ALTERNATIVE DISPUTE RESOLUTIONS THROUGH LAPS SJK: ARRANGEMENTS OF CONSUMER DISPUTES IN THE FINANCIAL SERVICES SECTOR IN INDONESIA

INTRODUCTION

Dispute resolutions recognized in the Indonesian legal system do not always have to go to the court. As an alternative to resolving disputes outside of court, there are mediation and arbitration processes. Definition of mediation may refer to Article 1 point 1 of Regulation of the Supreme Court of the Republic of Indonesia No.1 of 2016 on Mediation Procedures in Court (“Perma Mediation“) which defines mediation as a method of resolving disputes through a negotiation process to reach an agreement between the parties assisted by a mediator. Meanwhile, in Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolutions (“Arbitration Law“), arbitration is defined as a method to resolve a civil dispute outside the general court which is based on an arbitration agreement made in writing by the disputing parties.

The Financial Services Authority (“OJK”), as an agency established by the government to create a better national economy through Law Number 21 of 2011 on the Financial Services Authority (“OJK Law”), has the authority to regulate, supervise, examine and conduct investigations in the financial services sector. Through the authority set out in the OJK Law, OJK then established an Alternative Agency for Dispute Resolutions in the Financial Services Sector (“LAPS SJK“) which is an agency that has the authority to resolve disputes in the financial services sector outside of court, as stated in Article 1 point 1 of OJK Regulation Number 61 of 2020 on Alternative Agency for Dispute Resolutions in the Financial Services Sector (“OJK Reg. 61/2020“).

The background of the establishment of LAPS SJK is to create an alternative agency for resolving disputes in the financial services sector which is more effective and efficient, as well as to respond to developments in technology, products and financial services that are increasingly complex and cross-sector in the financial services, as set out in the considerations of OJK Reg. 61/2020. LAPS SJK was established on 22 September 2020, and further on 29 December 2020 it obtained an operational permit from OJK and began operating on 1 January 2021¹. LAPS SJK is currently the only Alternative Dispute Resolution Agency that obtains an operational permit from OJK².

B. DISCUSSION

In carrying out its duties, LAPS SJK provides facilities for resolving disputes through Mediation and Arbitration³.  The author will try to examine elements considered important in relation to dispute resolutions through LAPS SJK. 

B1. Requirements for Disputes that Can Be Resolved Through LAPS SJK

The requirements for a dispute to be submitted through LAPS SJK are disputes involving consumers and financial services players (“PUJK“) taking into account the provisions of Article 32 paragraph (1) of OJK Reg. 61/2020, as follows.

1. PUJK has attempted to resolve a complaint to reach a settlement but rejected by the Consumer or the Consumer has not received a response to the complaint as stipulated in the OJK Regulation on consumer complaint services in the financial services sector;
2. The dispute submitted is not an ongoing dispute or has been decided by a judicial institution, arbitration, or other alternative dispute resolution agencies; and
3. The dispute must be a civil dispute.

B2. Classification of Complaints that can be Resolved Through LAPS SJK

Furthermore, complaints as stated in point B.1 item a. above are classified into 2 (two) types. Under Article 9 of OJK Regulation Number 31 of 2020 on the Implementation of Consumer and Community Services in the Financial Services Sector by the Financial Services Authority (“OJK Reg. 31/2020“), OJK provides two types of complaint services to be submitted by consumers to PUJK, which are:

1. Complaints that indicate disputes, whereby under Article 1 point 6 of OJK Reg. 31/2020 Complaint is defined as an expression of consumer dissatisfaction caused by material, natural and direct losses and/or potential losses to consumers because PUJK does not perform the agreement and/or financial transaction documents that were previously agreed; and/or
2. Complaints that indicate violations, whereby under Article 1 point 7 of OJK Reg. 31/2020 Complaint is defined as submissions by consumers and/or people regarding indications of violations of provisions in the financial services sector committed by Financial Services Institutions (“LJK“) suspected to have occurred due to LJK’s intention or negligence.

Even though PUJK and LJK conduct activities in the financial sector, it should be noted that there are differences between LJK and PUJK. LJK here is not always relating to business actors, while PUJK is certainly a business actor. For example, the Indonesian Export Financing Institution (LPEI) is classified as an LJK, whose main activity is financing national exports, which was established by the government in order to support the financing activities of national exports.⁴

Back to the discussion regarding types of complaints, of the two types of complaint services, complaints that may be applied for resolutions through LAPS SJK are those that indicate a dispute as stated in the Elucidation of Article 32 paragraph (1) of OJK Reg. 61/2020.

B3. Classification of Dispute Resolution Fees through LAPS SJK

In the context of dispute resolution fees, LAPS SJK classifies 2 (two) types of disputes based on their fees, namely retail & small claim disputes and commercial disputes. With reference to Article 19 paragraph (1) of LAPS SJK Regulation Number 06 on Dispute Resolution Service Fees (“LAPS SJK Reg. No.06”), disputes that fall into the retail & small claim category are examined based on the value of the dispute to be resolved in LAPS SJK, as described further below:

1. Disputes with a value of consumer claim to PUJK up to IDR 200 million are relating to mortgage, financing and fintech;
2. Disputes with a value of consumer claim to PUJK up to IDR 500 million are relating to banking, capital markets, life insurance, pension funds, venture capital and guarantees;
3. Disputes with a value of consumer claim to PUJK up to IDR 750 million are relating to general insurance.

In the event that a dispute is categorized as a retail & small claim dispute, the dispute resolution fee will be waived as specified in Article 19 paragraph (2) of LAPS SJK Reg. No.06. On the other hand, if the value of a dispute exceeds the provisions above, it will be classified as a commercial dispute whereby a dispute resolution fee will be charged.

B4. Period of Dispute Resolutions through LAPS SJK

The period for dispute resolutions at the LAPS SJK is relatively fast, the verification process for mediation settlement takes a maximum of 5 (five) days as specified in Article 7 paragraph (2) of LAPS SJK Regulation Number 01 on Mediation Regulations and Procedures (“LAPS SJK Reg. No.01”). Meanwhile, verification of arbitration settlement takes a maximum of 10 (ten) days as specified in Article 9 paragraph (4) of LAPS SJK Regulation Number 02 on Arbitration Regulations and Procedures (“LAPS SJK Reg. No.02“). If this calculation ends on a holiday, the end of the period is extended until the nearest working day.

Furthermore, based on the LAPS SJK regulations, the dispute resolution period for mediation is up to 30 (thirty) days from the date the mediator receives the appointment and can be extended upon agreement of the Parties and the mediator as specified in Article 13 paragraphs (1) and (2) of LAPS SJK Reg. No.01. Meanwhile, as for arbitration, the settlement period is up to 180 (one hundred and eighty) days from the date the sole arbitrator is appointed or the arbitration panel is formed and can only be extended in certain circumstances as determined in Article 16 paragraphs (1), (2), and (3) of LAPS SJK Reg. No.02.

B.5 Enforcement of Mediation and Arbitration Agreement Results Through LAPS SJK

In the event that mediation or arbitration has reached an agreement, the parties are expected to comply and enforce the agreement voluntarily. In the event that PUJK does not comply with or does not enforce the results of the settlement agreement, LAPS SJK will report this matter to OJK. Regarding the report from LAPS SJK, OJK can impose administrative sanctions on PUJK that do not comply. Administrative sanctions may take the following forms: written warnings, fines, restrictions on business activities, or suspension of business activities.⁵

C. CLOSING 

Apart from being a dispute resolution agency through the judiciary means, LAPS SJK is a means of dispute resolution which consumers should consider to resolve disputes with PUJK in the financial services sector.

However, consumers need to know things important to understand if they want to resolve disputes through LAPS SJK, namely dispute requirements, types of complaints submitted, and fees charged for retail & small claim disputes and/or commercial disputes.

The presence of LAPS-SJK is expected to provide not only legal protection but also a sense of public trust in financial services.

Reference

1. https://lapssjk.id/pendirian-laps-sjk/, accessed on 19 February 2024.
2. https://lapssjk.id/, accessed on 19 February 2024.
3. https://lapssjk.id/jenis-kegiatan/, accessed on 19 February 2024.
4. Otoritas Jasa Keuangan, Seri 7: Lembaga Jasa Keuangan lainnya, Seri Literasi keuangan Perguruan Tinggi, page 119.
5. https://ojk.go.id/id/kanal/edukasi-dan-perlindungan-konsumen/pages/lembaga-alternatif-penyelesaian-sengketa.aspx, accessed on 19 February 2024.