Cablegate: Indonesia - 2007 Ipr Project Proposals

DE RUEHJA #1037/01 1020740
P 120740Z APR 07





E.O. 12598: N/A

REF: Jakarta 475

1. Summary: Embassy Jakarta requests $640,000 in INL/EB funding to
support the continued employment of our two DOJ-ICITAP Senior IPR
Technical Advisors for a second and final year. The success of
these advisors has been critical to Indonesia's recent improvements
in IPR protection and enforcement as well as to our ability to
leverage the Special 301 process. Their continued efforts on the
ground will be all the more important as we approach a critical
juncture where the GOI must act on mounting forensic evidence
against optical disk factories. Without their continued presence,
we fear the GOI will lack the capacity and imperative to take these
hard steps, and we may lose an important opportunity to build on
current momentum. End Summary.

2. With FY 2005 INL/EB Intellectual Property Rights funding,
Embassy Jakarta's Econ Section and its DOJ-ICITAP offices have
employed and co-managed two senior IPR technical advisors. For
roughly the last six months the two advisors have provided technical
assistance and training to the Indonesia Ministry of Industry (MOI)
and National Police on implementation of Indonesia's 2004 Optical
Disk Regulations. Both advisors are foreign experts who have
brought with them years of experience on IPR protection and
enforcement in Indonesia, as well as long-established relationships
with key Government of Indonesia (GOI) and intellectual property
(IP) industry contacts. From their first weeks on the job last
August and September, both were able to engage the GOI effectively
and produce tangible results quickly.

Optical Disk Monitoring Team Advisor

3. While both advisors coordinate their efforts closely and share
some responsibilities, the MOI advisor has focused his efforts
primarily on the further development and training of the GOI's
recently established Optical Disk Monitoring Team (ODMT). During
the past six months, he has achieved a number of impressive

-- Provided training and other capacity building to members of the
ODMT, including 16 hours of theory and 60 hours of field training at
registered optical disk (OD) factories;

-- Coordinated with IFPI to secure source identification codes for
the MOI to assign to registered factories;

-- Held public awareness seminars and other events for the media
and owners of Indonesia's 29 registered OD factories to inform them
of the requirements of the new OD regulations;

-- With assistance from IPFI, organized, training inspection visits
to OD factories in which four separate teams visited all registered
factories to assess their compliance and collected large numbers of
exemplars from 147 registered CD and/or DVD production lines. IFPI
is now examining these exemplars at its forensic lab in London and
preliminary results are providing some clear evidence of piracy at
some factories;

-- Refined the ODMT's data base to include allow for the recording
of more detailed and useful information related to OD factory

-- Established an ODMT office within the MOI with computers, digital
cameras, inspection kits, storage other ancillary equipment, and one
full-time administrative assistant to enter data from factory
inspections in the ODMT database;

-- Convinced the MOI to assign four full-time staff to lead the ODMT
and coordinate with other team members and agencies, such as the

-- Convinced the MOI to place tamper proof seals on equipment that
factories claim remain idle;

-- Established procedures whereby the MOI now sends warning letters
to factories suspected of piracy and, in the future, will sanction
factories that remain non-compliant;

-- Collaborated with the other IPR senior technical advisor for the
police in organizing a workshop for the cabinet and working
officials of the National IPR Task Force on OD regulation
implementation and other broader IPR topics. Those attending the
event included IP industry representatives, as well as IPR
enforcement officials from neighboring countries;

Police Advisor

JAKARTA 00001037 002 OF 003


4. During the last six months, the senior technical advisor for the
police has had equally important successes in working directly with
the police -- once the weakest link in the GOI's interagency IPR
enforcement efforts -- as well as other key GOI and industry

-- Identified targets for retail, distributor and factory raids,
including for newly discovered factories and burner operations;

-- Advised police on conducting raids and arrest, case investigation
and management, rules of evidence, and other IPR enforcement related
matters. (Note: As a result of Indonesia police human rights
violations, the USG currently requires special vetting procedures
for training for Indonesia's police. This has slowed to some degree
the pace of police trainings, but they should intensify in the
coming months. End Note);

-- In collaboration with Embassy's Resident Legal Advisor (RLA),
approached the Indonesia's Attorney General's Office (AGO) to
establish an IPR task force within the AGO with specially designated
prosecutors as members. One the task force is established, the
advisor will hold joint workshops on case development and
prosecution for the ODMT, police, prosecutors and judges. (Note:
INL/EB has provided Embassy RLA with $100,000 in FY 2006 INL/EB
funds to support the creation of the task force and related capacity
building programs. End Note);

-- Through IFPI forensic evidence, and other sources, developed a
map showing key individuals involved in piracy in Indonesia, and the
linkages between them and others;

-- Working with IFPI and the Indonesian Police to establish an
in-country forensic lab for the GOI, which will most likely be
housed at the Metropolitan Police Special Crimes Division;

GOI at a Turning Point

5. As noted in Embassy's recent Special 301 submission (ref A), GOI
leadership continues to demonstrate the political will to improve
IPR protection and enforcement. The Police Chief has made IPR
enforcement and raids a top ten priority, and President Yudhoyono
has called for the legalization of all GOI software. More recently,
we learned from Ministry of Justice Directorate General for IPR
Abdul Bari Azed that the GOI is working with a private Jakarta-based
University to launch on April 19 a one-year Masters program in IP.
According to Bari, the program will train future academics, law
enforcement and GOI officials, technical advisors and attorneys.

6. The coming year will likely be a make-or-break year in terms of
the GOI's longer-term resolve to address piracy and other IP
violations. Specifically, as forensic and other evidence against OD
factories mounts, the GOI will come under increasing pressure to
act. Given the powerful interests involved, GOI interagency
coordination will be critical to a successful outcome, and our MOI
and Police
advisors and work with the AGO will be invaluable. With our
technical support in these three key areas, and the incentives from
the Special 301 process, the GOI will find itself in a position
where, if it does not act, it can blame only itself. However,
without our ongoing support during the coming year, particularly
that of our two technical advisors, the GOI will likely lack the
technical assistance and perhaps even the sense of imperative to
take these next, hardest steps.

Request to Retain Technical Advisors for Second Year
--------------------------------------------- -------

7. Based on the successes to date of our two IPR senior technical
advisors and the critical juncture at which we have arrived, Embassy
Jakarta urges INL and EEB to consider funding for these two
positions for another year. (Note: The MOI position terminates in
August and the Police position in September. End Note.) The
positions and their achievements represent a creative approach to
the unique IPR challenges in Indonesia. They have been critical to
our successful efforts over the past two years to leverage the
Special 301 process (including two consecutive Out-Cycle-Reviews),
and they will be equally important for this upcoming critical

8. DOJ-ICITAP reports that the base salaries and benefits for both
positions would be roughly $440,000 for a second year. In addition,
we would hope that some programming resources, perhaps as much as
$200,000, could also be attached to the positions to support their

JAKARTA 00001037 003 OF 003

work and supplement the $100,000 already allocated to Embassy's RLA.
Those programming funds would be employed as follows:

Those programming funds would be employed as follows:

-- Two Senior Technical Advisors, four locally employed Indonesian
staff & Program support -- $442,000.

-- Program deliverables, capacity building training,
limited equipment donations and participant travel -- $198,000

9. This budget will serve to facilitate continuity of current term
achievements and provide a means to conclude the programs, while
addressing requests for extended assistance from the GOI.

The goals and objectives for the second term include:

IPR Program:

A) Support guide and assist the GOI in establishing an Optical Disk
forensic facility.

B) Mentor police with long term enforcement strategies and sustained

C) Assist police with identifying illegal, unregistered OD

D) Assistance and capacity building with border control

E) Assist in developing liaison between police, prosecutors and the

F) Provide advice to IPR stakeholders.

G) Assist the ODR program as required.

ODR program:

A) Mentor and assist the Department of Industry inspection team
further in carrying out regular compliance inspections of OD

B) Provide guidance and Assistance in methods of collection and
storage of exemplars from OD production lines to support a forensic

C) Support the DOI in updating the database of factory information
and mentor the team in reporting techniques and following up on
non-compliance issues.

D) Guide and mentor the DOI inspection team towards having all
registered factories fully compliant with the OD regulations by
project end.

E) Mentor and train the full time inspection team members to be
capable of replicating training and best business practice for OD

F) Provide input and assistance to the IPR program on issues
relating to OD regulation.

G) Compile a complete Guideline book of all training materials and
provide this to the DOI and DGIPR.


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