Establishment of investors association a must
------------------------------------------------------------------ More than 6,000 people invested a total of at least Rp 500 billion (US$55,5 million) into an agribusiness firm controlled by private firm PT Qurnia Subur Alam Raya (PT QSAR) which promised good dividends. The company recently collapsed and its president escaped leaving investors completely dazed at their loss. The following are excerpts from an interview on the issue between Indonesian Consumers Foundation (YLKI) chairperson Indah Suksmaningsih and The Jakarta Post's Soeryo Winoto. -------------------------------------------------------------------
Question: As a consumer advocacy activist how do you see the case involving the Sukabumi, West Java-based PT QSAR?
Answer: The investors are not really consumers. To become investors is their choice to increase their money. Frankly YLKI isn't deeply concerned with the case.
On Jan. 15 this year I was invited by an agribusiness community to speak at a forum titled Indonesia's Self Funding Agribusiness in Jakarta. I told the audience -- some of them investors -- that share investing is a gamble that can be profitable and knowing how to play the game enables them to protect their money. I had said investors should know how to protect themselves in this kind of business. Is it legally right for PT QSAR to collect public money by promising the prospective investors high profits, which sounds irrational?
So far there is no law which regulates such fund raising. However, Article 4C of the Consumer Law could be applied to curb such practices. The article says that advertisements must be clear and honest. Worse, our legal instruments have usually not involved small investments (in the PT QSAR case). Should the case be brought to court it will take a very long time. Does the case reflect the government's carelessness in protecting consumers?
We are aware of the working pattern of government officials. They always focus on business law, not contract law. In the credit card business, for example, the government is only concerned about the providers' readiness; its head office, investment or working capital and who is behind the business. But when it comes to the relations between the providers and the consumers the government always keeps its hands off. Therefore all parties involved in such a business must be extra careful. How should the government protect people from "pseudo" businesses?
The government should have been involved in the making of the contract between producers and consumers (investors in the PT QSAR issue). In this way the government could protect consumers should the contract be unfair, favoring the producers.
The PT QSAR case is a collective problem, not individual. Thus an investors' association is essential. The association should equip itself with adequate data based on all kinds of businesses the public can invest in. The association should also list the businesses based on its rating of them.
Agribusiness is a high risk investment because it mostly depends on nature, besides proper technology and good management. By establishing an association, consumers could prepare everything, including a solution in case of any dispute. Investing money in companies is a business based on mutual trust. Accountability of the two parties is a prerequisite. People tend to seek shortcuts to get as much money as possible while banks, which offer small interest rates, are no longer considered lucrative. Does the PT QSAR case reflect the people's frustration and irrationality?
Exactly. The government has led people to be frustrated by, among other things, the imposition of various taxes from electricity to toll roads. The government seems to rely on the taxes as its sole financial source. The government has failed to manage state-run companies (BUMN) properly. The companies should have contributed to the government's financial sources. We have heard several similar cases affecting the people before. What can YLKI really do to protect the people from further malpractice?
Our priority is public cases, while what happened with PT QSAR is an individual matter. Once again, PT QSAR investors are not consumers. Thus, an investors' association must be established to protect them. They could also hire lawyers to help them.