Wed, 31 Mar 1999

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)