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Ada Pertanyaan? Hubungi Kami Ari Pramuditya, Fitri N. Heriani
The Ministry of Trade is currently preparing to revise Law No. 8 of 1999on Consumer Protection (“Consumer Protection Law”). It has now been 15 years since the Consumer Protection Law was first issued and various loopholes are now starting to appear.
The Consumer Protection Law was first written into the statute books after Indonesia had been rocked by the Asian Financial Crisis of 1998. It became a precondition laid down by the International Monetary Fund for the dispersal of economic aid to Indonesia. After a decade and a half however, it’s finally time to revise this rather hastily drafted law.
Yohanes Gunawan, a law professor at Parahyangan University in Bandung, first suggested the Consumer Protection Law revision and believes it to be necessary, as the consumer protectionlaw is still facing a number of obstacles after fifteen years and encompasses various weaknesses, shortcomings and mistakes which need to be addressed.
Mr. Gunawan stated that these problems manifested themselves through the law’s confusing grammar and syntax, its systematic approach, the responsibilities of businessmen as set out in the law, its consumer-dispute resolution mechanisms, and its institutionalization.
“The UUPK should be repealed and replaced with new law, as the UUPK was originally drafted too hastily in order to address the crisis of the time and the demands of the IMF,” explained Mr. Gunawan during a discussion held at the Ministry of Trade on Tuesday, 24 November 2015.
As one of the drafters of the Consumer Protection Law revision’s academic text since 2007, Mr. Gunawan noted that at least four substantive changes had been made to the current the Consumer Protection Law. The first of these changes concerns the rights and obligations of consumers and businessmen/service providers.
In the academic text, there is a clausethat states that the state is obliged to protect consumers. However the term “businessmen” has now been exchanged with “supplier/service provider”, while goods and services have now been divided into “movable” and “immovable objects”, while “tangible goods”, as well as “professional services” and “commercial services” are also new terms which have been introduced into the revision.
The academic text also incorporates a separation of the rights and obligations of consumers and businessmen/service providers, particularly the rights and obligations of consumers and service providers. Professional services are now required to draft and follow a code of ethics, while commercial profit-making services are not required to follow a code of ethics. The second major change to the Consumer Protection Law involves a detailed stipulation of the responsibilities of businessmen regarding goods and services.
The third change to the law affects the form of standard contracts and standard clauses. According to Mr. Gunawan, three types of contracts are currently set out under the law: negotiated contracts, standardized contracts, and digital contracts.
To date however, consumer protection has not yet been afforded to the realms of e-commerce, and Mr. Gunawan believes that the establishment of a cross-border resolution mechanism in the new Consumer Protection Law is essential for safeguarding online transactions.
“For example, if I buy a product online via a site like Amazon, then does this count as a digital contract or e-commerce, in other words does the applicable law relate to the seller or the buyer? There is currently no rule, and so it is vital that e-commerce be covered by any revision to the Consumer Protection Law,” Gunawan explained.
The fourth change to the law concerns consumer dispute-settlement mechanisms and institutional consumer protection. Article 23 of the Consumer Protection Law explains that consumer disputes can be resolved in two ways: either in court or out of court.
The Consumer Protection Law states that decisions arrived at either through processes of non litigation or through the Consumer Dispute Settlement Agency (Badan Penyelesaian Sengketa Konsumen – BPSK)are final and binding. However, parties can also then file objections through the courts. Mr. Gunawan therefore believes that this legal settlement mechanism is imprecise and confusing.
In the Consumer Protection Law revision however, BPSK decisions are final and binding, and businessmen are required to implement any decision within seven working days. Otherwise, the BPSK may submit the decision to an investigator according to criminal procedural law.
In order to strengthen the position of the BPKN(Badan Perlindungan Konsumen Nasional - National Consumer Protection Agency), Mr. Gunawan said that as a body established by the President, should be able to make proposals, conduct evaluations and supervise the various relevant state bodies in order to ensure consumer protection in Indonesia.
The Government will thus be obliged to respond to any proposals made, as well as evaluation results and BPKN monitoring results, and these results should be announced to the public, according to Mr. Gunawan.
The proposal regarding consumer-protection institutions encompasses central government, local government, the BPKN, the BPSK, the General Courts, the Institute of the Consumer Protection Organization (Lembaga Perlindungan Konsumen Swadaya Masyarakat - “LPKSM”), the Association of Consumers, and the country’s business community.
Ahmad Sauqi, a Senior Economist with the Australia-Indonesia Partnership for Economic Governance, was also present at the Ministry of Trade discussion and expressed his belief that consumer protection in Indonesia was not yet at an optimal level.
According to Sauqi, this is due to the fact that the Consumer Protection Law, as a legal basis for consumer protection, still encompasses many weaknesses. Moreover, Mr. Sauqi believes that the implementing agencies are also weak, and asserts that consumer protection has not been a major part of economic policy to date, and thus consumers are still quite powerless in the country.
According to Mr. Sauqi, the success of any consumer-protection measures can be determined by three things: an effective policy framework, consumer power and effective competition policy.
At present, Mr. Sauqi believes that the Consumer Protection Law still encompasses too many weakness in terms of its confusing syntax and grammar, its systematic approach to the subject, and its inadequate links to the ITC, as well as weaknesses in its regulation of various institutions.
“In terms of consumer protection, the Consumer Protection Law needs to be tidied up," Sauqi explained.
Mr. Sauqi also asserted that the BPKN’s function was to offer advice to the government and that the body should therefore be expanded, its organizational structure optimized, and its resources improved. The BPKN should also be an integral part of any policy-making mechanism, Mr. Sauqi stated.
With regard to the BPSK, Mr. Sauqi asserted that its most pressing issue was that of low and unequal capacity in the country’s various regions. Not enough local resources are being used to support the BPSK, Sauqi believes, and this is leading to uncertainty as regards local-government commitment. The BPSK is thus not working optimally at the present time, Mr. Sauqi believes.
Consumer empowerment measures should thus be implemented by the government and the LPKSM. Competition policies should also be implemented in order to protect consumers and develop a national strategy for consumer protection, and reforming the consumer-dispute resolution mechanism would be a good place to start, according to Mr. Sauqi.
The next step should be the country’s competition policy itself. Mr. Sauqi believes that the Government should synchronize and harmonize its economic and competition policies, in order to create a competition policy which will encourage the development of domestic industry without sacrificing the interests of consumers.
Mr. Sudaryatmo, Daily Coordinator of the Indonesian Consumer Foundation, was also present at the discussion and stated his belief that consumer rights should be included in the 1945 Constitution and that it would be more appropriate if consumer organizations came under the Bappenas umbrella.
“In other countries, consumer-protection issues are closely related to the law. Therefore, it would be best if consumer protection in Indonesia followed the same model,” Mr. Sudaryatmo concluded.
(sp)
Ari Pramuditya, Fitri N. Heriani
The Ministry of Trade is currently preparing to revise Law No. 8 of 1999on Consumer Protection (“Consumer Protection Law”). It has now been 15 years since the Consumer Protection Law was first issued and various loopholes are now starting to appear.
The Consumer Protection Law was first written into the statute books after Indonesia had been rocked by the Asian Financial Crisis of 1998. It became a precondition laid down by the International Monetary Fund for the dispersal of economic aid to Indonesia. After a decade and a half however, it’s finally time to revise this rather hastily drafted law.
Yohanes Gunawan, a law professor at Parahyangan University in Bandung, first suggested the Consumer Protection Law revision and believes it to be necessary, as the consumer protectionlaw is still facing a number of obstacles after fifteen years and encompasses various weaknesses, shortcomings and mistakes which need to be addressed.
Mr. Gunawan stated that these problems manifested themselves through the law’s confusing grammar and syntax, its systematic approach, the responsibilities of businessmen as set out in the law, its consumer-dispute resolution mechanisms, and its institutionalization.
“The UUPK should be repealed and replaced with new law, as the UUPK was originally drafted too hastily in order to address the crisis of the time and the demands of the IMF,” explained Mr. Gunawan during a discussion held at the Ministry of Trade on Tuesday, 24 November 2015.
As one of the drafters of the Consumer Protection Law revision’s academic text since 2007, Mr. Gunawan noted that at least four substantive changes had been made to the current the Consumer Protection Law. The first of these changes concerns the rights and obligations of consumers and businessmen/service providers.
In the academic text, there is a clausethat states that the state is obliged to protect consumers. However the term “businessmen” has now been exchanged with “supplier/service provider”, while goods and services have now been divided into “movable” and “immovable objects”, while “tangible goods”, as well as “professional services” and “commercial services” are also new terms which have been introduced into the revision.
The academic text also incorporates a separation of the rights and obligations of consumers and businessmen/service providers, particularly the rights and obligations of consumers and service providers. Professional services are now required to draft and follow a code of ethics, while commercial profit-making services are not required to follow a code of ethics. The second major change to the Consumer Protection Law involves a detailed stipulation of the responsibilities of businessmen regarding goods and services.
The third change to the law affects the form of standard contracts and standard clauses. According to Mr. Gunawan, three types of contracts are currently set out under the law: negotiated contracts, standardized contracts, and digital contracts.
To date however, consumer protection has not yet been afforded to the realms of e-commerce, and Mr. Gunawan believes that the establishment of a cross-border resolution mechanism in the new Consumer Protection Law is essential for safeguarding online transactions.
“For example, if I buy a product online via a site like Amazon, then does this count as a digital contract or e-commerce, in other words does the applicable law relate to the seller or the buyer? There is currently no rule, and so it is vital that e-commerce be covered by any revision to the Consumer Protection Law,” Gunawan explained.
The fourth change to the law concerns consumer dispute-settlement mechanisms and institutional consumer protection. Article 23 of the Consumer Protection Law explains that consumer disputes can be resolved in two ways: either in court or out of court.
The Consumer Protection Law states that decisions arrived at either through processes of non litigation or through the Consumer Dispute Settlement Agency (Badan Penyelesaian Sengketa Konsumen – BPSK)are final and binding. However, parties can also then file objections through the courts. Mr. Gunawan therefore believes that this legal settlement mechanism is imprecise and confusing.
In the Consumer Protection Law revision however, BPSK decisions are final and binding, and businessmen are required to implement any decision within seven working days. Otherwise, the BPSK may submit the decision to an investigator according to criminal procedural law.
In order to strengthen the position of the BPKN(Badan Perlindungan Konsumen Nasional - National Consumer Protection Agency), Mr. Gunawan said that as a body established by the President, should be able to make proposals, conduct evaluations and supervise the various relevant state bodies in order to ensure consumer protection in Indonesia.
The Government will thus be obliged to respond to any proposals made, as well as evaluation results and BPKN monitoring results, and these results should be announced to the public, according to Mr. Gunawan.
The proposal regarding consumer-protection institutions encompasses central government, local government, the BPKN, the BPSK, the General Courts, the Institute of the Consumer Protection Organization (Lembaga Perlindungan Konsumen Swadaya Masyarakat - “LPKSM”), the Association of Consumers, and the country’s business community.
Ahmad Sauqi, a Senior Economist with the Australia-Indonesia Partnership for Economic Governance, was also present at the Ministry of Trade discussion and expressed his belief that consumer protection in Indonesia was not yet at an optimal level.
According to Sauqi, this is due to the fact that the Consumer Protection Law, as a legal basis for consumer protection, still encompasses many weaknesses. Moreover, Mr. Sauqi believes that the implementing agencies are also weak, and asserts that consumer protection has not been a major part of economic policy to date, and thus consumers are still quite powerless in the country.
According to Mr. Sauqi, the success of any consumer-protection measures can be determined by three things: an effective policy framework, consumer power and effective competition policy.
At present, Mr. Sauqi believes that the Consumer Protection Law still encompasses too many weakness in terms of its confusing syntax and grammar, its systematic approach to the subject, and its inadequate links to the ITC, as well as weaknesses in its regulation of various institutions.
“In terms of consumer protection, the Consumer Protection Law needs to be tidied up," Sauqi explained.
Mr. Sauqi also asserted that the BPKN’s function was to offer advice to the government and that the body should therefore be expanded, its organizational structure optimized, and its resources improved. The BPKN should also be an integral part of any policy-making mechanism, Mr. Sauqi stated.
With regard to the BPSK, Mr. Sauqi asserted that its most pressing issue was that of low and unequal capacity in the country’s various regions. Not enough local resources are being used to support the BPSK, Sauqi believes, and this is leading to uncertainty as regards local-government commitment. The BPSK is thus not working optimally at the present time, Mr. Sauqi believes.
Consumer empowerment measures should thus be implemented by the government and the LPKSM. Competition policies should also be implemented in order to protect consumers and develop a national strategy for consumer protection, and reforming the consumer-dispute resolution mechanism would be a good place to start, according to Mr. Sauqi.
The next step should be the country’s competition policy itself. Mr. Sauqi believes that the Government should synchronize and harmonize its economic and competition policies, in order to create a competition policy which will encourage the development of domestic industry without sacrificing the interests of consumers.
Mr. Sudaryatmo, Daily Coordinator of the Indonesian Consumer Foundation, was also present at the discussion and stated his belief that consumer rights should be included in the 1945 Constitution and that it would be more appropriate if consumer organizations came under the Bappenas umbrella.
“In other countries, consumer-protection issues are closely related to the law. Therefore, it would be best if consumer protection in Indonesia followed the same model,” Mr. Sudaryatmo concluded.
(sp)