Works of Arts as Loan Collateral; Koalisi Seni Talks of Potential Obstacles

TEMPO.CO, Jakarta - Koalisi Seni, a non-profit organization engaged in arts advocacy, expressed its appreciation for the ratification of Government Regulation No. 24 of 2022 on creative economy. 

The policy brings fresh air to creative economy players as it allows intellectual property products as collateral for loans to banks and non-bank financial institutions. This way, artists can guarantee their works of art, work contracts, and collecting rights. Similar mechanisms have been applied by other countries including Singapore, India, and South Korea.

“Nevertheless, Koalisi Seni finds that there are still structural problems that could hinder the implementation of this policy,” said the NGO deputy chairman, Heru Hikayat, in Jakarta, Friday, August 19, 2022.

The first issue is that the existing intellectual property system is not powerful enough to protect the rights of creators. Art policy researcher from Koalisi Seni, Aicha Grade Rebecca, explained that for example, there is no regulation on royalty in the film sector. To date, the royalty is regulated in contracts between producers and industry players.

In the music sector, meanwhile, the revenue from performing rights remains an issue. Koalisi Seni thus opined that the royalty should be managed transparently by the National Collective Management Institute (LMKN). “Music royalty rates in Indonesia are also relatively low,” Aicha added.

It is feared that the immature system could reduce the value of loan guarantees to be given as regulated in the policy. The other issue is related to the access for creative economic players to obtain the right.

On this basis, Koalisi Seni urged the government to immediately evaluate the policy implementation in order to ensure that artists can use their creative works as loan collateral in line with the government regulation on creative economy. 

KOALISI SENI/TEMPO

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