Parliament orders Competition Authority of Kenya 30 days to probe unfair business practices at multinational firms
Uniliver and Nestle Kenya at centre stage after the Transporters Association of Kenya petitioned, calling parliament to leverage the industry
The Committee on Trade, Industry, and Cooperatives has directed the Competition Authority of Kenya to probe claims that multinational firms are discriminating against local investors in the transport and logistics sector.
The directive was issued today by Committee Vice Chair, Hon. Marianne Kitany (Aldai), during a meeting with the agency’s Acting Director General, Dr. Adan Roba.
“We are directing you to conduct further investigations into the allegations,” stated Hon. Kitany.
On March 6, the House Team met with officials from the Kenya Transporters Association (KTA) Limited. The association had sought the MPs’ intervention to resolve an ongoing dispute between local transporters and international firms.
At the meeting, KTA Chairman Newton Wang’oo claimed that multinational companies prefer to work with fellow international firms in the transport sector, which they believe constitutes unfair business practices.
“The comprehensive probe should not only be confined to the transport and logistics industry alone but to other sectors of the economy as well,” Hon. Kitany emphasized to Dr. Roba.
In an earlier morning session led by Committee Chairperson Hon. James Gakuya (Embakasi North), senior officials from two multinational companies operating in Kenya refuted claims of unfair trade practices with their suppliers.
“Is it true that you engage in exclusive contracts with your fellow multinationals in the transport and logistics sector?” asked Hon Gakuya who observed that it’s important for local firms to also benefit from contracts from the companies
Unilever Kenya Limited’s Managing Director, Luck Ochieng, and Nestlé Kenya Limited’s Chief Finance Officer, Gibson Singen, separately stated that their companies actively work harmoniously with local transporters.
“Localisation is at the core of Unilever’s Supply Chain worldwide. Over the last few years, we have been intentional about developing local SME logistics partners in addition to other sourcing categories,” explained Mr. Ochieng.
“Nestlé is a company that prioritizes compliance with the laws and regulations in the markets where we operate,” added Mr. Singen.
Meanwhile, representatives from British American Tobacco and East African Breweries Limited did not appear before the Committee, citing various reasons.
Hon. Kitany directed that they attend a rescheduled meeting on Tuesday, September 17, to respond to the concerns raised by sector players.
The Embakasi North MP James Gakuya led committee led the mission to demand the authority mandated for ensuring equal and fair competition to look in to claims that Uniliver and Nestle Companies has been embroiled in by the Transporters Association ot Kenya.
The association had petitioned to the parliament over the claims of unfair price bidding and irregular behaviour by the multinational companies which has locked them out of the lucrative business in their own country
Funyula Member of Parliament Dr Ojiambo Oundo sought to know the CR12s of the local companies that have been transporting goods with the multinational firms and whether their bank accounts are domiciled within the country
By this, he made it that there are instances where multinational firms may subcontract local contractors only to benefit the overseas who are the major contractors, denying the spirit of fair competition
Members of Parliament Prof Ojiambo Oundo[Funyula] Antony Aluoch[Mathare] Amos Mwango [Starehe] disclosed that there are local contractors engaged as `insiders for outsiders’ meaning huge chunks of money is repatriated to international companies operating under the ‘shadowy proxies’
“We shall interrogate to see whether their members have been directly or indirectly benefiting from these multinational companies,” James Gakuya issued
However, Managing Director for Uniliver Luck Ochieng distanced the claims asserting that they do allow fair competition by making open tendering to the process to award the winning relatively winning bidder
“We train our transporters to build capacity and offer effective services, we do advertise for the bidding and in fact we pay above 20 per cent of the pricing figures to attract local firms to offer services for us,” Ochieng stated
He also disclosed that they have empowered street boys because they buy collected used bottles from dumpsites and recycle them to the market
“We do test all waters bottled before distributing it to our customers
90 per cent of our products are transported through SGR which we believe it came for us,” they added
The head of supply chain at Nestle Company Julius Togohm said that their products are traded all the world and they don’t disenfranchise local firms over the international ones
“ We have angaged farmers from different parts of the country to supply us with millet. We endeavour to empower our transporters linking them in the market to scale up their capacity,” Toghom commended
Edwin Komen the Head of Supply Chain and Procurement at Uniliver also seconded Toghon’s statements