Anti-Trust Law Amendment: APINDO Urges Establishment of KPPU Supervisory Council

Indonesian Version

Marcell Sihombing, Fitri N. Heriani
 

 

The Draft Bill on the Amendment to Law No. 5 of 1999 (Anti-Trust Law) on the Prohibition of Monopolistic Practices and Unfair Business Practices (Draft Bill) has finally been forwarded to the Legislation Board (Badan Legislasi or “Baleg”). Moreover, Commission VI of the House of Representatives (House) has also established a Working Committee (Panitia Kerja or “Panja”), which will be responsible for the deliberation of the Draft Bill.
 
A great deal of support for the strengthening of the Business Competition Supervisory Commission (KPPU) through the Draft Bill has been voiced by a number of young entrepreneurs, while many members of the Employers’ Association of Indonesia (APINDO) have also tabled several suggestions relating to this issue.
 
Indeed, Sutrisno Iwantono, Head of APINDO’s Public Policy Division, has pledged to fully support the plan to revise the current Anti-Trust Law, provided that the Draft Bill accommodates the input offered by APINDO. One such APINDO suggestion has been the establishment of a KPPU Supervisory Council (Dewan Pengawas KPPU or “Council”), an institution which would be independent and separate from the organizational structure of the KPPU.
 
According to Mr. Iwantono, the KPPU’s authority is currently too broad, ranging as it does from the authority to undertake both preliminary investigations and main investigations, engage in trial proceedings and render decisions regarding allegations of monopolistic and unfair business practices. Mr. Iwantono therefore asserts that it is necessary to establish the abovementioned Council in order to prevent any possible abuses of power occurring in the future.
 
“This is where the problem lies. Prosecutors currently have the authority to prosecute, while judges render decisions regarding any case. Judges have no authority to file prosecutions and vice versa, and yet the KPPU has the authority over both of these mechanisms. It is important that there is fairness as regards this particular matter,” Mr. Iwantono explained during a discussion event which was held in Jakarta on Wednesday, 2 November 2016.
 
Mr. Iwantono further revealed that APINDO had already received many reports pertaining to KPPU decisions that were considered to be overbearing by companies. Mr. Iwantono asserted that any decisions which are imposed should ultimately have a deterrent effect, however no such decision should be able to put an end to a company’s business operations altogether. In this context, every KPPU decision should be aimed at improving industrial efficiency and productivity, or else Indonesia’s investment climate may only be weakened in the long run.
 
“Let’s say a meat-product cartel is being sentenced, will this ultimately result in a price reduction [as regards the products in question]? Moreover, has this problem really been caused by cartel practices or by the wrong policy being implemented by the government?” Mr. Iwantono elaborated.
 
For these reasons, Mr. Iwantono expressed his hope that the Draft Bill would eventually encourage improvements as regards the KPPU’s functions as a government institution. Most importantly, the Draft Bill is also expected to allow the KPPU to have a direct impact upon the working lives of the general population, should any cartel practices be discovered in the marketplace.
 
Commenting on this issue, Syarkawi Rauf, the Head of the KPPU, expressed his hope that the KPPU would have the same status as other government institutions. Mr. Rauf claimed that the KPPU currently occupied a gray area, as no provision had been set out under the law to explain whether the KPPU was a government institution or not.  Such uncertainty in turn affects the status of KPPU officials, specifically whether they are treated as government officials or not. Mr. Rauf stated that it would be easier for the KPPU to exercise its various authorities, including offering advice and suggestions to the government, once this status issue had been clarified.
 
Continuing his address, Mr. Rauf also asserted that the establishment of a Council was unnecessary, as establishing any new institution would only increase bureaucratic processes and budgets, while having the potential to cause legal uncertainties for businesses.
 
“The KPPU has also been under the direct supervision of Commission VI of the House,” Mr. Rauf added.
 
Mr. Rauf expressed his firm belief that direct supervision of the KPPU by Commission VI of the House was already sufficient. Moreover, the KPPU has also routinely been reporting all of its activities to Commission VI of the House once every three months, and Mr. Rauf offered his assurance that this routine reporting mechanism was already serving as a strong supervisory mechanism as regards KPPU operations.

(cd/sp)