Political economics behind efforts to eliminate piracy

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.