ICC Decided Partnership Case Between PT Aburahmi and Penukal Lestari Cooperative.
Riau (11/7) – The Indonesia Competition Commission (ICC) ruled that PT Aburahmi was proven to have violated Article 35 paragraph (1) of Law Number 20 of 2008 in the implementation of its partnership with Penukal Lestari Cooperative. The verdict was read out in the Panel Hearing on the Verdict of Case Number 02/ICC-K/2020 on Alleged Violation of Article 35 Paragraph (1) of Law Number 20 of 2008 related to the Implementation of Partnership between PT Aburahmi and Penukal Lestari Cooperative, which was held today at the Faculty of Law, Riau University.
The case originated from the complaint of Penukal Lestari Cooperative to ICC against PT Aburahmi (the Reported Party) related to the Partnership Cooperation Agreement for the Development and Management of Oil Palm Plantations between PT Aburahmi and Penukal Lestari Cooperative. In the agreement, there were alleged elements of PT Aburahmi’s violation in making an Addendum to the Partnership Cooperation Agreement unilaterally, which resulted in: 1) The composition of the land changing; 2) Charging all costs of plantation development and management to Plasma Farmers; 3) Transferring Plantation Management Rights entirely to PT Aburahmi; and 4) Unilaterally adding conditions for selling crops. The complaint was then followed up with partnership supervision by ICC. In the implementation of this partnership, the Reported Party, as a plantation company, acts as a nucleus, while Penukal Lestari Cooperative acts as a plasma.
In the supervision process, ICC provided an opportunity for improvement through 3 (three) written warning to the Reported Party. In two warnings, the Reported Party has not taken corrective action. In Written Warning III, the Reported Party showed improvement but has not implemented all improvements ordered by ICC. These actions led ICC to continue the matter for the Continuing Examination of the Partnership by the Commission Panel.
In the Examination of the Commission Panel, it was found that the Respondent did not fulfil the obligation to make an Addendum to the Partnership Cooperation Agreement that did not conflict with the Cooperation Agreement for the Development of Oil Palm Plantations between the Community/Residents of Air Itam Timur Village, Penukal District, Muara Enim Regency, and the President Director of PT Aburahmi on May 12, 2006 as stated in the terms and conditions of the granting of Cultivation Rights Title (HGU) in the Decree of the Head of BPN RI Number 152/HGU/BPN RI/2009 dated November 13, 2009. In the Cooperation Agreement, there are provisions related to the composition of core and plasma land, which is 50%–50%. However, according to the facts on the ground, the land owned by the plasma is only 1,400 hectares, while the land owned by the nucleus is 1,863.84 hectares and has a Cultivation Rights Title (HGU) certificate.
Based on the facts in the trial, the Commission Panel stated that the Respondent legally and convincingly violated Article 35 paragraph (1) of Law 20 of 2008 in the implementation of the partnership with Penukal Lestari Cooperative as its plasma. For this violation, the Commission Panel imposed a sanction in the form of a fine of Rp2,500,000,000.00 (two billion five hundred million rupiah) and ordered the Respondent to provide the shortage of land to the Plasma in accordance with the 2006 Agreement, which amounted to 231.905 Ha (two hundred thirty-one point nine hundred and five hectares) taken from the land controlled by the Respondent no later than 180 (one hundred and eighty) working days since the decision is legally binding. In addition, the Commission Panel also ordered the Reported Party to make an Addendum to Agreement Number 01/KAR-KPL/LEG-PERJ/VIII/16 dated August 11, 2016 that does not conflict with the 2006 agreement as written warning letter III no later than 30 (thirty) working days since the decision is legally binding.