Political economics behind efforts to eliminate piracy

Yanuar Nugroho, Director, The Business Watch Indonesia Surakarta, Central Java

Recently my old laptop was seriously attacked by a worm virus called W.32Yaha@mm. The computer became slow and the virus started sending unauthorized emails, spreading the virus to all the people in my address book.

Almost instantly, I activated the "update" of my Anti-Virus software to prevent further damage and to destroy the virus. My attempt failed. An error-message was displayed on my screen stating, "Your Anti-Virus has expired".

I decided to purchase a newer version and telephoned a software vendor in Surakarta who sold pirated (and therefore cheap) software. But I got an unexpected answer that day, "We are not selling the (pirated) software anymore, Sir. We're only selling the original or OEM software", (i.e. software that is bounded to hardware). "We are afraid of raids." With the help of a friend, who also used pirated anti-virus software, I finally had my laptop fixed. I knew it was impossible for him to buy the original one that costs an incredibly high price.

On July 29, Law No. 19/2002 on the protection of copyrights was instigated. This was a consequence of Indonesia's acceptance of the clause-agreement on Trade-Related Intellectual Property Rights (TRIPs) of the World Trade Organization (WTO). People in Indonesia -- and in any other country -- will likely have more difficulty in purchasing counterfeit goods, be it pirated software, CDs, VCDs, DVDs or others, as vendors close up shop to avoid raids. The law not only targets the vendors but more seriously punishes copyright violators. A user of pirated computer software, for example, could be punished with up to five years in prison or a Rp 500 million (US$61,000) fine.

The Jakarta Post reported (July 30) that according to the director of copyrights, industrial design, integrated circuit layout design and trade secrets at the Ministry of Justice and Human Rights, Emawati Junus, the necessary government regulations have been prepared and will be issued soon to support the enactment of Law No. 19/2002.

To enforce the new law the government will also establish a team to draw up policies on intellectual property right's violations. It seems that the new law is seen as necessary in helping Indonesia avoid economic sanctions -- imposed by the United States over the gross violation of intellectual property rights -- since Indonesia ranks third in the rate of piracy cases, after China and Vietnam.

Those who support the policy assert that combating piracy will protect consumers from the poor quality of unauthorized goods. The government is said to have lost about Rp 1 trillion in tax revenue per annum from piracy and worldwide losses are estimated at between 5 percent and 7 percent of the world trade volume.

Those who are against the policy argue that the price of the original products is unaffordable, even for commercial use. In Solo, more than 95 percent of companies use pirated software. At the well-known Bandung Institute of Technology (ITB), computer- servers openly provides facilities for students streaming (music, MP3s) and downloading (movies, software, tools and utilities). Piracy helps people understand and cope with the technological advancement, in an affordable way.

How then, can we be informed about the situation before we adopt an opinion? The answer does not lie in the technical aspects of law enforcement. It lies in the substance, i.e. the notion of intellectual property-rights (IPRs), and its political economic aspects.

First, let us examine this data. Gartner Dataquest (2002) has provided information that the world computer industry manufactured one billion personal computers in 2002, and that another billion are expected to be built in Indonesia over the next six years, starting from next year. According to the World Bank, Information and Communication Technology (ICT) expenditures reached more than US$3.54 billion in 2002. Regarding the Internet, more than two million of the Indonesian population are Internet users, and this number will increase in 2003.

What does all this mean? Indonesia has a massive software market. Thus, it is not a surprise to read the report, issued by the Business Software Alliance (2003), which detailed that software developers suffered more than $100 million in losses in 2002 because of pirated software in Indonesia.

So, it will also come as no surprise if business and government join hands for the sake of this interest. A clear indicator is the emergence of the Indonesian Anti-Counterfeiting Society (MIAP), whose members are high-profile companies such as Aqua-Danone, Epson, Microsoft and Philips Electronics, which is supported by the Director General of IPRs at the Ministry of Justice and Human Rights. Business will acquire domination through a single pricing policy (if not monopoly) and the government will benefit through increased tax revenue. A perfect symbiosis mutualism.

In addition, we might confront an intractable problem since science and technology are being utilized, used, and exploited, and profit-seekers are logically incorporating it into business. If the power of business nowadays is democratic unaccountability, then we can figure out why the issue of the public accountability of IPRs is more urgent than admitted by its mostly false prophets.

IPRs and any other technological advancement must meet the criteria of democratic accountability. Otherwise, disaster results, since technology is both a locus and an extension of power. The issue of accountability should address the ethical implications of technological knowledge as power. Thus, IPRs are not simply about putting users before the experts, but rather the way technology has been exploited by business power.

A report by the Association of the Indonesian Recording Industry said that in 2002, the level of piracy of recorded materials had reached alarming levels, with 10 pirated versions for every original copy. It is noted that the number of pirated recorded materials stood at 363 million copies, dwarfing sales of originals which reached 34.2 million.

It is the industry which shouts for fair play and complains the most, not the artists. This is also true for scientists whose creations are exploited by industry. But what does it mean?

The notion of the "neutrality" of science and technology is only true insofar as they are separated from their exercising agents -- which is impossible. Science is not about the demonstrations of experts, market expansion or pure profit accumulation, dialog among stakeholders is necessary.

Thus, public participation is mandatory in solving the dilemma of IPRs. Neither business nor users can work alone.

The writer is also a researcher at Uni Sosial Demokrat and teaches at the Sahid University in Surakarta.