INDONESIA Law and Practice Contributed by: Chandrawati Dewi, Gustaaf Reerink and Bilal Anwari, ABNR Counsellors at Law
Investment/Investment Coordinating Board ( Badan Koordinasi Penanaman Modal , or BKPM) and are separate from the merger control rules enforced by the KPPU. Foreign entities may be required to sub - mit certain filings, such as regular investment reports. Although the BKPM predominantly governs and enforces FDI regulations, other ministries may also have sector-specific rules concerning FDI. 4.7 Special Consideration for Joint Ventures There are no special substantive tests for joint ven - tures. The KPPU does not specifically examine poten - tial co-ordination issues between joint venture parents within the context of merger control. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions The KPPU does not have the authority to prohibit or interfere in transactions within the framework of merg - er control. However, the authority can always initiate a formal investigation within the framework of cartel rules or abuse of dominance rules or other potential violations under the Competition Law. 5.2 Parties’ Ability to Negotiate Remedies If the KPPU has concerns about a transaction, the parties can negotiate structural remedies or behav - ioural remedies. However, to the best of the authors’ knowledge, the KPPU has so far only agreed to or imposed behavioural remedies, rather than structural remedies. The remedies may consist of structural remedies (ie, share or asset divestment) or behavioural remedies, such as: • access to IP rights related to essential facilities; or • elimination of competition barriers, such as exclu - sive contracts, consumer switching costs, tying or bundling, and supply or purchase barriers. The KPPU has so far imposed behavioural remedies in at least five cases, usually consisting of reporting requirements. To the best of the authors’ knowledge,
no remedies have so far been required to address non-competition issues. 5.3 Legal Standard There is no legal standard that remedies must meet in order to be deemed acceptable. The KPPU’s opinion must contain a description and timeline for: • structural remedies actions by the undertaking; • behavioural remedies by the undertaking; and/or • implementation of fair pricing strategies. 5.4 Negotiating Remedies With Authorities When the result of the KPPU’s comprehensive review indicates that the transaction could lead to monopo - listic practices or unfair competition, the KPPU will convene a commission panel that will decide on the results of the review. The panel will then summon the notifying party to an initial hearing, where the KPPU investigator will explain the results of the comprehensive review and the proposed remedies, along with the timeline for their implementation. The notifying party will be given the opportunity to respond. If the notifying party accepts the proposed reme - dies, the panel will issue a conditional approval that imposes the remedies. If the notifying party rejects the proposed remedies, it must submit a legal, economic and/or technical basis for the rejection and the case will continue to a further hearing, where the notifying party is expected to submit its counter-proposal for the remedies. Subsequently, taking into account the counter-pro - posal, the panel will issue a conditional approval that requires the notifying party to accept the remedies. Although the notifying party can submit a counter- proposal, the authority to decide on the type of rem - edies and the timeline for the implementation rests with the KPPU panel. 5.5 Conditions and Timing for Divestitures As Indonesia has a post-merger notification regime, a transaction will be legally effective by the time any
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