TPI still monopolizes insurance coverage for Pertamina despite anti-trust law

PT Tugu Pratama Indonesia (TPI) is still holding monopoly rights in providing insurance coverage for state oil and gas firm Pertamina's projects in the upstream sector, despite the implementation of the No. 5/1999 anti monopoly law since Sept. 5.

The chairman of the Association of Indonesian Insurance and Reinsurance Brokers (ABAI), Rubiyanto, said that if the monopoly would not be ended soon, it would penalize TPI itself because when the local autonomy law came into force starting Jan. 1, 2001, local administrations may control oil and gas production sharing contractors, and therefore, they would not be obliged to insure their projects to TPI.

"Up until now, TPI is still holding an exclusive rights from Pertamina, including in providing reinsurance coverage, and it still uses foreign reinsurance firms. They have not yet let the market decide and give local brokers the opportunity to participate," Rubiyanto said.

He noted that Pertamina had given a small portion of insurance coverage for its projects to a consortium of local insurance firms. "But it's very small."

The president of PT Jasindo, Amirudin Riayat, has also called on Pertamina to float its insurance coverage to the free market. "Now, we have many professional insurance firms, and therefore, there should be no fear to open Pertamina's insurance market."

Meanwhile, TPI president B Munir Syamsudin is not available for comment.

Pertamina has promised to revoke TPI's monopoly rights in providing insurance coverage for Pertamina's projects in the upstream sector. Pertamina's finance director Ainun Na'im once said that Pertamina would appoint a consortium of insurance firms to provide insurance coverage for Pertamina's projects in the upstream sector. (*)