It has now been 17 years since Law No. 5 0f 1999 on the Prohibition of Monopolies and Unfair Business Practices (Anti-Monopoly Law) entered into force. Several shortcomings with this law have come to light over the course of its lifespan. With these shortcomings in mind, Commission VI of the House of Representatives has now agreed to update the law to take account of recent developments, and will thus incorporate the revised law into the National Legislation Program for the 2016 period (2016 Prolegnas).
Commenting on this issue, Azam Azman Natawijaya, Vice-Chair of Commission VI, lauded the many benefits which have resulted from the establishment of the Business Competition Supervisory Commission (Komisi Pengawasan Persaingan Usaha – “KPPU”). The KPPU was originally set up soon after the Anti-Monopoly Law was introduced, not long after the 1998 reformation era got underway. Nevertheless, Mr. Natawijaya believes that the time has come to revise the Anti-Monopoly Law itself.
“Now is the time to revise the Anti-Monopoly Law and incorporate several new provisions in line with recent developments which were not relevant back then,” asserted Mr. Natawijaya.
Mr. Natawijaya further revealed that the revision was intending to strengthen the institutional foundations of the KPPU, whose presence and benefits for Indonesia and the general public as a whole haven’t been too visible. Mr. Natawijaya is hopeful though that the KPPU can ultimately improve its role in strengthening Indonesia’s business sector, business climate and overall efficiency.
Syarkawi Rauf, Chair of the KPPU, has also ventured an opinion on this matter and recently stated that Commission VI had already established an official Working Committee whose job will be to revise the current Anti-Monopoly Law. This committee will then forward the draft revision of the Anti-Monopoly Law to the Legislation Board (Baleg) for further deliberation.
Mr. Rauf has also revealed that the dialogue currently taking place between the House and the government was primarily focusing upon five main issues. Firstly, the KPPU’s institutional foundations require strengthening so that the body can effectively process and investigate any cartel allegations. Secondly, there is seen to be a need to increase sanctions in the form of fines. In contrast to previous fines, which were capped at a maximum of IDR 25 billion, the revision will set a new fine amounting to 30% of the total profits generated by any unlawful cartel practice.
“We [the members of Commission VI] have provisionally agreed to set a new fine of 30% of the total profits generated by any cartel, and it is hoped that this will serve as a deterrent to any business practitioners who are thinking of violating the Anti-Monopoly Law,” Mr. Rauf asserted.
Thirdly, it is widely accepted that the current company-merger procedures need to be updated. As of now, company mergers or acquisitions must be reported to the KPPU. However, the common practice is that business will report the mergers or acquisition after the event is completed. In contrast, the revision will mandate that any business practitioners intending to engage in either mergers or acquisitions will first have to secure approval from the KPPU. The hope is that this measure will effectively prevent cartels from forming.
The fourth issue which is being discussed is the need to extend the definition of business practitioners. Mr. Rauf asserted that the revision will also encompass not only domestic business practitioners, but also foreign businesses whose operations also affect Indonesia. By way of example, Mr. Rauf pointed out that many cartels, despite being based in Singapore and Malaysia, also affect Indonesia. The current Anti-Monopoly Law only applies to domestic business practitioners however, which prevents the KPPU from investigating foreign cartels which fall outside of its jurisdiction.
And fifth and finally, there is widely believed to be the need for a policy of leniency. In essence, the KPPU is intending to introduce a policy similar to that of the Corruption Eradication Commission’s (KPK) whistleblower system, via the revision of the Anti-Monopoly Law.
“Hopefully, the revision process will be concluded by the end of this year. At present, the revision is being deliberated by the Legislation Board [Baleg], and will subsequently be forwarded at a House plenary meeting. The revision will hopefully be sent to the government by the end of this month [in order to garner feedback and input],” Mr. Natawijaya concluded. (rs/sp)
Source: HukumOnline.co | 9 June 2016