Yes, you are part of it. A bully feeds on power and when others watch him/her that gives them more power. When people don't respond to a problem they are part of the problem. Doing nothing is giving approval.
There's usually three types of people involved in bullying:
the Bully
the Target
the Bystander
Often it is the Bystanders who have the power to put a stop to what is happening, by withdrawing their friendship from the Bully or making it clear it has to stop. But in many cases the Bystanders do nothing because they are scared that they will be the next one to be bullied.
Frequently the parents of The Bystanders know what is going on, but they do nothing too. So they reinforce the message to their children that it is OK to be a Bystander.