Govt' to Pass Law on Business Competition, Foreign Investors

The Indonesian government and the House of Representatives (DPR) are drafting a bill further regulating business competition, in an effort to prevent monopolies forming and restricting the activities of foreign investors. 

"We will apply 'extra-territoriality' principles, meaning a foreign company with interests in Indonesia will be subjected to the law," Business Competition Supervisory Commission (KPPU) chairman M. Nawir Messi said during a discussion in Jakarta yesterday.

Nawir said the revision is important because "too many" foreign companies are operating in Indonesia, with the number only set to increase as investors seek to capitalize on the growing middle class.

According to Nawir, the KPPU has been overwhelmed with foreign companies' activities in Indonesia.

"Especially in oil and gas sector, all tender process participants are foreign. We can't supervise them," he said.

The new bill is considered as urgent because of the upcoming ASEAN Economy Community coming into force in 2015. At that time, foreign companies from the ASEAN countries will have much greater access to the Indonesian market.

DPR's legislation board member from the National Mandate Party (PAN) A. Muhajir, said that the definition extension of business actor in the law is necessary to extend its legal coverage to foreign companies operating in Indonesia.

In addition, the DPR supports the KPPU as a state institution to be authorized to search and to seize evidence. KPPU says it has struggled to prosecute corporate offenders because the difficulty of bringing evidence to court without these powers.

Chamber of Commerce and Industry deputy chairman Natsir Mansyur spoke highly of the government and the DPR intention to amend Law No. 5/1999. He is convinced that the new law would not inhibit foreign business and investment.

Source : Tempo