greater understanding of CLP among all economic agents and strengthen the institutional capacity of the Superintendence. Deepening of activities in the field of competition will be carried through the following first national objective: "Strengthening competition advocacy in El Salvador".
Consumer protection issues
The contribution of COMPAL has led to an increase in understanding of the consumer protection law by consumer associations. During the first phase of COMPAL ten new consumer associations were created. As a consequence, more claims and investigations were triggered by associations who had benefited from training activities on the material and procedural aspects of the legislation. A concrete example is the financial sector.
Public participation has risen significantly due to vast information campaigns about consumer's rights and obligations; thus reinforcing consumer protection policy within the civil society. During this period a decentralized autonomous and modern institution was created, namely the Consumer Protection Agency of the government of El Salvador (Defensoría del Consumidor).
COMPAL positively influenced the adoption of a new consumer protection law that introduced improvements such as an alternate dispute resolution system, a better sanction system and the introduction of provisional measures.
Overall it can be said that resources allocated through COMPAL to El Salvador were properly used. A good balance between inputs and outputs was kept. Flexibility and coordination from the part of the national coordinators and UNCTAD proved to be a valuable asset in adapting objectives to country needs and circumstances during the implementation of COMPAL I.
Based on its experience, the needs established by El Salvador for COMPAL II comprise of the
following:
- Consolidate the national consumer protection system through educational campaigns,
- greater participation from various stakeholders and fostering a better functioning of the market.
Parallel to this, it is important to continue efforts in protecting consumer's rights, thus consolidating the National System of Consumer Protection (NSCP). The success achieved in COMPAL I with regards to consumer protection should be deepened by implementing the following second national objective:
"Strengthening effective protection of the consumer and the consolidation of the National System for Consumer Protection"