Watchdog Spots Cartel Practices In Port Services

Watchdog spots cartel practices in port services

The Jakarta Post , Jakarta
A monopoly watchdog raised concerns Wednesday of a possible cartel in the provision of storage and import clearance at Tanjung Priok Port in Jakarta.

The Commission for the Supervision of Business Competition (KPPU) has urged the government to step in and regulate the services in order to curb practices that have caused increased costs for local manufacturers.

KPPU competition policy analyst Sulistiyanto said the exclusive fee arrangements between service companies operating in the port had the potential to create a cartel.
"The arrangement is against the 1999 law on the prohibition of monopolies and unfair business competition," he said.

"The government, as the sole regulator of port services, must regulate the fee so port clearance can be done efficiently."

In the middle of last year, six powerful associations linked with import and export activities, as well as shipping affairs, began to regulate port service fees for around 700 port clearance service firms.

The firms are all members of the six associations, which include the Indonesian National Shipowners Association (INSA), the National Importers Association (GINSI), the Indonesian Exporters Association (GPEI), the Association of Indonesian Temporary Storage (APTESINDO), the Association of Indonesian Stevedoring (APBMI) and the Union of Forwarding and Exporting Companies (GAFEKSI).

The associations exclusively arranged fees for "less-than-container-load" (LCL) cargo, cargo containing goods belonging to more than one owner.

The LCL fees include those for stevedoring, warehouse rent and cargo delivery from vessels to warehouse.

"A seaport is categorized as an essential facility. Due to its importance, services related with this facility often enjoy an inevitable character of natural monopoly," said KPPU director for competition policy Taufik Ahmad.

Taufik said that because players providing port services were limited it would eventually create price exploitation.

"The government is needed to regulate all services related with ports," he said.

KPPU director of communication A. Junaidi said the agency sent a letter to the government Jan. 31 highlighting the problems.

"We want to protect both the companies and the consumers. We want to ensure there is no price exploitation," he said.

Tanjung Priok Port manages 60 percent of the country's export and import activities.

According to the directorate general of customs and excise, the volume of imported goods via the port in 2008 reached 44.7 billion metric tons, up by around 45 percent from 2007.(uwi)