New law boosts consumer's position

New law boosts consumer's position

People cheer that the much-awaited Consumer Protection Law
will take effect on April 21. But the long struggle to strengthen
the weak position of consumers in the country has not ended. The
homework is not finished as the government still has to issue
necessary regulations for its implementation, The Jakarta Post's
Stevie Emilia and Rita A. Widiadana report.

JAKARTA (JP): Enticed by a flashy ad promising a nice housing
complex with tennis courts and swimming pools, Tuti bought her
dream house in Puri Jaya housing complex in Tangerang, about 30
kilometers south of the city, three years ago. But up to now,
there are no such sports facilities there. The promise remains as
before -- just a promise.

When confronted, the developer simply said they could not
afford building them since many of the houses were not yet
occupied.

"I have to accept their excuse, I have to understand it,
although I think they should fulfill their promise. But I see no
point of arguing further, they won't build them anyway,"
complained the 29-year-old woman.

Consumers throughout the country are treated shockingly and
have extremely weak bargaining power against producers and
service providers. Even in establishments frequented by numerous
consumers, few, if any, customer service representatives are to
be found, and none who seem to care enough.

Meanwhile, at the Indonesian Consumers Foundation (YLKI), the
organization that first proposed a consumer protection law in
1981, the number of complaints are piling up.

Last year alone saw 848 complaints with bad banking service
grabbing the top position with 20.17 percent. Housing complaints
followed with 14.50 percent, telephone service racked up 14.27
percent, failure of electronic products received 8.37 percent,
electricity garnered 7.67 percent and the remaining 35.02 percent
of the complaints were divided between fraudulent advertising and
necessities like water, insurance, food, transportation, and
medical treatment.

YLKI's chairwoman Indah Suksmaningsih points out that until
now consumer rights were completely ignored.

"The situation is much worse if the victim is poor. Many
times, they are discriminated against and ignored... And their
lack of knowledge make them easy victims. They just take whatever
they get," Indah said.

The foundation's efforts to defend consumers reached a dead
end in many cases, because of the absence of a legal basis.

But enough is enough. After desperately waiting for 19 years,
the time has come for producers and service providers to watch
their backs. As of April 21, consumers will be empowered and have
a law to back them up, the Consumer Protection Law No. 8/1999.

Regardless of a consumers' wealth or social status, the law
will protect their rights and violators can no longer get away
with irresponsible behavior. If found in violation of the new
law, they are subject to a maximum Rp 2 billion fine (more than
US$250,000) or five-year jail term in addition to revocation of
their business permit.

So, lots of hope is placed on this long-awaited law, expected
not only to provide a legal basis but also to improve consumer's
bargaining power when facing producers or service providers.

One of the key provisions of the law is the ability to file
class-action suits against a delinquent producer or service
provider. Previously, class-action suits were very difficult to
initiate, such as the YLKI class-action suit against the state
electricity company, PLN, for the power blackout in April 1997.

The Consumer Protection Law also bans fixed clauses, such as
"Purchased goods cannot be returned". Till now, consumers were
forced to accept such clauses printed on shopping bills, parking
tickets or banking contracts. Take it or leave it, no protest or
objection allowed.

"A major work has been completed and now another begins -- how
to make sure the law is effective, because it is still not
perfect," said Indah.

Not perfect

The law, indeed, is not perfect as the government has not
issued regulations necessary for its implementation.

YLKI has demanded at least 20 regulations to support the law,
including a detailed regulation on proper advertising for drugs,
cosmetics and traditional herbs.

The Ministry of Trade and Industry has finalized only three
regulations. They concern the formation of the National Consumer
Protection Body, control and supervision, and NGOs working for
consumer protection.

"We still need time. We can't do something recklessly and pay
no attention to details. The most important thing now is we will
implement the law and prepare necessary regulations to make it
work," the ministry's director of consumer protection Eni Suhaeni
Bakri said.

She said the three drafted regulations had been submitted to
the Ministry of Law and Regulations. Once the regulations are
issued, the Ministry of Trade and Industry will have the legal
basis to issue a ministerial decree on the establishment of a
body in charge of handling consumer disputes.

Suhaeni said that she hoped the three regulations would be
approved and issued by the Ministry of Law and Regulations by the
end of the month.

The lingering question is -- When will the organization in
charge of handling consumer disputes exist?

Suhaeni estimated that it would be established at least two or
three months after the issuance of the ministerial decree. By the
end of the year it is expected that such organizations would be
set up in at least 10 big cities throughout the country.

Until the organization exists, consumers can lodge their
complaints to the YLKI or to the directorate of consumer
protection at the Ministry of Trade and Industry.

The body in charge of solving consumer disputes, comprises
representatives from the government, consumers and business
people; it will handle disputes out-of-the-court and can impose
administrative penalties up to Rp 200 million.

Unreadiness

Even though the Consumer Protection Law was signed last year,
the government did not make enough effort to introduce it to the
public and to producers. Consequently, the implementation of the
law has triggered mixed reactions from business people.

Several business associations have raised objections to
implementation of the law this year, demanding more time to
prepare.

"Three years is about the minimum time for everyone to really
understand their rights and obligations," Kustarjono the
executive director of Association of Indonesian Retailers said.

Director of the Indonesian Food and Beverage Association
Thomas Darmawan emphasized that small-scale food vendors would
face difficulties since the law required them to attach labels to
their products.

But some business people can see the bright side of the law.

PT Unilever Indonesia Tbk's corporate relations director Tonny
Pranatadjaja said the law would force companies to produce high-
standard products, a common practice in global business systems.

"It is good to implement the law, but the government should
make extra efforts to socialize it and to give more time and
tolerance to these small and middle level companies in adopting
the law...," Tonny said.

Laksmi Oktovi Ascaria, Corporate Communications Manager of
Bank Bali, said the company had already anticipated all possible
ramifications caused by implementation of the law.

She added that Bank Bali is now working hard to tighten
coordination among each division in order to enhance the quality
of services.

The calls to postpone the law were played down by Minister of
Trade and Industry Yusuf Kalla.

"They (business people) have already had a year to prepare
themselves, to understand the law. Besides, the law is good for
them, it will make them ready to face free trade," he said.

Indah also strongly refused to postpone the law.

"If the law is going to be postponed again, it's like
deceiving consumers.... The honest producer or service provider
will find nothing to worry about," she said.

"What we need to do now is not ask to postpone the law, but
how to enforce the law fairly, so that it does not just look good
on paper."

And the first thing the government has to do is to issue the
necessary regulations for the implementation of the law.