Snags in antimonopoly law

By Destivano Wibowo

JAKARTA (JP): With the promulgation of Law No.5/1999 on Anti- Monopoly and Unfair Competition it seems that those who have benefited from monopolistic practices in the past will have to reevaluate all their business activities.

Monopolistic facilities were either obtained directly or indirectly, through policies of the New Order administration or due to their own practice of obstructing competition.

In principle, the Law bans business agents from entering into agreements and conducting activities leading to monopoly, monopsony, oligopoly, oligopsony, price discrimination, marketing area division, boycott, cartel, vertical integration, closed agreement, conditional purchase, market domination, determination of very low prices, unfair price determination, collusion, abuse of dominant positions, double positions, share ownerships with certain conditions, amalgamation, merger and expropriation of business entities.

To control the implementation of all the provisions of this Law, the government has, through Presidential Decree No.75 dated July 8 1999, set up a Business Competition Control Commission, with a Board comprising a chairman and a deputy assisted by at least seven members.

Members of this commission are appointed and dismissed by the government with the approval of the House of Representatives. However, members of this commission have yet to be proposed by the government, even though the Law will become effective in the next three months (there will be a six-month period of adjustment).

This may be because our government has been too busy establishing other commissions. However, there are many provisions that need defining, both in government regulations and in policies of the commission, and with only three months ahead, will the government and the commission have enough time to formulate the necessary directives?

Article 39 of this Law stipulates that the commission shall be required to conduct preliminary investigation into each case having monopolistic tendency, and within 30 days it should decide if further investigation shall be required.

Failure to be prepared with the necessary directives could lead to the following possibilities:

a. Article 39 fails to specify whether "days" refers to business days or calendar days. If within 30 days the Commission fails to decide whether or not to conduct further investigations, then shall the business agent suspected of conducting monopolistic practices be declared free of such practices? Only a court ruling would decide the guilt or innocence of the suspect. b. Let us suppose that after the 30-day period the commission still cannot decide whether or not to conduct further investigations, while reports of the alleged practice continue. Shall the 30-day period be calculated from the beginning of the investigation, or shall the commission affirm that, due to the new reports, it will conduct further investigations? c. Suppose further investigation is completed within 60 days and is extended for another 30 days, but the commission fails to issue any ruling. Shall the suspect be automatically relieved from the sanctions of this Law? If the answer is 'yes', can the business agent sue the commission for slander? The commission would then only be busy serving the counter claims by such business people. d. Since the commission was established under a presidential decree, there may be a tendency for such business people to simply ignore the commission's findings because such findings often are not supported by court decisions.

Therefore, the commission may delegate the task to investigators. The question is, who would they be? The Criminal Code specifies that investigators are the police or special officers appointed for such purposes.

If the investigators are police, then they, apart from prosecutors or specially appointed officers, would need training on this law. e. In the judicial process, suspects are entitled to appeal to the Supreme Court if they are proven by the court to have violated the law. This law does not stipulate that the commission shall also be entitled to make such an appeal.

Therefore, shall the commission through the prosecutor exercise its right provided within the Civil Code by referring to the time period specified in this Law? Of course such matters needs further attention by the policy makers.

And what would happen if the Supreme Court finally annuls the commission's ruling? Can the commission apply for a review in accordance with the Civil Code if new matters arise? This should be possible because the Commission may discover new evidence to strengthen its claim.

Hopefully, answers to the above already exist, especially among those who will be charged with implementing this Law. Diligent implementation is required if we really want to create a healthy business climate in Indonesia.

The writer graduated from Boston University School of Law and works at Lubis Ganie Surowidjojo Law Office in Jakarta.