Pertamina, Medco, Mitsubishi fined for unfair practices

The Business Competition Supervisory Commission (KPPU) has fined state oil and gas firm PT Pertamina and PT Medco Energi Internasional (MEI) for unfair business practices in the selection of a partner to build a liquefied natural gas (LNG) plant in Central Sulawesi.

The commission ruled Wednesday that the two companies were been guilty of conspiring to help Japan-based Mitsubishi Corporation win a beauty contest to appoint the two companies' partner in the Donggi-Senoro LNG plant project.

“PT Pertamina, PT Medco Energi Internasional, PT Medco E&P Tomori Sulawesi [MEI's subsidiary] and Mitsubishi Corporation have been proven guilty of violating Article 22 and 23 of the 1999 Antimonopoly and Anti-Unhealthy Business Practices Law,” the chairman of the panel of judges, Nawir Messi, announced at the commission's office in Jakarta.

Article 22 of the law stipulates that business stakeholders are prohibited from colluding with other parties to determine the winner of a tender that could cause unhealthy business competition, while the next article states that business stakeholders are prohibited from working with other parties in an attempt to get confidential information about their competitors.

The commission has concluded that Pertamina and Medco rigged the beauty contest and took several illicit measures to help Mitsubishi win the contest. The commission also found that the two companies cooperated with Mitsubishi to reveal information about PT LNG Energi Utama, Mitsubishi's competitor in the beauty contest.

“Thus, we decide to fine PT Pertamina Rp 10 billion, PT Medco Energi Internasional Rp 5 billion, PT Medco E&P Tomori Sulawesi Rp 1 billion and Mitsubishi Corporation Rp 15 billion,” he said, adding that all funds from the fines would go to state coffers.