Call for Review of Indonesia’s Anti-Monopoly Law

Bhimanto Suwastoyo

The chairman of the Business Competition Supervisory Commission, Tadjuddin Noer, wants a review of the 1999 law prohibiting monopolies and unfair business competition.

Tadjuddin said the decision by the people to opt for free and healthy competition in business and the economy was a “milestone” in the journey of the nation.

“To come up with the decision was a real milestone,” said Tadjuddin Noer, head of the commission known as the KPPU.

He said that Indonesians, still in the euphoria of reforms that followed the end of decades of authoritarian rule, realized that free and fair competition in business was paramount to improving the welfare and prosperity of the country and themselves.

“This was the only way to make business and the economy more efficient,” Tadjuddin said. “It also gave the country the chance to face the global market.”

The KPPU was inaugurated in 2000, but 12 years after its establishment, the challenges facing the commission remain immense and its key goal of improving the prosperity of the people has not been fully reached.

In the government’s haste to ensure the commission’s independence, lawmakers stated in the 1999 law that the commission was “an independent institution that is beyond the influence and power of the government or other sides.”

“So what are we?” Tadjuddin asked.

He said it was difficult to enforce the 1999 law while not being a part of the government.

He added that the KPPU’s ambiguous status was hampering its work.

For example, the employees of the commission are not public servants, and therefore work under contract. Because of the limited contracts, the KPPU has a hard time making long-term plans.

Tadjuddin said that many of his workers have been poached by law firms and businesses.

“How can we function as a commission that can affect the fate of businesses?” he said, adding that the commission should be a government institution.

He pointed out that the telecommunications, oil and gas, and banking sectors are overseen by the Telecommunication Regulatory Body, the oil and gas regulators and Bank Indonesia, respectively.

Tadjuddin said that these government organizations should work together to ensure fair practices in the economy, and be well-regulated.

He added that it made sense for his commission to follow suit because the current economic system is providing conditions that could allow cartels and monopolies to thrive.

He has discussed the law and its possible revision with several entities, including President Susilo Bambang Yudhoyono.

“Law No. 5 of 1999 should be reviewed,” he said. “But this review must be conducted in an open manner, with stakeholders and the public involved or consulted.”

Tadjuddin said he was concerned that if the review was done in “business as usual” mode — in closed committees at the House of Representatives with government agencies and officials — the end result might not be what is best for the country, or what works best and is most efficient for the commission.

He said that an open and inclusive discussion is essential to creating the best reforms.

In order for healthy and fair competition to develop, an open-market mechanism is needed, Tadjuddin said.

But this mechanism would be different from the general notion of an open market, he added.

The difference, he said, was that the government should be able to intervene in the market if it is concerned that commodities, goods or essentials are affecting the public adversely.

He said that if such interventions and their conditions are made clear, investors would have less concern about putting their cash into the country.