Legal Reasons Underlying Demonopolization by State-Owned Enterprises in Indonesia

Demonopolization policy towards PT. PLN (Persero) and PT. Pelindo (Persero) conducted by the Indonesian government is aimed at enhancing efficiency, the effectiveness of state-owned enterprises (SOEs), as well as global competitiveness. The rationale in determining the demonopolization policy towards the two SOEs is based on the concept of neo-liberalism market economy, which promotes efficiency and effectiveness on free market competition. The concept of neo-liberal economics is contrary to the concept of democratic economics. The concept of democratic economics based on the 1945 Constitution of the Republic of Indonesia prioritizes fair efficiency. It is the reason for the Constitutional Court to return monopoly rights to PT. PLN (Persero) as an electricity provider in Indonesia. The argue of monopoly policy or demonopolization policy of SOEs is the main problem that will be elaborated through normative research methods (documentary research) by using secondary data as the main data. Problem analysis was done by qualitative juridical through of statute approach, philosophy approach, and history of law approach. This paper provides the reason of the policy of monopoly exemption on SOEs business activities, as well as the foundation of SOEs demonopolization policy taking into consideration the constitutional basis of Article 33 of the 1945 Constitution. The concept of demonopolization of SOEs is a new one that has never been described in the Indonesian literature. As a result, the demonopolization of SOEs does not divert SOEs into private companies but rather attempts to present competitors to SOEs to be able to compete in fair competition. In another side monopoly of SOEs can be implemented towards managing important production branches that control the livelihoods of many people. It is evidence of the state’s role in ensuring the welfare of its people.


INTRODUCTION
The establishment of state owned enterprises is a proof of state involvement in an economic activity, as a consequence of the development of the welfare state 1 , although the concept of the welfare state applied by the Indonesia government is the concept of the Pancasila welfare state, in which the involvement of the state or government is regarded as an obligation to organize and direct society towards unity. 2 The role of the state can be strengthened when it concerns the fulfillment of public services to its citizens and concerns the stability of state security, especially for sectors which is not capable to be undertaken by the private sector, and sectors involving important production branches and protecting the livelihood of whole society, then a government with a reason for the protection of public interest can make a monopolistic effort 3 through the establishment of SOEs as stated in Article 51 of Law No. 5 of 1999 concerning Prohibition of Monopolistic practice and Unfair Business Competition and reinforced by the constitution of Article 33 of the 1945 Constitution of Indonesian paragraph (2) and (3).
The policy of a free-market-oriented economic system has an impact on Indonesia's economic policy.The monopoly of business activities involving important production branches and controlling the livelihood of the public by SOEs is being demobilized.The reason for the efficiency and effectiveness of SOE performance, which is always a loss 4 .The SOEs demonopolization policy is carried out on almost all state-owned enterprises, including state-owned power suppliers and state-owned port service providers.
Basically, demonopolization is a government policy that provides opportunities for private 2 Philipus M. Hadjon, Perlindungan Hukum bagi  Rakyat di Indonesia, Surabaya: Bina Ilmu, 1987,  p77.   3 Holley H. Ulbrich, 1991, "Natural  state in protecting the welfare of the people began to be diverted to the private sector that is clearly more oriented to corporate profits and impossible to transfer it in the form provision of welfare guarantee of the people needed5 .
The major problem of the enforcement of SOEs demonopolization by the government raises the assumption that there are no more important branches of production and concerns of the life of the people who need to get direct attention and management by the government, or even the economy based on fundamental norm of Indonesia (Pancasila) as mandated by Article 33 of the 1945 Constitution of Indonesia has a shift to economic liberalization.These allegations will be addressed by focusing on a discussion that lays out a rationale that provides a justification argument about demonopolization policy or simply restores monopoly policy to SOEs in conducting their business activities.The focus of the discussion will begin by describing the basic question of giving monopoly rights to SOEs in Indonesia based on Article 51 of Law No. 5 of 1999 concerning Prohibition of Monopolistic Practice and Unfair Business Competition.Furthermore, the paper will trace the rationale of revocation of monopoly rights to the SOEs Provider of Electric Power and SOE Port Service Provider by using the policy of demonopolization openly.

METHODS
Normative legal research or doctrinal research, was a research method used in answering various problems in this paper.This normative study was conducted in an effort to try to answer the problem from the aspect of law principles and norms6 .This means that the research was conducted to examine the positive law, in the sense of collecting, describing, systematizing, analyzing, interpreting and assessing positive legal norms that give the basic justification of justification between monopoly policy or demonopolization of business activities undertaken by SOEs7 .This normative study also includes doctrinal research by finding legal rules that give arguments about monopoly policy by SOEs by taking into account the content of meaningful production branches which were important for the state affecting the livelihood of the people as a form of giving ideas about the ideal concept.On the other hand it also gives a thought on the basis of SOEs demonopolization policy aimed at efficiency and effectiveness of the performance of SOEs, and follow the demands of free market in international economic system for the improvement of state development progress.
The research approach used philosophical approach, statute approach, and legal history approach.The analysis was performed by the doctrinal method to determine how the legal subject should perform its obligations and obtain its rights.The results of normative-prescriptive analysis arrived at a conclusion as the exposure of thoughts on the justification to impose a monopoly or demonopolization of SOEs as a policy option that can be used by the government in an effort to create a fair Bernard Arief Sidharta, Filsafat Ilmu Hukum.Bandung: Laboratorium Hukum Fakultas Hukum Universitas Khatolik Parahyangan, 2001, p23  [127]   business competition market using qualitative descriptive analysis method8 .The conclusion was done inductively by looking at special facts by taking a study on SOEs providers Power Services and SOEs port service providers, then would be obtained the concept of a general nature to be applied thoroughly9 .the livelihood of the people, this means the income of goods and services felt vital to human life in a certain period, while within the relevant time limited supply, so that suppliers can determine the price and terms-other trade conditions that harm the masses for their personal gain.In other words Production branches that control the livelihood of the people are divided into three categories, namely: a) Related allocations, goods or services derived from natural resources.b) Related to the distribution, the basic needs of society, but a time or continuously can not be met the market.c) Related to stabilization such as defense of security, monetary, fiscal and regulation 2. The notion of "controlled by the state" which means mastery in a broad sense, which includes the notion of ownership in the public and civil sense, as well as the power in controlling and managing the fields of business directly by the government or government apparatus burdened with special duty.

ANALYSIS AND DISCUSSION
Referring to the understanding of Article 33 of the 1945 Constitution of the Republic of Indonesia, it can be seen that the government has the duty of safeguarding the economy of the Indonesian state, especially in the case of the production factors which affect the livelihood of the people in order to be disbursed to the people and not monopolized by private parties.The dominance of important production branches for the state is intended to protect state assets in the form of natural resources and human resources.The importance of the position of the state as the ruler of the natural wealth of Indonesia, confirmed by Bung Hatta as an effort to ensure the benefits of natural wealth for the greatest prosperity of the people.He also stated that what is referred to as important production branches for the state include basic industries and mining, while the production branches that control the livelihood of the people are water, electricity, gas, sugar, cement, copra and vegetable oil. 11n line on Article 33 of the 1945 Constitution of Indonesia which is reinforces the government's role in providing protection for Indonesia's economic development, Law No.5 of 1999 concerning Prohibition of Monopolistic practice and Unfair Business Competition was also prepared for the following purposes:12 1. Maintaining the public interest and improving the efficiency of national economy as one effort to improve people's welfare; 2. To create a conducive business climate through fair business competition so as to ensure the certainty of equal business opportunity for big business entity, medium business entity, and small business entity; 3. Prevent monopolistic practice, and or unfair business competition caused by business entity; and 4. The creation of effectiveness and efficiency in business activities.
Based on the objective of the establishment of Law No. 5 of 1999 it can be seen that the government has come out with a Law of state administration in juridical economic activity, namely the regulation of anti-monopoly and unfair business competition related to the production and marketing of goods and or services.However, in matters affecting the livelihood of the people as well as the important production branches for the state as referred to in Article 33 of the Indonesia Constitution 1945 there is an exception to the state, that is, the state is allowed to monopolize, as regulated specifically in Article 51 of Law No. 5 of 1999.
The regulation of monopoly exclusion is done in an effort to safeguard the public interest and improve the efficiency of the national economy as one of the efforts to improve the people's welfare.It is further stated in Article 51 of Law No. 5 of 1999 that, in the case of a monopoly, the rights of state owned enterprises and/or public institutions established or appointed by the Government.In practice these monopolistic exclusions are generally in the form of stateowned enterprises.This is because SOEs is a private state enterprise with its main function as Agent of development. 13The special stateowned enterprise lies in its capital, in which the capital of the SOEs either entirely or partially directly obtains equity participation from the separated state assets.The affirmation of separated state assets is the separation of state assets from the State Budget (APBN : Anggaran Pendapatan dan Belanja Negara) to be used as state equity participation in SOEs, for subsequent development and management is no longer [129]   based on the state budget system but on good corporate government principles. 14he importance of the role of the state in the economy through monopoly policy is because the state is obliged to meet the needs of its people, only the state has control over regulation formation.In the public interest framework, The regulatory regime performs the task of maximizing social welfare through proper pricing and entry policies. 15egarding the business activities that should be monopolized by the state through SOEs is the type of infrastructure industry, network industry, and natural resource management industry.The role of SOEs in these industries becomes very important, as it relates to the protection of national interests and ensures the affordability of the majority people of Indonesia. 16On the basis of the matter is the position of monopoly in the case of the implementation of electricity by PT Indonesia which states that the national economy is organized based on economic democracy with the principle of togetherness, efficiency of justice, sustainability, environmental insight, independence, and by maintaining a balance between progress and unity of national economy.The word fair efficiency should be major concern.The reason for demonopolization against PT.PLN (Persero) because of efficiency following the market movement.Efficiency is the result of a competition, but it can have an impact on injustice, so economic democracy juxtaposes fair efficiency.This argument is contrary to the will of the Electricity Law.The Electricity Law embraces the concept of a market economy of neo-liberalism, which believes that economic elements must be left entirely to market mechanisms based on supply and demand.According to this concept, efficiency in electricity business can be generated from free market competition, but it will impact on unfair efficiency and does not reflect the spirit of economic democracy as referred to in Article 33 paragraph (4) of the 1945 Constitution of Indonesia.The opinion that confirms that electricity is included in important production branch and related to the livelihood of the people resulted in the return of monopoly status to PT. PLN (Persero) in the management of electric power in Indonesia.

Rationale for Revocation of Monopoly Rights to SOEs Providers of Port Services by Enforce Policy of Demonopolization Openly.
The principle of SOEs demonopolization conducted by the government aims to improve the efficiency and productivity of SOEs, by reducing the role of the state in the economic field.The basic aim of demonopolization is to create transparency, to gain access to international markets to facilitate the flow of funds, as well as for the transfer of knowledge.The function of demonopolization is divided into:18 a) The function of the corporation, is a major function of demonopolization because its implementation aims to form a state-owned enterprise into a tough corporation in global economic competition.b) The function of competition, is a function that emphasizes the ability to compete from SOEs in the face of competitors in business sectors similar to business ventures.c) The function of regulation, is a function performed by the existing government authorities in organizing a variety of policies and strict regulations in the economic sector, so as to increase the competitive pro to the market.d) Budget function, intended implementation of demonopolization of the government can increase the state treasury to development the public interest.Demonopolization is an attempt to abolish the monopoly,19 in other words a situation in which a business entity is granted the right to monopolize a particular business activity, then that right is revoked by applicable laws or regulations.20 [131] Demonopolization has a notion that different from privatization.Privatization is a process of distribution of ownership transfers that were formerly controlled and administered by the state then transferred to the private sector, the transition not only in the form of asset SOEs (stock) shares but also the service contract that was formerly carried out by the state to private investor.statement is also expressed by Liuben Berov, that privatization is one of the forms/types of demonopolization of state enterprises. 23emonopolization also opens opportunities for private companies to compete in similar business activities with state enterprises, and the primary objective of providing consumers with choice to obtain better quality products (goods/ services). 24he fundamental point of the demonopolization exercise should be to create a pluralist entrepreneur in the conduct of a similar business, in other words the business owned should not be sole, and demonopolization must be done through legislation. 25Demonopolization is one strategies that can be undertaken to improve competitiveness for state enterprises that are considered less productive as a result of less professional management.The proposed demonopolization in this case is a form of demonopolization by allowing the private sector to establish a competitor company for a state enterprise, not in the form of privatization of a state enterprise.If the government opens opportunities for the private sector to conduct business activities similar to the business activities of stateowned companies that have been 23 Liuben Berov, 1993, "Demonopolization and  International Competition in Bulgaria 1990-1991 The study of the concept of demonopolization has not been discussed specifically in the literature or in the form of articles in Indonesia.Demonopolization in the form of giving equal opportunity to the private sector to be a competitor of SOEs who have been doing business in a monopoly will provide a discourse of thought to be regulated further as well as the privatization that has been established legislation.
In logic of the state, monopoly is indeed the authority of the state in order to guarantee the welfare of its people.But to be underlined is the monopoly policy should not 26 Thomas S. Friedland, 1978 hinder efforts to meet people's needs.It can be not let the noble cause for the welfare of the people actually turned into inconvenient people and even misery of the people.27Demonopoly policy was taken by the government because a reason to revitalize the SOEs that had often experienced losses.According to Bacelius Ruru, basically revitalization of SOEs can be done through two ways of improving SOEs both externally and internally.Settlement can be done one of them by giving more opportunities to the private sector into the market, thus battling SOEs and ultimately can motivate SOEs to grow up/increase.28One of the objectives of the establishment of SOEs is to seek profit from its business activities, but the performance of SOEs is not merely for profit, but it must pay attention to the public interest.This is because the business entity is majority or all of its capital is owned by the state.The government as a representative of the state has an obligation to carry out the duties of the state, among them is the conduct of public service.Providing public services to prioritize public interests is a privilege of SOEs that are not owned by private companies.This is behind the reason to improve the performance of SOEs by presenting competitors who are engaged in the same business.
The option of demonopolization is considered better than privatization, because demonopolization still gives the status of the company to a state enterprise whose business orientation is not only for profit but also commercially port shall be licensed as a Port Business Entity (PBE) granted by the Minister of Communications for major and non-collectors, by the Governor for regional feeder ports, and by the Mayor/Regent for local feeder ports.PBE consists of SOEs, Regional Owned Enterprises (ROEs), and private.PBE Laws as an operator that manages and operates on one or more port terminals and facilities.PBE may undertake port supply and/or service activities which include the provision and/or service of ships, goods and passengers.The type of supply and/or port services provided can be:31 1. Docking services for tethering; 2. Fueling and fresh water services; 3. Up and down facilities of passengers and vehicles; 4. Docking services for loading and unloading of goods and containers; 5. Warehouse and stockpiling, loading and unloading equipment, and port equipment; 6. Coal terminals, liquid bulk, dry bulk, and Roll on-Roll off; 7. Cargo loading and unloading of goods; 8. Vessel suspension service.
Seeing the diversity of activities from the provision and/or port services and supporting ports, certainly provides opportunities for the private sector to enter the same business activities with SOEs.The thing that needs to be paid attention is about the fair competition system and the government's alignment towards the middle and lower enterprises and cooperatives that must be protected.
Determination of the implementation of monopoly policies or demonopolization of

Rationale for Granting Monopoly Rights to SOEs Providers of Electric Power Based on Law in Indonesia.
Article 51 of Law No. 5 of 1999 Concerning the Prohibition of Monopolistic Practices and Unfair Competition, states that the monopoly and/or concentration of activities related to the production and/or marketing of goods or services affecting the livelihood of the people and the production branches that are important to the state shall be governed by law and organized by State-Owned Enterprises and/or public institutions established or appointed by the Government.Observing Article 51 of Law No.5 of 1999, it find a closely correlation with the 1945 Constitution of the Republic of Indonesia, especially paragraph (2), which formulates that the production branches that are important for the state and control the livelihood of the people are controlled by the state.Based on Article 33 Paragraph (2) of the Constitution 1945.There are 2 (two) points emphasized in the article, namely: 10 1.The meaning of the production branches that are important for the state and affect Bambang Sunggono, Metodologi Penelitian Hukum, Jakarta: Raja Grafindo Persada, 2007, p10. 10 Rachmadi Usman, Hukum Persaingan Usaha di Indonesia, Jakarta: Sinar Grafika, 2013, pp175-179.