Mon, 01 Mar 2010

The House of Representatives’ Commission VI, which oversees trade and industry, has asked the Business Competition Supervisory Commission to step up efforts to protect domestic businesses from unfair business practices under the Asean-China Free Trade Agreement.

The deputy chairman of Commission VI, Ariel Bima, a lawmaker from the Indonesian Democratic Party of Struggle (PDI-P), said Indonesian businesses need to be protected from unfair foreign competition.

“We asked the KPPU [Business Competition Supervisory Commission] to intensify the monitoring and prevention of unhealthy business practices by multinational corporations amid the ACFTA,” Ariel said.

The House commission urged the KPPU to focus on issues affecting the largest number of people, such as unfair practices related to key commodities like cooking oil, sugar and cement.

But the lawmakers praised the KPPU’s performance over the last year.

“The KPPU has been more independent in upholding regulations concerning healthy business practices,” Ariel said.

Ahmad Junaidi, the KPPU’s communications director, said the commission would not discriminate against foreign companies but would closely monitor major multinational corporations that are doing business in Indonesia.

“With the implementation of the FTA between Asean and China, the smaller Indonesian businesses need to be protected,” he explained.

The KPPU has been involved in meetings with the Asean Experts Group on Competition to set up standards for fair business practices, he said. The group sets competition guidelines for Asean regulatory bodies.

Independent analyst Yanuar Rizky said that even if the KPPU improved its monitoring of improper practices, local producers would not be protected from unfair foreign competition as the KPPU is only a supervisory commission.

“It is the task of the Trade Ministry and the Industry Ministry to come up with regulatory solutions to protect local companies,” Yanuar said. “There has to be a line separating regulators and observers.”

The ACFTA, which came into force at the beginning of January, established the world’s third-largest free-trade area, after the European Union and the North American Free Trade Agreement grouping of the United States, Canada and Mexico.

The Asean-China free trade area has a combined population of 1.9 billion people, with a combined annual GDP of $6.6 trillion. Irvan Tisnabudi