kompetisia 04 2010 lock · in soekarno hatta airport, jakarta competitionadvocacy international...

Newsletter on Indonesian competition law and policy

www.kppu.go.id

kompetisiavol. 04/2010

What’s new ?

Law Enforcement

Planned Establishment of the KPPU’sRegional Representative Office inManado

Decision for Cleaning Service Tenderin Soekarno Hatta Airport, Jakarta

CompetitionAdvocacy

International

Planned Issuance of a Guideline toArticle 14 on Vertical Integration of LawNumber 5 Year 1999concerningProcedures of Case Handling

A bilateral meeting between the KPPUand the Ministry of Water and Irrigationof Tanzania

kompetisia vol 04/20102

Table ofContents

Competition AdvocacyPlanned Issuance of a Guideline to Article 14on Vertical Integration of Law Number 5 Year1999concerning Procedures of CaseHandling

The KPPU Imposes a Guide for Prohibition ofMultiple Positions

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Law EnforcementDecision for Cleaning Service Tender inSoekarno Hatta Airport, Jakarta

Discriminative and Monopolistic Practices inTaxi Service at Surabaya JuandaInternational Airport

Bid Rigging of Fixed Fire Pump at PTPertamina Region I Medan

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PlannedEstablishment of

the KPPU’sRegional

RepresentativeOffice in Manado

As an institution having a task to oversee theimplementation of Law Number 5 Year 1999regarding the Prohibition of Monopolistic Practicesand Unfair Business Competition Law, the KPPU isobliged to always increase its performance inimplementing its tasks and authorities. One of itsactivities is the establishment of the KPPU’sRepresentative Office in regional areas. The KPPU’sRepresentative Office is expected to make it easier forthe community to have an access to delivering reportsof alleged violation against Law Number 5 Year 1999,and at the same time enable the KPPU to supervisethe monopolistic practices and unfair businesscompetition in regional level.

Currently the KPPU has 5 (five) regionalrepresentative offices in the municipalities of Medan,Surabaya, Makassar, Balikpapan, and Batam. In linewith the increasing activities of enforcement danadvocacy of business competition law throughoutIndonesia, in 2010 the KPPU plans to re-open 5 (five)regional representative offices, one of which is inManado municipality known as the feeder city for theEast-North Indonesia region. In connection with sucha plan, on 22 February 2010, the KPPU had a meetingwith the North Sulawesi Provincial Government inorder to discuss the plan.

In the meeting, the KPPU delivered the plannedestablishment of the KPPU’s regional representativeoffice in Manado and described in general the forms oftechnical cooperation that may be arranged betweenthe KPPU and the North Sulawesi ProvincialGovernment in order to accelerate the actualization ofsuch a plan. The North Sulawesi ProvincialGovernment responded in a positive way to the planand stated that it was ready to give a hand in makingany effort to actualize the establishment of theKPPU’s Regional Representative Office (KPD-KPPU). The selection of Manado is deemed accurateconsidering that business activities in Manado areakeep increasing in line with the event of plannedopening of Special Economic Area (KawasanEkonomi Khusus), so that more intensive businesssupervision by the KPPU is needed.

What’sNew ?

InternationalA bilateral meeting between the KPPU andthe Ministry of Water and Irrigation ofTanzania

Internal Discussion on Merger andAcquisition with JFTC

Report of APEC Senior Official Meeting I andRelated Meetings

UNCTAD Multi Year Expert Meeting

The KPPU’s contribution to the ASEANEconomic Community

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What’s New ?Planned Establishment of the KPPU’sRegional Representative Office in Manado

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kompetisia vol 04/2010 3

Decision for CleaningService Tender in Soekarno

Hatta Airport, Jakarta

The Commission for the Supervision of BusinessCompetition (KPPU) confirmed that the verticalconspiracy in holding a tender for cleaning service atTerminals A and B on Soekarno Hatta Airport. In thedecision read out on 5 March 2010, the KPPUconfirmed that 3 business actors were legally evidentto have violatedArticle 22 of Law Number 5 Year 1999regarding bid rigging. Those three business actorsare PT Spectra Jasindo, a business actor as a tenderparticipant, the Committee for Cleaning ServiceTender at Soekarno Hatta Airport and PT AngkasaPura II (Persero) - Main Branch Office of SoekarnoHatta.

This Case No.16/KPPU-L/2009 started from a reportfrom community regarding an alleged legalcompetition violation in holding Cleaning ServiceTender at Terminals A and B of Soekarno-HattaAirport. Pursuant to the results of Examination carriedout by the KPPU’s Examining Team and advocacy

from the Reported Party, theK P P U ’ s C o m m i s s i o nAssembly hence reviews andconcludes that there is avertical conspiracy among thethree Reported Parties. In sucha t e n d e r, t h e K P P U ’ sCommission Assembly found afact that PT Spectra Jasindohas undertaken post bidding inthe said tender, facilitated bythe Tender Committee and PTAngkasa Pura II that laterassigned PT Spectra Jasindoas the tender winner.

Towards such an action, theC o m m i s s i o n A s s e m b l ypunished PT Spectra Jasindoby prohibiting it to participate inany tender held by PTAngkasaPura II for one year, andordered PT Angkasa Pura II tohold again Cleaning ServiceTender at Terminals A and B ofSoekarno-Hatta Airport in

2010. The CommissionAssembly also recommendedthat the KPPU give suggestions and considerations toPT Angkasa Pura II in order to impose anadministrative sanction to the Head of Main BranchOffice in Soekarno Hatta and the Committee forCleaning Service Tender at Soekarno Hatta Airportthat evidently had undertaken conspiracies withtender participants.

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LawEnforcement


LawEnforcement

Discriminative andMonopolistic Practices inTaxi Service at Surabaya

Juanda International Airport

The KPPU affirmed that PTAngkasa Pura I, SurabayaJuanda International Airport Branch was provenlegally and convincingly to have violated Article 19letter (d) regarding the Market Mastery (discriminativepractice), while the Navy Primary Cooperative inSurabaya was proven to have violated Article 17 ofMonopoly Law Number 5 Year 1999. This decisionwas read out by the Commission for the Supervisionof Business Competition (KPPU) on 30 March 2010 inDecission Announcement No.20/KPPU-I/2009 regarding an alleged violation against ActNumber 5 Year 1999 that occurred in the taxi serviceat JuandaAirport in Surabaya.

This case began from the monitoring activitiesconducted by the KPPU on taxi services at SurabayaJuanda International Airport, in which, based on theresults of such monitoring, the Commission for theSupervision of Business Competition (KPPU) foundan indication of violation against Act Number 5 Year1999 conducted by PT Angkasa Pura I JuandaInternational Airport Branch (the Reported Party I)and the Navy Primary Cooperative (PrimKopAL) (theReported Party II) as the taxi operator of Taxi PrimaTaxi and Wing Taxi.

The violations were committed primarily against: (i)Article 17 of Monopoly, which reads: A business actoris prohibited from controlling the production and ormarketing of goods and or services which may resultin monopolistic practices and or an unfair businesscompetition, (ii) Article 19 paragraph (a) on theprohibition to reject and/or prevent a certain businessfrom conducting the same business activity on thesame relevant market, and (iii) Article 19 letter (d)regarding the prohibition of the discriminativepractices against certain business actors.

In the investigation process conducted by theCommission for the Supervision of BusinessCompetition’s inspection team, there was a writtenagreement between PT Angkasa Pura I and thePrimary Cooperative in 2006, which basically agreedthat the Primary Cooperative (Primer Koperasi) havea full right to manage the operations of taxis atSurabaya Juanda International Airport. Theagreement was put down in the CooperationAgreement valid for one year and may be extended inthe following year. It is known that since 1979, thePrimary Cooperative has been the only taxi operatorthat provides taxi service at Juanda Airport inSurabaya. In subsequent practice, the Primary

of Case

Cooperative has the authority to determine itscooperation partners (taxi operators) without havingto get an approval from PT Angkasa Pura I. Thisproves that the Primary Cooperative has amonopolistic position in the management of taxioperation at Surabaya Juanda InternationalAirport.

Considering that the taxi operations at the SurabayaJuanda International Airport involve manystakeholders, the Commission for the Supervision ofBusiness Competition (KPPU) considers providing acertain period of time to both the Reported Parties toundertake the implementation of this Decision.Besides, since they have been acting cooperativelyduring the inspection process and intending to gothrough changes in accordance with the prevailingregulations. In its decision, the Commission for theSupervision of Business Competition (KPPU)recommended the Administrator of the SurabayaJuanda International Airport to oversee theimplementation of airport taxi services to be moreorderly, and also recommended the Traffic and RoadTransportation Office in East Java province as theofficial authorized party to issue the Taxi OperationPermit in order to improve the taxi tariff fixing at theSurabaya Juanda International Airport in accordancewith the existing regulations.

Furthermore, the Commission for the Supervision ofBusiness Competition (KPPU) stated that PTAngkasa Pura I was found guilty of violating againstArticle 19 paragraph (d) of Act Number 5 Year 1999and therefore was obliged to pay a fine of IDR 1 billion,and provided other taxi operators with opportunities toprovide taxi services at the Surabaya JuandaInternational Airport at latest 3 (three) years after thisDecision has had a fixed legal effect. While thePrimary Cooperative was convicted of violatingArticle 17 of Law Number 5 Year 1999 and therebywas obliged to pay a fine amounting to IDR 1 Billion.The KPPU also ordered PT Angkasa Pura I and thePrimary Cooperative to implement taximeter fares intaxi operations at the Surabaya Juanda InternationalAirport at latest 1 (one) year after this Decision hashad a fixed legal effect.

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Bid Rigging of Fixed Fire Pump at PTPertamina Region I Medan

The Commission for the Supervision of BusinessCompetition (KPPU) affirmed that bid rigginghappened in the implementation of related activities inTender forAddition of 2 (two) Units of Fixed Fire Pumpin PT Pertamina Region I Medan, Installation at PulauSambu and Installation at Tanjung Uban in 2008performed at the KPPU that stated that bid riggingwas proven legally and convincingly to have violatedArticle 22 of Law Number 5 Year 1999 regarding bidrigging. In the case No.17/KPPU-L/2009, the KPPUdecided that 6 Reported Parties were proven to bidrigging, namely: PT Fara Mutiara, PT Herfin Jaya, PTMitra Perkasa Jaya, Roberto Nainggolan, TenderCommittee, and Jacob Tjandra. Concerning the sixReported Parties, the KPPU fixed punishments interms of different fines and sanctions in line with rolesand involvement of each party in bid rigging.

The case started from community’s report regardingalleged violation against Law Number 5 Tahun 1999 intendering of Additional 2 (two) units of Fixed FirePump di PT (Persero) Pertamina Region I Medan,with a value of Rp. 4.423 juta. Based on pricenegotiation that applies e-auction system, followed

with eye-to-eye meeting between PT Fara Mutiaraand Chairperson of Tender Committee that PT FaraMutiara is said to be the tender winner with offeringprice as much as Rp 4.324 juta.

Furthermore, based on the examination by theKPPU’s Examining Team, it was found that acooperation was held to ascertain and or select PTFara Mutiara as the winner of the tender, implementedby PT Fara Mutiara, Roberto Nainggolan, and JacobTjandra. Roberto Nainggolan is the representative ofPT Fara Mutira in delivering documents fornegotiation offer of e-auction, while Jacob Tjandra isthe Director of PT Herfin Jaya that also took part in thetender, yet he acted as the representative of PT FaraMutiara in undertaking negotiations with the TenderCommittee. The status of Jacob Tjandra indicatedthat PT Herfin Jaya was made a counterpart for PTFara Mutiara, and that this was known to the TenderCommittee, but no action was taken. In addition, theExamining Team also found the same offeringdocuments between PT Fara Mutiara and PT MitraPerkasa Jaya.

Regarding such a bid rigging, the CommissionAssembly confirmed that 6 out of 8 Reported Parties,namely PT Fara Mutiara, PT Herfin Jaya, PT MitraPerkasa Jaya, Roberto Nainggolan, the TenderCommittee, and Jacob Tjandra, were proven legallyand convincingly to have violated Article 22 of LawNumber 5 Tahun 1999. With its fault, PT Fara Mutiarais required to pay a fine amounting to Rp. 50 million,Roberto Nainggolan Rp.200 million, and JacobTjandra Rp.50 million. The Commission Assemblyalso issued a prohibition for PT Herfin Jaya and PTMitra Perkasa Jaya to take part in tenders within PTPertamina (Persero) Region I Medan for 2 (two) yearssince this decision has its fixed legal effect.

LawEnforcement


CompetitionAdvocacy

As mandated in Law Number 5 Year 1999, one of theKPPU tasks is to prepare a guideline and orpublication related to the Articles contained in the Act.Until March 2010, the KPPU has approved ninesubstantive legal guidelines (pedoman hukumsubstantif) and one procedural law (pedoman hukumacara) that may be used as guidelines forstakeholders to understand the provisions containedin the Indonesian competition law. In the early 2010,the Commission for the Supervision of BusinessCompetition (KPPU) published again the draftguideline of Article 14 of Act Number 5 Year 1999 onVertical Integration (Integrasi Vertikal). Thepublication of the draft guideline is carried out in orderto get public inputs and feedbacks on the draftguideline, which will be ratified inApril 2010.

The Article 14 of Law Number 5 Year 1999 on VerticalIntegration states that "A business actor is prohibitedfrom entering into an agreement with anotherbusiness actor in order to dominate a number ofproducts covered in the production chains of certaingoods and or services, in which every productionchain is the result of process or further process, bothin a direct sequence and an indirect sequence, whichmay lead to business competition that is unfair orunprofitable towards community. "In general, thevertical integration is an agreement that aims atdominating several business units included in theproduction series of certain goods and or services.The vertical integration may be undertaken with astrategy to control the upstream production unit wherea company has business units, the supplies of rawmaterials, and downstream production unit with theownership of business units up to the distribution ofgoods and services up to the end-consumers.

The positive value is that the vertical integration maylimit the double margin so that consumers may benefitbecause they could get products with cheaper prices.The companies are also becoming more efficienttechnically filed and in transaction costs, so the totalprofit earned will be greater than if they have to buy

raw materials from other companies or distribute itsproducts through other companies. The negativevalue is that the vertical integration could hampercompetition due to increased costs that shall be borneby competitors for getting accesses to raw materialsor necessary distribution channels to sell its products(rising rival's costs). The practice of verticalintegration may also reduce the availability of rawmaterials and increase the capital required forentering into the market. In other words, the verticalintegration may create a barrier to enter into a market.The competitors’ barriers to enter the market may bedone through (i) refusing and/or hampering certainbusiness actors in conducting the same businessactivities on the relevant market, and (ii) conductingdiscriminative practices and transfer pricing tp certainbusiness actors. The transfer pricing is the actiontaken by a business actor to give a lower price to acompany integrated under the business actor, so thetotal production cost will be lower. With low productionrates, a business actor can squeeze prices morecheaply compared to its competitors’ prices. Thetransfer pricing is the application of a double marginreduction concept that has been describedpreviously.

This is one of measures in undertaking efficiency, forboth business actors and consumers equallybenefited. The transfer pricing may provide benefits toa business actor who carries it out because it mayincrease sales volume. Through the verticalintegration, a business actor may also make cross-subsidies among their companies. However, acompetitor’s business actor will suffer losses due tosuch a policy. While the second impact occurs with theutilization pattern of market power of a business actoras the holder of vertical integration who controls andcoordinates the other competitors to practice cartelsand blocking against new competitors, price fixing orDividing Market Territory. These things will bedescribed in the guideline of the KPPU’s Articlesregarding Vertical Integration.

Planned Issuance of aGuideline to Article 14 onVertical Integration ofLaw Number 5 Year 1999


The Commission for the Supervision of BusinessCompetition (KPPU) authorizes the CommissionRegulation Number 7 Year 2010 regarding Guidelinefor the Implementation of Multiple Positions asrequired in Article 26 of Law Number 5 Year 1999concerning Prohibition of Monopolistic Practices andUnfair Business Competition (PerKom No.7/2010).This guidance is one for Article 10 imposed by theKPPU, where previously the KPPU has enacted otherCommission Regulations regarding relevant market,pre-notification of merger, bid rigging, administrativesanctions, control by the State-owned Enterprises(BUMN), Franchising, Intellectual Property,Agreements in laws and regulations, and the KPPU’sprocedural law.

Article 26 of Law Number 5 Year 1999 stipulates that aperson who serves as a director or commissioner of acompany at the same time is prohibited fromconcurrently becoming a director or a commissionerin another company, if the companies:(i)Are located within the same relevant market; (ii)Areclosely related to the business field and or type; or (iii)Together may dominate market shares of certaingoods and services that may result in monopolisticpractices and or unfair business competitions

The Commission Regulation Number 7 Year 2010confirms that the scopes of a director or commissionerare not limited to a legal body in terms of LimitedCompany (PT) but also include legal bodies in termsof a foundation, firm, maatschaapij, CV or even aCooperative. It means that the Director orCommissioner in Article 26 is interpreted also as a topmanagement and supervisor from a non-liabilitycompany in terms of a legal body. Thus, a person isprohibited from becoming a Director of a companyand at the same time he or she is a managementmember of a cooperative of 2 companies are engagedin a business mutually competitive in the samerelevant market.

This Commission Regulation Number 7 Year 2010was prepared in order to avoid the incidence of doublepositions that often block fair business competition.For example, in the horizontal relation, a personholding an important position in two competitivecompanies (direct interlock) is potential to carry out orform a mutual strategy between 2 companies,especially one that is related to price, marketallocation, and fixing of number of products made.Meanwhile, in the vertical relation, the double positionmay give rise to vertical integration of activities thatcause discrimination of payment terms for competitorand act as a catalyst in an effort to obtain vertical,horizontal, atau conglomerate dominance. Regarding

such a thing, pursuant to Law Number 5 Year 1999, aperson is prohibited to become a director orcommissioner of a company at the same time from 2companies horizontally connected (if involving 2competitive companies directly in the same relevantmarket) or vertically (if a company in a distributionnetwork or closely related in a field or certain businesstype).

Nevertheless, it is necessary to consider that theprohibition for holding double positions is related to itsmisuse that may “cause monopolistic practices andunfair business competition”, namely if the doublepositions possessed by a person become a means forthe person to control or distort the market by pricesfixing, marketing territory or goods/service supply thatmay cause losses to consumers.

The misuse of the double positions horizontally maybe carried out through:•Article 4 regarding Oligopoly•Article 5 regarding Price Fixing•Article 7 regarding Predatory Pricing•Article 9 regarding Dividing Market Territory•Article 10 regarding Boycott•Article 11 regarding Cartel•Article 17 regarding Monopoly

Meanwhile, the misuse of the double positionsvertically is usually closely related to production anddistribution processes, that may be carried outthrough:•Article 8 regarding Resale Price Maintenance•Article 14 regarding Vertical Integration•Article 15 regarding Exclusive Dealing•Article 19 regarding Market Control•Article 25 regarding Dominant Position•Article 27 regarding Share Ownership

Therefore, if a person is evident to have misuseddouble positions, the KPPU is authorized to exert asanction in terms of an order to prohibit the holding ofdouble positions and or imposing fines or evencompensation not only on the company where theperson works but on such a person himself or herself.The intentions of the preparation of the Commission’sRegulation are that (1) it shall provide the same, clearand true understanding or perception regarding theprohibition of the holding of double positions; (2) itshall provide clear understanding basis and directionso that there is no other interpretation other than thatdescribed in this guideline; and (3) it shall provide abasis to all parties in behaving so that not any partyexperiences any loss and consequently creating fairbusiness competition conditions.

The KPPU Imposes a Guideline forProhibition of Multiple Positions

CompetitionAdvocacy


International

As a realization of international cooperation activities,the Commission for the Supervision of BusinessCompetition (KPPU) had the honor of receiving a visitfrom the Tanzanian Ministry of Water and Irrigationdan the Energy and Water Utilities RegulatoryAuthority (EWURA). Such a bilateral meeting wasattended by nine delegates from Tanzania, led byProf. Mark Mwandosya (Tanzanian Minister for Waterand Irrigation) and Mr. Simon F. Sayore (Chairman ofEWURA).

The Ministry of Water and Irrigation is entrusted withthe responsibility of developing and managing waterresources of the Tanzania country. Its mission is toensure that water resources are developed andmanaged sustainable in collaboration with allstakeholders. Its also responsible to facilitateparticipatory irrigation so as to enhance sustainableproduction and productivity, food security, povertyreduction and achieve national economicdevelopment. While EWURA is an autonomous multi-sectoral regulatory authority established by theEnergy and Water Utilities Regulatory Authority Act. Itis responsible for technical and economic regulationof the electricity, petroleum, natural gas and watersectors in Tanzania.

A bilateral meeting between the KPPU and theMinistry of Water and Irrigation of Tanzania

During the meeting, the Tanzanian delegates and theCommission for the Supervision of BusinessCompetition (KPPU) discussed the public policyimplementation in fair competition in such sectors asindustry, energy and water utilization in Indonesia, inorder to become one of the references for Tanzaniandelegates to implement the similar way in theircountry.

In his presentation, the KPPU’s Chief explained thecharacters of relationship between the KPPU andsector regulators, in which the Commission for theSupervision of Business Competition (KPPU) isresponsible for competition issues while the regulatoris responsible for the technical and economic issues.The KPPU’s forms of monitoring for strategic sectorsin Indonesia, such as oil and gas sectors as well as theutilization and management of water, include severalphases such as planning and designing stages,allocation stages and implementation stages(monitoring and evaluation). Hopefully, through thismeeting, in addition to strengthening bilateralrelations between the two countries, this will also bethe beginning of further cooperation, especially forexchanges of legal information and experience inpolicy implementation in each country.


International

As a part of the Cooperation on Competition PolicyProject (Phase II) between KPPU and JICA (JapanInternational Cooperation Agency), KPPU held aDiscussion on Merger and Acquisition on March 31st,2010. The speaker in the workshop was Mr. YusukeSakurai, an investigator of JFTC (Japan Fair TradeCommission) who concurrently serves as a JICAResident Advisor at KPPU. The workshop wasattended by the employees of KPPU, particularlythose who are in charge of Merger and Acquisition aswell as the management of the Secretariat of KPPU.

Merger and Acquisition is one of the studies in thebusiness competition law in Indonesia ascontemplated in Article 28 and 29 on Merger,Consolidation and Acquisition of Law Number 5 Year1999. In line with the application of the GovernmentRegulation on Merger and Acquisition by theGovernment of Indonesia, KPPU is challenged to

keep developing its knowledge and capability inhandling the merger cases in Indonesia.

In the discussion, the speaker delivered thepresentation material on the merger and acquisitionconcept based on the JapanAnti MonopolyAct as wellas the case samples on merger and acquisitionhandled by JFTC as a Japanese competition lawenforcing institution. The main topic delivered by thespeaker was concerning ”Broad Outline of Mergerand Acquisition Regulations in Japan” and”Introduction on Investigations of Merger andAcquisition-related Cases in Japan by JFTC”.Through this discussion, it is expected that theKPPU’s employees, especially the investigators whowill handle the case related to merger and acquisition,can use the experiences of JFTC as one of theirreference in handling the similar cases occurring inIndonesia.

The KPPU sent two delegates to attend the APECSenior Official Meeting I and Related Meetings heldfrom 25 February to 2 March 2010 in Hiroshima,Japan. Specifically, the KPPU participates in theCompetition Policy and Law Group (CPLG) Forumand the APEC Business Advisory Council (ABAC)

Dialogue, that discussed the issue of ProceduralFairness in Competition Cases. Through this event,the competitive institutions in the APEC memberstates got the chances to exchange information,insights and experience related to the issue.

In the Competition Policy and Law Group (CPLG)Forum, Indonesia was represented by the KPPU thathas a chance to be one of the resource speakers in thethird session, who discussed the topic on “ProceduralFairness in the Deliberations and DeterminationPhase”. In this session, some points were discussed,such as criteria that the competition agency use todetermine admissibility of evidence in its decisionmaking, how should the investigative and decisionmaking functions be divided and performed incompetition cases, and the timeframe for coming to adecision and determination.

Internal Discussion on Merger andAcquisition with JFTC

Report of APEC Senior Official Meeting I and RelatedMeetings

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International

On 17-19 March 2010, the Chairman of KPPU takespart at the UNCTAD Multi-year Expert Meeting onServices, Development and Trade: the Regulatoryand Institutional Dimension, held in Geneva,Switzerland. In the meeting, the KPPU’s Chairmantook part as a resource person in the session on “KeyRegulatory Issues” by exposing a presentation with atheme “Interface between Competition Authorities,Competition Regulations, and other RegulatoryFrameworks and Institutions in InfrastructureServices”.

During his presentation, the best practices inIndonesia were discussed, especially the thingsrelated to the implementation of Law Number 5 Year1999 regarding the Prohibition of MonopolisticPractices and Unfair Business Competition Law. Inthe 2000 – 2009 period, the KPPU handled 207 caseson unfair business competition. As many as 22% of

the cases are those related to infrastructure, such asbuilding construction, public facilities, electricity, freshwater supply, road and bridge construction andgeneral infrastructure procurement. The KPPU’sChairman underlined the importance of cooperationand koordinasi with all interested parties to implementbusiness competition law in order to create fairbusiness competition climate. In Indonesia, this wasmade real through, among others, a cooperationmechanism among the KPPU, the Ministry ofCommunications and Information, and IndonesianTelecommunications RegulatingAgency (BRTI) in theformulation of a manual on fair competition intelecommunications sector.

In general, the objective of the meeting is to assistdeveloping countries in establishing regulatory andinst i tut ional f rameworks and cooperat ivemechanisms to support the strengthening of theirdomestic services capacity and its efficiency,competitiveness and export capacity. The meetingattended by experts and practitioners fromgovernments, sector regulators and competitionauthorities to address the development implicationsof regulatory and institutional frameworks ininfrastructure services sectors, and to identify andclarify the key issues to be further analyzed toenhance the capacity of developing countries tobenefit from services development and trade. Duringthe meeting, participants made discussions andexchanged information to assess the impact ofregulatory and institutional frameworks forinfrastructure services, development and trade, andto identify practical solutions, options, capacity-building programmes, and indicative guidelines/checklists of best practices for policymakers andregulators.

As a part of the development of an internationalcooperation network and the KPPU’s activeparticipation in AEGC (ASEAN Experts Group onCompetition), the KPPU sent its delegates to join aseries of activities and events held by AEGC in Hanoi,Vietnam, namely The 5th AEGC Meeting held in 19 –

20 March 2010 and The 6th AEGC Capacity BuildingWorkshop held in 22 – 24 March 2010. These eventswere attended by delegates representing 9 (nine)ASEAN countries, excluding Cambodia that wasabsent, and 2 (two) representatives from the ASEANSecretariat.

The 5thAEGC MeetingThe 5th AEGC Meeting was an annual meeting heldby the AEGC member countries. In the meeting,Vietnam was chosen as the new Chairman of AEGCreplacing Malaysia, and Indonesia (represented bythe KPPU) was assigned to become the ViceChairman of the AEGC. Therefore, pursuant to thedecision at the AEGC, Indonesia is authorized tobecome the Vice Chairman for Year 2010 and theAEGC Chairman for Year 2011. Indonesia was alsoappointed as the Working Group Coordinator onCapacity Building for 2010. In the meeting, the

UNCTAD Multi Year Expert Meeting

The KPPU’s contribution to the ASEAN Economic

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International

capacity building implemented by the AEGC duringAugust 2009 - February 2010 and the planned reportof three incoming capacity building events to be heldin Cambodia and Brunei Darussalam were reported.

Furthermore, a discussion on Progress of the AEGCCapacity Building Roadmap and AEGC StrategicPlanning Session, expected to assist the AEGC infixing the programs that are in line with the needs ofeach country. The discussion on the roadmap in themeeting was focused on operational steps in reachingthe expected targets of capacity building (Chapter 5).Especially for the benefit and cost measurements forbusiness competition law and policies, it was agreedthat three countries would be the pilot study for thoseactivities, namely Brunei, the Philippines, andThailand. These three countries were selectedconsidering the shortages of political willingness,progress of discussion and implementation ofcompetition policy in the related country.

The meeting also discussed the progress of RegionalGuideline on Competition Policy, and the final draftGuideline already prepared based on inputs from allmember countries. The printed forms of the Guidelinewill be delivered in the coming AEGC meeting inBrunei Darussalam. Then, the Guideline will bepresented to SEOM for approval in SEOM 3/41. Somemember countries (the Philippines and Indonesia) willcommunicate the Guideline with other institutions inthe related country. Afterwards, the meetingdiscussed the Progress of Handbook on CompetitionPolicies and Laws in ASEAN for Businesses. Vietnamas the Coordinator of the Working Group onHandbook submitted the draft prepared based on theresults of the meeting and inputs form all AEGCmember countries. It is expected that the Handbookmay be completed before the middle of May 2010 anddelivered to SEOM in the middle of June 2010. ThenextAEGC meeting will be held in Brunei Darussalamon 8 to 9 July 2010.

The 6th AEGC Capacity Building Workshop has atheme on Competition Regulatory Bodies (CRBs) inTheir Interaction & OutreachActivities. The Workshopis a part of AEGC capacity building activities andattended by the representatives of the competitionagencies from advanced countries (Spain, Germany,Belgium, and Russia), developed countries(Armenia), representatives of ASEAN countries(Indonesia, Singapore, Malaysia, Cambodia,Vietnam, the Philippines, Brunei Darussalam,Myanmar, and Laos), and ASEAN Secretariat andInwent as the host.

The 6thAEGC Capacity Building Workshop

The Workshop covered relevant issues related to thecommunications and public relations policies that aremost appropriate for the national and internationalrecognition of such newly established CompetitionRegulatory Bodies. Participants made discussion ofthe needs of CRBs to become known and acceptedfrom the private and from the public sector alike. Onthe international dimension, the swift development ofhorizontal relations among CRBs from differentnations will also be discussed. It is generally acceptedthat the international dimension of competition lawand policy requires CRBs to operate in the nationalterritories, but with a view to the real-life events thattake place abroad. The Workshop also analyzed theabove issues in applying international best practicesand appropriate techniques for CRBs’ interaction andoutreach activities.

In the workshop, Indonesia was represented by theKPPU that acted as the speaker in 2 differentsessions, namely Session 2 on Inter-relationshipbetween CRBs and other Government Agencies inASEAN Member States and Session 4 on the Needsof Advocacy and Public Outreach for IntroducingCompetition Law in ASEAN Member States. In thesecond session, in the presentation on CompetitionRegulation in Indonesian Perspective (RegulasiPersaingan dalam Perspektif Indonesia) thedelegates from Indonesia explained a number ofthings related to one of the functions of the JPPU asan agency dealing with competition in Indonesia,namely in furnishing suggestions and considerationsto the related government in relation with theregulation that impacts on business competition.While, in session 4, in the presentation entitled“Needs for Advocacy and Public Outreach inintroducing Competition Law in the ASEAN countries– Experience from Indonesia”, Indonesia explainssome elements in the competition advocacy, tasks ofcompetition advocacy, some advocacy instruments inpractice, types of competition advocacy, basic ideasof advocacy, and challenges in the early of lawimplementation. The subsequent descriptionsexplain the efforts of how to balance such challengeswith limited resources, some KPPU’s objectives,strategies in competition advocacy, the KPPU’s earlyachievements, and the KPPU’s transformation from2000 until 2010. On the third day of the workshop, theparticipants are divided into 4 working groups, eachdiscussing Advocacy, Systemic obstacles tohorizontal relations within Public Administrations,How to define target groups and communicationstools and The International Dimension of CRBs.

Competition is about price, supply, selection and service. It benefits consumers bykeeping prices low, avaibility, quality and choice of goods and services high.

KPPU-RICommission for the Supervision of Business CompetitionRepublic of IndonesiaKPPU Building, Jl. Ir. H. Juanda No. 36, Central Jakarta 10120

Phone. 021-350 7015, 350 7016, 350 7043 Fax. 021-350 7008

email: [email protected]

Surabaya

Medan

Balikpapan

Bumi Mandiri Building, Jl. Basuki Rahmat No. 129-137Surabaya 60271 - East JavaPhone. 031-545 4146, Fax. 031-545 4146email: [email protected]

Ir. H. Juanda No. 9AMedan - North SumateraPhone. 061-455 8133, Fax. 061-414 803email: [email protected]

BRI Building 8th Floor, Jl. Sudirman No. 37Balikpapan 76112 - East KalimantanPhone. 0542-730 373, Fax. 0542-415 939email: [email protected]

Jl.

Makassar

Batam

Menara Makassar 1st Floor, Jl. Nusantara No. 1Makassar - South SulawesiPhone. 0411-310 733, Fax. 0411-310 733email: [email protected]

Graha Pena Building 3rd A FloorJl. Raya Batam Center, Teluk Tering, NongsaBatam 29461 - Kepulauan RiauPhone. 0778-469 337, Fax. 0778-469 433email: [email protected]

www.kppu.go.id

Regional Representative Offices

kompetisia 04 2010 lock · in soekarno hatta airport, jakarta competitionadvocacy international...

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