Establishment of "Hua Tung Ho Ping River Mining Industry Development Co., Ltd." by Shih Hua Quarry and four other sand and gravel enterprises as a basis for applying and obtaining the right to quarry sand and gravel at section one of the Ho Ping River and to engage in concerted action through "joint quarrying of sand and gravel"
Chinese Taipei
Case:
Establishment of "Hua Tung Ho Ping River Mining Industry Development Co., Ltd." by Shih Hua Quarry and four other sand and gravel enterprises as a basis for applying and obtaining the right to quarry sand and gravel at section one of the Ho Ping River and to engage in concerted action through "joint quarrying of sand and gravel"
Key Words:
joint sand and gravel quarrying
Reference:
Fair Trade Commission Decision of March 27, 2003 (the 594th Commissioners' Meeting); Letter Kung Er Tzu No. 0920002728
Industry:
Land-based Quarrying (0612)
Relevant Law:
Summary:
1. Five sand and gravel enterprises, Shih Hua Quarry, Chia Hsin Cement Corp., Chih Shing Co., Ltd., Hua Lien Cement Corp., and Hsiung Hsing Quarry, in coordination with the Government's "Overall Management and Improvement Project for Ho Ping River Sand and Gravel Extraction" and in response to consigned implementation of the "Consignment Contract for Overall Management and Improvement Project for Extracting Sand and Gravel by the Ho Ping River" made by the 1st River Basin Management Bureau of the Water Resources Agency, Ministry of Economic Affairs, incorporated a separate company, Hua Tung HoPing River Mining Industry Development Co., Ltd. (Hua Tung), to apply for and obtain the right to quarry sand and gravel at section one of the HoPing River and to engage in concerted action in "joint sand and gravel quarrying."
2. Due to the size of river basin areas, water conservation agencies have had difficulty in regulating illegal and indiscriminate sand and gravel quarrying, which have severely jeopardized the safety of riverbanks and bridge piers. In addition, land-based quarrying has been frequently blocked for environmental reasons, meaning that sand and gravel resources in rivers become more valuable as they are further depleted. Therefore, the Water Resources Agency, Ministry of Economic Affairs, decided to divide the HoPing River into three sections and issued approval of legitimate extraction rights to development companies incorporated through self-regulation by the original quarrying and processing enterprises in each section. This was the major reason for granting approval for concerted action in this case. The concerted action application filed in this case was limited to incorporating a development company for the single purpose of joint extraction so as to contribute to legitimate acquirement of sand and gravel and reduction in exploitation costs. The incorporation of the company would also check illegal and indiscriminate quarrying within the area under control and help to prevent any damage to riverbanks or cross-river structures, and was thus beneficial to river dredging and flood discharge, as well as a reduction in social costs associated with monitoring illegal and indiscriminate quarrying. Based upon the existing information and materials, it was therefore considered that the incorporation of the company would be beneficial to the overall economy and in the public interest without creating the unfavorable situation of obvious restriction of competition. An approval was accordingly granted pursuant to paragraph 2 of the proviso under Article 14 of the Fair Trade Act. To avoid any detriment in relations between the applicants or in their external transactions that that might arise from approval of the concerted action in this case, and for ease of supervision, a time limit was prescribed and other conditions were attached to the approval in compliance with Article 15 of the same Act.
3. The approval granted to the aforesaid company will expire on 30 June 2004. It states that Hua Tung may not use the market position obtained through this approval to unfairly restrict the business activities of other enterprises, to impede fair competition, or to abuse its market position in other ways. When engaging in sand and gravel crushing, washing, or other related activities outside the scope of the approval, "Hua Tung HoPing River Mining Industry Development Co., Ltd." shall also file a separate application for permission for concerted actions in accordance with the provisions of the Fair Trade Act, and is prohibited from acting with other sand and gravel companies or enterprises to fix price, allocate distribution areas, restrict gravel volume, or to agree on trading terms and conditions and processing time, or other acts restricting each other's business activities. Hua Tung was also forbidden to impede fair competition by other enterprises or otherwise abuse its market position.
Appendix:
Shih Hua Quarry’s Uniform Invoice Number: 42101310
Chia Hsin Cement Corp.’s Uniform Invoice Number: 11892801
Chih Shing Co., Ltd.’s Uniform Invoice Number: 23211695
Hua Lien Cement Corp.’s Uniform Invoice Number: 04217826
Hsiung Hsing Quarry’s Uniform Invoice Number: 13656058
Summarized by Huang, Chung-Chieh; Supervised by Tso, Tien-Liang