Business monopoly watchdog KPPU at the crossroads

The Jakarta Post, Jakarta

In March this year, the country's monopoly watchdog -- the Business Competition Supervisory Commission (KPPU) -- came under the spotlight when it ruled that collusion had taken place in last year's sale of state oil firm Pertamina's two supertankers.

And although it was probably the scale of the case -- and the fact that a district court later overturned the verdict -- that drew public attention, the KPPU was nonetheless praised for its steadfast commitment to being the country's main guardian of fair business competition.

Indeed, despite all the shortcomings plaguing it after five years of existence, the KPPU has consistently followed up every report from the public of unfair business practices and given its say on the cases.

Since its establishment in June 2000, the KPPU has handled 41 cases, including those involving telecommunications firm PT Telkom, national flag carrier PT Garuda Indonesia, port operator PT Jakarta International Container Terminal (JICT), auto firm PT Indomobil Sukses International and Pertamina's tanker sale.

Still, despite its authority and rulings being legally binding, the KPPU is still facing an uphill battle in its mission of establishing a fairer business environment in the country.

Under the Antimonopoly Law, the KPPU has the authority to monitor business activities, probe any indications of unfair practices and give a verdict and penalty on any violations found.

Many loopholes still exist in the law itself, making the commission seem like a lone warrior in the battle against bad practices, which has tarnished the country's business climate for decades.

Among them is that indicted companies have the right to challenge KPPU rulings at any district court, despite the fact that not all courts have the capability to handle antitrust cases.

This has resulted in some of the commission's rulings being overturned on mere procedural matters, without the courts ever delving into the substantial matters of the case itself.

Out of the 41 cases the KPPU has handled, 10 had to be settled through the courts. Meanwhile, of the 23 it has issued verdicts on, six are being challenged in court, with the KPPU often appearing to be on the losing side, at least at the district court level. The only case to have gone all the way to the Supreme Court was a case involving Indomobil in 2003, when the court declared KPPU's ruling legally flawed.

At the district court level, the commission lost its cases against Garuda's allegedly unfair ticket reservation system, JICT's alleged monopoly at Jakarta's Tanjung Priok port and Pertamina's tanker sale. KPPU has filed appeals for each case with the Supreme Court.

Against such a backdrop, all does not look good for the KPPU and the cases do not bode well for the commission's efforts in promoting fair competition between businesses for the good of the public and public respect for the KPPU could be eroded.

In light of the situation, KPPU officials have called for an amendment of the law, suggesting that antitrust cases be tried as "administrative cases" instead of "civil cases", and only at certain courts with capable judges, like in Germany, where only the Bonn High Court has the authority to handle such cases.

With all commission members ending their tenure on June 6 -- although an extension is inevitable as the selection process for the new members has only just started -- now could be the time for members of the public to look back at how they have supported the KPPU, and decide how they can help improve it in the future.