Indonesia: IPR Update

UNCLAS SECTION 01 OF 02 JAKARTA 010200 SIPDIS SIPDIS SENSITIVE FOR EAP/MTS; EB/IPE/EAP COMMERCE FOR BERLINGUETTE/4430 COMMERCE PLEASE PASS USPTO FOR JOELLEN URBAN DEPT PASS TO USTR DKATZ, JGROVES, RBAE, VESPINEL E.O. 12598: N/A TAGS: KIPR ETRD WTO ECON ID SUBJECT: Indonesia: IPR Update ¶1. (SBU) Summary: Indonesia National Police (INP) continue their impressive campaign of raids against pirate optical disk (OD) factories and vendors, including at Jakarta's most notorious malls. The Jakarta Police on July 20 held a public destruction ceremony of 4.7 million optical disks, attended by several music industry celebrities and domestic intellectual property rights (IPR) industry representatives. Jakarta police say they have conducted 314 raids since February and arrested hundreds of suspects. A Motion Picture Association (MPA) representative working closely with the Jakarta police says they have passed at least 27 solid cases on to the Attorney General's Office (AGO) for prosecution. The Ministry of Industry's (MOI) optical disc factory monitoring team has conducted 15 announced factory inspections, but the Ministry promises to soon begin unannounced monitoring. The National IPR Task Force has not met since June and appears to be hampered by the lack of a formal budget. Still, industry representatives tell us that two of the Task Force's key members, the Chief of Police and the Minister of Justice, are teaming up to produce a public service anti-piracy message that will be shown on Indonesian television. Local industry representatives view recent developments favorably and recommend that the USG undertake the Special 301 Out-of- Cycle Review (OCR) for Indonesia around the end of September. End Summary. Police Continue Impressive Raid Campaign -------------- ¶2. (SBU) Police continue to raid vendors and factories in urban centers across Indonesia, with Jakarta police apparently taking the most aggressive action. Jakarta Police Special Crimes Unit Lieutenant Colonel Agus Adriyanto reported to us on August 9 that throughout the Jakarta metropolitan area, police units have conducted 314 separate raids on vendors and factories and detained hundreds of suspects since February. Agus' own five investigative teams have standing orders to produce at least one significant IPR raid per week. According to Agus, police are working with prosecutors to review and develop cases, and a number of them are proceeding to trial. To support his statement, he showed us letters from the AGO formally notifying his office of specific IPR cases accepted for prosecution. At our request, Agus has promised to work with the AGO to compile data on the number of cases actually prosecuted and any sentences imposed. A local MPA representative, who is working closely with Agus, said police have passed at least 27 well-developed cases to the AGO. One case includes charges against the manager of an optical disc factory, according to the MPA rep. ¶3. (SBU) Jakarta police held a public destruction ceremony of some 4.7 million disks on July 20, 1.7 million more than originally expect. The Jakarta Police Chief, several well- known recording artists, local IPR industry associations, and MPA representatives attended the event. Police destroyed a token number of the disks using a bulldozer, and the remainder were then mulched and sold back to one registered factory as raw polycarbonate material. Agus told us that 25 percent of the pirate ODs seized contained local content. He added that he and his staff were sincerely dismayed when the local recording artists at the destruction ceremony said they had given up creating new original works due to piracy. ¶4. (SBU) Since the July 20 ceremony, Jakarta police conducted seven raids on major malls -- including Ratu Plaza, Mangga Dua and Harko Glodok -- and seized roughly 1 million pirated ODs. Jakarta police also raided one registered and one unregistered factory on August 1 and 8 respectively. They discovered three production lines at the registered factory, one of which was producing without SID codes. Unfortunately, they sealed just the one production line, but left the other two untouched. During the August 8 unregistered factory raid, police first entered an empty factory, but then discovered a secret door and crawl space to a second hidden factory with three illegal production lines, 27,000 pirated VCDs, and 706,000 blank VCDs and DVD. Jakarta Police sealed the lines and confiscated the disks. IPR industry reps also inform us that Surabaya police recently conducted raids on two factories. One factory was in the process of registering with the Ministry of Industry, while the other was unregistered. Both were apparently found to be producing pirated material. We hope to have additional details soon. JAKARTA 00010200 002.2 OF 002 ¶5. (SBU) During a spur of the moment, somewhat unannounced visit to Agus on August 9, we found him and his staff stacking bags of recently seized disks in the Jakarta police parking lot in preparation for a press conference later in the day. Agus noted that some people were questioning police motives behind recent IPR raids, so he decided to hold the press event to provide greater transparency and to drum up greater pubic support for the enforcement campaign. Agus said he would take the journalists later in the day to see the hidden factory. He expressed hope that the press could help police monitor the factory and its equipment. Agus added that police would destroy recently seized ODs at the next quarterly destruction ceremony. Ministry of Industry Promises Unannounced Factory Visits -------------- -------------- ¶6. (SBU) Ministry of Industry Directorate General for Chemical, Agriculture and Forestry Based Industry Director Tony Tanduk told us on August 9 that the Ministry of Industry Optical Disc Factory Monitoring Team has conducted 15 initial factory inspections. Tanduk said that the visits have not uncovered evidence of piracy. He noted, though, that these first visits were intentionally announced to factories in advance to establish a baseline and warn factories of future unannounced visits. We stressed to Tanduk the importance, particularly during the ongoing OCR, that the monitoring team demonstrate its commitment and capacity to conduct unannounced visits. Tanduk promised to send a letter to all registered factories immediately informing them that the monitoring team would soon begin unannounced inspections. He also promised that the team would develop a plan of unannounced visits and start conducting them in the coming weeks. ¶7. (SBU) According to our contacts at the Ministry of Justice Directorate General for IPR, the National IPR Task Force has not met since June, and it has not set a date yet for its next meeting. Still, industry representatives tell us that two of the Task Force's key members, the Chief of Police and the Minister of Justice, are teaming up to produce a public service anti-piracy message that will be shown on Indonesian television. Tony Tanduk told us that he felt that the creation of the National IPR Task Force, and press coverage of its initial meeting, was an important symbolic commitment to IPR enforcement. He added, though, that the Task Force lacks its own budget and unrealistically relies on a pool of contributions from various member agencies to support its activities. Tanduk recommended that the USG press the Ministry of Finance to provide the Task Force with a formal budget to make it more effective. He noted that the Ministry of Industry has already budgeted USD 30,000 to support the monitoring team's activities for this year, and proposed USD 50,000 for 2007. Industry Upbeat About Progress -------------- ¶8. (SBU) Local and regional representatives of the Business Software Alliance, Motion Pictures Association, and the International Federation of the Phonographic Industry (IFPI) tell us they are impressed with the GOI's ongoing efforts. An MPA regional representative continues to characterize recent GOI actions as "the most remarkable in years." An IFPI regional rep has told us that, based on the GOI's progress, his association is now seriously considering establishing an optical disk forensic laboratory in Indonesia to further support implementation of the OD regulations. Strangely, we are also hearing murmurings within the IP industry community that, due to budget constraints, MPA is considering ending its IPR enforcement program in Indonesia. (Note: Over a year ago, once again citing budget issues, MPA cancelled its commercial program here. End Note.) Privately, each industry representative tells us that, provided the GOI stays on track in the coming weeks, they will recommend to their headquarters that Indonesia be moved to Watch List during the upcoming OCR. There is also consensus among them that the end of September would be a good time to conduct the OCR. PASCOE