Decked out in designer street labels like Bathing Ape and Etnies, Lee (not his real name) could be a graphic designer, a DJ or a member of any of those other counter culture professions. From the red and black dragon ink tattoos cascading down both arms to the artfully angled baseball cap, he appears every inch the style-obsessed street culture hipster.

But Lee is not part of the new shirtless office revolution. Lee is a modern day pirate dealing in cash and whatever other substances come his way. For the past four years he’s been selling pirated copies of CDs from his shop deep inside one of Kuala Lumpur’s most prestigious malls. “It’s hard work,” he says. “I’m open from midday to nine pm seven days a week. No off-day, no holiday pay, no sick pay. I don’t work – I don’t get paid.”

Lee is just like any shop manager. He opens and closes the store, balances the tills and keeps on top of stock movements in addition to making and buying the mixture of chart titles, underground rock and dance music that the shop specializes in. On the shelves around him the CDs are all original; his real stock is kept in boxes in various discreet cupboards around the shop. He rarely sees the boss he communicates with via mobile phone and never at their premises. According to Lee: “As far as I know he has at least two shops but I don’t know if he has any other businesses.”

Lee’s reticence to talk about his boss is symptomatic of the problem in Malaysia where music piracy is a huge business, which, according to RIM (Recording Industry Association of Malaysia) Chief Executive Officer Tan Ngiap Foo costs the industry an estimated RM100m (HKD200m) per year. 90% of the CDs sold in this country of 25 million people are bought illegally, a figure that only China and India with their huge topographies and massive low-income populations come close to.

“We are stealing from the artists it’s true. But I try and support the artists I like. I just bought a new UNKLE CD but we won’t be putting it in the shop, you know what I mean?” He maintains that most of the titles he sells are not available in the legitimate stores, one of the main reasons he operates largely below the authorities’ radar.

“The best way for me to explain it is it’s like we’re educating people,” he adds. “A lot of the people who come here they don’t know the different music styles so I explain to them and recommend music. And we sell a lot of originals as well. People come and buy the originals of all the stuff they’re really into.”

So why aren’t the legitmate music stores stocking his selection if there is such a demand? “I don’t understand it,” he puzzles. “I guess they don’t really understand the music as well. And when they bring it in on import, who has RM100 (HKD200) to spend to decide if they like a CD or not? They can spend RM10 (HKD20) on it in my shop and then buy the original if they like it.”

The reasons for piracy’s success are obvious: a pirated CD sells for around RM10 (HKD20) compared to around RM40 (HKD80) for the original version. For 15 year-old student Riduan Shah, the pirates are his only way to hear the music he likes: “My allowance is RM50 (HKD100) per week. That’s one CD if I go to Tower [Records and then I have no money for the bus or lunch for the rest of the week. Anyway, mostly the music stores don’t have the music I like; I can only find it at the pasar malam (night market).”

“At the big night markets like Petaling Street most of the stalls are run by the same boss with a central store somewhere in the market. Those guys sell thousands of CDs a week,” Lee confides, “Maybe they make around RM3 profit per disc after paying staff, production and coffee money [bribes].” And while it’s true that there is huge money to be made for the major players, independents like Lee face a much tougher battle to make ends meet.

“I get most of my commercial CDs from one of the biggest distributors: he supplies CDs to most of the city,” he says. “Like any dealer I call them up, order the titles and quantities over the phone and they deliver to my store. The underground stuff I make myself. I have three or four people I pay to work in my factory, duplicating the CDs and printing off the covers: they can only make 50 to 80 CDs a day. So you see, each CD sells for RM10 [HKD20] but takes so long to make, once I pay my staff and my overheads, my profit is very little.”

Raids on the pirates’ storage facilities by RIM (Recording Industry Association of Malaysia) in conjunction with the police and city hall regularly turn up hauls in excess of 20,000 CDs, often mixed up with movie and pornographic DVDs. However, both enforcement agents and pirates alike admit that this is only the tip of the iceberg.  “I’ve been to stores where there are around 100,000 discs,” admits Lee. “And they never get raided, their connections are too good.” Like most pirates Lee changes his manufacturing and storage facilities – usually a nondescript house in a residential neighbourhood – every few months.

In a country where all optical disc factories are licensed and the presses watermarked and guarded by government personnel against illicit use, you would be forgiven for thinking that manufacturing the discs here would be a problem. In fact, Malaysia is quickly replacing Honk Kong and China as one of the production and export centres of the international piracy trade. Forensic tests from seizures as far afield as South Africa, Latin America and the UK have traced discs back to licensed factories in Malaysia.

Yet even independents like Lee have no problem buying the machines that duplicate the discs. “The machines come from Taiwan because all laser duplicating machines in Malaysia have to be licensed.” Lee continues: “You just have to know someone who can smuggle one in and then you pay whatever the dealer here decided the price is to cover his own expenses and risk.” Lee operates a model designed for small-scale CD-ROM duplication but the large-scale pirates have machines that can produce thousands of discs per day.

Corruption and low-incomes in the enforcement agencies have created the perfect environment for the pirates to flourish. The criminal gags will let niche retailers like Lee operate as long as he buys some of his supplies from them, but he still has to negotiate his protection from the city hall enforcement teams. It’s a difficult balancing act: Lee cannot afford the ‘fees’ demanded by those at the top of the food chain, but at the same time he must find someone with enough influence to tip him off if his shop, factory or warehouse are about to be raided.

It’s something he is sanguine about: “Every month I pay a few thousand to my contact and he tells me when there will be raids and tries to keep me out of trouble. Sometimes we get raided without him telling us. Last year they raided my warehouse and I lost 20,000 CDs, that was the worst.”

On that occasion Lee was sleeping at the place and ended up being detained. “When they raided they put me in handcuffs,” he remembers with a smile. “They let me call my boss and I handed the phone to the top guy. They spoke for a while and then they undid the handcuffs and went away. I don’t know what he said but I’m glad because I had some Ice [methamphetamine] and my butterfly knife in my pocket. If they’d really arrested me that would have been it. Drugs and weapons. No way my boss can get me out of that.”

RIM Chief Executive Officer Tan Ngiap Foo acknowledges that corruption is one of the biggest problems in their fight against the pirates. “It’s a well known fact but it’s difficult to detect so we can only make presentations and send memoranda to the government. The government banned open sales of pirate CDs in 2001, so we are surprised that pirate sales are still so rampant in the night markets and street vendors all over the country.”

Partly because of the scale of the problem, Prime Minister Abdullah Ahmad Badawi has pledged to tackle corruption in the government sector and there have been a number of actions against government workers taking backhanders, the most high profile of whom being Abdul Kudus Ahmad, retired army captain and Ampang Jaya council enforcement chief who reportedly received tens of thousands of Ringgit a month from those he should have been pursuing.

A drop in the ocean perhaps but Lee admits that despite all his efforts doing business is becoming more difficult. “They can fine you RM2,000 (HKD4,000) for every illegal copy they find so it’s definitely getting worse, he reckons. “Now, I only sell to people I know and trust. There are so many raids and legislation keeps getting worse. I think in three years time it will be very hard to find pirate CDs in Malaysia.”

Despite the successes of RIM’s undercover teams and private prosecutions the real battle is in persuading Malaysians to boycott the pirates. Tan is steadfast: “You cannot compete with thieves and pirates no matter how low you price your product. You sell at RM10 [HKD20], the pirate can still sell at RM5 [HKD10]. CDs are a fashion product and I do not consider our current pricing to be unfair or out of reach.”

It’s a message that is slowly getting through. People like Creative Director Kenneth Chan reject counterfeits on principle. “For me it’s the design and the quality that’s important,” he says. “By buying it I reward the people who came up with the ideas.” But for the most part the night markets and backstreet shops like Lee’s are still the most accessible and affordable way for Malaysians to buy music. And their attitudes have become hardened. “I am only one person,” shrugs Joey Ng, an insurance agent, as he browses some of Hong Kong and Taiwan’s most recent releases, “I spend my money for me, not for some big company.”

But if Lee’s business is legislated out of existence in the future, what is likely to happen to the pirate who left school at fifteen? “It would be nice to sell [just] original [CDs] but I don’t know,” he muses. “I guess, streetwear. I design my own flyers and customize sneakers for my friends. But it’s hard, I don’t have backers and my family don’t have anything they can give me. What I have I made myself: maybe it’s not much but I’m proud of it.”

A version of this story appeared in the South China Morning Post in 2006.