New law empowers buyers to sue producers

New law empowers buyers to sue producers

JAKARTA (JP): The House of Representatives unanimously
endorsed on Tuesday a new law empowering consumers to sue
providers of defective goods and services.

The new law, the second piece of legislation proposed by a
House initiative in more than 30 years, also recognizes class
actions against unsatisfactory producers.

The law recognizing consumer rights includes the right to
obtain security and comfort when consuming or using products and
services, the right to choose and obtain goods and services at
fair prices, the right to correct and honest information on
products and services and the right to receive compensation.

It also has wide-ranging regulatory functions for businesses.

The law bans businesses producing or selling products and
services which do not conform with required standards, do not
mention expiry dates, do not follow halal (allowed by Islamic
law) production processes for products with a halal label, do not
have labels explaining the content of the goods or do not use
Indonesian language to explain the product's use.

The law also disallows the use of misleading advertisements to
promote products and services.

Producers or traders who violate the law could face a maximum
criminal penalty of a five-year imprisonment and a maximum fine
of Rp 2 billion (US$250,000).

In a plenary session of the House presided over by Deputy
House Speaker Ismail Hasan Metareum, spokespersons from four
House factions said in their final overviews the law should
increase businesses responsibilities and consumer right's
awareness.

Golkar spokeswoman Lydia Arlini Rianzi said producers should
be given enough time to adjust to the new law. She said otherwise
the law would only result in an increase in production costs,
which in the end would burden consumers.

"Consumers also need time to learn about the new law, so they
can fully understand their rights."

The Armed Forces faction stressed the importance of an
obligation to attach information in the Indonesian language for
the direction of use in every product.

"The obligation will prevent any misunderstanding among
consumers when using products, especially amid the flooding of
imported goods," Sutrisno Suwari, who delivered the faction's
outlook told the session.

The five factions -- Golkar, Armed Forces, the United
Development Party and the Indonesian Democratic Party factions --
urged the government to establish regulations to implement the
law as soon as possible.

Minister of Industry and Trade Rahardi Ramelan, who
represented the government at the session, promised to produce
follow-up regulations once the law came into force.

The consumers protection law will come into effect one year
after its ratification by President B.J. Habibie.

The law requires the establishment of a new independent Agency
for the Settlement of Consumers Disputes in each regency.

If consumers and producers or traders wished to challenge an
agency verdict, redress from district courts was available.

The new dispute settlement agency could mete out maximum
administrative sanctions or compensation of Rp 200 million
against law-breaking producers or traders.

Under the new law, the government will also be required to set
up a National Consumer Protection Agency to oversee the
implementation of the new law.

Members for the protection agency will be appointed by the
President in consultation with the House. They will comprise
government officials, producers, nongovernmental organizations,
representatives of educational institutions and experts.
(gis/aan)