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 IndonesiaTeam Leader: Ningrum Natasya SiraitTeam Members: 1. Muhammad Faiz Aziz

2. Siti Maryam Rodja 3. Rachmad Maulana Firmansyah

ContentsContentsI

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

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

ContentsContentsI

II

IV

III

Activities of Study

Result Findings from Literature Research

Findings from Perception Survey

Conclusion & The Way Forward

Definition of UTPsDefinition of UTPsUnfair 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 bisFraudulent act or misled in business expansion which caused loss to competitorsArt 383Deceptive act regarding goods quality, quantity and delivery

UTPs related regulations and authorized institutions

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 Enforcement Record (only KPPU provides data)(only KPPU provides data)Five largest Number of Cases in

Competition Law (2000-2010)

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 Enforcement Record (only KPPU provides data)(only KPPU provides data)UTPs cases of Competition Law (2000-

2010)

The Facts on UTPs Cases in The Facts on UTPs Cases in Competition LawCompetition Law

The Facts on UTPs Cases in The Facts on UTPs Cases in Consumers LawConsumers Law

The Way It Has Been DealtThe Way It Has Been Dealt

ContentsContentsI

II

IV

III

Activities of Study

Result Findings from Literature Research

Findings from Perception Survey

Conclusion & The Way Forward

Stakeholder’s PerspectivesStakeholder’s Perspectives35 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 PerspectivesStakeholder’s PerspectivesContact with relevant authorities Access to relevant authorities

Stakeholder’s PerspectivesStakeholder’s PerspectivesCooperation with relevant authorities Regulation Enforcement

Stakeholder’s PerspectivesStakeholder’s PerspectivesDo current regulations need to be amended? UTPs still prevail or

resolved?

Widespread of UTPs

Stakeholder’s PerspectivesStakeholder’s PerspectivesDo the UTPs affect small-scaled business actors, consumers and investment climate?

Effect of UTPs in investment climate and consumers’ demand

Stakeholder’s PerspectivesStakeholder’s PerspectivesMost UTPs in

Competition LawMost UTPs in

Consumer Law

Stakeholder’s PerspectivesStakeholder’s Perspectives

UTPs Actors

The Cause of UTPs

Stakeholder’s PerspectivesStakeholder’s Perspectives

Stakeholder’s PerspectivesStakeholder’s PerspectivesJoint Arrangement

ContentsContentsI

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.