THE INDONESIAN COMPETITION COMMISSION (KOMISI PENGAWAS PERSAINGAN USAHA)
INTRODUCE A NEW REGIME OF COMPETITION COMPLIANCE PROGRAM
Background
The Indonesian Competition Commission (“ICC”)has issued ICC Regulation Number 1 of 2022on Competition Compliance Program(“ICC Reg. 1/2022”) on 23 March 2022.The regulation is intended to promote legal compliance of Indonesian companies related to competition law as stipulated under Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Competition as amended under Law No. 11 of 2020 on Job Creation (“Competition Law”).The ICC Reg. 1/2022 provides necessary guidelines for companies to create or to align their existing internal regulations and policies, and/or to establish a specific guidebook that contain internal competition compliance that comply with the prevailing Competition Law (“CompetitionCompliance Program”).
The Elements of Competition Compliance Program
The subject of the ICC Reg. 1/2022 are companies that has not establish a Competition Compliance Program; or companies that already has a Competition Compliance Program, but has not been registered to the ICC, in which both can register their respective companies to the ICC (Meanwhile, the registration by group of companies shall be regulated further by the ICC).
The Competition Compliance Programshall consist ofthree following matters:
- Code of ethics,the company’s internal regulationthat containsvalues, norms and/or ethical principles related to fair competition;
- Compliance guidelines,the company policy that contains working guidelines and commitments intended for every element in the company in performingtheir business activities and to interact with stakeholders in accordance with the principles of fair competition;
- The implementation of socialization, counseling, training and/or other activities in the context of implementation of Competition Compliance Program in the company, such as the following actions:
- To provide knowledge on the principles of fair competition to entire sectors/units of the company;
- To increase specific and systematic understanding of the principles of fair competition to certain sectors/units within the company;
- To develop competence and technical skills in order to implement the principles of fair competition in certain sectors/units within the company in performing their business activities.
The Assessment from the ICC
The ICC shall perform an assessment of the Competition Compliance Program under the following procedures: reporting, evaluation, and stipulation.
- Reporting
Companies can submit report to the ICC regarding the establishment of Competition Compliance Program implementation report (“Report”),that shall at least consist of commitment of the company;
- person in charge;
- risk identification;
- risk mitigation;
- socialization, counseling, training, and/or other activities;
- surveillance schemes;
- internal reporting mechanism;
- monitoring and evaluation;
- internal sanctions;
- periodic adjustments.
- Evaluation
The evaluation is carried out by the ICC by conducting a hearing based on the Report. The hearing shall be held within 15 (fifteen) working days from the submission of the Report and may be extended for a maximum of 15 (fifteen) working days.
- Stipulation
In the event that after conducting the evaluation, the hearing consider that it is necessary to make improvements, the ICC shallreturn the Report in which contains guidelines for the improvement to be performed.
However, if the hearing approves the submitted Competition Compliance Program, the decision shall be conveyed under an ICC Stipulation on Compliance, which announced in a hearing. The said stipulationis valid for 5 (five) years and can be extended (further provisions on the extension shall be determined by the ICC).
The Importance of Competition Compliance Program
Under the Competition Compliance Program, the ICC encourages companies to establish and to enforce internal regulations that provides clear guidelines to employees and management in performing their business activities.
In the event that a company is being investigated and/or found guilty of Competition Law infringements in the future, under the condition that the Company own and/or have registered theirCompetition Compliance Program, therefore the ICC can grant reduction over the penalty imposedto the company.
The Competition Compliance Program becomesa positive incentive for companies, considering that in accordance to the latest provisions, the number of fines that can be imposed by the ICC is more costly than before. Based on the new provision, the ICC can impose a maximum fine of 50% (fifty percent) of the net profitin the relevant market during the period of infringement; or a maximum of 10% (ten percent) of total sales in the relevant market during the period of infringement.
ROBERT DANIELS & Partners is a law firm that have a unique expertise in the field of Competition and Antitrust. If you need further information or consultation regarding the Competition Compliance Program, please do not hesitate to contact us.
For more information:
| Martina Tambunan | Lantiko Hikma Suryatama | Stenley Ludya Liap |
| Managing Partner | Senior Associate | Junior Associate |
| martina@rdsp.co.id | lantiko@rdsp.co.id | stenley.ludya@rdsp.co.id |
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