The Commerce Commission is so concerned about construction
industry cartels, price-fixing and bid-rigging that it has
launched a website calling for whistleblowers.
Kate Morrison, the commission's competition general manager,
said the site www.construction.comcom.govt.nz
went live partly as a result of Canterbury's rebuild but also
Auckland's busy building sector.
"It is widely acknowledged internationally that corruption,
fraud and anti-competitive practices, for example
price-fixing, bid-rigging and market sharing, occur after
And it wasn't just Canterbury; rorts could be widespread in
other parts of the country.
"The idea for a website arose from our work with the sector
in the last few years. We saw a need for a user-friendly
guide specifically tailored to the needs of construction
businesses and workers to help them understand and comply
with the laws we enforce."
The sector was incredibly important to the economy for a
number of reasons and estimates suggested the country was on
the brink of its largest construction boom for 40 years,
partly because of Canterbury but also the high levels of
activity in Auckland, she said.
Overseas experience indicated the sector was very susceptible
to cartel or illegal agreements between firms not to compete,
such as the restriction of outputs and allocation of
customers, suppliers or territories.
The new website, launched this month, cites this year's $1.85
million fine in the High Court of Carter Holt Harvey after it
entered into an understanding with Fletcher Distribution to
fix prices for supply of structural timber to Auckland
The commission became aware of the understanding in January
2013 through its cartel leniency programme when Fletcher
Distribution, operating as PlaceMakers, sought leniency.
Meanwhile, the commission is investigating the plasterboard
market after a complaint from Elephant Plasterboard managing
director Kevin van Hest.
He claimed arrangements between Fletcher Building's Winstone
Wallboards and major building supply merchants restrict the
non-Gib board sales, leaving him with 3 per cent of the
market after starting out in the 1980s.
Fletcher said it was co-operating fully with the commission
on the plasterboard investigation, which began in September.
Investor relations and capital markets group general manager
Philip King this week acknowledged the company was operating
a system to reward major building supply merchants for Gib
King said: "Rebate structures are prevalent in most
industries, not just building materials and in reality amount
to price competition with supply terms being based on volume
and the duration of contractual relationships."
- Anne Gibson of the NZ Herald