Fair competition law must be enacted on time: Official

Fair competition law must be enacted on time: Official

JAKARTA (JP): Vice cabinet secretary Erman Rajagukguk has
urged the country's next government to implement the antimonopoly
and unfair competition law in the first quarter of next year, as
scheduled, in order to ensure fair business practices.

"I hope the next government will enforce the law in early
March," he said at an economic law seminar jointly sponsored by
the University of Indonesia law school and the Ministry of Trade
and Industry.

He however said that businesspeople required a six-month
transition period after enforcement of the law to adjust their
businesses to the laws' provisions.

The antimonopoly and unfair competition law, passed in
February by the House of Representatives and ratified on March 5
by President B.J. Habibie, prohibits a single company from
holding more than a 50 percent share of the domestic market.

Companies breaching the law are liable to a maximum fine of Rp
100 billion (US$12.8 million) and six-month jail terms for
company executives.

Erman said Indonesia desperately needed the law to improve its
domestic business environment and enable competition to be based
on efficiency and fair play.

He said private businesses in the country had developed during
the past three decades amid unfair market competition.

"Those who were close to the power elite enjoyed special
privileges to dominate the market," he said.

Erman said the situation had led to the emergence of
conglomerations and a small group of powerful business executives
devoid of true entrepreneurship skills.

He said the government needed to cease such inequities by
enforcing the antimonopoly and unfair competition law.

The antimonopoly and unfair competition law also prohibits
vertical restrictions on competition and any deals or contracts
allowing for oligopolies, price fixing, cartels, trusts and
geographical designations of markets between suppliers.

An oligopoly occurs when a few large producers of similar
commodities dominate the market.

An evaluation on whether instances of unfair competition were
committed by any parties would be carried out by an independent
commission to be formed by the government and approved by the
House of Representatives prior to full enforcement of the law.

Erman said a company with a 50 percent market share would not
necessarily be penalized if the independent commission determined
that the company was operating efficiently and did not abuse its
dominant position to restrict other competitors from entering the
market.

"However, such a case may be very rare," he said. (udi)