Snags in consumer protection law

Snags in consumer protection law

By Destivano Wibowo

JAKARTA (JP): The passing of Law No. 8/1999 on Consumer
Protection, which will become effective on April 20, indicates
the government's earnestness in protecting the rights of
consumers to obtain and consume quality goods and/or services.
This law will provide consumers with convenience, health and
security.

The long-awaited law is expected to protect consumers of goods
and services produced and marketed by businesses in the country,
and goods and services imported from other countries and marketed
domestically.

The government, as the party most responsible for the
supervision of consumer protection, will establish the
Coordinating Body for Consumer Protection (BPKN). This body will
suggest and recommend to the government policies on consumer
protection, conduct studies on relevant prevailing regulations
and examine goods and/or services related to consumer safety.

However, settling consumer disputes will fall under the
authority of the Consumer Dispute Settlement Body (BPSK), which
will be established in all regencies.

The obvious problem is that we have yet to see the
establishment of these two crucial bodies. If the government
wants the law on consumer protection to become effective on
schedule, it should at least indicate a timetable for the
necessary preparations leading to this law taking effect.

To settle possible disputes between consumers and business
agents, the law provides three alternatives:

a. Peaceful settlement between a consumer and a business agent
without the intervention of a third party;

b. Dispute settlement via the Consumer Dispute Settlement
Body;

c. Settlement via the judiciary, namely the district courts.

In terms of settling disputes peacefully, there needs to be an
agreement applicable to the concerned parties. In the event of a
breach of the agreement, the impaired party could turn to the
courts. A final settlement could then be expected to take a long
time, because a party dissatisfied with the court's ruling could
file an appeal.

In the event of a dispute being brought directly to the BPSK,
this body is required to issue a final and binding ruling within
21 days of receiving the dispute, meaning that there would be no
appeal. This is reasonable because disputes between consumers and
business agents would be differentiated from other civil cases.

However, for no clear reason Article 56 of the law stipulates
that should a party object to a ruling by the BPSK, this party
may file an objection with the district court. If it is still not
satisfied, it may appeal to the Supreme Court -- so the BPSK's
ruling would be neither final nor binding.

Compare this provision with that of the Arbitration Law which
basically states that the ruling of the arbitration committee
shall be binding and final, and that there shall be no further
legal recourse.

Another matter of no less importance is the provision on
standard clauses in Article 18. These clauses are regulations or
provisions and conditions in a document binding to consumers.

A common example found in contracts between businesses and
consumers is, "Goods which have been purchased shall not be
exchanged or returned." When the law on consumer protection
becomes effective, such clauses shall be deemed null and void.

The question here is: What about the standard clauses which
existed prior to the law; how much time do business agents have
to adjust their standard clauses? Article 18 says businesses are
required to adjust their agreements which contradict the law, but
the adjustment period is not specified.

This would certainly cause uneasiness to business agents who
in good faith make changes to their agreements, given the
sanctions for violating Article 18.

Strict liability in consumer laws, such as is seen in the
United States, should also be applied and provided for. The
principle of strict liability suggests that business agents shall
be directly responsible to consumers of their goods and services.

The "consumer" is extended to not only include the purchaser
or user of the goods or services, but also other parties falling
victim to defective goods and services.

For instance, a motorist hits a pedestrian crossing the road
due to the car's faulty brakes. Should the car brake producer, in
addition to the motorist, be held liable to compensate the
pedestrian? The answer is yes, if strict liability is applied.

And what about the settlement of disputes between consumers
and business agents involving small claims? The cost of
registering such a case with the courts and the lawyer fees would
be too high compared to a claim of only several hundred thousand
rupiah.

Further, if such a dispute was brought to the BPSK, it would
eventually be settled by the courts given the law's
inconsistency, as described above. It is thus necessary to seek a
settlement which is inexpensive, fast, final, binding and direct
for cases entailing relatively small amounts of compensation.

Irrespective of the above weaknesses, business agents have a
moral obligation to apply and comply with the law's provisions.
Producing quality goods and services would prevent frequent
consumer claims.

Consumers also need to be encouraged to exercise their rights
and control over businesses, as the success of this law depends
on the function of checks and balances by consumers.

The writer graduated from Boston University's School of Law
and works at Lubis Ganie Surowidjojo Law Office in Jakarta.