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Panic strikes the public after the Indonesian President announced that two Indonesian citizens were infected with coronavirus (COVID-19). After the announcement, many people were ‘hunting’ for drugs, antiseptics, and facemasks in pharmacies. Besides that, basic needs, such as rice and instant noodles were also bought up in large quantities in department stores. It seems that the fear of running out of supply of basic needs causes the people to buy up goods in large quantities. However, it is crucial to realize that the purchasing of goods in large quantities can cause scarcity which may trigger business entities to ‘take advantage’ the situation by hoarding highly scarce goods with the intention to be sold in the future at a higher price and thus gaining a huge profit. This, obviously, will cause harm to the public and has the potential to disturb the nation’s economy and security. Therefore, the government assigns the police force to protect the department stores in anticipating the public’s panic.

Penalty according to Law No 7 Year 2014 regarding Trade (“Trade Law”)

According to Article 29 paragraph (1) of Trade Law, a Business Entity shall be prohibited to store up any goods of basic needs and/or important goods in a certain amount and in a definite period of time at the time of scarcity of goods, price fluctuation, and/or trade barrier of goods. It is further regulated in Article 107 that a Business Entity that is storing up goods of basic needs and/or important goods in a certain amount and in a definite period of time at the time of scarcity of goods, price fluctuation, and/or the existence of trade barriers of such goods as referred to in Article 29 Paragraph (1) shall be sentenced with imprisonment at a maximum of 5 (five) years and/or fine at a maximum of Rp50.000.000.000,00 (fifty billion rupiah).

Penalty according to Law No. 18 Year 2012 regarding Food (the “Food Law”)

Article 53 of Food Law states that a Business Entity shall be prohibited UU to hoard or storing up basic foods exceeding the maximum amount as referred to in Article 52. Furthermore, Article 54 (1) a Business Entity that violates the provision of Article 53 shall be imposed with administrative sanctions. (2) the administrative sanction as referred to in paragraph (1) may be in the form of:

a. fine;

b. temporary suspension to the activity, production, and/or circulation; and/or

c. license revocation.

With regards to criminal sanction, Article 133 of Food Law states that a Food Business that intentionally hoards or stores up food exceeding the amount as referred to in Article 53 with the intention to gain profit which causes the price of Basic Food to become expensive or soared shall be sentenced with imprisonment at a maximum of 7 (seven) years or fine at a maximum of Rp100.000.000.000,00 (one hundred billion rupiah).

The difference in the application of Criminal Sanction

At a glance, it seems that the two laws regulate the same matter but with a different sanction, but if we study further, there are differences between the laws with regards to the issue of hoarding goods, which is explained below.

The sanction under Article 107 of Trade Law shall be imposed on a Businessmen who is storing up goods of basic needs and/or important goods in a certain amount and in a definite period of time at the time of scarcity of goods, price fluctuation, and/or trade barrier. In this law, there is no intention to gain profit from the action. The question becomes, why is the sanction regulated under the Trade Law lower than the sanction regulated in the Food Law? The answer is because the sanction that is regulated under Article 133 of Food Law is for a business entity that is hoarding/storing up goods with the intention to gain profit while Trade Law, as previously explained, does not talk about the intention of the businessmen who committed such action. Therefore, the existence of intention results in the difference between the sanctions imposed to business entities in this situation.

Legal Theory about Intent

Criminal Law Professor, Prof. Mr. Moeljatno [1] by noting some opinion from several Dutch criminal law experts, explains the meaning of “intent”. According to Moeljatno, the Indonesian Criminal Code does not explain the meaning of “intent”. It is different from the Switzerland Criminal Code, which in its Article 18 states “when a person commits an action knowingly and willingly, then such person has committed the action intentionally. Such definition is contained in the Memori van Toelichting Swb. The Memori also states, “A punishment in general shall be imposed only to the person who commits an action that is prohibited, willingly and knowingly.”

Based on the above explanation, if a business entity is charged with Article 133 of the Food Law due to a strong allegation that such business entity has an intent to gain profit from the hoarding of goods, then a legal question that needs to be answered is: whether the business entity has the willingness and the knowledge that the action will or may bring profit for them?

With regards to this issue, there are two schools of law theory, these are:

  1. Theory of Will (wilstheorie), which is the oldest theory. While there are new theories that are born, this theory is strongly defended by Von Hippel, a Criminal Law Professor in Gottingen, Germany, while in the Netherlands, this theory is adopted by Simons.
  2. Theory of Knowledge (voorstellingstheorie), which was taught by Frank, a Professor in Tubingen, Germany at around 1910. This theory gains support from Von Listz, while in the Netherlands it is adopted by Van Hamel.

According to the Theory of Will, intention is a will that is directed to the manifestation of an action as formulated in the Law. While according to the Theory of Knowledge, intention is a will to commit an action by knowing the existence of necessary elements of such action as formulated by the Law. With regard to the two theories, Prof. Mr. Moeljatno is in the opinion that the Theory of Knowledge is more satisfying because within intent there is the element of knowledge. This is because by having an intention to do something, a person must first have knowledge (imagination) of the thing that the person is doing. However, on the contrary, what is known to a person does not necessarily mean that it is intended by the person. Moreover, according to Moeljatno, intent is a direction, intention, or purpose, which is related to the motive (what drives a person to commit an act) and the purpose of the action. Its consequence is that to determine that an action is intended by the defendant, it must first be proven that the action corresponds with the motive to commit the action and the intended purpose that is expected to be achieved. Between the motive, action and purpose, there should be a causal relationship in the defendant’s mind.

Conclusion

Based on the explanation above, if it can be proven that a business entity who hoards or stores up goods have the intent to resell the goods with a higher price then there is a motive and purpose to gain profit unfairly from the scarcity condition and it can be concluded that the hoarding is committed intentionally. Therefore, it would be more proper if the charge for hoarding goods in times of scarcity is made against business entities under Article 133 of Food Law with the punishment of imprisonment at a maximum of 7 (seven) years or fine at a maximum of Rp100.000.000.000,00 (one hundred billion rupiah).

Hope it’s useful,

Fredrik J. Pinakunary


[1]  Prof. Mr. Moeljatno, Asas-Asas Hukum Pidana, Bagian 3, Penerbit Seksi Hukum Pidana FH-UGM, 1970.


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