A Brief of the Minister of Trade Regulation on the Use of Bahasa Indonesia on Product Labels

Despite the debates on the high rate of consumerism in Indonesian society, we cannot neglect the fact that people who spend most of their income on shopping (whether for daily primary needs or only for a certain lifestyle) must be protected from faulty products. One of the basic protections is product information on labels and/or in manuals. As many products in Indonesian markets are imported products, or are manufactured by foreign investment manufacturers, certain measures have been taken to emphasize the necessity of using Bahasa Indonesia (the Indonesian language) on product labels. This is to prevent consumers in Indonesia who do not understand foreign languages, particularly those living in remote areas, from misunderstanding the labels and misusing the products.

In 1999, the Indonesian Government issued Law No. 8 of 1999 concerning Consumer Protection ("Law 8/1999"), which specifies certain requirements and conditions that must be met by business actors to protect consumers, one of which is a requirement to give information and/or guidance on the use of products in Bahasa Indonesia (Article 8 paragraph (1) point (j) of Law 8/1999). As an implementation of the mandatory use of Bahasa Indonesia under Law 8/1999, the Minister of Trade issued a specific regulation on the mandatory use of Bahasa Indonesia in Product Labels in 2009. That regulation has been amended several times, most recently by Regulation of the Minister of Trade No. 73/M-DAG/PER/9/2015 concerning Mandatory Labeling of Products in Bahasa Indonesia ("MTR 73/2015") which revoked Regulation of the Minister of Trade No. 67/M-DAG/PER/11/2013 concerning Mandatory Labeling of Products in Bahasa Indonesia as amended by Regulation of the Minister of Trade No. 10/M-DAG/PER/1/2014 ("Old MTR").

MTR 73/2015 and the Old MTR

MTR 73/2015 makes certain adjustments and revisions to the Old MTR.

MTR 73/2015 Old MTR
The Definition of "Business Actors"
Defines "Business Actors" as:

"Any Indonesian citizen or business entity, whether or not in the form of legal entity, established and domiciled within the territory of the Republic of Indonesia which carries out trading business activities."		 Defines "Business Actors" as:

"Any person or business entity, whether or not in the form of legal entity, established and domiciled or carrying out activities in the territory of the Republic of Indonesia, whether by itself or together through an agreement on the operation of business activities in any economic sector."
Both MTR 73/2015 and the Old MTR state that the Business Actors who manufacture or import the products listed in the attachments thereto for sale in the domestic market must label the products in Bahasa Indonesia.

In our view, the definition of the Business Actors in MTR 73/2015 has a narrower meaning than the definition in the Old MTR. For example, under the Old MTR, any foreign entities which have a representative office in Indonesia would arguably have been subject to the Old MTR since even though they are not Indonesian entities, they have an operation in Indonesia through their representative offices. Under MTR 73/2015, on the other hand, foreign entities having a representative office in Indonesia are not subject to MTR 73/2015 since they are not established and domiciled in Indonesian territory.
Type of Products
Each of MTR 73/2015 and the Old MTR lists the type of products subject thereto in Attachment I to Attachment V.
The list consists of 80 types of product, each of which may consist of one or more Description of Goods Codes (Kode HS or "HS Code"). The list consists of 148 types of product, each of which may consist of one or more HS Codes.
The obligation of having the Declaration of Label Being Written in Bahasa Indonesia (Surat Keterangan Pencantuman Label Dalam Bahasa Indonesia or "SKPLBI")
No longer specified in MTR 73/2015 The Old MTR provided that any Business Actor who imports or manufactures the products listed in Attachment 1 to Attachment V thereto must file an application for an SKPLBI with the Director General of Consumer Standardization and Protection enclosing among others a sample of the product and the relevant label in Bahasa Indonesia. The SKPLBI, which would be in effect so long as the Business Actor manufactured or imported the relevant product, was a document verifying that the product label was in line with the Old MTR.

Provisions under MTR 73/2015

Generally, as stated in Article 7 of MTR 73/2015, Business Actors are prohibited from using labels in Bahasa Indonesia which (i) are not complete; and/or (ii) are incorrect and/or mislead consumers. Products which are subject to the Obligatory Indonesia National Standard (Standar Nasional Indonesia or "SNI") must also have a label which is in compliance with the SNI concerned.

According to Article 8 of MTR 73/2015, the obligation to have a label in Bahasa Indonesia for the specific products listed in Attachment I to Attachment V under MTR 73/2015 does not apply to (a) bulk products (liquid or solid products which are traded by volume or weight measured in front of the consumers) which are packaged and sold directly in front of the consumers; or (b) products manufactured by micro and small Business Actors.

Failure to comply with the obligations in MTR 73/2015 is subject to administrative sanctions in the form of revocation of trading licenses and/or revocation of other licenses by the relevant authority. On the other hand, failure to comply with the requirements under Article 8 of Law 8/1999, one of which is including product information and/or a manual of product use in Bahasa Indonesia according to the prevailing law, is subject to criminal sanctions in the form of a maximum of 5 (five) years imprisonment or a maximum fine of 2 (two) billion Rupiah (IDR2,000,000,000), to which sanctions can be added administrative sanctions, such as an order to cease the business activities which are detrimental to consumers, seizure of products or revocation of licenses.

MTR 73/2015 came into effect on 1 October 2015, but MTR 73/2015 gives a period of up to a year after it came into effect for Business Actors and any person or business entity having a business activity of collecting for trade the products manufactured by micro and small enterprises (collecting traders), who trade their products in the domestic market, to make adjustments to the labels of their products bring them into line with the requirements under MTR 73/2015 (Articles 17 and 14 of MTR 73/2015).

With MTR 73/2015 now in effect, we can expect a reduction in misunderstandings and misuse of products by consumers in Indonesia.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.