Applications to take concerted action to quarry and decide production output along the Chuo Shui Stream filed separately by ten joint management companies, including Siha Co., Ltd.
Chinese Taipei
Case:
Applications to take concerted action to quarry and decide production output along the Chuo Shui Stream filed separately by ten joint management companies, including Siha Co., Ltd.
Key words:
quarrying, crushing and washing, concerted action
Reference:
Fair Trade Commission [FTC] Decision of 7 January 1998 (the 323rd Commission Meeting); Letters (87) Kung Erh Tzu No. 8609257-002, 003, 004, 005, 006, 007, 008, 009, 010, 011; Letter (87) Kung Erh Tzu No. 8701896-001
Industry:
Quarrying Industry (1080)
Relevant Laws:
Article 14 of the Fair Trade Law
Summary:
The annual gravel production of the Chuo Shui Stream (the Stream) can reach 20 million or more cubic meters. It accounts for one fifth of the total production in Chinese Taipei, and may affect the domestic supply and demand seriously. In the past, the output produced by legal quarrying took up less than 30% of the total production every year, and the rest came from illegal or excessive mining, which posed a serious threat to the safety of the embankments and bridge piers. Government agencies in charge of water conservancy (the Agencies) could have imposed a comprehensive ban on quarrying along the Stream, but in view of various factors, such as the little headway made in land quarrying, less than mature sea sand desalting techniques, etc., there was no alternative way of acquiring gravel. Under such circumstances, a complete ban on quarrying along the Stream would surely have created chaos. Therefore, the Agencies decided to divide the streamside quarries into four sections, and assist members of the quarrying industry to establish joint ventures in the name of joint management companies (the Companies) to be in charge of concerted quarrying in the four sections. As such an act is a form of concerted action subject to Article 7 of the Fair Trade Law, applications for approval were submitted to the Fair Trade Commision pursuant to the Fair Trade Law Article 14.
The Companies on one hand followed the "Chuo Shui Stream Quarrying Collective Management Plan." of the Taiwan Provincial Government in its "Chuo Shui Stream Quarrying Collective Management Plan." The Changhua County Government also entrusted them to execute the task of improving the collective management of quarrying along the river. According to the contract, the Companies were established as joint ventures; they would jointly quarry in the four sections and determine the output quotas. Such concerted action may deter illegal and excessive quarrying in the areas under the joint management and prevent impairment to river embankments and river-spanning bridges, lowering of the level of underground water, and protect the safety of people obtaining water along shore. The result would be good to river dredging and flood drainage. The overall economic and public interests would be also enhanced by saving the social cost of excessive and illegal quarrying. Moreover, there was nothing showing obvious restraint on competition. Therefore, the Commission granted to the application which would be valid for three years starting from the date when the [Changhua] County Government issued a quarrying permit.
The Commission' s approval of the concerted action was granted with the following conditions:
(1) The Companies shall not take advantage of their market position, which was acquired based on the FTC's approval, to restrict their shareholders or trading counterparts in terms of their choice of marketing areas or prices. Nor shall the Companies engage in acts that could place improper restrictions on other enterprises' activities such as collecting revenues on behalf of their shareholders, and setting specific terms of transaction and processing time. The Companies also shall not abuse their market position or obstruct other enterprises' fair competition.
(2) If the Companies decide to take concerted action in crushing , washing the gravel or any other activities, they shall file new applications for permission as provided for in the Fair Trade Law. In addition, they shall not collaborate with other joint management companies in acts that place improper restrictions on other enterprises' activities such as determining the prices, allocating sales areas, restricting output quantity, and agreeing on specific terms of transaction or processing time. Nor shall the Companies engage in acts that hinder other enterprises' fair competition or any other acts that abuse their market position.
(3) The Companies shall submit their trading information to the Commission each quarter, including the list of members of the quarrying industry demanding gravel, the output quantity and prices.
Summarized by Liu, Chin-chih
Supervised by Yu, Su-su
Appendix:
Siha Co., Ltd.'s Uniform Invoice No. 97056417