Consumer Protection Law is just the start

By Stevie Emilia

JAKARTA (JP): After pushing for the Consumer Protection Law for 19 years, the Indonesian Consumers Foundation (YLKI) can now breathe easy. The law will be implemented April 20, a year after being signed by former president B.J. Habibie.

The foundation's chairwoman, Indah Suksmaningsih, was deeply touched when the law was finally passed.

"A huge task has been accomplished and now we must work hard to make sure the law is effective because a new law is still not perfect," said the graduate of the microbiology department at Satya Wacana Christian University in Salatiga, Central Java, and holder of a Master's degree in public management from Carnegie Mellon University in Pittsburgh, Pennsylvania.

YLKI proposed the consumer protection bill in 1981, a rare move made by an NGO at the time. The idea to draft the bill was started as early as 1975, involving representatives from the government, NGOs and universities. Unfortunately, such bills, including those proposed by the Ministry of Trade and Industry, were abandoned.

The last bill, the House of Representatives initiative law on consumer protection, was proposed in December 1998. The bill was finally enacted on 20 April of last year -- an unexpected gift for YLKI, which celebrated its 26th anniversary on May 11.

"For YLKI, the important thing is that the law exists, no matter who signed it.... With the law, activities in defending and protecting consumers will be stronger and also have a strong legal basis," said the 44-year-old Indah.

She said that the House of Representatives' initiative should be recognized, but that the role of academicians and NGOs in pushing for the law should also be praised.

She joined YLKI in 1979, but later moved to another NGO, the Indonesian Forum for Environment (Walhi), following her senior -- now Minister of Settlement and Regional Development -- Erna Witoelar.

She later worked in a property company, then left to work for a foreign company. In 1986, upon Erna's request, Indah worked part-time at YLKI while keeping her full-time job at the foreign company.

"If I'm wealthy and don't need to earn a living, maybe I won't be interested to work in other places besides YLKI. For me YLKI is a place where I can learn many things. It's also a place to fight for something. I didn't get the chance to fight before, the country was independent when I was born...," the single woman said jokingly.

It was her scholarship to study in Pittsburgh that "forced" her to work full-time in YLKI upon her return in 1996. She became the foundation's chairwoman, replacing Tini Hadad in August for a three-year office term.

"The most important thing is how can YLKI affect decision makers' pricing policy to make services or products affordable for consumers," explained Indah.

She has no regret spending most of her time defending consumers. In fact, she feels satisfied she can do something for them. "Maybe because I love what I'm doing here...," Indah stated.

A week before the Consumer Protection Law is implemented, Indah shared her views about the law with The Jakarta Post. Here are the excerpts of the interview:

Question: Does the law meet the expected target?

Answer: Amid its shortages, the law has meet the target, yes. The most important thing is we have the law, which protects a consumer's basic rights. Whether the law will reach its maximum target depends on several factors, such as consumers' willingness to fight for their rights as stipulated in the law.

Another necessary factor is to change the social and cultural habits of consumers. Many simply accept things as they are. Now, consumers should have the courage to be critical and brave in defending their rights. They should also nurture solidarity with other consumers to defend their rights.

The government needs to shift from a producer-oriented to consumer-oriented attitude, or at least put a balance between consumer and producer. And the government should also give good and satisfactory service to consumers.

What substantial changes will the law make?

First, the elimination of fixed clauses. Fixed clauses mean one-sided agreements that hurt consumers. Under the law, fixed clauses will be annulled. It means that any agreements made only by one side, such as those found in shopping receipts, parking tickets, or contracts to purchase houses, are annulled.

The law also opens up the opportunity for consumers to do class action and to shift the burden of proof. By shifting the burden of proof, any business person (producer), who receives a consumer's complaint -- for instance, regarding food poisoning -- is obligated to prove it (true or not).

Another substantial change in the law will be the establishment of a body in charge of solving consumer disputes by the government. The body will handle disputes between consumer and producer through mediation, conciliation and arbitration procedures. The purpose of setting up this body is to speed up the process and provide more and easy access for people at low costs.

Are you sure the law will guarantee better bargaining power for consumers?

Under the law, consumers will have a better advantage. Any violators will face not only administrative penalties but also criminal charges. The law has also included consumer rights, which are defined in the UN Guidelines for Consumer Protections.

But it should be remembered that consumers will have strong bargaining power not only by knowing their rights, but by being willing to fight for those rights, too. If consumers realize their power and know they have the law on their side, they will become a very strong and united front.

But it seems like there's not enough socialization of the law. How can consumers gain strong bargaining power if they have never heard of the law?

It has to be understood that YLKI is not the only organization responsible for consumer protection, although morally we are very responsible to the community. But officially, it's the government -- in this case the Director of Consumer Protection under the Ministry of Industry and Trade -- that should be fully responsible in such matters.

But we can't say there is absolutely no socialization process. And it's not true if we fail (to familiarize the law). As we all can see, consumers now are getting critical. Urban people, for instance, now check expiration dates on every product they buy, know the danger of certain substances and they even openly protest improper ads.... Maybe their numbers are small, but the most important thing is, people have started to learn about consumer problems based on their own experiences.

But is it realistic to implement the law with the lack of socialization?

The law should be enforced as planned amid its present shortages. I'm sure we can improve it along the way.

The law is badly needed. If it's being postponed again, it will only make the position of consumers, who have started to learn their rights, become weak.

Do you think Indonesian consumers will have the courage to use the law to their own advantage?

Let me give an example. Previously, even a doctor on economic law could not do much in dealing with fixed clauses, say, in a banking transaction. And it's impossible that a doctor on economic law did not know what fixed clauses were. But then, it was impossible even for the doctor to question the clauses. There's no rule about it and producers could do whatever they liked.

But now, under the law, the fixed clauses are annulled. Such clauses, which do not consider consumer interests, will not be tolerated anymore....

Apart from the lack of socialization, it seems like there's also the lack of preparation in implementing the law. Even the body in charge of solving consumer disputes is not yet being set up.

The preparation is relative and depends on the good will of all, especially of the government, the economic players and consumers. That way, all of us should have the intention to improve the law and enforce it....

And the body will be set up once the government regulation on its establishment is released. At the moment, the consumer protection director is preparing the regulation. Hopefully, the body can be set up before the law is enforced.

Once it is set up, will the body's decisions be legally binding?

This body is different from that of an ordinary court. Here, the judges, between three to five people at most, are comprised of representatives from the government, consumers and producers. Their decisions will be binding, yes, and if they are ignored by the producer. The body can then report the case to the police for further investigation.

The body is more geared at solving small scale disputes. The body's judges go through three stages: mediation, conciliation and arbitration that should be completed within 21 days.

Although the body's decisions are legally binding, those in dispute still can appeal to the district court.... If there's objection, the next appeal can reach the supreme court. So the overall proceedings might take a maximum of 100 days.

Some business people have requested that the law be postponed. Does the law pose a serious threat toward businesses?

The demand to postpone the enforcement of the law is mainly a result of business people's unreadiness to face free trade. In my opinion, there's no reason to postpone the law. In fact, export- oriented producers will find an easy market for their products since many countries have imposed such laws.

Fair and honest business people will find that the law protects their interests. If they reject the law, maybe it is an indication of their unhealthy business practices. The law will force them to change their dirty business tricks. Maybe.

It's not sensible to postpone the law then?

So far, there's two kinds of rejections: to completely postpone the law and to implement it selectively. Being tolerant of middle-to-small scale businesses is a still sensible request. Actually, they had a year to prepare. Some businesses have made necessary adjustments because they're accustomed to exporting their products to countries which strictly impose the law. So they know.

For me, I disagree with discrimination in implementing the law. But multinational companies should be distinguished from small scale industries.

For YLKI, every step, including postponement of the law, has its own consequences. After all this time (pushing for the law), the effort to postpone it will be seen as an effort to deceive consumers.

Once the law comes into effect, are we much better than other countries in terms of consumer protection then?

Well, if we compared it to ASEAN countries, we're the third after Thailand and the Philippines.

But if we look at the government's will in protecting consumers, Malaysia is really a good example. Although Malaysia does not have a national-scale regulation to protect consumers, it has regulations at the sectoral level and good legal enforcement to protect consumers. In practice, NGOs are the government's partner in protecting consumers. In Indonesia, we're not. One more thing. In Malaysia, consumer protection is handled by an official at the ministerial level, while in Indonesia it's only tackled at the director level. So it can be said that we've only just started.