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Competition Commission of Pakistan issues show-cause notices to Gulf Corporation Council medical centres

Islamabad: The Competition Commission of Pakistan (CCP) has issued show cause notices to Gulf Corporation Council (GCC) Approved Medical Centres Administrative Offices (GAMCA) and GCC Approved Medical Centres in Pakistan (GCC Medical Centres) for, prima facie, cartelization to distribute customers on equal basis, fix the medical fee and also exploiting customers by restricting their choice and imposing unfair terms and conditions thereby violating Section 3 and 4 of the Competition Act, 2010 (the “Act”).

A formal complaint was filed by Pakistan Overseas Employment Promoters Association (POEPA) before the CCP against GAMCA and GCC Medical Centres in Pakistan that GCC Medical Centres working under their respective GAMCA have cartelized to allocate the customers among themselves on equal basis. The Commission initiated an Enquiry and appointed Ms. Nadia Nabi (Senior Joint Director) and Mr. Noman A. Farooqi, (Joint Director) as Enquiry officers to conduct a detailed enquiry on the complaint.

The Enquiry Officers completed their enquiry and submitted the Enquiry Report on 31 January 2012. In terms of Enquiry Report, in order to procure visa for GCC countries except UAE, every intended immigrant/expatriate is required to go through a pre departure medical test which is conducted only by GCC approved medical.

Currently there are 20 GCC Medical Centres divided in five regions of Islamabad/Rawalpindi, Lahore, Peshawar, Karachi and Multan along with their adjoining cities. In each region there is one GAMCA established to oversee the working of GCC Medical Centres in its region. Each GAMCA is also engaged in issuing the registration numbers to the intended emigrants and referring them to the GCC Medical Centres for tests to ensure equal distribution system amongst the GCC Medical Centres.

In terms of Enquiry Report, equal distribution system was introduced in 1999 when the GCC Medical Centres started complaining to Executive Board of GCC Health Ministers Council about “uncertainty in distribution of medical slips”.

Fear that one GCC Medical Centres is getting more business by paying commission to recruiting agents to refer customers to its medical centre apparently resulted into formation of GAMCA and equal distribution system in the region of each GAMCA. The Enquiry Report also highlights that no disciplinary action was taken against that particular medical centre involved in mal-practices and it still continues to work.

Further, Enquiry Report concludes that, prima facie, GCC Medical Centres are charging the same fee for the pre-departure medical tests which under the auspices of GAMCA is decided and fixed and also proposed to the Executive Board for approval.

These practices of territorial division and equal distribution of customers and fixing the fee, prima facie, restrict the choice of customers and competition among medical centres for price and quality of services and therefore are in contravention of Section 4(1) and 4 (2)(a),(b) and (c) of the Act.

In terms of Enquiry Report, it appears that this particular case involves a captive market as the intended immigrants/expatriates for the GCC Countries except UAE have to get their mandatory medical test conducted by only GCC Medical Centres.

Further, their choice is restricted to a particular medical centre allocated by GAMCA. Therefore, prima facie, the GCC Medical Centres, severally and jointly, under the auspices of GAMCAs have the ability to behave to an appreciable extent independently of competitors, customers and thus hold dominant position in the relevant market.

Enquiry Report also reveals instances whereby it appears that GCC Medical Centres are conducting pre departure tests of intended immigrants on their own terms and conditions including; (i) repeat medical tests conducted to charge extra fee; (ii) customer declared unfit once has no choice/alternative, (iii) customers required to go through a repeat test are forced to come back to same medical centre; and (iv) refusal to o conduct medical test on the basis of city of origin. Such practices, prima facie, amount to unfair trading conditions imposed on customers and are in contravention of Section 3(1), in particular, Section 3(3)(a) of the Act.

Under the given facts and circumstances in the Enquiry Report, it appears that GCC Medical Centres and GAMCAs are subjecting a vulnerable segment of society to unfair conditions. Most of the intended immigrants/expatiates to GCC countries are those people who procure visa for manual labour in these countries. In fact these immigrants bring a significant amount of remittance from GCC countries to Pakistan which is 6 to 8 B USD in a year.

On the other hand GCC Medical Centres are earning a huge amount through pre-departure medical tests. In last 3 years (2008-2010), medical centres only in the region of Peshawar, Karachi and Islamabad/Rawalpindi earned 1.8 B PKR excluding repeat tests whereas medical centres in the region of Lahore and Multan earned in one year (2010-2011) 144 M PKR.

GAMCAs and GCC Medical Centres have been given fourteen days to show cause in writing and to avail the opportunity of being heard before CCP. The show cause notices were issued by the Director General (Legal)/Registrar of the Commission.

For more information, contact:
Asfandyar Khattak
Joint Director (Media and Communications)
Competition Commission of Pakistan (CCP)
4-C, Diplomatic Enclave, Shams Gate G-5, Islamabad, Pakistan
Tel: 051-9247531
Fax: +92-51-9247548
Email: akhattak@cc.gov.pk
Web: www.cc.gov.pk

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