Indonesia is the worst country in Asia when it comes to protecting intellectual property rights, according to a survey of expatriate businessmen.
The Hong Kong-based Political and Economic Risk Consultancy said on Wednesday that recent efforts by Jakarta to crack down on piracy of intellectual property and bring the country up to international standards had "lost momentum."
The nation "has passed new laws that should improve protection of intellectual property, but those rules are not enforced effectively and piracy levels in Indonesia remain among the highest in the world."
This conclusion came as no surprise to Donny Sheyoputra, chairman of antipiracy group Business Software Alliance Indonesia, who said the government should target the pirates themselves as well as small vendors.
"What's still lacking is the quality of these raids and law-enforcement activities because these raids mostly target the small piracy players, who are less of a threat compared to the big-time players who commit piracy," he said.
The bigger players often used bribery to escape punishment, Donny said.
In June, BSA Indonesia said international and domestic software companies had lost a total of $886 million in licensing fees in 2009 due to piracy here, up 60 percent from the year before.
At the time, Autodesk Indonesia, the local license-holder of AutoCad, 3D Max and MAYA software, said that about 70 percent of users of their products in Indonesia were using bootleg versions. A 2009 BSA study ranked Indonesia as the 12th worst country in the world for software piracy.
Donny said the practice was common even among the country's biggest multinational companies. "I've seen big companies that use pirated software," he said. "There are even multinational companies that use pirated software in Indonesia while their branch offices in other countries use the original software."
The PERC survey of 1,285 expatriate managers was conducted between June and mid-August. Indonesia was given the worst score of 8.5 out of a maximum 10 points. Zero is the best possible rating.
More advanced economies fared better, with Singapore topping the list with 1.5, followed by Japan at 2.1, Hong Kong 2.8, Taiwan 3.8 and South Korea 4.1. At the other end of the scale, Vietnam was second-worst at 8.4, China scored 7.9, the Philippines 6.84, India 6.5, Thailand 6.17 and Malaysia 5.8.
The rankings largely reflect studies by the global software industry, which is alarmed by the easy availability of pirated movies and software in Asian cities despite government pledges to crack down.
China has also come under sharp scrutiny because of the sheer size of its economy and the presence of large companies "capable of using pirated technology to compete in foreign markets."
"Countries like Vietnam, the Philippines and Indonesia do not have this same ability to inflict global damage through piracy as Chinese companies do," the report said.
The Indonesian government has been lobbying the Office of the US Trade Representative to remove it from its priority watch list of countries that fail to protect intellectual property rights.
In 2008, the USTR took Indonesia off the list and placed it on the regular watch list in recognition of the government's crackdown on copyright theft.
However, Indonesia was put back on the priority list in May 2009 as Washington determined that Jakarta was no longer adequately protecting intellectual property.