Buyers beware, you're in Indonesia

Although Indonesia finally passed the long-awaited Consumer Protection Law in 1999, consumers' rights remain largely neglected. While the law is still toothless, the public's awareness of their rights as consumers has not improved either. The Jakarta Post contributors Prapti Widinugraheni, I. Christianto, Tri Hafiningsih and reporter Ida Indawati Khouw look into the issue.

JAKARTA (JP): Inferior or dangerous goods and bad service thrive here because of lousy law enforcement and little promotion of consumers' rights. The state's failure means consumer protection comes from companies' quality-control processes and public-relations policies. If a company is not morally responsible or commercially motivated to protect its reputation or its brands, consumers suffer.

Agus Pambagyo, deputy chairman of the Indonesian Consumers Foundation (YLKI), says that since the 1997 economic crisis, public awareness of consumers' protection has dropped as low as in the 1970s.

"People don't think about whether a product is good or bad in terms of quality. They just buy something if they can afford it. They don't think about guarantees, spare parts or after sales service," he says.

Electronic goods, for instance, should come with warranties, but not many consumers want to go to the trouble of ensuring that they do, as long as they are inexpensive.

Agus blames the situation on ignorance. "People just don't care, except when there are problems. We can, and actually should be, well-informed about the products or services we purchase," he says.

Another issue is poor law enforcement and the lack of legal awareness, not only on the part of the consumer, but also law enforcers. "When we filed a particular case at the Central Jakarta District Court, the judges didn't know what a class action was. We (YLKI) had to educate them," he says.

"We file court cases based on the Consumer Protection Law (CPL). If we never use it, it'll end up like other laws, such as the traffic law, or the law on broadcasting ... We want to encourage the authorities to issue necessary rules and regulations based on the CPL," he says.

Despite all this, there is an encouraging trend, he insists. "Judging from the increasing number of consumers' complaints filed through YLKI, I would say they may have better awareness now than before."

And there is no shortage of tales from unsatisfied customers.

In early 1997, Tatang Setianto and his wife Helly decided to buy two houses in Bumi Indah, a housing complex in Tangerang, about 40 km west of Jakarta. After paying a Rp 20 million down payment, they were to pay the balance in installments with loans from Bank Harapan Sentosa, which is now defunct. The houses had not yet been built.

"At the time, we were promised that we could occupy the houses by July 1998, but several months before that date, the creditor bank was liquidated. We banded together with several other customers who wanted to cancel the transaction and ask for their money back, but the developer wouldn't comply. A representative of the company even convinced us that construction would resume as soon as the money was available," he says.

Sure enough, the developer built about 200 houses, located in four of the eight sectors planned for the complex. But facilities were poor: the roads were damaged and building materials were low-grade, according to Tatang.

"All I can do now is wait for the project to be completed. I once thought of taking legal action but I doubt it would help much because it would be too time-consuming and costly," he says.

Then there are state-owned companies, with perhaps the most frequent target of criticism being telecommunications provider PT Telkom. Not surprisingly, the company's "meet-the-customer" session last Thursday at the Bentara Budaya building in Central Jakarta drew an enthusiastic audience. About 300 people attended the event that was held by Telkom's Jakarta branch office.

One customer from the audience, Tuti, chided Telkom for continuously billing her even though none of her three phone numbers worked after her shop-house in Villa Tanah Mas complex in East Jakarta was damaged during the May 1998 riots.

"Now I've been told I have to pay an accumulated amount of Rp 359,000 in phone bills. I reported the case to PT Telkom last December, but there has been no concrete action so far," she says.

Another customer, Jalaludin from Kalideres in West Jakarta, says his telephone line goes dead every time it rains.

Checkout counters at supermarkets are another place where customers need to be wary. They should double-check that the amount charged for items is the same as the price displayed. Fitri W. Rinasari from South Jakarta says she often sees people paying more than the price displayed on shelves or in advertising flyers.

"I had an experience like that last year when I bought cheese at Carrefour in Cempaka Putih (East Jakarta). The brochure said the price was Rp 8,700, but I had to pay Rp 9,100," she says. She reported the case to YLKI.

Registering complaints with YLKI is a good way to let off steam, but may not necessarily result in customer satisfaction. According to Diah Indriantari, a lawyer with YLKI, the agency last year received 1,301 complaints filed through its hotline service and 892 through letters.

Agus Pambagyo admits that it is difficult and complicated for consumers to file their cases in court and while YLKI can assist in negotiations, applying public pressure and helping out with legal action, it can not act as a law firm.

No law firm

For example, in the case of consumers who are against electricity rate increases, YLKI is able to assist in negotiations with the authorities. If that fails, YLKI can influence the public to apply pressure on the offending company, such as by encouraging people to boycott the product. But how many people would be prepared to stop using electricity?

"Not many consumers want, or can, do this. If this also fails, we take it a step further and go to court. But we seldom go this far. Most consumers are reluctant to go along with court rules. They have to attend every court hearing. Yes, it takes money and is time-consuming. But these are the right steps," he says.

In most cases, customers want YLKI to go all the way to court, but many would claim they cannot afford it.

"YLKI is not a law firm. If they (consumers) want to go to court, we can facilitate that. But we can't go alone. They have to be there with us. When it comes to this, most of them give up. The better-educated consumers would say they don't want to waste their time, while the less educated ones are reluctant because they are too afraid. Their rights have been repressed for so long. They've lost all the initiative, creativity, ability and knowledge as consumers. They don't know they have rights," Agus says.

Which is why YLKI puts emphasis on educating people about consumer protection through seminars, lectures and discussions with various consumer groups such as students, youths and women. Public service ads placed on television, radio and in print media, he says, are also effective but are very expensive: "We don't have the budget for that. Anyway that's not our job. That's the government's job."

He points out that the Consumer Protection Law promotes the formation of grassroots Consumer Protection Agencies (Lembaga Perlindungan Konsumen Swadaya Masyarakat/LPKS).

"It's good for public control. But it also has excesses. Many such agencies have had to blackmail retailers and business associations because they don't have enough financial support to survive. They have had to sacrifice their independence. As an NGO we have to be independent. We can't have anything to do with traders or any business organizations," he says.

Complaints in media

In the end, unsatisfied customers who are aware of their rights yet understand the lack of law enforcement in the country opt for a well-known and highly-proven method to get the attention of retailers or service providers: they write their complaints in the media. And who can blame them since in most cases, it is easier for customers to get hold of the contact numbers of newspapers and magazines than that of goods and service providers.

Anton Situmeang from PT Unilever's media relations division admits this. But he adds that Unilever, which produces household items like soap and toothpaste, has plans to add a customer hotline number on the packages of its products. Still, he does not know when it will happen: "We are going in that direction, but everything needs preparation."

At the moment, the company handles complaints through its distribution network, which he claims is well-established throughout Indonesia.

"People from our representative offices meet directly with the customers and will then establish whether a product is faulty from our factory or whether it has been tampered with -- this includes determining that a product is indeed ours and not an imitation. If the product is defective from the factory, then we will replace it. This is common practice," he says.

Some companies, mostly multinational service retailers, can handle complaints through a customer relations department of some sort and give customers the appropriate response.

Ditta Amahorseya, a public relations officer at Citibank, says the bank tries to resolve each complaint on the day it is lodged. If more time is needed, it is passed on to the division concerned or a special "Total Quality" division that regularly monitors customer satisfaction and reports to the bank's Asia Pacific headquarters.

"It is not true that consumer complaints are only dealt with after they are written in the media," she insists.

Riko Abdurrahman, also from Citibank, claims that the fine print on banking products -- such as the writing on credit card application forms which state the legal implications of owning the product and the customer's rights and obligations -- was not intended to dupe would-be customers or take advantage of their lack of knowledge.

"It is only a matter of available space. In the case of Citibank's credit cards ... customers whose applications have been approved will receive the credit card and a directory book explaining in detail about ownership benefits and obligations," he says.

State-owned Merpati Nusantara Airlines is more aware of the bad image with which fine print is related. Merpati's general manager of corporate affairs, Imam Turidy, says: "We reprinted the terms and conditions usually found on tickets into a far clearer format as only a few passengers previously read it because the print was too small. We now offer and promote everything carefully as we have to make sure that we can really deliver."

Since the introduction of the Consumer Protection Law in 1999, Merpati has held programs to familiarize the staff with it. But he insists that customers must do their part as well.

"For example, passengers who arrive late at check-in counters should understand that their baggage might not arrive at the same time as them. Late passengers can still get on board, but not their baggage because of different handling (by another company)," he says, adding that most passengers do not care about this and would be quick to blame the airline when their baggage is late, or considered lost.