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Cablegate: Indonesia: Ipr Update

DE RUEHJA #0200/01 2260830
P 140830Z AUG 06





E.O. 12598: N/A
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.

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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.


© Scoop Media

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