The Indonesian government and the House of Representatives are currently drafting the Bill on Consumer Protection (the Bill), which will amend the existing Indonesian law on Consumer Protection of 8/1999. Attention of business actors should be given at least to the following three consumer protection concepts that are introduced in the Bill namely the standardisation of contracts; the revision of consumer protection responsibility; and the establishment of the National Consumer Protection Agency and the Alternative Consumer Dispute Resolution Institution.

The Standardisation of Contracts

The Standardisation of Contracts will be introduced which prohibits the inclusion of certain clauses in the contract. The Bill provides for an exhaustive list of prohibited clauses to be included in the contract, inter alia, the limitation or waiver of the consumer’s right to take legal action, the prohibition of unilateral amendment and interpretation, the prohibition of non-refundable clause, the prohibition of exclusion of liability for the consumer’s loss, the prohibition of disclosure of consumer data and information protected by applicable laws, and the reaffirmation of the prohibition of exoneration clause.

Consumers’ Data Protection

The Bill mandates that business entities comply with strict enforcement measures to maintain and protect the confidentiality and security of consumers' personal information. This obligation is to be handled with the utmost priority and transparency. The requirements encompass a range of aspects, including general obligations, procedures for data exchange, cross-border data transfers, and the security of information systems, emphasizing the importance of cyber resilience.

Complaint Handling

The Bill introduces comprehensive mechanisms for complaint handling as part of consumers' rights. Consumers will have the ability to submit complaints seeking compensation based on standardized criteria, mechanisms, and procedures established by business entities. Additionally, complaints may be escalated to external institutions when necessary, ensuring that consumers have multiple avenues for addressing their concerns.

Establishment of National Consumer Protection Agency and the Alternative Consumer Dispute Resolution Institution

The Bill mandates the establishment of the National Consumer Protection Agency (Badan Perlindungan Konsumen Nasional – BPKN), which will have extensive authorities, including but not limited to: issuing guidelines for the standardization of contracts, supervising and evaluating their implementation, overseeing the protection of consumer data, and investigating serious alleged violations of consumer protection laws.

Additionally, the Bill proposes the creation of the Alternative Consumer Dispute Resolution Institution (Lembaga Alternatif Penyelesaian Sengketa Konsumen – LAPSK). This institution aims to resolve consumer protection disputes through mediation and arbitration, while retaining the possibility of criminal liability. The establishment of LAPSK marks a significant transformation from the previous Consumer Dispute Settlement Body (Badan Penyelesaian Sengketa Konsumen – BPSK). The transition from BPSK to LAPSK must be completed within two years following the enactment of the Draft Bill. Furthermore, LAPSK will be required to render judgments within 30 to 60 days from the registration of a lawsuit, ensuring timely resolution of disputes.

The parties may file a request to the Head of the District Court for the annulment of the judgment of the Institution but restricted only to the following grounds:

(i) when the evidence is recognised or declared to be false

(ii) when a decisive document is subsequently found to have been concealed by the opposing party

(iii) when a deception was committed by one of the parties to the dispute examination. It follows from the aforementioned grounds that the procedure is based on both material and formal truth. The judgment of the Head of the District Court on the annulment of the Institution may also be appealed before the Supreme Court which must render its judgment, that is final and binding, within 30 days from the appeal registration.

In conclusion, the upcoming Bill on Consumer Protection represents a significant advancement in Indonesia's legal framework, aimed at enhancing consumer rights and business accountability. By introducing the standardization of contracts, strengthening consumer data protection, and establishing key institutions for dispute resolution, the Bill seeks to create a more transparent and fair marketplace. Business actors have no other choices except to proactively adapt to these changes after the formal adoption to ensure compliance and foster trust with consumers. As the legislative process unfolds, it will be crucial for stakeholders to engage with these developments to navigate the evolving landscape of consumer protection effectively.

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