If…, and only if….: a short perspective on one of Indonesia anti trust case
By: Fatahillah Hoed



On 19th November 2007, Indonesia Commission for the Supervision of Business Competition (in Indonesia known as KPPU) has ruling in his decision No. 07/KPPU-L/2007 Temasek Holdings Pte.Ltd and Singapore Technologies Telemedia Pte. Ltd., STT Communications Ltd., Asia Mobile Holding Company Pte. Ltd, Asia Mobile Holdings Pte. Ltd., Indonesia Communication Limited, Indonesia Communication Pte. Ltd., Singapore Telecommunications Ltd., dan Singapore Telecom Mobile Pte. Ltd have legitimately and convincingly violated article 27 Letter a Law No.5 year 1999 concerning Prohibition of Monopolistic Practices and unfair business Competition (Law No.5 year 1999). The ruling also stated PT Telekomunikasi Seluler, which 35% of share owned by Singapore Telecom Mobile Pte. Ltd, also have legitimately and convincingly violated article 17 section 1 Law No.5 Year 1999. Violation of such Law, KPPU have sentence Temasek and its related subsidiary to stop action of share ownership by spinn-off the whole share in PT Telekomunikasi Seluler (35% share) or PT Indosat Tbk (75% from 40,77% share) within 2 (two) year maximum since the Ruling become legally effective (after 14 working days elapsed without legal action to higher court institution to challenge such rulings). KPPU have also require Temasek to decide which one between Telkomsel and Indosat to be discharge and also to release his voting right to nominate Director and Commissioner until the completion of transaction to sell the whole share in one of the company with condition that each purchaser only allow to purchase 5% share maximum and have non-affiliation relationship whatsoever with Temasek and other purchaser. KPPU also punish Temasek and all related subsidiary (excluding PT Indosat Tbk) to pay fine 25 billion rupiah individually and require PT Telekomunikasi Seluler to cut high tariff Seluler Services practice and shrink it minimum 15% from the current tariff at the issuance date of KPPU ruling.
If I was Temasek, those ruling absolutely will give me a lot of headache especially remembering the unsuccessful action to acquire Idea Cellular in India which make me asking to my self: “wow! Do I have to fall again?”
But I’m finally realized, Indonesia and India have differences and Indonesia was the land with thousand of opportunity which make me think I could do all legal effort require before raising the white flag to KPPU.
After I get my self the Law No.5 year 1999 and look for Article 27 Letter a, it stated:
“Business actor shall be prohibited to own majority shares in several similar companies which conduct business activities in the same field in the same relevant market, or establishing several companies with the same business activities in the same relevant market, if such ownership results that:
a. one business actor or a group of business actors control more than 50% (fifty percent) of the market share of a certain type of goods or services

And Article 17 Section 1 stated:
“Business actor shall be prohibited to control the production and/or marketing of goods and /or services that may result in the occurrence of monopolistic practices and /or unfair business competition”

I understand in Seluler Services, PT Indosat Tbk and PT Telekomunikasi Seluler are similar companies which conduct in the same business field in this case GSM Seluler Service. It is very obvious that I’m not the founder of Indosat or Telekomunikasi Seluler. Is it at that time, I was a PT Telkom Tbk counterparts for East Indonesia KSO (Kerja Sama Operasi = Operational Cooperation) and already owned 35% share in PT Telekomunikasi Seluler (Kekeliruan Divestasi Indosat by Rahardi Ramelan at www.leapidea.com )?
Even the Entities signed the agreement was Indonesian Communication Limited (ICL) not Singapore Technologies Telemedia Pte. Ltd, based on factual history that the Government of Indonesia still continuing the transaction and there was no action in any form whatsoever from KPPU at that time to postponed or stop the continuance of such transaction? Try to understanding and remembering what was really occurred in 2002 only gives me more headaches, so I just look at again in Law No.5 year 1999.
Law No.5 year 1999 Article 50 Section a stated that actions and/or agreement with the purpose of implementing the prevailing law exempted from the provision of this Law. This was probably the legal grounds which cause KPPU in silence at that time. So I take a look another regulation, Government Regulation Number 30 year 2002 concerning selling of share owned by Republic Indonesia in PT Indosat Tbk. The Ultimate legal ground of such Regulation is Article 5 Section 2 Indonesia Constitution 1945 which authorizes President to issue Government Regulation to support the implementation of Law, well this is comforting, and its means I was not illegally purchase Indosat at year 2002. I have Constitution 1945 as my ultimate Legal basis that indicate the President have legal basis to issued Government Regulation Number 30 year 2002 disregard KPPU have different standing on this issue.
So, do I have to go immediately to International Center for Settlement of Investment Disputes (ICSID) in Washington because of non action taken by KPPU at 2002, which out of sudden KPPU since 2006 instigate investigation and finally giving their ruling in 2007? After I surf www.worldbank.org , I saw that Indonesia signed the Convention at February 16, 1968 and entry into force at October 28, 1968, which based on Convention on The Settlement of Investment Disputes between States and Nationals of Other States in Chapter IV article 36, all I have to do just address a request for Arbitration in writings to the Secretary General of ICSID and also New York Convention 1958 on Recognition and Enforcement of Foreign Arbitral Awards. Well, not so fast, I should be looking for ICSID to compensate the loss after all legal effort in Indonesia indicate poor result or will i do it at the same time in order to give more pressure to Indonesia justice system to be aware that I will still maintain the effort in ICSID when I’m fail in Indonesia to receive proper justice.
I have to focus on article 50 sections a which correlated with Government Regulation No.30 year 2002 as the legal basis of Indosat divestment from the Government of Indonesia to fight in District Court against KPPU. The Lawyer shall give more comprehensive assistance for this matter. Basically, Indosat divested based on Government Regulation No.30 year 2002 which the Minister of State Owned Enterprise was the Officer that authorize by such Regulation to conduct divestment process.
KPPU should already known in 2002 that I will be owned more than 50% market share in Indonesia after acquired PT Indosat Tbk because PT Indosat Tbk one of major player at that time together with Telkom. At that time Government had initiated Duopoly policy related to enactment the Law No.36 Year 1999 concerning Telecommunication. Based on article 30 Law No.5 Year 1999 stated that KPPU responsible to the President and the issuer of Government Regulation No.30 year 2002 also President, its means KPPU could not stop the instruction from their Bos at such time, the changing of Bos does not mean authorize KPPU to disregard Government Regulation No.30 year 2002 and the previous standing of their previous Bos because there was no nullification or revocation of such Regulation which could initiate KPPU to require me to sell one of the share. Well, let’s leave it to the Lawyer to think of it.
If KPPU role as the Guardian of Law No.5 Year 1999, is there any Guardian for Indonesia Constitution? Constitutional Court will be available when there is certain Law that contravene with the Right that I was entitled under the Constitution 1945. It will be a long shot for me to appear before Constitutional Court because KPPU only Government interpreter not the Law itself. Even I have the ultimate legal basis of Government Regulation No.30 year 2002 at article 5 section 2 Indonesia Constitution, the Law No.5 it self not directly reduce or eliminate the Right.
If I could not rely on the current President and State Owned Enterprise Minister to provide me fair perspective value of opinion related with this matter other than following the available legal proceeding to procure, at least Constitutional Guard probably could give another perspective on this issue . Well, after googling few moment, I’m finally found Law No.24 year 2003 concerning Constitutional Court in www.mahkamahkonstitusi.go.id. I also reading some of the cases like Judicial Review submit by the Bali-9 member in Constitutional Court Ruling No. 2-3/PUU-V/2007 which some of them Foreign Citizen who received death sentence from the Supreme Court was unacceptable by the Constitutional Court due to their status as Foreign Citizen (even Constitutional Court also declined the submission from the Indonesian citizen member).
Mmh, from this point of view, it looks I only have small opportunity for the Constitutional Court to grant my petition, because article 51 section 1 letter a give limitation for petitioner only for Indonesian Citizen, which reflected the consistency on this limitation on Constitutional Court Ruling No.2-3/PUU-V/2007 as mentioned above. But article 51 section 1 letter c only stated public or private legal entities, which means I could probably have a legal standing in Constitutional Court by submit the Judicial Review through the Company I owned, which this Company status as Shareholder of PT Indosat and PT Telekomunikasi Seluler.
Article 28H section 4 Indonesia Constitution stated that every person entitled to owned personal ownership and such ownership should not repressively takeover by anyone. I acquire PT Indosat share through competitive bidding which I have competed with other competitor in 2002, and assume that State Owned Enterprise Minister held that bidding process based on Government Regulation No.30 year 2002 which the ultimate goal was to increase Government Income by put up for sale share of PT Indosat owned by Government of Indonesia.
So, I’m not stealing the share from Government, but I purchase legally even the divestment itself legally support and instructed by Government Regulation No.30 year 2002. It’s means I’m legally owned the share which this right protected by Article 28H Section 4 Indonesia Constitution, even at that time I already owned 35% share in PT Telekomunikasi Seluler and partner for PT Telkom Operational Cooperation for East Indonesia which at that time there was no warning or rejection from Indosat Divestment Tender Committee at State Owned Enterprise Minister or KPPU as anti trust supervisory board. So probably I have to submit Judicial Review to Constitutional Court to challenge KPPU authority to ordered me to sell one of the share which I assume KPPU using their authority based on Article 49 Letter C because based on the pers release (I forgot where I put the copy of KPPU decision, probably still in my Lawyer desk) at KPPU website at point 4 line 4 of Commission Assembly decision, it stated “to stop action of ownership…” (“untuk menghentikan Tindakan Kepemilikan saham…”), so the KPPU authority to force Business Actor to sell the share should correlated with article 49 letter C (by referring to Article 10 Criminal Code concerning crime as referred to in article 48, additional criminal penalties might be added in the form of cessation of certain activities or actions that cause losses to other party). If I’m lucky, Constitutional Court based on their jurisdiction to review Law against Constitution (article 10 section 1 letter a Law No. 24 year 2003) could rule that article 49 C related to KPPU authority to order Business Actor to sell their own share is contravene with indonesia Constitution and declare that article 49 C shall no more have Legal Binding Power. This is because based on article 57 section 1 Law No.24 year 2003, Constitutional Court only authorize to deliver a verdict by stating any article that contravene with Indonesia Constitution shall no more have Legal Binding Power. Well right now I require having my sleep before discuss this matter with the Lawyers whether they could enter Constitutional Court to prevent any further damage in the future related to ownership I owned in another entities.
After I woke up, I see my e-mail and there was one of e-mail from one of my investment banker that Q-Tel finally accepts the offer to acquire Indosat as it is. It seems like dream come true, well I just give my consent to him and finally relieved that I cure from my headache. Few weeks later one of Investment banker told me that Indonesia Supreme Court made their ruling revised the Court decision and it seems everything have happy ending for Q-Tel. I just finally realized that in Indonesia you don’t have to solve legal issue through legal way, there are many ways available to solve the Legal Problem before choose to solve it in Legal battle.