As recommended by the workshop on “Promoting Sustainable Growth and Competitiveness of NAM’s SMEs in a Globalized Market through E-Commerce” conducted in Brunei Darussalam on October 2001, NAM CSSTC organized an Expert Group Meeting on “Harmonizing National E-Commerce Laws in NAM Member Countries”. Harmonization of national e-commerce laws of NAM member countries is considered essential, even imperative to increase trade of SMEs in these countries. Harmonization requires the need to ensure that there is uniformity with regard to use of e-signature and certification authority standards between countries so as to facilitate the development of trade using electronic means.

The workshop was attended by 8 experts and 5 participants from  8 NAM member countries in Central and South Asia, Southeast Asia, Europe and Latin America (in Attachment 1), and 1 expert from United Nations Commission on International Trade Law (UNCITRAL).

The workshop was divided  into 4 sessions:

1.      Introduction to the UNCITRAL Model Law on E-Commerce: Its Salient Features and Methods of Adoption;

2.      Use of Electronic Signature and Legal Aspects of Certification Authorities;

3.      Uniform Rules on Electronic Signatures and Its Implications;

4.      Implementation of Laws Relating to IT and E-Commerce in NAM Member Countries

5.      Discussion to Formulate Recommendations and Presentation on the Recommendations.

The papers presented are listed in Attachment 2.  In each session the participants came up with recommendations on how to regulate e-transactions and harmonize the laws in order to boost trade activities of NAM countries in a globalized market.

The meeting noted some fundamental issues and principles and also identified specific actions and recommendations that could be taken by NAM Government, NAM CSSTC and other related institutions to establish a conducive and supportive legal and regulatory regime. The conclusions and recommendation were presented by the experts and participants, under the heading of “The Jakarta Recommendation”.

“The Jakarta Recommendations”

The phenomenal growth of ICT based commercial activity has created numerous opportunities for NAM member countries to participate in International trade and other forms of commercial activity and there is potential for increased trade for SMEs of the NAM member countries.

While efforts in those countries will obviously have to focus on technological developments, the importance of ensuring parallel developments in the Legal framework should be emphasised. E-commerce has considerable potential for developing countries, but the positive impact expected from it would be reduced if users were confronted with doubts as to the legal value of electronic commerce transactions after conducting costly modernisation of communication systems.

New developments in Information Technology has significantly affected the traditional legal concepts and brought about the necessity for the review and the reform of the law receptive to modern electronic dimensions. The scope and ambit of ICT related legal issues extends beyond e-commerce to areas such as Computer Crime, Intellectual Property protection for IT based products and Data protection and privacy issues.

The question then arises: Why is there a need to harmonize the laws that respective countries would have? There are at least three reasons why NAM Member Countries should harmonise their e-Commerce laws. Firstly, it is critical that e-Commerce laws be introduced to enable NAM Member Countries to globalize and leapfrog into the Cyber Age. Secondly, borderless e-Commerce is a reality and it would be better for legal certainty and facilitation of international trade if the laws of different countries are as similar as possible so that they present few surprises to those who embark on e-Commerce in any part of the world. Thirdly, uniform laws throughout the NAM Member Countries would allow us to learn from each other’s experiences in the implementation and enforcement of such laws.

Recommendations & Conclusions

E-commerce

In order to take advantage of facilities provided by e-commerce it is imperative that NAM member countries have a conducive and facilitatory legal and regulatory regime. One major bottleneck faced by most NAM countries is the lack of proper a legal framework to facilitate the development of e-commerce and related activities.

There is general consensus that the “Model Law on e-commerce” formulated by the United Nations Commission for International Trade Law (UNCITRAL) is best suited to address the legislative needs of member countries to formulate laws relating e-commerce.

In enacting e-commerce laws, we recommend to NAM Member countries the following general principles:

General Principles

1. NAM member countries should consider adopting the UNCITRAL Model law on E-commerce Law 1996 and the UNCITRAL Model Law on Electronic Signatures 2001 to facilitate trade.  In order to achieve a satisfactory degree of harmonization and certainty, it is recommended that NAM member countries should adhere as much as possible to the text of the Model Laws in order to make national law as transparent, predictable and familiar as possible for foreign users of the national law.
2. The E-commerce law should be transparent and predictable so that there is no legal ambiguity between transacting parties in an electronic transaction parties in an electronic transaction.
3. The E-commerce law should be technology-neutral i.e no discrimination between different types of technology
4. The E-commerce law should be media-neutral i.e paper-based transactions and electronic-based transactions should be treated equally by law
5. There should be non-discrimination between domestic and foreign electronic signatures and between traditional paper-based and electronic transactions.

Specific minimum legal requirements

1. A contract can be formed electronically unless agreed between the parties
2. No record should be denied any legal effect just because it is in a form of electronic record
3. Where there is existing law requiring information to be in writing, an electronic record would satisfy that rule if it is accessible for subsequent reference
4. There should be provisions clarifying that the rules of contract should apply equally to electronic transactions
5. There should be provisions governing the legal effects of using electronic records and electronic signatures and digital signatures, in particular:

a)     Information given in electronic record should not be denied legal effect merely on the basis that it is in electronic form

b)    Electronic signatures meet all existing requirements for handwritten signatures and a reliable electronic signature should satisfy any law that requires a signature for a document, subject to reasonable exceptions

c)     There should be rules to prove  the reliability of an electronic signature

d)     A reliable electronic record should be legally valid and enforceable subject to reasonable exceptions

e)     There should be provisions ensuring recognition of functionally equivalent foreign certificates and signatures.

Technical Assistance

In this regard it is further recommended that NAM-CSSTC will:-

1. Coordinate efforts and to seek possible technical assistance from and /or enter into a co-operative arrangements with UNCITRAL and other international organisations and experts from NAM member countries and other jurisdictions which have taken the lead in the introduction of e-Law with varying legal systems (such as Singapore  and Thailand) to assist NAM Member countries which are yet to enact their own e-commerce laws. Expert assistance should be provided by NAM CSSTC to NAM Member countries to identify Legal issues, both potential and perceived, which hinder the growth of e-Commerce and related activities. Some of the legal issues and problems may be unique to the particular country and it is imperative that the legal barriers are properly comprehended before Law reform projects are embarked.

There is also a need for NAM countries to comprehend the technical and legal issues revolving around the use of e-signature & certification authorities so as to facilitate the development of trade using electronic means. With numerous new dimensions to electronic transactions resulting from the phenomenal growth of m-Commerce, there is an urgent need to ensure that security needs of the Electronic Transactions be also addressed as part of the Law reform effort. In this regard it is imperative that NAM member countries be encouraged to consider the application of the concepts contained in the Model Law on E-Signatures formulated by UNCITRAL.

2. encourage NAM member countries which have enacted their e-commerce laws based on the UNCITRAL Model Laws to appoint national correspondents to inform the UNCITRAL Secretariat regarding enactment, and case laws relating to e-commerce so as to facilitate the publications of country enactments and case law.

The Experts Group recognises that while e-commerce laws will enable electronic transactions to take place with trust, confidence and certainty in the electronic medium, these laws must however be further complemented with other laws in order to ensure that the interests of businesses, consumers, the public as well as the governments are balanced and protected.

Further recommends NAM-CSSTC to coordinate efforts on training and educating NAM Member Countries’ policy-makers and experts (legal, judicial and technical) and assisting them if needed to draft policies, laws, rules and best practices on:

1. Admissibility of computer evidence in court
2. Addressing procedural provisions on evidence and jurisdiction of Courts
3. E- Payment issues
4. Computer crimes
5. Intellectual property rights for ICT related products and services
6. Privacy and data protection
7. Consumer protection including the use of trust marks
8. Content regulation
9. Dispute resolution and alternative dispute resolution/ governance methods
10. Domain names and related issues such as cyber  squatting
11. Taxation

Other areas

Computer Crime

The recent wave of cyber crime indicates the gravity of Computer related crimes and the need to address these issues and ensure better co-operation between member NAM countries. Every benefit of the Internet has an ugly cousin. The globe-girding nature of the Internet virtually eliminates distances between people, but it can expose them to a world of criminals from far off regions and the importance of dealing with the computer related crimes is becoming even more important than ever before.

The rapid development of Information and communication technologies has led to the growth of new forms of trans-national crime, especially computer related crime. Computer-related crime has virtually no boundaries and does or may affect every country in this world. The recent wave of attacks has opened the eyes of all to the extent to which Computer related crime could affect society.

Therefore it is recommended that NAM Member Countries be encouraged to adopt measure, Laws and procedures to deter computer and cyber crimes.

It is also recommended therefore that expert assistance be provided by NAM CSSTC to NAM Member countries to adopt laws and procedures to deal with Computer and Cyber Crime and resources and expertise from countries having experience in formulating laws in this area should be utilized.

Other Recommendations

Expert assistance for the formulation of Intellectual Property Laws in NAM Member countries for the protection of ICT based products to benefit from the new development of technology.

Provide expert assistance to formulate laws or voluntary guidelines to address Data protection and privacy issues

Expert assistance for Establishment of the Internet Exchange.

----------------------------------------