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          PAS : KE ARAH PEMERINTAHAN ISLAM YANG ADIL
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Newsgroups: jaring.pcbase,soc.culture.malaysia

MAY 29, 2000 VOL. 156 NO. 21

Digital Underground

Malaysia's attempts to fashion itself as Asia's Silicon Valley are
threatened by a booming piracy industry

By ERIC ELLIS

Among Malaysia's legions of civil servants, few are as implacable as
Pahamin Rajab. As point man in the country's struggle against digital
counterfeiting, Pahamin cuts a colorful figure. Decked out in his
trademark bow tie and Akubra cowboy hat, he recently led 100 security
agents on a morning raid through a downtown shopping mall, seizing
illegal music, video and computer-software CDs. At one retail booth, a
television monitor was advertising the bootlegged wares. "Take the TV,"
he ordered, pointing with his gold-tipped walking stick. "The law gives
us the right to take anything that is used to sell pirated products, and

we will be back day after day until they shut down forever."

Tough talk, but Pahamin has a long way to go. As secretary-general of
the Trade and Consumer Affairs Ministry since 1998, he has watched
Malaysia become one of Asia's biggest centers of digital piracy. For
years, illegal CDs came largely from factories in Taiwan, Hong Kong and
mainland China. But as police have cracked down on criminal syndicates
in those places, much of the production moved south. A recent report by
the International Intellectual Property Association says: "vcd piracy
originating in Malaysia is polluting markets all around the globe."

Malaysian factories churn out an estimated 315 million CDs a year, worth

$300 million. By comparison Thailand produces less than one-third that
amount and is still importing principally from Malaysia. Just three days

after last year's blockbuster Star Wars, Episode 1: The Phantom Menace
opened in U.S. theaters, pirated versions were on sale in Kuala Lumpur.
And within two weeks, Malaysian-made copies had popped up in nine other
Asian countries. Local knock-offs have been spotted as far away as
southern Africa, Europe and South America. Malaysia's legitimate CD
producers are feeling the squeeze. Kuala Lumpur has encouraged digital
production--which has expanded from one optical disc plant in 1996 to
around 50 today--as part of the country's effort to move up the
technology ladder. But producers who respect intellectual property
rights complain they cannot compete with the meatier profit margins of
those who don't.

Piracy is also crippling the local film and music industries. Employment

at music production houses has dropped by a third since 1996, and many
artists are holding back new releases until their rights are protected.
Malaysian filmmakers released seven movies last year, compared with 18
in 1995, and box office receipts are down 49% over the past two years.
Yusof Aslam, a prominent film producer, was so incensed when bootlegs of

his Pasrah (Acceptance) appeared a day after its release in January that

he personally led authorities on raids. CD pirates "are like leeches,
sucking the life out of the film industry,"  reports the Video and Film
Industry Association of Malaysia.

Pahamin has 500 agents at his disposal, but they spend much of their
time monitoring the price of chickens and other staples that are part of

their domestic-trade mandate. His strategy is to shut down the
counterfeiters rather than go after consumers. But the outlaws are
outwitting the sheriff.  One night last September Pahamin and 100
officers descended on a warehouse in Johor Bahru--a major transit point
for goods headed to Singapore--that had been under surveillance for
months. The building was empty; its occupants apparently had been warned

of the impending raid. Similar forays have also turned up nothing. "As
sophisticated as we are,"  concedes Pahamin, "the pirates are more
sophisticated."

Authorities suspect that pirates contribute to a common fund to reward
tip-offs. On some raids, agents have run up against closed-circuit
cameras and steel doors that slow their progress enough to allow the
culprits to escape--after throwing phony wares into shredders and
acetone vats. Even counterfeiters who are caught often escape
punishment: a 1987 law stipulates prison terms of up to five years for
copyright infringement, but courts have yet to send an offender to jail.

That may change. Parliament is expected to adopt a law that will require

manufacturers to maintain stricter records on raw materials, provide for

specially trained prosecutors and judges in copyright-violation cases
and ensure tougher penalties. The U.S. industry, which claims it lost
$287 million in CD sales to piracy last year, is lobbying for tough
action against the country. "Even if we don't succeed, it will not be
for lack of trying," says Pahamin. The new bill would also make it
easier for his agents to stage surprise raids: Pahamin's cowboy hat may
become a common sight to many Malaysians.

Reported by Ken Stier/Kuala Lumpur




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