Antimonopoly law must be revised: Experts<\/p>\n
JAKARTA (JP): Experts called on the government to amend Law
\nNo. 5\/1999 on the Prohibition of Monopolistic Practices and
\nUnfair Business Competition due to its lack of clarity.<\/p>\n
Top economist Faisal Basri, who is a member of the Business
\nCompetition Supervisory Commission (KPPU), said on Monday that
\nthe revision of some of the articles of the law was needed to
\nallow the commission to work effectively.<\/p>\n
"The definition (of some of the articles) is not clear, it
\nconfuses us in making a firm decision," Faisal told a seminar on
\ninstitution building in a global economy.<\/p>\n
Legal expert Erman Radjagukguk, who is also deputy Cabinet
\nsecretary, said that aside from the lack of clear definition,
\nsome articles were almost impossible to implement.<\/p>\n
He cited Article 45, which states that the district court had
\nto give its verdict within 30 days on a company's appeal over an
\nobjection to a decision by the KPPU.<\/p>\n
"It's difficult for judges to give a verdict in such a short
\ntime because the cases are not easy," Erman said.<\/p>\n
He added at present many of the judges do not have a good
\nunderstanding of the law.<\/p>\n
Erman also said that the definition of "market dominance" by a
\ncompany and "price fixing," was not clear.<\/p>\n
Meanwhile, Mari Pangestu, an economist at the Center for
\nStrategic and International Studies (CSIS) said it was
\npreferable to add further description within the articles than to
\nrevise the law.<\/p>\n
"Yes, the law has many weaknesses, but it will also take time
\nto amend the law," she said.<\/p>\n
"Besides, the image of the country will not be good if we
\nrevise too many laws," she added.<\/p>\n
According to her, one of the main problems is the clause on
\nthe 50 percent market share limit, which was considered too
\nrestrictive and may be counter-productive to business in general.<\/p>\n
"It may limit a company's ability to expand and compete in the
\ninternational market," Mari said.<\/p>\n
The limitation of market share might also discourage foreign
\ninvestors particularly if the KPPU failed to provide a good
\nexample in dealing with such cases.<\/p>\n
Law No. 5, 1999, which took effect on March 1999, was
\nintroduced as part of an agreement between the government and the
\nInternational Monetary Fund.<\/p>\n
KPPU was established in July 1999 to be the sole organization
\ntasked with supervising the implementation of the law. But the
\ncommission only started work in the middle of last year.<\/p>\n
So far, KPPU has handed down two verdicts under the law.<\/p>\n
In April, the commission ordered Caltex to terminate its
\nwelded steel pipe procurement contract worth US$12.35 million
\nover three years after the commission found evidence of a
\nconspiracy to rig the outcome of the tender.<\/p>\n
Second, it ordered that Indomarco, the owner of the Indomaret
\nstore chain that has about 470 stores, be prohibited from
\nexpanding its Indomaret stores in areas where traditional markets
\nwere located.<\/p>\n
Elsewhere, Mari said that exception provided by the law,
\nincluding protection on small and medium enterprises, made the
\nlaw have no clear focus.<\/p>\n
"The protection of small and medium enterprises should be in a
\nseparate law, not in this law, " she said, adding that the law
\nwould not be effective if it had many goals to achieve.(05)<\/p>",
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