Today’s conversation is with Fair Trading Commission chief executive officer Sandra Sealy.
CONGRATULATIONS ON YOUR RECENT APPOINTMENT as chief executive officer (CEO) of the Commission. How many years have you been with the organisation?
Thank you. I joined the Commission as the telecommunications analyst soon after it was established in 2001. Prior to my appointment as CEO in October last year, after the retirement of Ms Peggy Griffith, I held the position of director of utility regulation. Now that my responsibilities extend to the Commission as a whole, I intend to ensure that we continue to be effective and responsive in addressing the myriad matters that are placed before us.
The Commission is celebrating its 15th anniversary this year. What have been some of its memorable achievements?
First, I must express my sincere appreciation for the contribution of all of the commissioners and indeed all the staff who have worked with us over the past 15years.
I believe the Commission has established itself as an agency that contributes positively to Barbados and persons now have a better understanding of our operations. Over the years, there has been a reduction in consumer protection complaints coming to the Commission for resolution.
This was achieved through maximizing opportunities to aggressively educate consumers and increasing interaction with businesses with regard to legislation. Some businesses have also adjusted their processes of their own volition and more customers are able to deal with situations without the Commission’s involvement.
We have successfully managed the liberalisation of the telecommunications sector. This involved a transition from rate of return regulation to price cap regulation, an incentive based type of regulatory system that provides greater flexibility in pricing. We also recently issued our Decision on the Price Cap Plan 2016.
What is the Commission’s view on the contribution of renewable energy (RE) to our energy supply?
While the growth of this industry is acknowledged as being important, its expansion has slowed as oil prices have dropped to their lowest in years. As Barbados seeks to reduce its dependence on oil products and reduce its foreign exchange bill, the focus must shift from this short term reprieve to long term sustainable energy.
The decisions that have to be made will have lasting effects on the country, the new independent power producers (IPPs), the Barbados Light and Power Co. Ltd. (BL&P) and the consumer. As such, great care must be taken with any rate setting exercise that will determine the rate that BL&P pays for electricity that is produced from renewable energy generation. While our legislation generally requires that a least cost approach be used to set rates, the Commission may be called upon to take other factors into consideration, such as the promotion of the growth of the RE sector, the costs incurred by the RE producers and their expectations for a reasonable return on investment.
The setting of an appropriate tariff may also be influenced by the technology used and the capacity generated. The sector is evolving and as such, this may lead to changes in the regulatory framework. The long term advantage of transitioning to increased use of renewable energy is recognised. It is expected that this will be to the ultimate benefit of Barbados.
Persons have indicated interest in the Cable & Wireless/Columbus merger condition regarding number portability. What progress has been made in this regard?
This condition required the merged entity to be technically ready for number portability in the fixed network by September 30, 2015 and the mobile network by November 30, 2015. I can confirm that this condition has been met. However, in order to port numbers, the other provider must also have the necessary functionality and there needs to be synchronisation and management of this porting functionality between operators. There are also legal, administrative and procedural issues, such as numbering plans, to consider. So there are still several matters that have to be addressed.
What are some of the other major issues being addressed by the Commission?
A review of the construction industry by our consumer protection department and mergers were matters that held the attention of the Commission in the last quarter of 2015, and we expect this trend to continue.
This year, we will be examining issues that consumers have experienced in relation to the second-hand car industry. Furthermore, the prevailing economic situation will see businesses seeking to strengthen their position in relevant markets, therefore, mergers and acquisitions are expected to be more prevalent. Depending on the structure of the particular market, companies will have to seek merger approval from the Commission, especially if any of the parties controls 40 per cent or more of the relevant market.
Has the Commission concluded its review of the acquisition of Cable & Wireless Communications Plc and Banks Holdings Limited (BHL)?
Yes, and the Commission has approved the acquisition of Cable & Wireless Plc by Liberty Global Plc, as well as SLU Beverages/Ambev’s acquisition of BHL. In the case of the C&W/Liberty merger, the Commission concluded that it would not have any significant negative effect on competition in Barbados. The BHL acquisition, in view of the potential efficiency gains and other benefits to be derived, was not considered anticompetitive. Both acquisitions were approved without conditions.
What contributions do you envision the Commission making in the future?
I see the Commission continuing to shape the business landscape. Our role may be considered intrusive at times when, with merger investigations for example, we require detailed information about company operations, whether local, regional or international. However, we must ensure that transactions are conducted in a manner that does not compromise the competitiveness of the market nor the rights of consumers.
As we enter our 16th year of existence, we will work towards improved public awareness and education and greater interaction with stakeholders, resulting in a cadre of empowered consumers and informed businesses. The launch of our Facebook page – www.facebook.com/BarbadosFairTradingCommission – last year signalled an expansion of our public outreach and we look forward to increasing our efforts through this and other non-traditional media.
The Commission will also seek to adopt a greater enforcement role and consider providing access to its reports on consumer protection and fair competition cases, as it currently does with utility regulation. I believe that through the sharing of such information, businesses will have a greater appreciation for our role.
