Shell reaches settlement with Competition Commission on bitumen case
Feb 21, 2012
PRETORIA – February 21, 2012 – Shell South Africa today reached a settlement agreement with the Competition Commission to pay an administrative penalty of R26.2 million for its involvement in the use of a pricing methodology for bitumen.
The pricing methodology was agreed within the Southern African Bitumen Association (SABITA), of which Shell is a member.
“Shell has co-operated fully with the Commission’s three-year investigation and will continue to cooperate with the competition authorities in this regard,” said Bonang Mohale, Chairman of Shell South Africa.
“Furthermore Shell immediately conducted its own internal investigation into the matter and shared its findings with the Commission,” he confirmed.
Mohale said that while it was the company’s view that the pricing mechanism was aimed at creating transparency to track bitumen price fluctuations and not set a final price to the consumer, Shell accepts that its conduct in this regard, as a member of SABITA, contravened the Competition Act.
“We regret Shell’s involvement in this matter. Anti-competitive conduct is against our business principles and values and not tolerated in our organisation.”
Mohale added that Shell provides extensive training for employees in commercial roles to ensure strengthened understanding and compliance with company policies and applicable laws.
“We are fully committed to compliance and conducting our business in a manner that is both fair and ethical,” Mohale concluded.
The settlement is turnover based, and the Competition Tribunal can impose an administrative penalty of up to 10% of total business turnover in South Africa. However, Shell’s negotiated administrative penalty is 9% of its 2009 turnover in bitumen only.
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