NMa Starts Accelerated Sanctions Procedure against 400 Construction Companies in the Earthworks, Roadworks and Hydraulic Engineering Sector

The Netherlands Competition Authority (NMa) has started a sanctions procedure against approximately 400 construction companies active in the earthworks, roadworks and hydraulic engineering sector. This relates to two cases. In the first case, NMa suspects approximately 400 companies of infringing the Competition Act between 1998 and 2001 by participating in various combinations in prior consultation in relation to tenders with a view to coordinating their bidding behaviour. Of the approximately 400 companies about which a report has now been drawn up, approximately 140 notified NMa voluntarily under the leniency programme. From the information which the leniency applicants gave NMa, evidence has emerged against the other companies. These companies have therefore not notified NMa themselves. In order to reach an adequate and swift settlement of the cases, NMa will apply an accelerated sanctions procedure to these companies as a group.

In the second case, NMa accuses two groups, each consisting of six companies in respectively the road construction sector and concrete and hydraulic engineering sector, of dividing the market for large infrastructural works in The Netherlands, such as the high-speed rail link to Belgium and France (HSL) and the rail link through the Betuwe region to Germany (Betuweroute). This case is the result of an investigation which took approximately two years. The evidence consists of documents, which NMa encountered during unannounced company visits to various construction companies, supplemented by information which companies gave NMa in their applications for leniency.

The material shows that the earthworks, roadworks and hydraulic engineering sector infringed the Competition Act on a large-scale and in a structural manner. NMa's investigation focuses on exposing cartel structures (extensive and continuous infringements). In addition, NMa aims to bring about a change of culture in the sector through the swift conclusion of its investigation into the construction sector and a quick sanctions procedure.

Accelerated sanctions procedure
NMa will apply an accelerated sanctions procedure to all construction companies on which a report is drawn up. This procedure has been specially designed to ensure that the imposition of fines occurs adequately and swiftly. This enables companies to come clean quickly.

With a view to the exceptional situation and the focus of the investigation, NMa has adopted a supplement to the Guidelines for the Imposition of Fines, which will be published today and will also be sent to the companies involved.

In the accelerated sanctions procedure, the companies authorise a representative who, on behalf of all the companies acting jointly, presents generic arguments which are relevant to the imposition of the sanction. Mr J.C. Blankert, former chairman of VNO-NCW, the umbrella organisation of employers, has accepted this task. NMa has opted for such representation to ensure that NMa and the sector are not involved in procedures which drag on for years. To provide companies with an incentive to opt for this procedure, NMa will grant companies a 15% reduction in their fines for this far-reaching cooperation. After NMa has received the joint opinion of the construction companies, the Director-General of NMa will take a decision on the sanctions to be imposed on individual companies on the basis of the reports and the companies' joint opinion.

Leniency
The applications for leniency of companies in the earthworks, roadworks and hydraulic engineering sector fall within the lowest leniency category. This means that the companies that qualify for leniency will be granted a reduction in their fines ranging from 10 percent to 50 percent. In granting this reduction, the value to the investigation of the information provided by the leniency applicants will be taken into account. Approximately thirty companies which notified NMa have not been granted leniency because the information provided was too limited.

The companies which have not notified NMa of their own accord, but which have emerged from the information provided by other companies, should also not expect leniency. They are expressly invited, however, to participate in the accelerated sanctions procedure with the accompanying reduction in fines.

Other parts of the sector
It is NMa's aim to settle all current cases in the construction industry in a manageable procedure and within a foreseeable term. NMa has opted for an approach which focuses on parts of the construction sector: earthworks, roadworks and hydraulic engineering sector, civil and utility engineering, installation engineering and other sectors (such as concrete production and concrete products, traffic systems, and the laying of underground cables, pipes and pipelines). The reports on the installation engineering sector are expected in January 2005, the reports on the civil and utility sector in April/May 2005, and the reports on the 'other' category from January 2005 onwards.