Like most lawyers, I tend not to talk about my work. Part of this stems from client confidentiality, but the main reason is that I suspect it’s just not interesting. That changed when I moved to Indonesia. There’s nothing particularly unusual about Indonesian law. It’s the Indonesian context within which we must operate which makes it so interesting.

For those of you who don’t know, I work for an international IP (intellectual property) consultancy. We help (mostly) foreign clients with their IP strategies. A significant part of this work involves advising them how to tackle IP infringement, such as trademark and DVD piracy. This is often an eye-opener for foreign companies, to say the least. Often they react with disbelief - sometimes anger - when they learn of the extent of IP theft and the difficulties involved in stopping it.

One of the more significant challenges at the moment is our relationship with the Police. The way the legal system is structured, IP owners have pretty much no choice but to seek support from the Police to stop IP theft and infringement.

You do this by filing a “complaint report”. If the “complaint” relates to unauthorized use of a trademark (as it often does), the Police are legally required to investigate, usually by raiding the factory, shop or warehouse in question. Then the Police must prepare an investigation report for the public prosecutor, who takes the case to Court for trial.

In practice things work a bit differently. The Police will not take any action - they will not even allow you to file a complaint report - unless the IP owner contributes to the Police’s operational costs in the form of a “facilitation payment”. This is okay in principle; conceptually, facilitation payments are not a problem. They are allowed under Indonesia’s anti-corruption laws and specifically excluded from the definition of “bribe” under the US anti-corruption law (so long as certain criteria are met).

The purpose of a facilitation payment is to assist the Police with the operational costs associated with the investigation. Logically, this might include the cost of hiring a truck to transport counterfeit products the Police seize, or the cost of renting a warehouse for storage of the seizure. If the Police need to run laboratory tests (this is often necessary where counterfeit pharmaceuticals are involved), they might ask for help with the laboratory costs. In some cases, the Police might ask for some overtime or meal allowances. All this is is quite legitimate.

To give you an example of how this is supposed to work, in one case, the Police helped us with a raid in Surabaya, Jakarta’s second largest city. The Police were overwhelmed and under-prepared for the quantity of counterfeit machinery parts (industrial roller chains) they seize. In the end, one of our quick thinking lawyers hired a fleet of becek (rickshaws) to transport the seized products back to the Police station. Needless to say, we (not the Police) paid the becek drivers for the use of their vehicles.

All this is necessary because the Police are under-funded and under-resourced - at the street level, anyway. Budgets at the Polres (regional) level only cover 40% of operational requirements. At the Polsek (district) level - the front-line Police - operational budgets are non-existent. Often this means that the Police stations don’t have enough money to pay for their own petrol, let alone hire trucks and warehouses so they can carry out raids.

Not that this is unique to Indonesia. I recently met the head of London’s Economic Crimes Unit, who cited case after case of examples where the “victim” has provided the Police with operational support during the course of an investigation. Sure, the examples he gave all involved high-level technical support, such as face-recognition equipment, and there are all sorts of checks and balances in place to make sure it couldn’t be said the Police were being unduly influenced, but the principle is the same.

The problem we now have is that the legitimate practice of providing the Police with operational support appears to have been hijacked for nefarious means.

When we rock up to Polda to file a complaint report, we already have a pretty good idea of what the Police are likely to discover when they carry out a raid. We have already carried out our own investigation, surveyed the site in question, taken some photos and the such. As a result, it’s pretty easy to figure out what a raid and the subsequent investigation will involved from an operational perspective. Will the Police need trucks? How many and how big? Do the Police have enough storage space or do we need to rent a warehouse? Will the Police need to interview experts or carry out lab tests? With a calculator and a bit of common-sense, you can quickly figure out how much this is all likely to cost.

So, we know what help the Police require and how much this is likely to cost. Logically, the next step would be to pay those costs directly to the truck driver, laboratory or warehouse owner, or to the Police on them giving us some sort of receipt in return. Because we cannot simply hand money over to the Police; that is illegal will most likely result in us all (including the Police) serving jail sentences.

But that’s exactly what is expected: a large unmarked envelope containing a similarly large amount of money.

Even if you could put aside the fact that this kind of carry on is highly illegal, all this wouldn’t be so bad if we knew that the money would actually be used as intended. But all the evidence suggests it’s not. In cases where we have been able to hand over money (because we have received receipts in return), it’s been pretty obvious that none, if any, of the money has been used as promised.

in this case, the brand-owner paid US$2,500 to cover the costs associated with a secure destruction site and security personnel. Not only was no security provided, but villagers from the neighbouring kampung crossed the river to intercept the counterfeit cigarettes before they could be incinerated. Not surprisingly, some ended back on the streets of Jakarta. So where does the money go...?

If you’ve seen my previous rants about corruption, you can probably guess how I feel about this. There is no doubt that the Police genuinely need help and, on the whole, IP rights holders are quite willing to help. Ironically, by adopting this practice, the Police have effectively eliminated a potentially significant source of income. The result: no money, no enforcement.

The Police today doesn’t look all that different from the way it did 8 years ago. Prior to 1999, it was part of the Army. In fact, for pretty much all of its 62 year history, the Police have operated as a division of the Indonesian military forces. After President Suharto “stepped down”, plans were made to transform it into a modern police force. However, these haven’t materialized into real reform. Not yet, anyway. It is still largely a military institution, with all the associated trappings.

Under Suharto (himself an Army general), the Army controlled significant parts of the economy and operated legitimate and illegitimate businesses. Corruption was (and is) rampant. It’s not surprising then that the Police exhibit the same cultural and institutional traits as the Army. Corruption has been institutionalized. The Police extract "unofficial fees" whenever and wherever they can. A traffic citation can be waived by paying a 50.000 rupiah fine. A Police escort can be bought for 500.000 rupiah ($50). They operate legitimate and, more often than not, illegitimate businesses. They extort payment from criminals and law-abiding citizens alike. As the Army’s influence wanes, the opportunities previously available only to the Army are now the domain of the Police. A career in the Police can be very lucrative and the opportunity to attend the Police academy carries a hefty price - 60 million rupiah ($6,500), I am told. This is a very hefty price when you consider that a typical officer’s salary is around 800.000 rupiah a month - about $1,000 per annum.

This is the context we are faced with. So what do you do? This is the challenge we have right now: how to crack this. So far, this has involved a lot of talking: to the United States Trade Representative and the City of London Police - to name a few. Talking and listening, as we try to figure out how best to tackle this. Ideally, we hope to establish a working framework which allows IP owners to work with the Police, providing operational and financial support fully in compliance with the various anti-corruption laws. The key to success is showing the Police that there is something in it for them. Watch this space!