KP konstatē pārkāpumu meliorācijas nozarē

On 11 March, the Competition Council of Latvia (hereinafter – the CC) adopted a decision to impose a fine on two reclamation companies – SIA “Valkas meliorācija” and SIA “Agromeliorators” – for coordinated submission of tenders in procurements organised by VSIA “Zemkopības ministrijas nekustamie īpašumi” (hereinafter – ZMNĪ). The CC has imposed a fine of more than 221,000 euros for the prohibited agreement of the companies.

During the inspection of procurements in the reclamation sector, the CC detected suspicious coincidences in the procurements organised by ZMNĪ in the period from 2016 to 2019, implemented within the framework of the European Agricultural Fund for Rural Development programme for 2014 – 2020.  During the examination of procurements and conducting inspections at six companies, the CC obtained evidence that providers of reclamation services – SIA “Valkas meliorācija” and SIA “Agromeliorators” – have concluded a prohibited agreement on conditions for participation in three procurement procedures.

SIA “Valkas meliorācija” and SIA “Agromeliotors” submitted mutually coordinated tenders in procurements organised by ZMNĪ on renovation of the water drain of national importance, Ījovka Brook, as well as on renovation of the water drain of national importance, Rēzeknīte. The suppliers mutually exchanged the documents to be submitted in the respective procurement, including financial estimates, thus imitating competition. As a result of such coordinated action of suppliers, the customer did not receive procurement tenders prepared under conditions of fair competition, which would allow to procure the most favourable service. The CC imposed a fine of 208,837.15 euros on SIA “Valkas meliorators” and 13,132.45 euros on SIA “Agromeliorators” for the detected infringements.

Ieva Šmite, the Head of the Cartel Department of the Competition Council: “This is one of the rare cases, where investigation was initiated exactly thanks to an anonymous application, which was more directed to alleged dishonest action by officials. Taking into consideration the self-initiative (ex-officio) of the CC, investigation was initiated – screening was made and facts were obtained, which served as a basis for initiating an infringement case. An additional signal about problems in reclamation procurements and suspicions about a prohibited agreement in activities of providers of reclamation services was received from the Central Finance and Contracting Agency. Consequently, the issues to be investigated were combined in one joint investigation procedure. In general, it confirms once more that also anonymous applications can lead to investigation of an infringement case; therefore, we highly appreciate public involvement in detection of infringements.”

Considering the information obtained during the investigation and signals received about alleged competition infringements in the reclamation sector, including anonymous and official applications, the CC draws attention to the opportunity for companies to use the Leniency Programme – a facility for companies involved in bid-rigging to confess an infringement and obtain full or partial release from a fine, as well as release from the prohibition to participate in public procurements for a period of one year. The Competition Law stipulates that a company can be penalised for involvement in a prohibited agreement, which has been implemented several years ago; therefore, the Competition Council encourages companies, which have got involved in a prohibited agreement of competitors due to intentional or unintentional reasons, not to remain silent and use the facilities offered by the Leniency Programme.

The CC calls everyone who holds any information on alleged competition infringements, for example, prohibited agreements or abuse of the market power by the dominant companies, to report it to the CC. It can also be done anonymously on the authority's website.