● 12.29.11
●● Cablegate: With Microsoft Front Group Taking on Indonesia, a Call for Open Source Software Adoption
Posted in Asia, Cablegate at 6:09 am by Dr. Roy Schestowitz
Summary: Cables shed light on how Hollywood and a Microsoft front group pressured Indonesian authorities, which had also proposed moving to Free/open source software
We previously covered cables from Indonesia, just shortly after we wrote about ODF there and years after we wrote about a Microsoft MOU. According to the following Cablegate cable, Microsoft’s front group, the BSA, complained about “lack resources to move and properly store cumbersome and sensitive optical disk production machinery seized during raids.” It is in the same cable that we found (in ¶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.
Just above that it says: “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.”
As we already know with Cablegate aside, Microsoft used the usual tricks to impede the adoption of FOSS in Indonesia (more on that later). In any event, here is the cable in question:
>
VZCZCXRO2803
PP RUEHCHI RUEHDT RUEHHM
DE RUEHJA #8114/01 1790836
ZNR UUUUU ZZH
P 280836Z JUN 06
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 6462
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 05 JAKARTA 008114
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 [Intellectual Property Rights], ETRD [Foreign Trade],
WTO [World Tourism Organization], ECON [Economic Conditions], ID [Indonesia]
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 *~cQnzvh-0`eia and Pacific
Affairs Director Disited 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 00008114 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. (SBU) 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
JAKARTA 00008114 003 OF 005
April 27. Based on leads from this raid, police raided a
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. (SBU) 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. (SBU) 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
JAKARTA 00008114 004 OF 005
GOI's new draft customs law contained the same ex officio
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
machinery seized during raids. Police are scared that if
the machinery is damaged while under their custody, the
courts may rule that they pay compensation to the owners.
Consequently, police customarily seal OD machinery with
police tape at factories, and it is often just a matter of
days before pirates break the seals move the machinery or
simply begin operating again.
Comment
-------
¶21. (SBU) The GOI continues to make steady progress on
IPR, and high level backing from the Police Chief and
Attorney General bodes well. Closer cooperation between the
MOI, police and AGO will be important for ensuring effective
factory monitoring and greater prosecutions of pirates. Our
new senior technical advisors at the MOI and police, and a
new Embassy resident legal advisor with considerable IPR
JAKARTA 00008114 005 OF 005
experience, should provide valuable new tools for assisting
the GOI with these challenges.
¶22. (U) USTR Director David Katz has cleared this cable.
SILVER
A separate cable says that “[o]ne of the ICT National Team’s stated objectives is to work towards legalizing all government software, regardless of whether it is open source or licensed.” Here is the full cable:
>
UNCLAS SECTION 01 OF 03 JAKARTA 000475
SIPDIS
SIPDIS
SENSITIVE
FOR EAP/MTS; EB/TPP/IPE JBOGER
COMMERCE FOR 4430/BERLINGUETTE AND PETERS
COMMERCE PASS USPTO FOR URBAN AND FOWLER
DEPT PASS USTR FOR DKATZ, JGROVES, RBAE, CCOLLEY
E.O. 12598: N/A
TAGS: ECON [Economic Conditions], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], ID [Indonesia]
SUBJECT: INDONESIA IPR - ANNUAL SPECIAL 301 SUBMISSION
Ref: a) State 07944; b) Jakarta 00011
¶1. (SBU) Summary: Since Indonesia's upgrade to the Special 301
Watch List in November 2006, the Government of Indonesia (GOI) has
continued to make steady progress towards improving its enforcement
and protection of intellectual property rights (IPR). A National
Intellectual Property (IP) Task Force now holds regular interagency
coordination meetings, and President Yudhoyono (SBY) signed a decree
in November 2006 committing the GOI to legalize all its computer
software. Parliament passed a new Customs Law on November 15 that,
when fully implemented, will provide ex officio powers for Customs
Officials to seize suspected infringing products. Jakarta
Metropolitan Police continue to elicit praise from local and
regional International Intellectual Property Association (IIPA)
representatives for raids on notorious malls, vendors, distributors
and factories. The Ministry of Industry's Optical Disk Factory
Monitoring Team (ODFMT) inspected registered factories in November
2006 and February 2007 and issued initial warning letters to some 12
optical disk (OD) factories. The Ministry of Industry (MOI) plans
to assign full-time staff to the ODFMT, conduct more regular
inspections (including inspections after hours), and begin
sanctioning non-compliant factories. A recent Supreme Court ruling
in favor of the company Intel in a trademark infringement case case
bodes well for future cases.
¶2. (SBU) Summary, continued. Despite these steps, the GOI needs to
further improve the operations of the ODFMT and involve the police
more closely in the ODFMT's operations. It also needs to step up
prosecutions and deterrent convictions of IPR violators and combat
book piracy and pharmaceutical counterfeiting. But the GOI is
steadily taking ownership over the IPR issue, and our interactions
with Indonesia on the issue have grown less confrontational and more
collaborative. To further encourage this important U.S. policy
success, we recommend that Indonesia remain on the Watch List for
the entire 2007 Special 301 regular cycle. End Summary.
¶3. (SBU) In response to Ref A, we reviewed this year's Special 301
submissions from the GOI, IIPA, Intel, PhRMA, and the Phillip Morris
Company. In general, we agree with their data, characterizations,
and assessments of the state of IPR protection and enforcement in
Indonesia. Piracy and counterfeiting rates remain high and,
although improving, enforcement remains weak. At the same time, GOI
engagement and political will continue to improve and are gaining
their own momentum.
National IP Task Force Remains Active
-------------------------------------
¶4. (SBU) According to GOI contacts, The National IP Task Force
continues hold regularly scheduled quarterly working level meetings,
as well less frequent senior and Ministerial-level meetings. At the
working level, the Task Force has developed a national IP strategy
and strengthened data collection and interagency coordination.
However, the lack of a formal budget continues to hamper the Task
Force, and it must rely on limited funding from the Ministry of
Justice Directorate General for IPR. Nevertheless, the Task Force's
regular interagency meetings, particularly those of senior and
ministerial level officials, are encouraging greater GOI focus on
IPR. Following the first Task Force meeting last year, for example,
the Minister of Justice and National Police Chief collaborated in
developing a clever, animated TV spot emphasizing the costs of
piracy on Indonesia's culture and creative arts.
SBY Leads Efforts to Legalize GOI Software
------------------------------------------
¶5. (SBU) There are other recent examples of growing GOI initiative
and high-level political will to improve IPR protection. On
November 13, SBY signed a decree establishing an Information
Communication Technology National Team. The team consists of
academics, business leaders and GOI officials and aims to create an
IT regulatory regime that can contribute to economic growth, job
creation and poverty alleviation. One of the ICT National Team's
stated objectives is to work towards legalizing all government
software, regardless of whether it is open source or licensed.
Further, the Team will also pursue approaches to cracking down on
the use of pirate software in internet cafes, universities and the
private businesses. The ICT team will report directly to President
SBY and work out of an office at the Ministry of Communication and
Information Technology.
¶6. (SBU) Two months after SBY signed the decree, Minister of
Communication and Information Sofyan Djalil signed an MOU with PT.
Microsoft Indonesia, under which the software maker will help GOI
ministries legalize and upgrade their MS Windows products at a
significantly discounted price. Although there has been some public
JAKARTA 00000475 002 OF 003
criticism of the MOU, including by State Minister for Research and
Technology Kusmayanto Kadiman, SBY has stood behind the agreement.
PT Microsoft Indonesia President Director Tony Chen recently told us
he was "astonished" by the GOI's growing commitment to legalize its
software and recommended we encourage the GOI by maintaining
Indonesia on the Special 301 Watch List.
Customs Law Enacted with Ex Officio Powers
------------------------------------------
¶7. (SBU) Parliament passed a new Customs Law on November 15, 2006,
that, when fully implemented, will provide ex officio powers for
Indonesian Customs officials to seize suspected infringing products
without a court order. The new law retains ex officio powers that
existed in the old law, but also clears up court jurisdictional
issues that had blocked their implementation. Indonesia Customs
expects to promulgate the new law's implementing regulations,
including those pertaining to ex officio powers, by the end of
2007.
Jakarta Police Sustaining Enforcement
-------------------------------------
¶8. (SBU) As noted in the GOI's submission, and confirmed by local
IIPA representatives, the Jakarta Metropolitan Police have sustained
enforcement actions against malls, vendors, distributors and
factories of pirated optical discs. Ratu Plaza, Indonesia's most
notorious modern market for pirated ODs, has been the subject of
repeated raids, and one Motion Pictures Association (MPA) regional
representative told us recently that some of Ratu's vendors have
given up or moved to other, less-centrally located malls. That same
MPA representative described the Jakarta Police's continuing police
cooperation as "brilliant" and he too recommended Indonesia remain
on the Watch List. Our EEB-funded senior IPR technical advisor has
been instrumental in training and encouraging the Jakarta Police to
step up their IPR enforcement. Looking forward, the advisor will
work to encourage greater police collaboration with the ODFMT and
prosecutors, as well as greater police enforcement actions beyond
the boundaries of metropolitan Jakarta.
Monitoring Team Yielding Some Results
-------------------------------------
¶9. (SBU) As noted in ref b, the ODFMT, with training and planning
support from our second EEB-funded advisor, conducted monitoring
visits to all registered optical disc factories in November 2006.
The MOI subsequently sent 12 warning letters to factories observed
to have irregularities. However, the letters highlighted only minor
infractions, and there has been little ODFMT follow-up. Although
the visits revealed weaknesses in the ODFMT's capacity and security
procedures, they also gleaned useful baseline data on the capacity
and activities of registered optical disc factories. More
importantly, the visits allowed the ODFMT to collect forensic
exemplars from a majority of the known production machines in
Indonesia's registered factories. The International Federtion of
the Phonographic" Industry (IFPI) continus to analyze tthese
exemplars in its forensic laboratory in London, and already they are
yielding important information.
¶10. (SBU) The ODFMT still requires considerable institution and
capacity building to be fully effective. The ODFMT does not have
full-time monitors, and relies largely on MOI and Police officials
temporarily seconded from other positions. t needs direct support
from the police, particulrly if it is tt c"n*duct visits at night
and to wlll guarded factories. The ODFMT also needs to impe ment a
more credible system of warning and sanctioning factories in
violation of laws and regulations.
¶11. (SBU) MOI Director General for Downstream Chemical Industries
Benny Wahyudi told us on February 20 that the ODFMT visited seven
factories on February 17, and inspected the five that were open and
operating. He promised to provide us with the results of those
visits as soon as they were compiled. Wahyudi agreed that the
Monitoring Team needs at least one full-time staff member. He
noted, though, that this person might have to be a contractor, as
the MOI did not have a specific budget and position set aside to
staff the ODFMT. Wahyudi also agreed that the MOI would need to
work closer with the police and develop a more effective system of
warning and sanctions. He suggested that the Embassy senior advisor
for the ODFMT would be instrumental in helping the MOI address these
challenges.
Glimmer of Hope in Intel Case
-----------------------------
¶12. (SBU) The Supreme Court's February 1 ruling in favor of Intel in
JAKARTA 00000475 003 OF 003
the Intel Jeans case is also a favorable development. In the case,
the court cancelled the trademark of a local brand of jeans, Intel
Jeans, and ruled that Intel is entitled to trademark protection as a
well known brand. The ruling bodes well for the Supreme Court's
upcoming decision in the appeal of Intel's Panggung case (the
Indonesian firm PT Panggung produces a number of electronics
products under the registered trademark "Intel"). While the
Commercial Court's previous rulings against Intel in the Panggung
case have been setbacks, Intel's legal counsel recently described
the case as an aberration in the Commercial Court's otherwise
respectable record in handling civil IPR cases, particularly those
involving trademarks.
Significant Concerns Remain
---------------------------
¶13. (SBU) Despite the clear momentum on IPR issues, there are
remaining concerns. Indonesia's record on IPR prosecutions remains
poor. Frequent prosecutor rotations, lack of transparency, and
corruption make this a daunting task; and high level political will
and support will be critical to making headway on IPR convictions
and prosecutions. Pharmaceutical counterfeiting and book piracy
also remain largely unchecked. GOI officials tell us frequently
that they consider pharmaceutical counterfeiting to be a serious
health concern for the country, as well as a potential rallying
point for greater public support for IPR protection and enforcement.
Key GOI officials have endorsed a University of Indonesia study
revealing alarming pharmaceutical counterfeiting rates and its high
cost to the Indonesian economy. The GOI, however, has yet to
effectively engage the pharmaceutical industry on these issues.
Book piracy remains rampant in universities and local bookshops.
Indonesia has yet to develop an association or other means through
which publishers and authors can collect and distribute book
royalties. The GOI would very likely welcome U.S. technical
assistance in this area.
Watch List is the Best Option
-----------------------------
¶14. (SBU) Over the past two years, the combination of a
reform-minded government in Indonesia and five regular or
out-of-cycle Special 301 reviews has done much to change our
interactions with the GOI on IPR issues. GOI leaders are pursuing
initiatives to promote IPR that were a only short time ago beyond
our expectations. At the same time, our relationships with working
level contacts have become much more collaborative, particularly
following Indonesia's removal from the Priority Watch List last
November. Four months later, although much work remains, the GOI is
moving forward on IPR issues largely under its own steam. With the
GOI taking increasing ownership of the issue and steadily improving
its IPR enforcement and protection, we believe a third consecutive
OCR would be counterproductive. Accordingly, Embassy Jakarta
recommends strongly that Washington agencies retain Indonesia on the
Special 301 Watch List for the 2007 regular Special 301 cycle, with
no OCR.
HEFFERN
We will cover some more Indonesia cables in a separate post. █
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