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.