Investigation over the sales of Pertamina's tankers continues

The Commission for the Supervision of Business Competition (KPPU) has continued its investigation over the sales of state oil company PT Pertamina's two Very Large Crude Carriers (VLCCs) after the commission found a fresh indication that the sales could violate the Anti Monopoly and Unfair Business Competition Law, Kompas reported on Saturday.

The commission chairman, Sutrisno Iwantono, confirmed Friday that KPPU had found an indication of violation of the law in the sales of the two tankers but he warned that the finding would be further probed before the commission made a final decision.

He said that the commission would need at least 60 days to prove the finding and could have another 30 days if the process could not be completed within the 60-day period.

"We've also been corresponding with (India-based) Indonian Essar Shipping, one of the participants in the tender, and of course, (Bermuda-based) Frontline Ltd. as the winner," he said.

However, the KPPU refused to elaborate on the indication of violations it found in the tender process, saying only that the tender may have violated Articles 16, 19(d) and 22 of the Antimonopoly Law.

Article 16 prohibits business players from making agreements with foreign parties that may lead to a monopoly or unfair competition.

Article 19(d) prohibits business players from discriminating against other players, while Article 22 prohibits conspiring with parties in determining the winner of a tender.

Pertamina sold the two VLCCs in June to Norway's Frontline Shipping Ltd. for $184 million, despite protests by Pertamina's labor union and a recommendation from the House of Representatives that the company hold on to the tankers for long-term benefits.

The company said that operating such large tankers would be too expensive for Pertamina due to its high operating and maintenance costs but many analysts had challenged the reason behind the sales of the tankers. (*)