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Constitutional Justice Suhartoyo reading out the Court’s legal considerations at the ruling hearing of the judicial review of the Law on the Prohibition of Monopolistic Practices and Unfair Business Competition (LPMPUTS Law), Monday (26/10) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Gani.

JAKARTA, Public Relations of the Constitutional Court—The Constitutional Court (MK) held the ruling hearing of the judicial review of Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition (LPMPUTS Law) on Monday, October 26, 2020. The case No. 54/PUU-XVIII/2020 was filed by Kamal Barok, Nurul Fadhilah, Erika Rovita Maharani, Melita Kristin B. R. Meliala, Helli Nurcahyo, and M. Suprio Pratomo, employees of the Commission for the Supervision of Business Competition (KPPU). Chief Justice Anwar Usman stated alongside the other eight constitutional justices that the Court rejected the entire petition.

The Petitioners argued the contradiction between the phrases “a presidential decree” in Article 34 paragraph (1) and “the commission’s decisions” in Article 34 paragraph (4) of Law No. 5 of 1999 had resulted in a deadlock in institutional arrangements and staffing of the KPPU secretariat, leading to the understanding that the law only mandated the commission to regulate the KPPU secretariat’s organization and staffing. 

The Court stated that the KPPU was formed based on Law No. 5 of 1999 to oversee its implementation. Furthermore, the Constitutional Court in Decision No. 85/PUU-XIV/2016 on September 20, 2017 stated, “… in the Indonesian administration system, the KPPU is an institution independent from the influence and power of the government and other parties and accountable to the president [vide Article 30 of Law No. 5 of 1999]. In other words, the KPPU is a state auxiliary organ. In simple terms, the KPPU is a state institution and a state auxiliary organ established outside the constitution and is an institution that assists in the implementation of the duties of the main state institutions. The KPPU is accountable to the president, which illustrates that the KPPU’s function as an auxiliary state institution is part of the main executive state institutions.”

Justice Suhatoyo added that the Petitioners’ objection to the KPPU’s formation, which was through a presidential decree (Keppres), was inseparable from the material and nature of the provision on the KPPU. A presidential decree only binds those it regulates, in this case the KPPU’s organization, duties, and functions. This strengthens the argument that substances relating to the KPPU can be accommodated in a presidential decree. Meanwhile, the Petitioners’ argument requesting that matters relating to KPPU be regulated in a presidential regulation (Perpres), the problem lies not solely because of the statutory regulations, but rather the substance to be regulated.

In other words, the need for regulation on the KPPU highly depends on the substance of statutory regulations or how far the needs and dynamics of the KPPU will be responded to. Regardless of any imminent need for the KPPU as the Petitioners argued, the Court believed that as far as the KPPU’s authorities, duties, and functions had not been concretely improved, they shouldn’t be regulated in a presidential regulation. Besides contrasting with the historical reason why the commission was formed, it wouldn’t be in line with the nature of in a presidential regulation, which regulates general, abstract, and continuous norms.

Justice Suhartoyo stressed that the Court’s legal considerations also applied mutatis mutandis to the Petitioners’ request that the phrase “a decision of the Commission” in Article 34 paragraph (4) of Law No. 5 of 1999 be interpreted “a presidential regulation” because the norm is concrete, individual, and non-recurring. If the request had been granted, the structure, duties, and function of the KPPU and units therein would have been regulated with a presidential regulation (perpres) and shifted the substance and historical reason of the establishment of the KPPU.

It would have contradicted the nature of a presidential regulation, which regulates general, abstract, and recurring matters and created contradictio in terminis situation between the regulated substance and the regulating norm. moreover, not all presidential decrees (keppres) can be interpreted and applied as a presidential regulation can, because only presidential decrees that have a regeling nature (regulating) can be interpreted the way presidential regulations are. The Court didn’t believe it had the authority to judge whether the disputed phrase has a regeling or beschikking (ordering) nature. Therefore, the Court declare the request legally groundless.

KPPU Secretariat

The Petitioners had previously argued that as a state agency with an important and strategic role, the KPPU should be assisted by an independent permanent secretariat general in staffing and budgeting. The Court believed it needed a more comprehensive study to judge whether that is necessary, as the establishment of a secretariat general has far-reaching consequences not only in the state budget, but also in the scope of the organization. It also believed it didn’t have the authority to analyze the scope and authority of positions in a potential KPPU secretariat general. The Court also stated that it believed the Petitioners had understood that the Court couldn’t determine the status of the possible KPPU secretariat general, as they had stated in one of their arguments that the revision to the disputed law was the authority of the legislature.

The Petitioners had requested that the Court gave way to the revision of Law No. 5 of 1999 so that the bill on the ban of monopoly practices and unfair competition be included in the Prolegnas (National Legislative Program) priority list and be passed immediately. The Court stated that it understood that the revision to the law could be a confirmation of the position and authority of the KPPU secretariat, thus the Court stressed that if there was an urgency to do so and a comprehensive study had been done, the KPPU could be developed.

Based on those legal considerations, the Court declared the Petitioners’ argument that the word “secretariat” in Article 34 paragraphs (2) and (4) of Law No. 5 of 1999 is conditionally unconstitutional and not legally binding insofar as not interpreted other than “general secretariats in other institutions that are related to judicial powers based on the 1945 Constitution” was legally groundless.

Concurring Opinions

Four of the justices—Constitutional Justices Enny Nurbaningsih, Saldi Isra, Aswanto, and Daniel Yusmic P. Foekh—had concurring opinions on the petition along the phrase “a presidential decree” with regards to Article 34 paragraph (1) of Law No. 5 of 1999. They believed it was imperative to look back on the promulgation of the law and the establishment of the KPPU. The time constraint was necessary as it related to the change of legal nomenclature of a “decree” because of the enactment of Law No. 10 of 2004 on the Formation of Statutory Laws.

If the word “decree” for any regulatory norm was eliminated, the phrase “closing provision” in Article 56 of Law No. 10 of 2004 that reads, “All Presidential Decrees, Ministerial Decrees, Gubernatorial Decrees, Regent/Mayoral Decrees, or the decrees of other officials as referred to in Article 54 that have regulating nature, which have existed before this Law is in effect, must be read as regulations, insofar as it is not contradictory to this Law.”

Justice Enny stated that even if Law No. 10 of 2004 was annulled, the provision of Article 56 of Law No. 10 of 2004 would remain as Article 100 of Law No. 12 of 2011 on the Formation of Statutory Laws as the replacement of Law No. 10 of 2004 reads, “All Presidential Decrees, Ministerial Decrees, Gubernatorial Decrees, Regent/Mayoral Decrees, or the decrees of other officials as referred to in Article 97 that have regulating nature, which have existed before this Law is in effect, must be read as regulations, insofar as it is not contradictory to this Law.”

She added that to implement Article 34 paragraph (1) of Law No. 5 of 1999, the Presidential Decree No. 75 of 1999 on the Commission for the Supervision of Business Competition was issued. The issuance was understandable as the presidential decree was issued before Law No. 10 of 2004. However, after Law No. 10 of 2004 was in effect, said presidential decree was amended by the Presidential Regulation No. 80 of 2008 on the Amendment to the Presidential Decree No. 75 of 1999 on the Commission for the Supervision of Business Competition because it was necessary for supporting the implementation of the KPPU.

Pursuant to Article 56 of Law No. 10 of 2004, Justice Enny said, the nomenclature was no longer “a presidential decree” as it was in Article 34 paragraph (1) of Law No. 5 of 1999, but “a presidential decree.” This must’ve been realized by the Petitioners who questioned the ambiguity of the KPPU’s status. Therefore, the Petitioners’ request was self-answering.

Writer: Utami Argawati
Editor: Nur R.
PR: Raisa Ayudhita
Photographer: Gani
Translator: Yuniar Widiastuti (NL)

Translation uploaded on 11/04/2020 13:49 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.

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