JICT, Koja criticized for monoply practices

JICT, Koja criticized for monoply practices

Sari P. Setiogi, The Jakarta Post, Jakarta

The Jakarta chapter of the Indonesian Chamber of Commerce and
Industry (Kadin Jakarta) has accused the Jakarta International
Container Terminal (JICT) and Koja Container of acting as a
monopoly, resulting in high fees and poor service.

JICT and Koja are the two largest operators of container
terminals at the country's main Tanjung Priok Port, in North
Jakarta.

Chairman of Kadin Jakarta, Pungky Bambang Purwadi, said in a
press statement over the weekend that several business
associations had complained about the problem.

The two operators have set a charge of US$93 for every 20-foot
equivalent unit (TEU) container, compared to less than $60 per
TEU in Malaysia.

Bambang said that despite the high fee, the service provided
by the two operators was below standard. As a result, he alleged,
the Indonesian port was listed as a "black area" by international
container ship operators.

JICT and Koja are partly owned by Hong Kong-based Hutchison,
the world's largest container terminal operator with about 35
terminals worldwide. Hutchison, through its Singapore affiliate
Grosbeak Pte. Ltd., controls a 51 percent stake in JICT, and
through subsidiary PT Ocean Terminal Petikemas owns a 48 percent
shares in Koja. State-owned port operator Pelindo II owns the
remaining shares in the two companies.

Last week, the Indonesian antimonopoly watchdog (KPPU)
concluded that JICT and Koja had violated the antimonopoly law,
saying that both Hutchison and Pelindo controlled 75 percent of
the container market in Tanjung Priok, shutting out smaller
competitors and harming the interests of customers.

The watchdog accused the JICT and Koja of using Hutchison's
global domination of the port business to coerce businesses to
use their services or risk being shut out at other container
terminals abroad.

The KPPU gave the JICT and Koja 14 days to respond to its
ruling.

Meanwhile, the KPPU dismissed an earlier report in this paper
that it had ordered the JICT and Koja to shut down their
operations.

The watchdog said in a statement that it ruled the two
terminal operators must "halt activities that specifically
violate Law No. 5/1999 regarding unfair business practices and
monopolies".

This includes activities related to the following conditions:
- Monopolistic activities (violation of Article 17)
- Barring customers of competitors from engaging in a business
relationship with such business competitors, which could result
in monopolistic practices (violation of Article 19)
- Abusing their dominant market position (violation of Article
25).