Norton Rose Fulbright
Tel+ 62 21 2965 1829
Associate, New York
Norton Rose Fulbright
Tel+ 1 212 318 3044
It is indeed well recognized that autonomous vehicles (AVs) are here and their market is growing. As of now, however, Indonesia does not have any specific regulatory framework for the operation of AVs. The absence of regulation, however, does not necessarily mean that AV technology is prohibited. We have seen several cases in which the government of Indonesia would regulate a certain matter only after the development of a market or a massive public request.
For the purpose of this paper, the analysis of the operation of AVs in Indonesia will be made based on the regulations related to road traffic and motor vehicles being (i) Law No. 22 of 2009 on Road Traffic and Transportation (Law 22/2009); and (ii) Government Regulation No. 55 of 2012 on Vehicles (GR 55/2012). These two regulations, and other regulations related to road traffic and vehicles, are under the auspice of the Road Transportation Division of the Ministry of Transportation.
The spirit of Law 22/2009 is to ensure secure, smooth, safe and integrated road transportation. The law covers guidelines on road traffic management including specification of vehicles, motorized vehicle testing and other industrial and technological developments of transportation infrastructure. An implementing regulation of Law 22/2009, GR 55/12 covers more detailed requirements on technical and operational worthiness of motor vehicles and its testing requirements.
The regulations define the term “motor vehicle” as any vehicle activated by mechanical equipment in the form of an engine except for those operating on a railway track. Neither this definition nor any other provisions of Law 22/2009 and GR 55/12 excludes AVs from the definition of a motor vehicle, or impose any restrictions on the operation of AV technology in Indonesia. Since all motor vehicles operating in Indonesia must comply with the requirements under both Law 22/2009 and GR 55/12, we believe that those same requirements would also apply to AVs to be operated in Indonesia.
A. Licensing, operating and safety issues
All motor vehicles that are imported, produced and/or assembled in Indonesia must be subject to testing prior to their operation. There are two types of testing: (i) type approval testing; and (ii) periodic testing. For initial operation in Indonesia, any motor vehicle must pass the type approval test which consists of: (i) physical testing to examine the fulfilment of technical and operational worthiness requirements; and (ii) examination testing of the design and engineering of the motor vehicle. The Road Transportation Division of the MOT is responsible for carrying out both type approval testing and periodic testing. Any motor vehicle that passes the testing will obtain the type approval test completion certificate and approval for the design and engineering. In addition to the testing, all importers, assemblers, and manufacturers of motor vehicles in Indonesia must register the vehicle production type approval and obtain the type test registrating certificate.
With respect to AVs, the testing does not present any specific requirements for their use. In the absence of regulation, the testing requirements set out above will prevail, although it is possible that the government may issue certain guidelines upon development and utilisation of AVs in Indonesia.
(ii) Technical and operational worthiness
All motor vehicles operating in Indonesia must fulfil the technical and operational worthiness requirements at all times. The Road Transportation Division of the MOT is the responsible authority to carry out the examination of technical and operational worthiness of a motor vehicle.
The technical requirements include, among others, composition, equipment, size, car body, vehicle technical design, loading, using, coupling and sticking. The operational worthiness requirements include the amount of the exhausted gas emission, noise, main brake system efficiency, parking brake system efficiency, narrow front wheel, horn voice, emanating power and main lamp light, notary radius, speedometer accuracy, suitability of wheel performance and tire condition, and suitability of the activating engine power to the vehicle weight.
Due to the absence of regulation on AVs, the technical and operational worthiness requirement applicable now would possibly be imposed to the AVs, subject to certain future policy of the MOT.
(iii) Licensing and liability for “drivers”
Drivers of motor vehicles in Indonesia must be 18-years old and pass a driving test and possess a driving license. Based on the current regulation, “drivers” of AVs would need to meet these standards. It is unclear, however, how passengers (the young or old) would be treated if no “driver” was present.
Liabilities of a motor vehicle driver varies from administrative sanctions, fines to criminal sanctions depending on the type and level of offence.
B. Data privacy and cyber security issues
(i) Data privacy
Indonesia is currently preparing a law on data privacy that covers a broader range of personal data protection than the current prevailing regulation which only regulates personal data in the context of electronic systems.
If the AV manufacturers or service providers will collect personal data using electronic systems, the Minister of Communication and Informatics (MOCI) Regulation No. 20 of 2016 regarding Protection of Personal Data in Electronic System (MOCI 20/2016) requires at least the following protection to be taken:
- to obtain certification for its electronic system;
- to have internal policies on the protection of personal data;
- to obtain consent for collecting, processing, analysing, storing, disclosing, transfering and deletion of personal data by providing a written consent form, either manually or electronically, using Indonesian language; and
- to only use, process, disclose and share the personal data in accordance with the given consent.
There is a two-year transitional period for compliance with the MOCI 20/2016 (i.e. until December 2018), as many provisions will require further guidance to be issued to clarify its effect and required implementation.
(ii) Storing, sharing and transferring personal data
In respect to storing of personal data, there is no requirement for AV manufacturers or service providers to store their customers’ personal data in an onshore data centre. Note, however, storing of personal data offshore may be considered as an offshore transfer of personal data that triggers further requirements under MOCI 20/2016. MOCI 20/2016 requires that any offshore transfer of personal data must be made after coordinating with the MOCI, in which the coordination will be on a case-by-case basis by way of (i) submission of plan; (ii) discussion; and (iii) submission of implementation report.
In respect to any sharing and transfer of personal data to a third party, as mentioned before, AV manufacturers or service providers must obtain consent from data owners. In addition, in the event of the failure of the protection of personal data, AV manufacturers or service providers must provide written notification to the data owners within 14 days as of the failure. This consent, of course, may prove difficult to obtain by the passengers of such vehicles. For example, how will a child consent be properly obtained?
Although there is no specific regulatory framework applicable to cybersecurity of AVs, Indonesia has covered certain crimes related to electronic systems as regulated under Law No. 11 of 2008 as amended by Law No. 19 of 2016 regarding Electronic Information and Transaction. The laws stipulate that cybercrimes including hacking, illegal distribution/transmission, illegal access and interception are subject to imprisonment of 4 to 12 years and fines of IDR 600 million to IDR 10 billion. Since cybersecurity is an important aspect in ensuring safety of AVs, we believe that some sanctions under Law 22/2009 may also be imposed depending on the types and level of results of the cybercrimes.
C. Intellectual property
The operation of AVs involves many aspects of technology and requires protection of intellectual property. We believe that there are two main intellectual property protections that are the most relevant to the operation of AVs in Indonesia, patent and copyright.
Patents give exclusive rights to the inventor for its invention in the field of technology for the purpose of either using the invention exclusively or granting license to other parties to use the invention. In respect to the AVs, the technologies that include (i) automated automotive technology; (ii) telecommunications technologies such as dedicated short-range communication (DSRC) and 5G technology; (iii) machine-learning technology and (iv) Light Detection and Ranging (LIDAR) technology can be protected under patent rights. Patents must be registered with the Indonesian Patent Registry under the principle of “first registration.” Since Indonesia has ratified the Paris Convention for the Protection of Industrial Property, Indonesia will acknowledge the patent registration date of an invention in its country of origin. This allows the AVs holding patents in its country of origin (subject to whether the country of origin is a party to the Paris Convention for the Protection of Industrial Property) to reserve priority rights to be firstly registered in the Indonesian Patent Registry, thus granting the benefits of intellectual property protection under the jurisdiction of Indonesia.
Copyrights give exclusive rights to the creator automatically for the creation in several forms including literary works and computer programs. In respect to the AVs, the computer programs used to run the AVs, including source codes and object codes, can be protected by copyrights. Unlike patents, copyright does not have to be registered under Indonesian law. Copyright comes automatically when the creator “expresses” or “declares” its creation. Indonesia, however, provides a registration mechanism for copyrights for the creators who wish to publicly “expresses” or “declares” its creation.
D. Product liability
Indonesia does not have any specific regulatory framework with respect to the liability of a manufacturer, distributor or supplier of an AV but the spirit is covered under the Law No. 8 of 1999 regarding Consumer Protection (Law 8/1999).
Law 8/1999 restricts manufacturers, distributors, suppliers or service providers for providing a defective product or a product that is not compliant with the laws and regulations relating to consumers. Violation can lead to criminal offence with sanctions in the form of imprisonment of maximum five years and fines of maximum IDR 2 billion.
Law 8/1999 guarantees that the manufacturers, distributors, suppliers or service providers will have to pay compensation if its product harms the consumer and that the manufacturers, distributors, suppliers or service providers are required to disprove the actuality of any claim submitted by the consumer. There are two options of dispute settlement in this case: (i) alternative dispute settlement assisted by the Consumers Dispute Settlement Agency; and (ii) court proceeding.
With respect to AVs, it may be possible that the government will issue certain product liability regulation or impose higher sanctions for the manufacturers, distributors, suppliers or service providers considering the safety issues related to AVs. Nonetheless, it would require a set of specific rules for determining liability related to AVs involving not only the manufacturers, distributors, suppliers or service providers and the drivers, but also the software manufacturers and network providers.
Indonesia does not have a mandatory insurance policy requirement for the use of private vehicles. Law 22/2009 only requires mandatory insurance for public vehicles and public transportation service providers. Considering safety is a main issue in AVs, we believe that the government is likely to impose mandatory insurance policy requirements for any operation of AVs in an effort to mitigate risks and losses.