VZCZCXRO2749
PP RUEHCHI RUEHDT RUEHHM
DE RUEHJA #8107/01 1790804
ZNR UUUUU ZZH
P 280804Z JUN 06
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 6451
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 05 JAKARTA 008107 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
FOR EAP/MTS; EB/IPE/EAP 
COMMERCE FOR GOLIKE/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: IPR Update - GOI Making Steady Progress 
 
 
¶1. (SBU) Summary: At the first meeting of the Indonesian 
Government's (GOI) newly-established National Intellectual 
Property Rights (IPR) Task Force on June 7 Indonesia 
National Police (INP) Chief General Sutanto and Attorney 
General Abdul Rachman Saleh pledged to improve IPR 
enforcement and Minister of Trade Mari Pangestu outlined the 
importance of IPR to the country's economic development. 
The Task Force's senior working level committee is drafting 
short and medium term plans of action, as well as 
coordinating efforts to collect better IPR enforcement data. 
The Ministry of Industry (MOI) optical disk (OD) factory 
monitoring team has registered 26 factories,  provided them 
with source identification (SID) codes, and established a 
schedule of unannounced factory visits.  It is also in the 
process of registering the remaining three factories that 
have been identified by the intellectual property (IP) 
industry.  In response to GOI demands, local OD producers 
have voluntarily surrendered over 180 OD stampers without 
SID codes.  Local OD producers and distributors have agreed 
with the GOI that, after this year, any optical disk sold 
without SID code can be considered a pirated copy.  Local IP 
industry representatives report that police cooperation has 
improved. For the first time, police are conducting vendor 
and factory raids on their own initiative.  Jakarta district 
and national police have promised to continue raids, 
particularly against Jakarta's most notorious malls. Police 
and prosecutor collaboration remains weak and there is a 
large discrepancy between the number of cases police turn 
over to the Attorney General's Office and the number 
actually prosecuted.  Overall however, in comparison to thee 
Special 301 Out-of-Cycle Review (OCR) in 2005, GOI officials 
appear more engaged, better coordinated and focused on 
producing results from the start of the current OCR.  End 
Summary 
 
¶2. (SBU) Office of the United States Trade Representative 
(USTR) Southeast Asia and Pacific Affairs Director David 
Katz visited Jakarta June 20-22 to discuss Indonesia's 
current Special 301 OCR with key GOI officials and IP 
industry representatives.  GOI officials expressed general 
disappointment with Indonesia's retention on the Special 301 
Priority Watch List in May.  They welcomed, though, the U.S. 
Government's (USG) decision to conduct a second consecutive 
OCR.  Katz informed them that the timing of the OCR would 
depend on GOI efforts and that it could take place as early 
as the end of August or September.  He also stressed to GOI 
officials and IP industry representatives the importance of 
providing regular enforcement data and other information in 
support of the OCR. 
 
National IPR Task Force Holds First Meetings 
-------------------------------------------- 
 
¶3. (SBU) Ministry of Justice Director General of IPR Abdul 
Bari Azed informed Katz on June 20 that the GOI's newly- 
established National IPR Task Force held its first monthly 
senior working level meeting in May and quarterly 
ministerial-level meeting on June 7.  Bari reported that on 
June 7 Indonesian National Police Chief Sutanto and Attorney 
General Abdul Rachman Saleh along with other key cabinet 
officials pledged to improve IPR enforcement. (Note: Katz 
confirmed Bari's account in subsequent meetings with the 
MOI, MOT and police. End note.)  Minister of Trade (MOT) 
Mari Pangestu, vice chair of the Task Force, explained the 
importance of IPR protection and enforcement to Indonesia's 
investment climate and economic development.  The heads of 
several agencies -- Trade, Research and Technology, Economic 
Planning (Bapenas) and the DG for IPR -- also pledged to 
replace pirated software in their agencies computers with 
open source or legal products. 
 
¶4. (SBU) According to Bari, General Sutanto promised INP 
support for MOI OD factory monitoring team inspections and 
continued police raids on pirate OD vendors and factories, 
with emphasis on Ratu Plaza and Mangga Dua Mall, two of 
Jakarta's most notorious pirate OD markets.  Sutanto pointed 
out the challenges inherent in conducting aggressive raids 
against Harko-Glodok, Jakarta's primary pirate OD 
distribution center, noting that it risked social disorder. 
(Note: Harko-Glodok is located in an ethnic Chinese majority 
area of Jakarta and is thought to have links to organized 
crime.  A police raid on the area several years ago led to 
riots, a fire, and several deaths, with police paying 
compensation for some of the damage. End note.) 
 
¶5. (SBU) Bari, who serves as chairman of the Task Force's 
 
JAKARTA 00008107  002 OF 005 
 
 
senior working level committee, said his group would meet 
again in July to agree on text of short and medium term 
plans of action.  Priorities will include OD Regulation 
(ODR) implementation and collecting better data and 
information on GOI IPR enforcement efforts, particularly 
from Indonesia's major urban centers (greater Jakarta, 
Surabaya, Medan, Bandung, Makasar and Denpasar).  Bari noted 
that members of the senior working level committee met 
recently with officials at the Supreme Court to request data 
on civil and criminal IPR cases.  According to Bari, the 
committee is also establishing sub-committees to focus on 
specific issues.  One subcommittee, led by Ministry of Trade 
Senior Advisor Halida Miljani, would liaise with IP industry 
representatives and associations, and another with donors 
and the diplomatic community.  (Note: Miljani on May 30 
briefed American Chamber of Commerce IPR Committee members 
on the National Task Force. End note.) 
 
OD Factory Monitoring Team Sets Schedule 
--------------------------------- 
 
¶6.  (SBU) MOI Directorate General for Chemical, Agriculture 
and Forestry Based Industry Director Tony Tanduk on June 21 
told Katz that the MOI has registered 26 OD factories  and 
distributed SID codes to each of them.  It is also in the 
process of registering the remaining three OD factories 
identified by the IP industry.  The MOI has allocated Rp 300 
million (approximately USD 30,000) per year to the OD 
factory monitoring team. The team, which now includes 
members of the INP, has set a schedule of six unannounced 
factory visits per month.  The first three inspections 
occurred on June 13.  While all three factories had SID 
codes engraved in their moulds and stampers, none were 
producing ODs.  Tanduk remarked, somewhat sheepishly, that 
managers at all three factories claimed that they were 
waiting to ensure the accuracy of copyright documentation. 
 
¶7.  (SBU) Under an agreement with the MOI, owners of 
stampers without SIDs have agreed to turn them in to MOI by 
June 15.  Tanduk showed Katz one surrendered stamper and 
said he has collected 186 to date; he expects to receive 
another 100 in the coming weeks.  The MOI plans to destroy 
the stampers at an IPR public destruction ceremony with the 
police sometime in July.  The agreement also stipulates 
that, after December 31, 2006, the GOI will consider all ODs 
sold without SID codes as illegal pirated copies.  Some 
owners of stampers and factories have delayed using SID 
codes, as it requires them to send stampers and molds to 
Singapore or Hong Kong for engraving.  Katz suggested that 
Tanduk send a letter to all registered factories warning 
them that all their molds and stampers must include engraved 
SIDs codes.  Tanduk agreed. 
 
¶8.  Tanduk provided Katz with an impressive, newly-published 
handbook titled "Optical Disk Regulation Implementation 
Guide."  The hard-cover, Indonesian language publication 
caps a highly successful series of USAID-funded training 
workshops for the OD factory monitoring team.  It includes 
relevant GOI laws and regulations, color photographs, and 
detailed technical and procedural guidance for the team. 
The technical advisor who ran the USAID project, a former 
Business Software Alliance (BSA) and Motion Picture 
Association (MPA) local representative, has recently agreed 
to continue his ODR work with the MOI for another year as a 
Department of Justice ICITAP senior technical advisor. 
 
Police Continue Raids 
--------------------- 
 
¶9. (SBU) Jakarta Metropolitan Police (Metropolda) Special 
Crimes Lieutenant Colonel Police Agus Adriyanto and Chief of 
Investigation Umar Surya Fana on June 23 provided Katz with 
a spreadsheet detailing 267 IPR raids on pirate OD vendors 
that police conducted throughout the greater Jakarta 
metropolitan area since the beginning of this year. 
According to the report, police seized roughly 1.2 million 
pirated ODs, and at least temporarily detained 433. 
According to a local MPA representative, these figures do 
not include a raid on Ratu Plaza late on June 23, during 
which Metropolda police seized roughly 100,000 pirated ODs 
and arrested several people.  The 267 raids also do not 
include West Jakarta Police's seizure on June 1 of 140 DVD 
burners and 55,000 pirated ODs and the arrest of two 
persons.  Metropolda also seized 55 burners and 360,000 
pirated ODs and arrested two persons in a separate raid on 
April 27.  Based on leads from this raid, police raided a 
 
JAKARTA 00008107  003 OF 005 
 
 
small distribution warehouse where they seized 30,000 
pirated ODs and arrested another two individuals. 
 
¶10. (SBU) Umar explained that police had investigated and 
referred all 267 cases to the AGO.  He also showed Katz a 
wall chart indicating that 16 individuals remained in 
Metropolda's temporary detention facilities on IPR-related 
charges.  Umar could not say how many of the 433 individuals 
arrested in 2006 were transferred to AGO holding facilities 
along with their case files.  He complained that once police 
sent cases to the AGO, it was very difficult to obtain 
information on their outcomes from the AGO or courts.  Katz 
suggested that joint workshops with the police, AGO and 
courts on IPR evidence collection, investigations and 
prosecutions might facilitate greater cooperation between 
these groups.  Both Agus and Umar welcomed the idea. 
 
¶11.  Katz congratulated Agus and Umar on their successes and 
noted that reports of their actions had been received in 
Washington.  He encouraged them to continue their efforts, 
and suggested particular attention be paid to Jakarta's most 
notorious malls.  Umar said his unit would remain focused on 
Ratu Plaza, Mangga Dua and Harko-Glodok, but added that 
raids on Harko-Glodok posed risks.  On June 22 some Jakarta 
police ran into physical resistance when they attempted to 
conduct a limited raid on Harko-Glodok's street vendors, 
located some distance away from its main wholesale 
distribution center. 
 
¶12.  Umar, a son-in-law of Indonesia Anti-Corruption 
Chairman Taufikurrahman Ruki, said that support for 
Metropolda's efforts came directly to him from General 
Sutanto.   He provided Katz with a tour of Metropolda's 
halls and warehouse filled with growing sacks of seized 
pirated ODs and DVD burners.  Sometime in July, the police 
plan to hold a public destruction ceremony with support from 
the Motion Pictures Association (MPA).  An investigator for 
a local law firm, who works part-time for MPA and supports 
Metropolda's raids, has recently accepted a second DOJ 
ICITAP one-year senior technical advisor position to support 
INP IPR enforcement efforts. 
 
¶13. (SBU) In a separate meeting on June 23, INP Headquarters 
Special Economic Crimes Colonel Police Rycko Amelza Danniel 
told Katz that INP Police Chief General Sutanto has ordered 
his unit to work with North Jakarta police units to develop 
a plan for shutting down Harko-Glodok.  Rycko added that his 
unit would also begin collecting data from police raids, 
seizures and arrests from major urban centers across 
Indonesia. 
 
AGO Remains Weak But Interested 
------------------------------- 
 
¶14. (SBU) Although he did not provide detailed information, 
AGO Acting Deputy Attorney General for Special Crimes Abdul 
Hakim Ritonga on June 23 informed Katz that the Jakarta AGO 
had prosecuted roughly a dozen IPR cases over the past year. 
He admitted that until recently IPR has not been a high 
priority.  He suggested the AGO could raise the profile of 
IPR by including it under the purview of the AGO's newly 
created Transnational Crimes Task Force.  Katz remarked that 
detailed data on IPR prosecutions and convictions throughout 
Indonesia would be very useful for the Special 301 decision- 
making process.  Ritonga said that he could gather such 
information, provided the U.S. Embassy formally requested 
it. 
 
¶15.  (SBU) Katz showed the Ritonga Metropolda's data on 
raids, arrests and investigations since the beginning of 
this year, and asked if the AGO could tell us what happened 
with each case.  Ritonga said it was possible, but warned 
that, while police have recently referred many IPR-related 
case files to the AGO, their cases were often poorly 
investigated, lacked sufficient evidence, or were intended 
to simply to boost police arrest numbers and impress 
superiors.  Ritonga said he would support joint workshops 
with the police, AGO and courts on IPR evidence collection, 
investigations and prosecutions. 
 
Draft Customs Law Includes Ex Officio Powers 
-------------------------------------------- 
 
¶16. (SBU) Ministry of Finance Directorate General of Customs 
IPR Unit Chief Okto Iranto on June 22 told Katz that the 
GOI's new draft customs law contained the same ex officio 
 
JAKARTA 00008107  004 OF 005 
 
 
powers contained in the existing 1995 customs law.  The new 
customs law, however, is intended to resolve court 
jurisdiction issues that held up the issuance of 
implementing regulations for the ex officio power. Okto said 
that Indonesia Customs is eager to obtain the new authority, 
as it will enable customs officers to detain temporarily 
suspected shipments of pirate or counterfeit goods.  He 
added that Customs has consulted closely with local IP 
industry representatives on the status of ex officio powers 
in the draft law, including the  American Chamber of 
Commerce IPR Committee on May 2.  The issue was also 
discussed throughout a May 16-18 USPTO-Indonesia Customs 
workshop in Jakarta that included presentations and 
participation by senior Customs officials and IP industry 
representatives.  Okto said that the GOI has set a deadline 
by the end of this year to enact the new Customs law and 
accompanying implementing regulations. 
 
Other GOI Efforts 
----------------- 
 
¶17. (SBU) During their June 21 meeting, Bari informed Katz 
of several other ongoing IPR related efforts within his 
office.  The Directorate of IPR is cooperating with the 
Japan International Cooperation Agency (JICA) in conducting 
15 IPR public awareness seminars throughout Indonesia this 
year for officials, academics, students and the press.  DG 
IPR also collaborated with the European Commission-ASEAN IPR 
Co-operation Program] in holding a May 22-23 workshop in 
Jakarta on civil and criminal court proceedings.  Lastly, DG 
IPR Abdul Bari Azed on June 6 gave opening remarks at the 
opening of a BSA representative office in Jakarta. 
 
Amcham Members See Improved Enforcement and Cooperation 
--------------------------------------------- ---------- 
 
¶18. (SBU) At a June 22 meeting with Katz, Amcham IPR 
Committee members were in agreement that police were 
improving IPR enforcement and cooperation.  An MPA 
representative said that, for the first time, police were 
conducting raids on their own initiative and were no longer 
requiring formal complaints to act.  She attributed this to 
General Sutanto's December 2005 instruction to district 
police chiefs ordering them to step up IPR enforcement 
activities, particularly against pirated ODs.  The MPA 
representative noted that Jakarta police raids on Ratu Plaza 
and Mangga Dua Mall, however, stopped after Indonesia was 
retained on the Priority Watch List in May, but that police 
continued raids at other locations across the city. 
 
¶19. (SBU) A representative of a major U.S. cigarette 
manufacturer said that he has received very good cooperation 
from police and customs over the last year in seizing large 
shipments of counterfeit cigarettes.  In these cases, 
customs is able to make seizures without ex officio powers 
because the counterfeit cigarettes have counterfeit excise 
stickers that violate Indonesia's tax laws.  He added that 
his company was considering a plan to provide equipment and 
training to some police units.  He noted that one unit he 
works closely with in the Riau Islands has 70 officers but 
severely lacks other resources: it has only two vehicles, 
one telephone line, no internet, and a yearly operating 
budget of USD 12,000. 
 
¶20. (SBU) A Business Software Alliance (BSA) representative 
added that police also lack resources to move and properly 
store cumbersome and sensitive optical disk production 
mah(inery seized during raids.  Police are scared that if 
the machinery is damaged while under their cuttody, the 
courts may rule that they pay compensai(on to the owners. 
Consequently, police customarlly seal OD machinery with 
police tape at factoris", and it is often just a matter of 
days before pirates break the seals move the machinery or 
simpyy begin operating again. 
 
Comment 
------- 
 
2.*  (SBU)  The GOI continues to make steady progres  on 
IPR, and high level backing from the Police h(ief and 
Attorney General bodes well.  Closer cooperation between the 
MOI, police and AGO will be mmportant for ensuring effective 
factory monitorig" and greater prosecutions of pirates.  Our 
new eenior technical advisors at the MOI and police, an  a 
new Embassy resident legal advisor with considerable IPR 
experience, should provide valuable ne  tools for assisting 
 
JAKARTA 00008107  005 OF 005 
 
 
the GOI with these challenges. 
 
¶22. (U) USTR Director David Katz has cleared this cable. 
SILVER