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Water investment in Indonesia

Friday, January 19, 2007

A good article on water investment appears on today's Jakarta Post:

No significant improvements in services have been seen since the Jakarta water business was taken control of by the foreign investors, as evident from the thousands of complaints sent to the companies. There are now a number of unresolved problems that the new investors will have to tackle as a legacy.

First, the scarcity of raw water, particularly during the dry season, as the companies rely too much on water from the Jatiluhur reservoir in West Java. Meanwhile, the water from the 13 rivers in the capital is too dirty to be processed into potable water.

Second, many people are unhappy about a clause in the agreement that provides for automatic water-price increases every six months. There have been rumors circulating that the privatization of the tap-water business was made possible due to collusion involving the family of then president Soeharto. Both Palyja and TPJ have denied the accusation.

Third, water privatization remains a controversial issue in this country, despite the enactment of the 2004 Water Resources Law. Many insist that privatization will deny the poor access to water.

Fourth, and most problematic, many customers say they have not seen any significant improvement in services since the arrival of TPJ and Palyja, although the two companies say they have invested a lot on improving water-supply infrastructure, such as the construction of new mains and the repair of old ones

The Judicial Review of the Water Law by the Constitutional Court arises important legal consequences for water investment, as I have previously discussed in my article at the LEAD Journal downloadable here. The consequences of the judicial review are:
The Court (with 7 concurring and 2 dissenting) held the Law to be “Conditionally Constitutional”. It considers the Law to be sufficient in protecting the citizen’s right and is so far compatible with the Constitution. It however warned that if the implementation is different than what has been outlined by the Court in its Decision, the Law can be subjected to a re-judicial review.

The Court is silence with regards to the parameters of “implementation”. Implementation can mean Implementing Regulations of the Law or the Government’ s Practice in the form of decrees, circulars or unwritten decision of the bureaucracy. It is not known as to whether -- for example-- a single cooperation contract between a regional government and a foreign investor or a bureaucratic behaviour requiring traditional salt farmer to obtain license from his village chief can be used as a ground for re-judicial review.

The author is of the opinion that examination of ‘Conditionally Constitutional’ should refer to policies of the Central Government and validity of the Law’s Implementing Regulations. It is also important to note that the Court tends to reinterpret the Law at several occasions in its Judicial Review as seen when examining Customary Water Right

"Pricing" is going to be a problem and a possible source of conflict. Unfortunatelly the law is silent of this matter. It is to be regulated in implementing regulations.


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Q and A for environmental law

Thursday, January 18, 2007

As a part of a book titled "Getting the Deal Through" which discusses overview of legislations and legal policies in several countries, an internet page for Q n A is prepared. Visit the page here. Summary of US environmental law was prepared by lawfirm Foley Lardner, downloadable here.

I haven't seen any specific discussion on Nanotech issue.

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Four reasons why Constitutional Court's reasoning is not compelling

In our newspaper Article, we highlighted four reasons why Constitutional Court's reasoning in invalidating Article 53 of the KPK Law was less compelling. The four reasons are:
  • First, there is no evidence whatsoever that regulating the Corruption Court in the same law as the Corruption Eradication Commission (KPK) automatically violates the Constitution. The Constitution only mandates that the composition, membership, appointment and procedural law of the courts existing below the Supreme Court is regulated by a law. The KPK law has fulfilled such requirements and should therefore be consistent with the Constitution.
  • Second, there is no guarantee that "equality before the law" will be observed by simply segregating the corruption court in a new law other than the KPK law. In order to be fully constitutional, the future corruption court must have specific competencies in adjudicating all corruption cases, as part of a "one-roof" system.
  • Third, the Constitutional Court did not clearly establish the link between a violation of the "equality before the law principle" and why the existence of the corruption court under the KPK law violates such a principle. The reference made by the court in justifying its argument is more to "a custom of regulation", and not directly about the Constitution itself. It is a custom in Indonesia that special courts are regulated through specific legislation, but this custom does not imply that it is a Constitutional requirement to regulate specific courts in an exclusive law.
  • Fourth, there is presently no direct constitutional injury suffered by anyone due to these measures, so the dangers as seen by the court are potential, not actual. It is true that there has been discrimination against people in corruption cases -- those who go to ordinary courts are generally treated more lightly compared to those detained by the KPK. However, these are not direct constitutional injuries but merely injuries caused by a corrupt legal system. Had the legal machinery functioned properly, these negative effects could be minimized as the law has already outlined the exact competencies of each institution.

Political parties and the draft law on corruption court

I just received information. The draft law on corruption court will be discussed by the third commission in the House of Representative. Many activist are worried that political parties will exert their influence during the law making process. Other issues will hovers around:
  1. Influence of the Supreme Court to the new Corruption Court
  2. Composition of ad hoc judges at the new Corruption Court and influence from political parties
  3. Extension of Corruption Court to regions and the influence of regional government
I'll let you know if I found other info.

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Nanofactory licensing

Wednesday, January 17, 2007

Michael Anissimov wrote a very cool piece on nanofactory regulation:
A primary concern for the development of civilian and commercial nanofactories is the buildup of NanoTrash - cheaply mass-manufactured products made of mostly diamond and empty space. Avoiding NanoTrash while preserving our freedom to design and create will be a great challenge of the early nanotech era. For starters, each nanofactory user should have a personal matter and energy budget determined by a safety authority. These limits should be variable based on product class and user profession. For example, someone that works at a hospital should have a larger energy budget when it comes to manufacturing medical products. In the same way that it’s illegal for just anyone to randomly practice medicine, not just anyone should be permitted to manufacture large quantities of painkillers, syringes, or scalpels.
The idea is to limit and allocate matter and energy budget per person. I guess this means that it operates more like a "license" than a "right". Note that when we talk about right, then the general rule is 'you are allowed to do anything unless it is prohibited'. But when we talk about license, the general rule is 'you are prohibited to do anything unless it is allowed'. For example a driving license: you may not drive unless you have a license.

Who has the power to allows and restricts? Of course, it's the authorities job. The general system in today's licensing-cycle may then be applied: granting of licenses, monitoring of licenses, warning, suspension of license, and finally, revocation of license. Also, this means that we need to consider the types of the licenses. Individual license? Corporate license? Are the licenses transferrable (Can I give my quotas to third parties)? Can parties aggregate their quotas? etc.

Regulating matter may be relatively easier than regulating energy intake. Authorities can regulate matter at the upstream level if they are presented as blocks. But regulating energy may not be that easy. As I have noted in my previous post, even the present day nanotechnology will make it possible for lay people to generate energy. Thus, the general rule in current energy law is: you can consume as much as energy it takes as long as you can either generate it or pay for it. It would be interesting to see that the rule is reversed. Energy is not scarce but they need to be allocated for security reasons. I guess -- for environmental reason -- energy consumption must be limited anyway.

I've been imagining that the licensing will come in the same bundle with the purchase of nanofactory. This licensing discussion is a good start to prepare proto-regulation for future nanotechnology. Another important step would be in designing the authority.

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Nanotechnology Regulation in EU

Prof. Van Calster's article for NLB on european nanotechnology regulation is available for download at Nanoforum's website here (free signup required). Here's a quote:
The expectation is that the EU will adopt a cautious approach, following the example of the European Chemicals policy under REACH. In that case, the burden of proof of safety is shifted from the authorities to the manufacturer. Product liability law is less likely to be applied, because this area is not harmonised at EU level. Geert van Calster compares the EU and US legislative framework and trends.

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Nanotechnology: Broadband, Renewable Energy, Long Tail

Tuesday, January 16, 2007

Professor Lessig wrote an interesting article in Wired commenting on municipal broadband initiative:

Yes. There isn't yet a Linus Torvalds of broadband, nor is a single competitive platform being built by volunteers to displace AT&T. But there are forces mucking up the game for those who would profit most from last-mile control.

The core of this resistance comes from municipalities. Local governments are building neutral infrastructures that allow anyone, from ISPs to community networks, to use and extend blisteringly fast broadband networks. At the end of its first year, a project in Sandoval County, New Mexico, for example, already provides many in the area with more than 10 times the capacity than anywhere else in the US.

And municipal networks are just a first step. Many Linux-style volunteers are building free wireless networks that enable participants to share access and offer capacity to others. These volunteers are also building free protocols that enable legal access without shifting control to a last-mile access provider.

What can Nanotechnology can contribute to broadbands? Cheaper cables, cheaper routers, cheaper, faster, better connections. Similar to broadband, nanotech may contribute significantly to the energy market: cheaper, high capacity high quality solar cells. What effects will this brings to the future regulations?

As for the energy market, the network still belong to the giants. But this will soon changes as nanotech makes it easy for anyone to provide energy:
MIT's Vladimir Bulovic said that nanotechnologies such as nanodots and nanorods are potentially "disruptive" technologies in the solar field. That means they could cause a major switch in a primary energy source, potentially proving more efficient than the silicon used in most solar energy devices today. Bulovic is fabricating quantum dot photovoltaics using a microcontact printing process.

"If 2 percent of the continental United States were covered with photovoltaic systems with a net efficiency of 10 percent, we would be able to supply all the U.S. energy needs," said Bulovic, the KDD Associate Professor of Communications and Technology in MIT's Department of Electrical Engineering and Computer Science.
Thus, nanotech will trigger a long tail effect in the energy market: everyone can supply energy,mostly through solar cells. This is not good for the giants of course, but this does not mean that they'll lose their business. Like Microsoft's response to Linux and open access, they only need to change their business model. One of the possible business model is to become an energy aggregator. As to my knowledge, a scheme similar to this one has been applied in Germany for wind-energy electricity providers. The government there supports independent green energy production and provide mechanism for energy providers to sell their surplus to the authorities. Nanotech will only make the pattern and the tail longer. Nanosolar, a solar cell company called this the third wave of solar energy as it will open mankind to the era of abundant energy.

What the legal people need to consider is how to adjust the regulation to this phenomenon; how to adjust the regulation to support the long tail. Unbundling of energy market will still be a hot debate for the next decade.