TPP and Digital Rights: Indonesian Perspective Overview

Indonesian Perspective Overview
image:eff.org&kepakgaruda

Indonesia for the Digital Economy

Indonesia for the Asia’s 3rd & TPP
Source: trpc.biz/goingdigital-indonesia2015/ (Sept, 2015) Source: setkab.go.id / Cabinet Secretary

Internet Economy: Digital Business

Internet Ecosystem: Multistakeholder
image:internet

Internet Governance: Open, Inclusive
image: iccwbo.org

But, TPP is a closed-door negotiation!
image:statusmind.com

TPP Final Texts
Final Texts:
- https://ustr.gov/trade-agreements/free-trade-
agreements/trans-pacific-partnership/tpp-full-text
- https://wikileaks.org/tpp-final
image:iese.edu

1. Cross-border Data Transfer (TPP e-Commerce, Article 14.11.2)
– TPP: restriction of cross-border digital data transfer is not allowed
– Standard for data and personal information?
– Jurisdiction? Bilateral /multilateral agreement?
2. Data Center Territory (TPP e-Commerce, Article 14.13.2)
– TPP: computing facility / data center localization is not allowed
– Indonesian Government Regulation No. 82/2012?
– Localization = trade barrier? Market (traffic) domination?
3. Copyrighted Digital Content (TPP Intellectual Property, Article 18.82.3)
– TPP: immediate remove/disable digital content of the copyright infringement
– Liability of service providers? User-generated content?
– Regulation? Procedure? How about fair-use?
4. Trade Secret in Computer System (TPP Intellectual Property, Article 18.78.2)
– TPP: unauthorized access of trade secret in a computer system is a criminal
– Revelation of a corporate wrongdoing is criminal?
– New threat for whistleblower, journalist or netizen who tell the truth?
5. Internet Access for Consumer (TPP e-Commerce, Article 14.10)
– TPP: Consumer’s Internet subject to “reasonable network management”
– Justification for “reasonable”? Unjustifiable discriminatory?
– Limitation of “network management” practice? Net neutrality?
6. e-Transmission Custom Duties (TPP e-Commerce, Article 14.3)
– TPP: custom duties on electronic transmission is not allowed
– Global operators’ revenues are stagnating, operating and capital expenditures are increasing. Meanwhile,
the “over-the-top” (OTT) players that piggyback free on telecom systems are gaining in number and
popularity, making the traditional operators’ task that much more difficult* ?
– Taxing of over-the-top (OTT) services? Digital products?
*) http://www.strategyand.pwc.com/perspectives/2015-telecommunications-trends
Full Presentation: http://bit.ly/tpp4id or http://s.id/tpp4id
Summary of the 6 TPP’s Impacts on Digital Rights from
Indonesian Perspective (Brief Overview)

TPP e-Commerce, Article 14.11.2:
“Each Party shall allow the cross-border
transfer of information by electronic means,
including personal information, when this
activity is for the conduct of the business of
a covered person.”
#1 | Case : Cross Border Data Transfer
image:internet

#1 | Note: Data Needs Safe Environment
Global trends #3 to create opportunities to transform Southeast Asia by 2030
(McKinsey, Nov 2014)
“Establish a policy framework for data
collection and sharing as well as online
privacy. Capturing the value of big data, the
Internet of Things, and the cloud depends
on creating a safe and predictable
environment for data collection, storage,
and usage across business entities and even
across country borders. (McKinsey, Nov 2014)

Protecting personal data online is key for the data driven
economy, since it will increase trust in the internet, and greater
trust will foster more use. Data flows nowadays are global, and
privacy regimes need to be interoperable with one another to
really enable the internet to be an engine of innovation and
economic growth. (World Development Report, Jan 2016)
#1 | Note: Protecting Data is a Key

TPP signatories would still be free to restrict cross-border
data flows* as long as the restriction reasonably relates to:
1. Legitimate public policy objective.
 Fact: Indonesia does not have Personal Data
Protection and/or Privacy Law/Bill yet.
2. Not applied in an arbitrary or unjustifiable
discriminatory or a disguised restriction on trade.
 Fact: Should comply with the General
Agreement on Trade in Services (GATS) / WTO.
#1 | Note: Restriction OK, but…
*) TPP e-Commerce, Article 14.11.3

#1 | Note: Benefit for (US) Data Services
“Our member companies, the leading
developers of software, hardware, and
data services, will benefit particularly
from the right of free transfer of data, and
the freedom to locate computing facilities
based on business decisions, not
protectionist policies.“ (BSA, May 2016)
Logo of several BSA member:

#1 | Impact: Standard & Jurisdiction?
A country that has such laws will find it challenging to enforce
data standards on a company resident in a country that does not.
In addition, some companies may rely on the lack of a physical
presence in a particular jurisdiction in order to argue that they
need not comply with the privacy and other consumer protection
laws of that country. (Public Citizen, Nov 2015)

TPP e-Commerce, Article 14.13.2:
“No Party shall require a covered person to
use or locate computing facilities in that
Party’s territory as a condition for conducting
business in that territory.”
#2 | Case: Data Center Territory
image:internet

TPP signatories would still be free* to request data center
localization as long as the request reasonably relates to:
 Legitimate public policy objective.
 Fact: Indonesia has Regulation of the
Government of the Republic of Indonesia
number 82/2012, concerning Electronic
System and Transaction Operation
 Not applied in an arbitrary or unjustifiable
discriminatory or a disguised restriction on trade.
 Fact: Should comply with the General
Agreement on Trade in Services (GATS) / WTO.
#2 | Note: Localization OK, but…
*) TPP e-Commerce, Article 14.13.3

#2 | Note: Indonesian Regulation(s)
• Regulation of the Government of the Republic of
Indonesia number 82/2012, concerning Electronic
System and Transaction Operation, article 43.1.b:
“The Electronic Transactions in the territory of the
Republic of Indonesia shall: perform transactions
data storage in domestically”
• Draft of MCIT Ministerial Decree concerning
Personal Data Protection in the Electronic System:
“Data center and disaster recovery center of
electronic system operator for public service used to
process the Personal Data Protection shall be placed
in the territory of the Republic of Indonesia”

United States Trade Representative, “2016 National Trade
Estimate Report on Foreign Trade Barriers” (page 231):
• The Indonesian government has signaled plans to enact a
personal data protection regulation under Regulation 82/2012,
and may pursue national legislation on personal data protection
in 2016, both of which could further define requirements for
data localization.
• A local data center requirement could prevent service suppliers
from fully leveraging the economies of scale from existing data
centers and discourage future investment in Indonesia.
• Furthermore, such a requirement could inhibit the cross-border
data flows that are essential to electronic commerce.
• The U.S. Government continues to engage the Indonesian
government on this issue.
#2 | Note: Localization = Barrier?

‘‘Bipartisan Congressional Trade Priorities and Accountability Act of 2015’’.
- SEC. 102. Trade Negotiating Objectives
- (b) Principal Trade Negotiating Objectives
- (9) LOCALIZATION BARRIERS TO TRADE
“The principal negotiating objective of the United States with respect to
localization barriers is to eliminate and prevent measures that require
United States producers and service providers to locate facilities, intellectual
property, or other assets in a country as a market access or investment
condition, including indigenous innovation measures.”
#2 | Note: What Congress Said
In the United States, Congress should be asked for approval after the TPP
Agreement is signed by the President, pursuant to the requirements set
forth under the Trade Promotion Authority (TPA).

#2 | Impact: Domination & Market?
“The country distribution of major data centers clearly reflects two things the
US dominance of cloud and internet technologies; and the scale and unique
characteristics of the Chinese market. The ranking also reflects the relative
importance of smaller countries that are often used as regional hubs – Hong
Kong, Singapore…” (Sinergy Research Group, Oct 2015)

TPP Intellectual Property, Article 18.82.3:
“Requirement for Internet Service Providers to
expeditiously remove or disable access to
material residing on their networks or
systems upon obtaining actual knowledge of
the copyright infringement…..”
#3 | Case: Copyrighted Digital Content
image:wikimedia

#3 | Impact: UGC & Liability?
images:internet
*) UGC = User-Generated Content

TPP Intellectual Property, Article 18.78.2:
“Each Party shall provide for criminal procedures
and penalties for one or more of the following:
– the unauthorized and willful access to a trade secret held in
a computer system;
– the unauthorized and willful misappropriation (unlawful
acquisition) of a trade secret, including by means of a
computer system; or
– the fraudulent disclosure, or alternatively, the unauthorized
and willful disclosure, of a trade secret, including by means
of a computer system.”
#4 | Case: Trade Secret in Computer System
image:internet

#4 | Impact: Threats for the Truth?
(TPP) Creates New Threats for Journalists and Whistleblowers.
Dangerously vague text on the misuse of trade secrets, which could
be used to enact harsh criminal punishments against anyone who
reveals or even accesses information through a "computer system"
that is allegedly confidential.
TPP Could Criminalize Journalism and Whistleblowing.
TPP’s trade secrets provisions could make it a crime for people to
reveal corporate wrongdoing “through a computer system.” The
language is dangerously vague, and enables signatory countries to
enact rules that would ban reporting on timely, critical issues
affecting the public. (May 2015, 250+ Tech Companies and Digital Rights
Groups signed a letter to Congress).

#5 | Case: Internet Access for Consumer
TPP e-Commerce, Article 14.10:
“Subject to applicable policies, laws and
regulations, the Parties recognize the benefits
of consumers in their territories having the
ability to: (a) access and use services and
applications of a consumer’s choice available
on the Internet, subject to reasonable
network management.”
image:internet

#5 | Note: Open Discrimination
“The provision doesn’t advance anything for countries that
don’t have net neutrality regulation. It also fails to effectively
address existing net neutrality challenges, because it may only
apply to situations where access to applications or services are
blocked. It may not include situations where traffic is
unjustifiably degraded or discriminated against in an economic
sense, or where a service provider prioritizes certain services,
giving them significant advantages over competitors. Due to
these shortcomings, the TPP’s open access framework leaves
open an entire universe of discriminatory and innovation
harming activity that traffic carriers can leverage and which
regulators have found objectionable.” (Nov, 2015)

“A network management is a practice that has a primarily
technical network management justification, but does not
include other business practices. A network management
practice is reasonable if it is primarily used for and tailored to
achieving a legitimate network management purpose.
Reasonable network management is an exception to the no-
blocking rule, no-throttling rule, and no-unreasonable
interference/disadvantage standard, but not to the rule against
paid prioritization, because it does not a network management
practice and not primarily a technical purpose”. (FCC, Mar 2016)
#5 | Note: “Reasonable” according to FCC
“Protecting and Promoting the Open Internet”

#5 | Impact: Net Neutrality Debate?

#6 | Case: e-Transmission Customs Duties
TPP e-Commerce, Article 14.3:
1. No Party shall impose customs duties on
electronic transmissions, including content
transmitted electronically, between a person
of one Party and a person of another Party.
2. For greater certainty, paragraph 1 shall not
preclude a Party from imposing internal
taxes, fees or other charges on content
transmitted electronically, provided that
such taxes, fees or charges are imposed in a
manner consistent with this Agreement.

#6 | Note: Ensuring Common Sense

#6 | Note b: Taxing (Digital) Services
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#6 | Impact: ....................? (you decide it!)
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• http://www.worldbank.org/en/publication/wdr2016
• https://www.eff.org/issues/trade-agreements
• https://www.citizen.org/documents/tpp-ecommerce-chapter-analysis.pdf
• http://www.bsa.org/~/media/Files/Policy/IssueBriefs/05032016TPP.pdf
• https://www.wto.org/english/tratop_e/ecom_e/ecom_briefnote_e.htm
• http://www.oecd.org/internet/ieconomy/
• http://trpc.biz/goingdigital-indonesia2015/
• https://www.globalpolicywatch.com/2015/11/the-tpps-electronic-commerce-chapter/
• http://www.globalresearch.ca/tpp-could-criminalize-journalism-and-whistleblowing/5451009
• http://www.slideshare.net/SutedjoTjahjadi/transforming-to-indonesias-digital-economy-menuju-digital-ekonomi-indonesia
• http://www.mckinsey.com/global-themes/asia-pacific/three-paths-to-sustained-economic-growth-in-southeast-asia
• https://www.srgresearch.com/articles/us-and-china-account-54-all-major-cloud-and-internet-data-centers
• https://www.srgresearch.com/articles/us-accounts-almost-half-all-major-cloud-and-internet-data-centers
• http://submarine-cable-map-2016.telegeography.com/
• https://web.kominfo.go.id/sites/default/files/users/1536/RPM%20Perlindungan%20Data%20Pribadi%20dalam%20SE%20-
%2028%20Maret%202015_nando_bersih.pdf
• https://jdih.kominfo.go.id/produk_hukum/view/id/6/t/peraturan+pemerintah+republik+indonesia+nomor+82+tahun+2012
• http://www.thejakartapost.com/news/2016/03/03/telkom-vs-netflix-and-network-neutrality-debate.html
• http://www.thejakartapost.com/news/2016/01/27/indonesia-s-telkom-effectively-blocks-netflix.html
• http://www.thejakartapost.com/news/2016/03/28/telkom-bring-netflix-rival-indonesia.html
• http://www.thejakartapost.com/news/2016/06/09/activists-urge-govt-to-ensure-net-neutrality-in-indonesia.html
• http://www.thejakartapost.com/academia/2016/05/10/taxing-the-internet-giants-catch-me-if-you-can.html
• http://www.wsj.com/articles/indonesia-to-pursue-u-s-tech-firms-on-taxes-minister-says-1459951546
• http://rabble.ca/news/2016/02/false-positive-tpp-net-neutrality-rules-lack-enforceability-and-impact
• https://apps.fcc.gov/edocs_public/attachmatch/DA-16-271A1_Rcd.pdf
• https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.pdf
• https://ustr.gov/sites/default/files/TPP-Promoting-Digital-Trade-Fact-Sheet.pdf
• https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2016/2016-national-trade-estimate
• https://www.congress.gov/114/plaws/publ26/PLAW-114publ26.pdf
• https://www.congress.gov/bill/114th-congress/senate-bill/995
• https://fas.org/sgp/crs/misc/R43491.pdf
• https://www.govtrack.us/congress/bills/114/s995
Reading Sources

www.ictwatch.id
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e-mail: donnybu[at]ictwatch.id
blog: donnybu.com
twitter: @donnybu
mobile: +62-818-930932
• Daily Activities :
 ICT Watch, Executive Director
 ICT Lecturer (NIDN: 0306117401)
 Fellow Researcher of Citizen Lab - Toronto University and
Global Partners Digital - London
 Former of : Journalist, Editor and VP at Detikcom Online Media
• Formal Educations :
 University of Indonesia, Communication Management
 Gunadarma University, Computer Science
• Brief CV : http://bit.ly/dbu-cv
Brief Biodata

TPP and Digital Rights: Indonesian Perspective Overview

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TPP and Digital Rights: Indonesian Perspective Overview