Antimonopoly bill 'must hit its target'

JAKARTA (JP): Minister of Industry and Trade Rahardi Ramelan suggested on Monday that the House-initiated antimonopoly bill should also regulate unfair trading practices by multinational companies.

Speaking at the plenary session of the House of Representatives, Rahardi said multinational firms often practiced transfer pricing by quoting lower product prices for local subsidiaries.

This discriminates against other local companies.

"However, the regulation must be pursued in an appropriate manner so that it shoots the right targets," he said.

Rahardi also said the bill should regulate the banning of any business agreement between local and foreign entities, the implementation of which could hamper business competition in Indonesia.

The bill should regulate all unfair business practices, not only in trading, but also those conducted through rental and leasing agreements.

However, Rahardi warned that the bill should not be too rigid in terms of market shares limitation as this could be counterproductive.

The minister proposed that the bill should not rigidly limit a company's market shares at 30 percent maximum as this could create an unfriendly climate for investors.

He contended that such a limitation would discourage investors to enter capital-intensive industries.

Rahardi also suggested that the bill provide an exception or some leeway and protection for small-scale businesses so that they could grow accordingly.

"Such an exception is expected to give broader business opportunities to small enterprises so they can expand their business by abiding by the norms existing in the competition law," he was quoted by Antara as saying.

Rahardi supported a suggestion that the bill should provide a clause for the establishment of an independent agency or institute to monitor the implementation of the antimonopoly law.

Such an agency must be independent and nonstructural and, therefore, should not be under a ministry. It must be able to act fairly and not be influenced by anybody either inside or outside the government.

The antimonopoly bill is the first House-initiated bill since 1971. It was drafted by a group of 34 legislators using their initiative right to propose a bill.

Consisting of 11 chapters and 53 articles, it was formally submitted to the House's plenary session two weeks ago. The government supported the bill last week and gave its views and comments on the bill on Monday.

The government and the House will soon deliberate the bill, which is expected to be completed by the end of this year. (29)