Arbitration As A Method To Resolve Consumer Protection Disputes In China And Indonesia

In the relationship with business operators, the consumer are always in a weaker position,it’s because most consumers are people from the lower-middle class with low education, somany of them don’t know their rights. It is important to protect the rights of consumersbecause almost everyone is a consumer therefore by protecting the consumer we alsoprotecting the welfare of the society. Generally dispute resolution can be done in two waysnamely through litigation in courts and through ADR (Alternative Dispute Resolution). Butcourt litigation had been known for their corruption, collusion and nepotism, this is thebackground that supports the development of ADR.ADR consist of three methods, Negotiation, Mediation and Arbitration. Arbitrationinstitutions such as CIETAC (Chinese International Economic and Trade ArbitrationCommission) in China and BANI (Indonesian National Board of Arbitration) in Indonesia areinstitutions that function to resolve disputes through arbitration.Based on the information above, the question arises whether the arbitration could be usedto resolve disputes consumer protection? The answer is yes it could, BPSK, as an Indonesianinstitution founded by the government, applies Conciliation, Mediation and Arbitration tospecifically resolve consumer protection disputes. But in China there is no institution thatspecialized in resolving consumer protection disputes through ADR.The purpose of this study was to determine how the resolution of consumer protectiondisputes by arbitration, how the mechanism is and how long the time period is. To answerthese questions it will be conduct a review of the related literature, review on consumerprotection cases which resolved with arbitration and there will be a mechanism of consumerdisputes settlement using arbitration.The first chapter of this research is an introduction outlining the background ofarbitration and consumer protection, the purpose and benefits of the research.The second chapter is literature review of consumer protection and arbitration in general,including the advantages and disadvantages of arbitration. This chapter also will specificallyreview arbitration and consumer protection in Indonesia and China.The third chapter consist a discussion of three arbitration institutions, they are CIETAC(China International Economic and Trade Arbitration Commission) in China; BANI(Indonesian National Board of Arbitration) and BPSK (Consumer Dispute Settlement Body)in Indonesia. In this chapter there is also a comparison between those three institutions. The fourth chapter is a discussion of why Indonesia applies arbitration to resolveconsumer protection disputes also a discussion of reasons and advantages in applyingarbitration to resolve consumer protection disputes.The fifth chapter is a discussion of obstacles in applying arbitration to resolve consumerprotection disputes and a discussion on how to overcome the requirement of arbitrationagreement in consumer protection disputes.In the sixth chapter conclusions will be given based from all the previous chapters andthen eventually will be given suggestions and recommendations for China, Indonesia and alsoin general. In this chapter also will be given a concrete steps on how to apply arbitration toresolve consumer protection disputes in China.