Research Project on Unfair Trade Practices in Select ASEAN Countries 2nd Policy Dialog, Jakarta 19 December 2012 PSHK Pusat Studi Hukum & Kebijakan Indonesia Indonesia Centre for Law & Policy Studies

Study on Unfair Trade Practices (UTPs) in Indonesia Team Leader: Ningrum Natasya Sirait Team Members: 1. Muhammad Faiz Aziz 2. Siti Maryam Rodja 3. Rachmad Maulana Firmansyah

Contents I II IV III Activities of Study Result Findings from Literature Research Findings from Perception Survey Conclusion & The Way Forward

Objectives Highlighting the relevance of designing appropriate regulatory frameworks Capturing the perceptions and expectations of relevant stakeholders groups Facilitating contacts and networking between relevant stakeholder groups Generating attention and supporting dialogues amongst members Activities Research on UTPs legal and institutional framework (and also enforcement record and cases) Perception surveys Policy dialogues Details Study on regulation, institution and cases Survey on 35 respondents from business actors, resource persons, practitioners and authorized agencies In depth interview with relevant stakeholders Participation in Policy Dialogue

Contents I II IV III Activities of Study Result Findings from Literature Research Findings from Perception Survey Conclusion & The Way Forward

Definition of UTPs Unfair Trade Practices encompass a broad array of torts, all of which involve economic injury brought on by deceptive or wrongful conduct (UTPs annotations by CUTS).

No formal definition of UTPs in Indonesia. Similar concept is found in Indonesian Criminal Code Article 382 bis 383. However, the Code regulates lesser detail than Competition Law and Consumer Law. Art 382 bis Fraudulent act or misled in business expansion which caused loss to competitors Art 383 Deceptive act regarding goods quality, quantity and delivery

UTPs related regulations and authorized institutions

Law on Consumer protection, 352 district courts possess the authority to handle consumers’ complaints in addition to BPSK. Both Competition Law No.5/1999 and Consumers Law No. 8/1999 have definition of consumer. However, each definition posed a different scope of meaning and different approach when interpreting the clause of the law.

UTPs related regulations and authorized institutions (specific sector regulations and agency) However, only Banking Mediation has authority to settle consumer dispute and remedies.

UTPs related regulations and authorized institutions (specific sector regulations and agency) * BPOM has no authority to settle consumers’ disputes.

Enforcement Record (only KPPU provides data) Five largest Number of Cases in Competition Law ( ) KPPU is the only institution providing complete enforcement record regarding UTPs in competition area since others do not provide detail data. During the research, it is also to access and or obtain the data regarding UTPs enforcement record.

Enforcement Record (only KPPU provides data) UTPs cases of Competition Law ( )

The Facts on UTPs Cases in Competition Law

The Facts on UTPs Cases in Consumers Law

The Way It Has Been Dealt

Contents I II IV III Activities of Study Result Findings from Literature Research Findings from Perception Survey Conclusion & The Way Forward

Stakeholder’s Perspectives 35 respondents: 23 respondents or 65.71% from business actors (including small-scaled business actors and business organizations); 8 respondents (22.86%) from resource persons/practitioners; and 4 respondents (11.43%) from relevant authorities related to UTPs. Methodology: Interview and open-ended questionnaires.

Stakeholder’s Perspectives Contact with relevant authorities Access to relevant authorities

Stakeholder’s Perspectives Cooperation with relevant authorities Regulation Enforcement

Stakeholder’s Perspectives Do current regulations need to be amended ? UTPs still prevail or resolved? Widespread of UTPs

Stakeholder’s Perspectives Do the UTPs affect small-scaled business actors, consumers and investment climate? Effect of UTPs in investment climate and consumers’ demand

Stakeholder’s Perspectives Most UTPs in Competition Law Most UTPs in Consumer Law

Stakeholder’s Perspectives UTPs Actors The Cause of UTPs

Stakeholder’s Perspectives

Joint Arrangement

Contents I II IV III Activities of Study Result Findings from Literature Research Findings from Perception Survey Conclusion & The Way Forward

Updates on the Indonesian Context Regulatory Framework: No specific regulation & institution : amendment of the law is not an easy process as it must go through “list of proposed legislative progam at the House”. Once this proposal could be executed, the harmonization between the laws,dispute settlement agencies and different definition of consumers would be resolved under one interpretation. Proposing commercial court to ajudicate competition and consumer cases has been submitted for quiet sometimes and the law need to be amended to accomodate such need. Again, harmonization among the institutions especially with the Supreme Court is needed. Institutional Framework: Indonesia with around 250 M people regarded with variety level of consumers awareness and knowledge. Therefore, continuous socialization and education to increase public awareness on UTPS is mandatory. This is to include easy access and to understand case procedures. Question between civil damages compare to criminal sanction as deterrent effect should be balance adequately.