Some note on Indonesian Investment Law

Saturday, August 18, 2007

FDI.net hosted an article on the newly amended Investment Law which may be good as a kickstart. You can download it here.

Note: I have not throughly read the content myself. In any event, no guarantee on its accuracy.

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The Tanzania Water Privatization Problem

Guardian issued an interesting article elaborating the Dar-es-Salam Water Privatization problem:
At 11.30am on June 1 2005, three British expatriates were detained by the police in Tanzania. Cliff Stone, Michael Livermore and Roger Harrington were the senior managers at City Water, a consortium responsible for managing Dar es Salaam's water supply. After being held for several hours, the men were served with notices describing them as "undesirable immigrants" and told to leave the country.

I do not know the privatization scheme of Dar-es-Salam water service, but it appears to me that they are using a leasing scheme, where the authority retains ownership of the infrastructure (plus doing some administrative work) and the private operator runs the water treatment, extend network, and in this case, do the billing.

There is one contractual issue that I would like to highlight in this Dar-es-Salam case:

City Water repeatedly complained to the Tanzanian water ministry that its bid was based on flawed information supplied by Dawasa. According to a subsequent World Bank report, signed by the bank's then-president, Paul Wolfowitz, City Water stopped paying its monthly fee for leasing Dawasa's piping and other infrastructure in July 2004, less than a year into the contract. The company was also insisting that its operating fee be raised.

Asked by Dawasa to assess if this was justified, auditors PricewaterhouseCoopers and the British engineering consultants Howard Humphreys rejected City Water's arguments. (Biwater, for its part, directs blame at Dar es Salaam's water authority, saying that Dawasa had "barely started" big capital-works projects on which rehabilitation of the system depended.)

In infrastructure projects, it is common to assume that the local authority knows more about the condition of the installations, more than the investors. The investor then makes the bid (and calculate the prices) based on these estimates. And then, if they won the bid, the contract is concluded. What can make things worse is if the investor puts some clauses on the contract, making the authority liable for imperfect or inaccurate information they supplied to investors. In the Tanzania case above, the Govt was lucky because the PwC audit confirm that they were correct. But what if the result is otherwise?

Some lessons for government's lawyers:
  1. Make sure the client makes proper disclosures
  2. Find a way to get around with the clause that puts the burden of liability on the client's shoulder, for giving inaccurate information
  3. Put a clause that the counterpart is also responsible for their own judgement, in addition to information supplied by the client
  4. Find a win-win solution if a case on imperfect information arise, in any event, avoid the Court

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The future of work: no cubicle culture, smaller companies, working from home

Saturday, August 11, 2007

I am still on the Lawfirm 2.0 topic. This week's edition of business week issued an interesting report about the future of work. The articles are a good news for all (structured) procastinators, freelancers, solo lawyers, outsourcee and those who hates cubicle culture.

Take a look at one of the companies covered by the magazine:
It sounds like the corporate paradise of the future. Workers organize themselves, coalescing around natural leaders and gravitating to the most exciting projects. There are no middle managers, no hierarchies, no fixed assignments.
And its article titled "the wiki workplace":

Nourished on instant messaging, blogs, wikis, chat groups, playlists, peer-to-peer file sharing, and online multiplayer video games, the Net Generation will increasingly bring a heightened comfort with technology, inclination toward social connectivity, more emphasis on creativity and fun, and greater diversity to the companies they work for and to the companies they found themselves.

Eighty million young people are entering the U.S. workforce. Are today's senior managers ready?


The future is a designed chaos, and we love it ;)

Read more.






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Solo Practicioner Lawyer, a Trend?

Thursday, August 9, 2007

Wired.com released an article about career 2.0. One of them is lawyering:

The idea of working hard to pay your dues as a lawyer is outdated. The Wall Street Journal says the latest law firm trend is "de-equitization," which is a fancy word for kicking a partner in the pants and throwing him or her out the door. Since there is no longer a safe ladder to climb in big law firms, people will stop climbing and set up shop on their own.

Warning: Lawyers are the most unhappy of all professionals, according to the Colorado Law Journal. But people who work for themselves are among the most satisfied workers, according to Dartmouth economist Daniel Blanchflower (.pdf). Add the two together for a more balanced work life.

Preparation: Success as a lawyer is increasingly about client relations rather than providing Alan Dershowitz-style genius legal representation. Take some marketing courses in college since that's what you'll be spending time on once you hang out your shingle.

If this prediction is correct, we shall see that either the period of partnership tenure or the total amount of partners appointment declining from time to time, and at the same time solo or boutique lawfirm mushroomed. Another possible thing: once these lawyers 'disaggregates' and work as a solo practicioners, they might need to collaborate. Do we have the collaboration engine in place?

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Nano divide: some comments on Post MNT Economics

Sunday, July 29, 2007

An interesting post on CRN's blog:
"...so imagine a third world country somewhere in the year 2035, most home industries wiped into oblivion by nanotech minifacs, traditional agriculture wiped into oblivion by cheap biogenetics and superefficient nanotech based agriculture - those people would be without any product in demand, locked away from resources and raw materials, largely incapable of coping because of traditionalist lifestyles..."
Makes me wonder. How long will it take since the first day nanofac is invented to ubiquitous mass production? Will it be enough to buy time. If a moratorium is allowed, international trade can continue for a while to fill the gap on the transitionary phase.

But even with the moratorium, I would expect a rush, capital and financial market fells followed by lay offs triggered by manufacturing companies spreading to other industries. This disruption may cause extreme economic crisis. But I am not an economist. Any ideas on how to prevent it?


ps: blog hiatus until August 11th. I am on vacation.

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Tragedy of the commons in water

Friday, July 27, 2007

BBC had an interesting article on the debate as to whether market forces would be able to manage water:
The editor of the book, Kendra Okonski, a director of the UK-based International Policy Network, says the solution is to give water a market value.
"If we view water as a global common good, it means that we collectively own it and no one has the responsibility to look after it. "But if we manage it with markets and underlying institutions - such as property rights and the rule of law - then people are much more likely to look after the water and use it more effectively," she told the BBC News website.

Not looking after (and eventually) destroying resources is something that Garret Hardin termed as "Tragedy of the commons".

While bringing value to water (through cost recovery) is important -- as it encourages people to conserve, denying access to water because a person is unable to pay is bad. Thus, a subsidy or other mechanisms must be created, and that is the role of the state.

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Wilson center issued a report on handling Nanowaste

The institutional capacity for handling nano waste is put under scrutiny. Wilson Center adresses the issue:

A new report from the Project on Emerging Nanotechnologies, Where Does the Nano Go? End-of-Life Regulation of Nanotechnologies, addresses these issues. Authored by Linda K. Breggin and John Pendergrass, legal experts from the Environmental Law Institute (ELI), the report presents the most comprehensive analysis to-date of two key Environmental Protection Agency laws that regulate the end-of-life management of nanotechnology. These are the Resource Conservation and Recovery Act (RCRA), and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as the Superfund statute.

The report is timely. Today, there are over 500 company-identified nanotechnology consumer products on the market, all of which will sooner or later be disposed of. These products can be seen in an online inventory maintained by the Project on Emerging Nanotechnologies. This inventory does not include nanotech products being sold but not identified as such, or the hundreds of nano raw materials, intermediate components, and industrial equipment items used by manufacturers today.

The webcast and report is downloadable here.