Middle East and Africa

Horizontal agreements in the environmental context: In 2020, the OECD issued a paper that discusses whether competition policy should be influenced by sustainability. The 2020 paper follows the OECD's 2010 paper, which considers, from national perspectives, the interaction between horizontal agreements with environmental goals and competition law policies.

The 2020 paper also analyzes the substantive application of competition law to sustainability issues by exploring the extent to which competition law can be interpreted in a way that fosters or limits sustainability initiatives. In addition, Australia and New Zealand, Germany, Greece, Lithuania and the Netherlands have submitted contributions to this discussion. The OECD's 2020 paper provides a thorough introduction to the state of play of sustainability in the context of competition law. It encourages agencies to be clear about their objectives and priorities in order to provide clarity on how sustainability fits into competition law, with formal and informal guidance emphasized. It also examines approval procedures, sandboxing, admissible evidence, capacity, fining and international cooperation as possible measures to further sustainable goals. In December 2021, the OECD roundtable assessed these issues again and published a follow-up paper specifically on environmental considerations in competition enforcement. Additionally, the 2022 OECD Competition Open Day addressed, inter alia, green innovation. In December 2022, the OECD Global Forum on Competition will discuss the goals of competition policy including the question on whether "competition law and policy needs to adapt as a policy instrument to better accommodate socio-economic trends such as the rising importance of sustainability."

In January 2023, the OECD held a high-level symposium on pro-competitive policies for a sustainable economy, during which the attendees discussed how competition policy can contribute to the objectives of economic growth and green transition.

Merger and antitrust rules: Although South Africa was one of the first countries to adopt a public interest provision in its competition law in 1998 (whereby, in the aftermath of apartheid, an exemption for inter alia "firms controlled or owned by historically disadvantaged persons (HDPs) to become competitive" was created), the law does not currently expressly provide for sustainability as a relevant public interest exemption.

The Competition Act created four public interest grounds, only one of which specifically related to HDPs. However, given the structure of South Africa's economy, pretty much all of the public interest grounds largely impacted HDPs (e.g., employment). Moreover, even though the law does not expressly refer to environmental sustainability, the Minister of Trade, Industry & Competition (on whom the public interest factors primarily lie) has seemingly interpreted "effect on particular sector or region" to include environmental sustainability goals, which are in line with South Africa's push to move away from coal to renewable energy.

Guidelines: The guidelines on the assessment of public interest provisions in the merger regulation list "impact on regional sustainability" as one of the factors to consider when the Competition Commission assesses the likely effect of a merger on a particular industrial sector or region. The definition of "sustainability" for these purposes is typically considered from an economic perspective only, although in a recent decision, the Competition Tribunal considered in its analysis the impact of the merger on the environment and has imposed conditions to mitigate such impact.

The Air Liquide merger concerned an acquisition by Air Liquide Group (a supplier and producer of industrial and specialty gases) of 16 air separation units owned by Sasol South Africa Ltd. The air separation units separate atmospheric air into nitrogen and oxygen and are used to produce both industrial and speciality gases. The merger was approved subject to the following condition:

• Carbon emissions reductions: a commitment to substantially reduce the carbon emissions associated with air separation units within ten years of the merger implementation date by initiating, among other reduction strategies, a renewable energy procurement process aimed at procuring an aggregate amount of up to 900 MWs of renewable energy

Antitrust rules: Israel allows for an approval procedure where public interest, including environmental considerations, can be taken into account when deciding on restrictive arrangements (see the contribution of Israel to the OECD paper on Horizontal Agreements in the Environmental Context). In such cases, practice indicates that the positive effect on the environment must be significantly greater than the damage resulting from an anti-competitive agreement.

Position of antitrust authority: The Israel Antitrust Authority (IAA) has also acted as an unofficial advisor in the legislative process for the regulation of the market for the collection of beverage containers, where it expressed a view that environmental legislation should be structured in a manner that promotes competition.

The IAA has refused to grant an exemption from the approval of a restrictive arrangement submitted by the Association of Food Industries of the Israel Manufacturers Association, in which they sought to coordinate the price of the deposit of beverage containers, and in particular those of 1.5 liters and up. The Association was concerned that a minimum deposit of ILS .30 per bottle, which is determined by the Environmental Protection Minister with the approval of the Knesset Economics Committee, was insufficient to meet the collection targets set under law. The IAA denied the request and determined that granting the exemption would allow the association to set a deposit while considering the profit margins of the association members, which could place a greater burden on and harm consumers, leading to an increase in prices and in beverage collection costs. In addition, coordinating high deposit fees may serve large manufacturers but a detriment to the interests of small manufacturers. (see OECD Annual Report on Competition Policy Developments in Israel 2021)