Consumer sovereignty in the framework of social justice, economic equality and environmental balance, within and across borders

Addressing Unfair Trade Practices in ASEAN to Protect Small Businesses and Consumers

Jakarta, 19 December 2012

“Unfair trade practices (UTPs) such as unfair pricing, misleading advertisement, undue use of bargaining power by big businesses, etc are thought to be extremely and highly prevalent in Indonesia by 90% of representatives of relevant national stakeholder groups (consumers, businesses and government officials). However, these very same stakeholders think that, even though the legitimate rights and interests of small businesses and consumers in the country are being negatively affected by these unfair practices, they are not receiving sufficient protection due to the ineffectiveness of the regulatory and institutional framework,” said Prof. Ningrum Sirait, the leading researcher on competition issues and vocal advocate for the cause of competition in Indonesia, at a one-day Policy Dialogue organised as part of a two-year regional project implemented by the Consumer Unity & Trust Society (CUTS International) – an international non-governmental organisation doing research and advocacy on various issues related to international trade, competition law and policy, economic regulation and consumer protection, in collaboration with the Indonesian Centre for Law and Policy Studies (PSHK) – in five ASEAN countries i.e. Indonesia, Malaysia, Philippines, Thailand and Vietnam with support from the International Development Research Centre (IDRC, Canada) entitled ‘Study on Unfair Trade Practices in select ASEAN countries’ (http://utp.cuts-hrc.org).

Agreeing with Prof. Sirait, Mr. Ahmad Junaidi, Head of the Public Relations and Legal Bureau of the Commission for the Supervision of Business Competition (KPPU), Indonesia called for harmonisation of the legal and institutional frameworks in Indonesia and reduction of individualism across various agencies dealing with UTPs with focus on the welfare of the consumers, so that these challenges vis-a-vis UTPs in Indonesia could be resolved. Mr. Junaidi therefore affirmed the support of KPPU to the project by CUTS International for its findings and recommendations.

Mr. Udai S Mehta, Associate Director, CUTS International provided a brief overview of the project and emphasised that this project, being a pilot initiative, has been successful to the extent of pointing out and highlighting the problems and challenges within as well as across ASEAN countries regarding unfair trade practices, which is the reason why in the future, further in-depth and extensive research and awareness raising on the issues are extremely needed.

Providing an overview of the situation across ASEAN countries, Dr. Deunden Nikomborirak, Director of the Thailand Development Research Institute, pointed out that unfair trade practices are highly prevalent in various sectors such as retail trade, franchising, contract farming, multi-level marketing, etc in ASEAN economies, harming the consumers and the small businesses, including poor farmers. However, the legal and institutional frameworks dealing with these practices remain very much inadequate across these countries, and to make matters worse, extremely different among them, putting under spotlight the issue of harmonisation of competition laws in ASEAN. The prospect of having an ASEAN Economic Community by the year 2015 with all the member States having a national competition law is exciting and attractive to all the stakeholders. However, everyone is extremely sceptical as to the actual scenario then and thus agreed that ASEAN countries should have a more realistic and cautious working agenda to approach the issue.

The meeting brought together more than 40 experts and academicians within and beyond the ASEAN region, as well as partners, advisors and select local government officials working in the field, press to discuss and exchange views on the nature and prevalence of UTPs in the region, their impacts on business growth and consumer welfare, and the legal and regulatory framework as well as institutions to deal with them, etc.

For further information, please contact Ms. Alice Pham at ap@cuts.org, +84 917 817 644, or Mr. Muhammad Faiz Aziz atmuhammad.aziz@pshk.or.id, +628 158 253 446.