VZCZCXRO9455
PP RUEHCHI RUEHDT RUEHHM
DE RUEHJA #0200/01 2260830
ZNR UUUUU ZZH
P 140830Z AUG 06
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 8715
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC

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