Preventing the smuggling of counterfeit goods into Indonesia through sea route proves to be an extremely hard task for the authorities. As a country made of nearly 17,000 islands, Indonesia’s geography appears to be an almost insurmountable obstacle in the fight against counterfeits. The customs forces are too severely outnumbered to tackle efficiently the entry of illegal products into a market of 250 million people.
While Indonesia is not renowned for its manufacturing of fake goods like China, Vietnam or Cambodia are, as a developing economy with the fourth largest population in the world, it does represent an important market for counterfeits with a high demand for these goods, as a large part of the population cannot afford genuine products. As such, the customs are facing an uphill battle.
President Joko Widodo launched an effort last summer to close all illegal entry points into the country, such as unofficial ports and airports in which there is no customs activity and goods can be brought without being checked by the authorities. The geography and the remoteness of the unauthorized ports, however, are not the only factors which explain the success of the smuggling business in Indonesia. First, and as is the case in the border regions of several other poor Asian countries, the smuggling activity represents the livelihood of a substantial part of the population, which is therefore unlikely to cooperate with the authorities.
Secondly, the complexity and ensuing high cost of the intellectual property enforcement mechanism in Indonesia may deter right owners from taking legal actions against infringers and smugglers. Indeed, while in most countries the right owner only has to deal with the national customs to organize seizures of goods at the point of entry, Indonesian law stipulates that intellectual property matters must involve the local police, namely for the destruction of the infringing goods. Having to work with several police authorities rather than one border control agency increases the cost of each action organized, in terms of money and time for IP holders; however, this is still lower price for right holders to pay than dangers counterfeits present to the brand in the long run.