Legal Literacy - Have you ever heard of the institution KPPU (Komisi Pengawas Persaingan Usaha/Indonesia Competition Commission)? This article explains the urgency of strengthening the institutional status of the KPPU.

In the provisions of Article 30 to Article 37 of Law Number 5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair Business Competition, it is explicitly mandated that an independent institution be established, namely the Komisi Pengawas Persaingan Usaha (KPPU/Indonesia Competition Commission) which was established based on Presidential Decree of the Republic of Indonesia Number 75 of 1999. The KPPU is authorized to supervise and enforce the implementation of Law Number 5 of 1999 and resolve disputes related to business competition law.

Problems and Challenges in Enforcing Business Competition Law in Indonesia

The imperfection of the law in the provisions of Law Number 5 of 1999 as the basis for the KPPU's authority can be seen from the various shortcomings contained in the law, namely:

  1. The ambiguity of the KPPU's institutional status, both juridically and practically, whether it is classified as a legislative, judicial, or special institution. The appointment of civil servants as members of the KPPU is an urgency that must be clarified immediately so that the institution's operations can run optimally, so that KPPU members are bound by the oath or responsibility of office that must be upheld by every state official and do not freely resign from their positions;
    The regulation regarding the use of indirect evidence in resolving several cases handled by the KPPU must be further considered because the legal system in Indonesia does not recognize such a model of proof;
  2. The need for changes regarding the definition of legal subjects in business competition law in Indonesia because the law currently in force has not yet reached the interests of business actors who carry out business activities abroad. Thus, it needs to be expanded and adjusted to regulations in other countries so that business activities can keep up with international economic developments;
  3. Various government policies are considered to often trigger unhealthy business competition, such as the regulation of dispute resolution procedures at the KPPU which have not been systematized in a complete regulation, so several provisions need to be harmonized in order to create a healthier business competition climate.

2. Application of Law Number 5 of 1999 in Resolving Business Competition Disputes

In the provisions of Article 36 of Law Number 5 of 1999, it is stated that the authority as an investigator carried out by the KPPU is within the realm of criminal law, even though this is also the basis for the KPPU in seeking and finding material truth, namely whether business actors have violated Law Number 5 of 1999 or not. This confirms that the KPPU is only an institution that oversees the implementation of the law so that the KPPU does not have the authority to carry out coercive measures. This issue is also related to the legal position of the KPPU in the constitutional system, whether as a supervisory institution or a special law enforcement institution.

3. Institutional Problems and KPPU Authority

Law Number 5 of 1999 gives the KPPU very broad authority in enforcing business competition law, starting from receiving reports of alleged unfair business competition and monopolistic practices, conducting examinations, investigations, making decisions and imposing sanctions administrative for business actors who violate. In reality, the KPPU's authority actually raises concerns for business actors because there is no balance in due process of law because law enforcement is still considered one-way and there is an accumulation of authority which has implications for abuse of power from law enforcement institutions.

The problem that occurs is that the KPPU has not yet been facilitated by tools or coercive measures that can effectively implement the decisions and sanctions issued. As a result, many business actors do not comply with implementing these decisions. The KPPU requires implementing regulations that refer to the procedural law used in following up on Law Number 5 of 1999.

Government Actions in Efforts to Strengthen the Institutional Status of the KPPU

It is necessary to resolve juridically by affirming the KPPU as an independent state institution with financing through the State Revenue and Expenditure Budget and for the employee status of the KPPU secretariat, it needs to be formulated appropriately because the KPPU secretariat functions to support the implementation of the commission's duties in a single state institution. This affirmation can be done through changes to several provisions in Law Number 5 of 1999 so that the substance can keep up with the times and run effectively in the context of enforcing business competition law.

Amendment to Law Number 5 of 1999

Synchronization and harmonization between Law Number 5 of 1999 and existing regulations, as well as adding rules, is an urgency in strengthening the institutional status of the KPPU. The regulations referred to are HIR/RBg which are more general as well as other government policies in various sectors or across sectors.

In addition, it is necessary to review the duties and authorities assigned to the KPPU, considering that the KPPU is not a law enforcement institution and the sanctions given are only administrative. Moreover, the KPPU's authority and the limits of the authority it has are not clearly stated. Amendments to Law Number 5 of 1999 must include the separation of investigation, investigation, prosecution and adjudication authorities so that potential abuse of authority can be avoided.

Amendments to the anti-monopoly law also need to be made regarding business competition procedural law. To carry out business competition law enforcement, great authority is needed, namely the authority to search and confiscate, which has so far been carried out by the Police investigators. Several countries such as the United States, Germany and Japan, have accommodated the authority of investigators in their competition institutions to maximize their performance in enforcing business competition law. Therefore, the Indonesian government must be able to grant search authority and confiscation independently to the KPPU through changes to Article 35 and Article 36 because this authority will make it easier for the KPPU to uncover business competition cases.

The KPPU's authority to carry out investigations, investigations, prosecutions and adjudicate cases as contained in the current anti-monopoly law is an authority that is proportional to the objectives to be realized in the draft anti-monopoly law. The lawmakers can be guided by the authority possessed by investigators of the Corruption Eradication Commission (KPK), namely the authority to search and confiscate themselves specifically in the field of competition and anti-monopoly. The investigators themselves can be taken from the police, especially in the directorate of economic crimes.

Another KPPU authority that needs to be strengthened is the authority to implement decisions or executions and coercive measures against business actors who do not want to comply with KPPU sanctions. One of the obstacles faced by the KPPU is the inability to execute decisions that have been decided by the KPPU itself. The existing laws and regulations are also less effective in making criminal acts against business actors who do not want to comply with KPPU decisions.

References

Mantili, Rai, Hazar Kusmayanti, and Anita Afriana. “Problematika Penegakan Hukum Persaingan Usaha di Indonesia dalam Rangka Menciptakan Kepastian Hukum.” Padjadjaran Jurnal Ilmu Hukum 3, no. 1 (2016).
Mochtar Arifin, Yasir. “Ideal Authority of Business Competition Law Enforcement Institutions in Indonesia.” Yogyakarta, 2019.
Sekarmaji, Aji. “A Review of Problems Arising in Business Competition Law Enforcement.” Jurnal Hukum dan Pembangunan Tahun ke-39 3 (2009).
W.Tobing, Donny. “Legal Review of Business Competition Procedural Law in the Perspective of Due Process of Law.” Journal of Private and Commercial Law 1, no. 1 (2017).
*This article represents the personal opinion of the author and does not represent the views of the editors of Literasi Hukum Indonesia.