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I’nesia competition law revision causes concern

Apr 17. 2017
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By THE JAKARTA POST
ASIA NEWS NETWORK
JAKARTA

SINCE HUMANKIND first began to trade, producers and consumers have always sat at different sides of the table: the former looking for ways to maximise profit, the latter seeking to buy quality products at an affordable price.

In the modern world, efforts to promote fair business competition are unlikely to run smoothly in the absence of strong, credible anti-monopoly watchdogs that works to accommodate the interests of both parties.

Thus, when lawmakers sealed last week a collective endorsement to upgrade the authority of the Business Competition Supervisory Commission (KPPU), criticism began to emerge, particularly from businesses, given the institution’s controversial track record in the area of business supervision.

On Thursday, the House of Representatives’ Legislation Body completed the harmonisation process of the draft revision for Law No. 5/1999 on monopolies and unfair business competition, during which representatives from all political parties agreed to endorse the bill at the House’s upcoming plenary meeting.

The revision of the law, expected to be completed this year, is set to address several clauses that will equip the KPPU with expanded authority in its efforts to tackle unfair business practices, including the authority to seek support from the national police to summon business players, witnesses or experts related to the former’s investigations into alleged violations of the law.

The draft law revision, a copy of which has been obtained by The Jakarta Post, also stipulates that fines for business players convicted of unfair practices range from 5 to 30 per cent of their sales value throughout the period of violations. The prevailing law sets the maximum penalty at 25 billion rupiah (Bt64.3 million).

“If the KPPU has the authority to investigate, prosecute and even impose fines on business players, there is a big possibility that abuses of power will occur in the future,” Sutrisno Iwantono, an Indonesian Employers Association executive in charge of public policy, said over the weekend.

“As a result, potential investors will be reluctant to bring in their money. Who wants to risk their assets in a business environment prone to abuses of power?”

Sutrisno’s concerns are not baseless.

In 2008, the Corruption Eradication Commission investigators caught then KPPU member Muhammad Iqbal receiving 500 million rupiah in cash from a company executive whose firm had been declared not guilty in a dispute handled by the body.

A year later, the Jakarta cor-|ruption court sentenced Iqbal |to four-and-a-half years in prison for accepting a bribe.

Democratic Party lawmaker Azam Asman Natawijana, who leads a House working committee assigned to deliberate the law revision, said the current draft allowed the KPPU to undertake joint search and seizure operations with the police.

Chris Kanter, an advisory board member of the Indonesian Chamber of Commerce and Industry (Kadin), said the extension of the KPPU’s authority was actually needed because the body had long been recognised as a toothless tiger.

“However, with such great power, the KPPU must also ensure its credibility and capability to prevent feared abuses of power,” Chris said.

Earlier in February, the KPPU announced that Indonesia’s motorcycle manufacturing giants Yamaha Indonesia Motor Manufacturing and Astra Honda Motor had engaged in cartel practices in the sales of automatic 110 cc and 125 cc scooters by marking up the vehicles’ prices.

The KPPU’s decision in the case has been questioned by many, including Apindo’s Sutrisno. He has voiced concerns over the commission’s arguments which refer to an alleged meeting of the companies’ high ranking officials at a golf course and alleged email exchanges between both sides.

Separately, KPPU member Muhammad Nawir Messi said the public should not be anxious about the proposed revision, saying that there is still room to challenge the commission’s verdict at district courts.

 

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