30 March 2020 (closed)
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The customer protection in Indonesia is regulated in law number 8 of 1999 on Consumers' Protection (Consumer Law). The Consumer Law gives consumers the right to sue PT Companies for any damage incurred due to the use of certain goods or services. In this column we discuss the shareholder liability in case of such consumer claim. We compare the Consumer Law with the Law number 40 of 2007 on Limited Liability Company (Company Law), to gain understanding about the risk and liability of shareholders in such claims.
Liability of PT Companies in Consumer Claims
Article 19 of the Consumer Law provides that a business agent must indemnify consumers for damage incurred as a result of the consumption of goods or services provided or traded by the business undertaking. Such compensation is in the form of a refund or replacement of the good or service of the same type or equivalent value, funding health care and or providing an allowance to the claimant for the damage or injury incurred.
A business agent is defined in article 1 of the Consumer Law. The article states that a business agent shall be any individual or business corporation, either in the form of a statutory body or otherwise, set up and domiciled or undertaking activities in the jurisdiction of the state of the Republic of Indonesia. Based on the definition in article 1, a PT company is included in the definition of business agent.
Article 45 of the Consumer Law states that every disadvantaged consumer may sue a business agent through an institute assigned to settle disputes between consumers and business agents or through a judicial process within the public court. This means only the Indonesian PT companies can be sued for product liability by Indonesian customers.
Shareholder Liability in Consumer Claims
According to Article 3 (1) of the Company Law, the shareholders of a PT company are not personally liable for agreements made on behalf of the company, and are not liable for the PT company’s losses in excess of their prospective shareholding.
Moreover, according to Article 100 Reglement op de Rechtsvordering parties can also file a claim against a foreign company through the Central District Court of Jakarta. However this avenue is only applicable to a party that has a written contract with the foreign company. Since operations in Indonesia are usually handled by the PT company, any claims to via this avenue are rare.
This column is provided by PNB Law Firm Jakarta