Business monopoly watchdog KPPU at the crossroads

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.