Someone wants to shoot MindShare. Indonesia’s former minister of information and communication, Sofyan Djalil, let slip his secret death wish during a radio talkshow about the Government’s latest protectionist laws affecting the industry.
But laughable as it sounds, he had his reasons. MindShare’s dominance in the local media scene - with 40 per cent of the market - hinders the success of all the local agencies that Djalil invests in, according to sources. Furthermore, rumour has it that Djalil, and possibly even Indonesia’s president himself, is chummy with a local agency chief whose profits have dipped over the years.
With such a personal stake in the outcome of the local industry, it is no surprise that the Ministry of Information and Communication is trying to pry adspend from multinational agencies, via increasing levels of restriction towards the employment of foreigners.
The Government’s efforts took their most desperate turn yet in April, when the ministry slapped a cumbersome, 25-page decree demanding that ads be produced by locals at local production houses.
More recently, the ministry declared a crackdown on the phantom role of the ‘nominee director’ - effectively a non-executive local who owns a small stake in the company, to ensure that it is ‘locally-owned’. Furthermore, foreign ownership has been drastically slashed from 100 per cent to less than 50. “The Government is starting to realise that the communications industry is very profitable,” says a source. “But the laws are too little, too late. The multinationals are light years ahead of them.”
While the outside world shudders at the nation’s growing xenophobia, members of the industry are hardly fazed. After all, history has shown that for every new law there is a loophole - and a lawyer - to circumvent the restrictions. Ricky Pesik, managing director of Matari-owned agency Satu Citra, and the secretary of the Jakarta chapter of the 4As (PPPI), agrees. “You can re-name your industry, the name of your agency, the job titles, anything, and you will get by,” he says.
For instance, changing one’s industry category from ‘advertising’ to ‘marketing communications’ immediately absolves a company from such laws. Another common practice is to call a foreign agency chief a ‘technical advisor’, given that expats cannot hold top job titles.
While the evasion method is hardly a secret, the Government occasionally performs spot checks to ensure that the technical advisor is nothing more than a consultant, without an office or any discernible authority. “Our lawyers tell me to stay home when the spot-checkers come,” says a source.
Clearly, Indonesia has some enforcement issues. To make matters worse, the April decree was passed just before the presiding members (including Djalil) stepped down from their five-year terms. The new Minister has yet to meet with local industry bodies - no doubt trying to understand the issue himself.
“In this country, it is always the execution that falls short,” says a source. “Why did they wait until the commission was in limbo to launch this? It’s all very political. Lots of power-play is involved - and none with the intent of benefiting the industry.”
“The new regulation is simply trying to minimise foreign dominance in the industry,” agrees another ad executive.
But the story gets more complicated. Apparently, the Government shifted the advertising industry to the realm of the Ministry of Tourism and Culture, several weeks ago. “It’s a total mess now,” seethes a source. “We really don’t know what to do now. No one’s following the April decree even though the one-year grace period is almost over.”
