KKPU looks into Pertamina's tanker sale

The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) said on Wednesday it was studying the sale of two supertankers by state oil and gas firm PT Pertamina to see whether the transaction had been conducted in a fair manner.

"We're studying all the documents and data related to the tender. Then we will determine whether the tender process was in line with Law No.5/1999 on business competition," KPPU member Pande Radja Silalahi said.

Pande added that the investigation into the case was underway after the KPPU received complaints from Pertamina's labor union, which criticized the process as lacking in transparency.

"The KPPU will process this as soon as possible. We will also try to get clarification on all the complaints we've received," Pande said, but did not mention the specific time table.

The Antimonopoly and Unfair Competition Law, passed in 1999, states that a business is forbidden from making deals that could result in unfair competition.

Established under that legal basis, the KPPU has the authority to investigate businesses, and/or their operations, suspected of using unfair practices and imposing sanctions on them.

Earlier this month, Pertamina sold the two tankers, known in the industry as Very Large Crude Carries (VLCC), which are still being built by South Korea's Hyundai Heavy Industries.

But the process has not been free of controversy.

While the company's management insists that selling the tankers is better for Pertamina, which is in dire need of cash, but some observers and Pertamina's workers union believe otherwise.

Elsewhere, asked whether the KPPU would also investigate the appointment of consulting company Goldman Sachs as Pertamina's financial advisor for the tender, Pande said they would not as it was the right of Pertamina as a limited liability company.

"Nothing was wrong in the appointment of Goldman Sachs. What we're investigating is the whole process of the tender (of the sale)," he said.

The two tankers were eventually sold to Norwegian shipping giant Frontline Ltd. for US$184 million. Previous reports have said that Goldman Sachs also own some shares in Frontline.