PT Anjawani Mitra Madani Executes The Order of ICC To Improve Its Partnership.

Jakarta (9/6) – Indonesia Competition Commission (ICC) in the context of performing its duties as mandated in Law Number 20 of 2008 regarding Micro, Small, and Medium Enterprises, supervises partnerships established by broiler breeders between PT Anjawani Mitra Madani (PT AMM) and plasma farmers.

ICC has ordered PT AMM through Warning Letters I and II by obligating it to improve partnership relations with plasma farmers, viz., by way of revising the clauses contained in their agreement and improving the implementation of the partnership with plasma farmers. Based on the results of monitoring conducted by ICC, PT AMM has made improvements to the implementation of the partnership in accordance with the improvement commands as set forth in the Warning Letters. For this end, ICC issued a Stipulation of the Commission based on Article 41 paragraph (2) of Regulation of ICC Number 4 of 2019 regarding Procedures for the Supervision and Handling of Partnership Cases. The Commission Stipulation constitutes the result of the assessment conducted by the Commission decided in a Commission Meeting to stop the case after the Reported Party has made all the improvements to the alleged violation committed in accordance with the Warning Letters.

This case had its origin from an initiative research conducted by the ICC in 2021, wherein PT AMM was suspected of violating Article 35 Paragraph (1) of Law 20/2008 with indications that PT AMM was alleged of:

1. Unilaterally setting the guarantee for farmers,
2. Unilaterally determining the quality of livestock production facilities,
3. Unilaterally determining the sanction on plasma farmers,
4. Obligating the farmers to pay for losses if intending to chick-in

The said initiative study of partnership continued up to the handling of the case as Partnership Case Number 6/KPPU-K/2021 concerning Alleged Violation of Article 35 Paragraph (1) of Law Number 20 of 2008 regarding Micro, Small, and Medium Enterprises with regard to the Implementation of Broiler Chicken Partnership by PT Anjawani Mitra Madani in West Java Province.

Based on the available instrument of proof, the Commission found the existence of alleged control as committed by PT AMM over the plasma farmers in a partnership relationship between the two parties. The control alleged to have been perpetrated by PT AMM are:

1. The transfer of risk to the plasma farmers, including therein the setting of sanctions that is unilateral and burdensome in nature to plasma farmers. The plasma farmers are obligated to collateralize their assets and money, the transfer of rights to physical guarantees from plasma farmers to PT AMM through a Power of Attorney, the binding of plasma farmers to bear the debts to PT AMM as set forth in the Debt Assumption Statement Letter, and the stipulation of provisions with regard to the obligation of plasma farmers to pay 30% of the total losses before the subsequent chick-in.
2. The fixing of single price for livestock production facilities for any brand and quality whatsoever.
3. Nontransparent with regard to the partnership agreement documents.
4. Nontransparent in the recording of the recapitulation of debts incurred from the losses suffered by the plasma farmers.

Warning Letters I and II issued by ICC obligate PT AMM to improve partnership relations with plasma farmers by revising several matters as follows:

1. Revising the clauses of the Broiler Chicken Raising Agreement (Livestock Production Facilites).
2. Revising the clauses of the Agreement with regard to the Price and Bonus.
3. Improving the implementation of partnership established by PT AMM.
4. Providing comprehensive understanding for all the field officers who are in direct contact with the plasma farmers pertaining to the partnership mechanism.
5. Ensuring that all the field officers on duty to:
6. Monitor the coops of plasma farmers in line with the Standard Operating Procedure (SOP),
7. Provide accurate information on the partnership mechanism in line with the new agreement for plasma farmers,
8. Explain the camplaint lodging mechanism to plasma farmers pertaining to livestock production facilites.
9. Ensuring that plasma farmers obain accurate information on the partnership mechanism in accordance with the newest agreement.
10. Ensuring that plasma farmers accept the agreement and carry out the partnership in accordance with the newest agreement.

ICC accepts and grants appreciations to business actors demonstrating improvements in their behaviors to comply with the Law and supporting the creation of fair business competition. ICC expects that the improvement in the implementation of partnership by PT Anjawani Mitra Madani serves as a boost for business actors so as to continue paying attention to and complying with the Law in their every corporate action.