Massey warning on cartel threat to State

Ireland will end up with a "paper tiger" Competition Authority to police the Celtic Tiger economy unless it gives the organisation significantly greater resources and powers, according to Mr Pat Massey, the director of the cartels division at the State agency.

Mr Massey told the opening session of the Dublin Economic Workshop annual conference in Kenmare, Co Kerry, last night that: "The war against cartels cannot be fought with phantom battalions, much less phantom platoons."

It was time for the Government to recognise the State was a major potential victim of cartel behaviour and "to take measures to protect itself from being ripped off", he said.

The priority should be the provision of significantly greater resources, including Garda assistance, he said. "This recognises one cannot smash trade rings unless adequate resources are devoted to the task," Mr Massey said .

He also called for competition legislation in respect of documentary evidence so that statements in company documents could be considered as admissions of anti-competitive actions. Mr Massey said almost one quarter of complaint cases opened by the authority in the last four years involved allegations of price fixing or other cartel activities. Such investigations were highly complex and required considerable resources, Mr Massey said.

Despite having an established strength of 29 people the Competition Authority only had a staff of 19, he said.

The assigning of gardai to assist the authority would give the authority expertise in criminal investigations and would also "represent a clear signal of the Government's commitment".

"With the Government committed to a massive capital-spending programme over the next few years, it seems greater attention needs to be given to eliminating the opportunities available for bid rigging," Mr Massey said.

"It is vital taxpayers obtain the best possible return from such a major investment programme and a significant slice is not siphoned off by would-be cartels," he said.

The way Ireland's utilities were regulated also needed to be reviewed, the conference was told by Mr Tom Ferris, an economist with the Department of Public Enterprise. He said the State could no longer own large energy, transport and telecommunications concerns and make policy in this area, let alone regulate it.

What was needed was independent regulators who were still accountable to the Dail, he said. "The real challenge is to find the most suitable and effective way to ensure accountability, without compromising or damaging the necessary independence of regulators," Mr Ferris said.

Another important issue was to ensure the regulatory environment adapted to changes in national economic, social and regional objectives, he said.

Mr Ferris recommended the regulatory framework should be formally reviewed every three or four years with a view to improving the efficiency of the economy and its ability to remain competitive.