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Consumer protection
Indonesia’s first Consumer Protection Law No. 8 of 1999 (Undang Undang Tentang Perlindungan Konsumen) came into force in April 2000. The Consumer Protection Law sets out basic rights of consumers (including the right to bring class actions) and the obligations of business entities (manufacturers, distributors, retailers and importers) with respect to the sale of their products and services in Indonesia. The Consumer Protection Law provides that business entities must:

  • include an expiry date or “best before” date on their products
  • follow “halal” production processes (that is, processes in accordance with or permitted under Islamic Shari’a law) for products with such “halal” labels
  • include labels on their products stating the name of the product, size, weight, volume (gross or net), composition, directions for use, production date, details of any side effects, name and address of the “business entity” (it is not clear whether this refers to the manufacturer, the distributor or some other entity) and other information required to be included on the label by law
  • provide information in Indonesian relating to the use of the products
  • ensure that their products comply with the information contained on the product labels and any required standards under the general law.
Business entities are prohibited from offering, promoting or advertising particular products or services involving the provision of misleading or false information to consumers. When advertising, promoting or offering their products or services for sale, business entities are also prohibited from directly or indirectly disparaging other goods and/or services. In addition, business entities are prohibited from using descriptions such as “safe”, “not harmful”, “not risky” or “no side effects” without including a detailed explanation of these warranties. Pursuant to the Consumer Protection Law, advertisers may be liable for all consequences arising from any false or misleading advertising carried out by them.

Under the Consumer Protection Law, a local importer (other than an agent or foreign representative of the foreign manufacturer) will be treated the same as a manufacturer. In practice, this means that a consumer who suffers damage arising from the purchase of a defective product can make a claim against the importer and the importer will be liable to the consumer for any such damage.

A violation of the Consumer Protection Law may result in a fine of up to Rp2 billion or imprisonment of a violating company’s management for up to five years. In light of the harsh sanctions that may be imposed under the Consumer Protection Law, it is important for foreign companies to be fully aware of their obligations and the restrictions that now apply concerning the sale of products and services in Indonesia.