Snapshot: automotive product safety and liability in Indonesia

Product safety and liability

What are the most relevant automotive-related product compliance safety and environmental regulations, and how are they enforced? Are there specific rules for product recalls?

Type test and periodical test shall be exhausted for the operation of motor vehicles. The type test itself is a test conducted on the physical conditions for the compliance of technical or roadworthiness requirements, and its design or engineering prior to the production or assembly or mass importation of the motor vehicles. While the test is conducted periodically for every operated motor vehicle, the Ministry of Transportation (MOTR) will issue a certificate for both tests to substantiate that the motor vehicles have undergone and passed the tests. 

In addition to the above, every manufacturer is required to register the types of motor vehicles that are produced, assembled, imported or modified by filing an application to the relevant directorate general at the MOTR along with the, among others, a copy of the type test certificate and the application fee for the issuance of a type test registration certificate. The aforementioned type test registration certificate is a prerequisite document to register and identify the motor vehicles to obtain the books motor vehicle owner, vehicle registration certificate and vehicle registration plates.

Failure to undergo the type test and registration of type test as aforementioned will be subject to administrative sanctions in the form of a written warning and administrative fines imposed by the MOTR. 

MOTR has issued a specific rule of product recalls under its ministerial regulation where it governs the requirements and technicality of product recalls, this will be further elaborated on below. 

Describe the significance of product liability law, and any key issues specifically relevant to the automotive industry. How relevant are class actions or other consumer litigation in product liability, product recall cases, or other contexts relating to the automotive industry?

With respect to product recall, the Indonesian Consumer Protection Law generally provides that business owners or applicants are prohibited from producing or selling goods or services that, among other things, do not meet or are not in accordance with the standards required and the provisions of the laws and regulations, as well as not being in accordance with the condition, guarantee, speciality or efficacy as stated on the label, tag or information of the said goods or services. Failure to comply with the above-mentioned requires the business owners or applicants (in this regard, the automotive products’ manufacturer or importer) to recall the goods from circulation.

Relating to the automotive products, if once the type test certificate has been obtained and later found that there is an indication or manufacturing defect within the motor vehicles, it shall undergo a recall. The aforementioned manufacturing defect comprises design flaws (during the design of motor vehicles’ system or components that are not in accordance with the established design quality standards) or manufacturing errors (during the assembling or manufacturing process, resulting in the motor vehicle’s component not performing optimally). Prior to the recall, MOTR, through its ministerial regulations, requires the manufacturer, importer or agents to have a standard operating procedure in place for recall procedures.

In January 2021, a group of consumers brought a class action suit against a Chinese automobile manufacturer at the South Jakarta District Court due to certain 1.5 CVT Turbo cars’ performance. Prior to submitting the claim, the consumers had reported the issues to the manufacturer and had also tried to repair their cars. As the problem persisted, the consumers escalated their complaint to a local consumers community in Indonesia and decided to submit a claim to the South Jakarta District Court.  The consumers claimed that the inability of the defendant’s cars’ uphill acceleration has caused material, as well as immaterial, losses and this shall be deemed as a hidden defect that was not disclosed earlier by its dealers in Indonesia. Responding to the claim through its attorney, the defendant stated to the Indonesian press that an investigation will be conducted to assess the consumers’ claim. It is unclear how the dispute will be resolved as, prior to the tribunal rendering its decision, the parties are allowed to reach an amicable settlement.