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CSR/GCG for utility companies

Monday, December 24, 2007

I wrote a paper explaining why certain Good Corporate Governance (GCG) and Corporate Social Responsibility (CSR) norms needs to be practiced by utility companies. You can download the paper here.


This paper argues that utilities delivers basic services to society, a function that was previously undertaken by the state. Given the problematic nature of corporations, the prevalence of natural monopoly in utilities, the asymmetric information present in certain utility markets and the social costs that may occur due to utilities privatization, stronger government intervention in utilities might be desirable. It must however, be conducted in a manner which aligned the corporation's self-interest of profit seeking with the social cost. The inspiration for such regulation can come from the recently growing CSR and GCG norms.

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Safeguarding Water Contracts (peer-reviewed version)

Saturday, December 8, 2007


The The provision of water and sewerage services has been in the public sector for thousands of years. However, the trend towards privatising these basic services has recently been growing. When dealing with Multinational Corporations (MNCs), governments face risks in the form of legal asymmetries.

This paper explains the theory and practice of water privatisation in Indonesia. It analyses the legal anatomy of privatisation, from the regulatory to the contractual levels. It attempts to highlight important issues and risks that governments and other stakeholders need to focus on when dealing with privatisation.

We've made some significant editing for this version. Download the full paper here.

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State and Religion relationship in Indonesian Constitution

Friday, December 7, 2007

An excerpt from my newspaper article:

Unlike in theocratic states, in Indonesia, clerics may issue a verdict (fatwa) but this verdict is not legally binding.

It is important to note that the word "God" appeared many times on the Indonesian constitution. Nevertheless, unlike the UK/Greece model, Indonesian Constitution is silent with regard to recognition of a particular religion.

There is no single article in our Constitution that mentions the name of a particular religion. Article 29 stipulates "the state is based on the belief in the One and Supreme God" but does not explain further -- "God according to who?"

Moreover, although Indonesia "is based in the one and only god", the constitutional practices in the past allowed non-atheistic beliefs (as implemented by the Indonesian Communist Party and local beliefs such as kejawen) to grow.

I therefore tend to conclude the Indonesian model sits somewhere between the German and the Greece/UK model.

The Indonesian Constitution is not neutral towards religion. It is "pro-religion" in the sense that it prefers and supports a theistic worldview rather than the non-theist worldview, but is nevertheless neutral on which theistic view it prefers the most. Thus, the idea of "state-acknowledged religions" (agama yang diakui negara) actually has no constitutional basis.

A pro-religion constitution means that religious adherents may enjoy more freedom of religion in positive terms (the freedom to exercise) through state facilities compared to adherents of non/atheistic beliefs.

However, the negative freedom (the freedom not to be forced toward a particular religion or belief) of all persons remains protected. The power struggle within a particular religion is clearly not the business of the state.

The state has no constitutional authority to dictate its citizens on which version of God it shall worship. Forcing a particular religious interpretation would infringe article 29 (2) of the Constitution.

That means, if you are a moslem and works at public institution, you can wear a scarf (in Germany this could be prohibited if you work as a teacher, as it tends to influence the pupils, whereas the state has to be neutral from religion) and government offices can also be used for religious activities. However, if you are an atheist, you cannot expect the government to allow you to use their facilities to perform your ritual. You can do it somewhere else of course, at the government needs to protect that.

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Foreigners has no right of judicial review

Monday, November 19, 2007

A colleague of mine explained eloquently in his blog that only Indonesians -- and not foreigners -- are entitled to request judicial review to the constitutional court. This does not mean that foreigners do not have legal rights. They are guaranteed with legal rights -- as well as constitutional rights, however they do not have the formal procedural previleges to request a review.

This brings me a question. Supposed foreigners are legally harmed by a provision of a law, then who would have the standing to challenge the law? Indonesians will not have such standing as they do not sustain legal injury (and not the "adressat" of the norm). This will leave the problem in a legal limbo. The laws would be left unchallenged.

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Jakarta's water problem

Friday, October 26, 2007

Pfff, check this out:

In my recent visit to Jakarta I found out that things are worse than I had envisaged. What I have feared has become reality. Lands in northern parts of Jakarta have subsided. Jakarta bypass has subsided by 50 centimeters since it was laid. The deep wells in Jakarta have to go deeper and deeper to produce water, and their output has been dropping off with time and many wells have been producing undrinkable water. Seawater has infiltrated as far as 7.5 kilometers from the coastline into the land and corrupted the groundwater such that it has become undrinkable.

Hopefully their mitigation plan works.

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Where is the "wealth of nations"? Answer: Rule of Law

Saturday, October 6, 2007

An interesting story from Reason Magazine:

A Mexican migrant to the U.S. is five times more productive than one who stays home. Why is that? The answer is not the obvious one: This country has more machinery or tools or natural resources. Instead, according to some remarkable but largely ignored research—by the World Bank, of all places—it is because the average American has access to over $418,000 in intangible wealth, while the stay-at-home Mexican's intangible wealth is just $34,000.

But what is intangible wealth, and how on earth is it measured?

...the World Bank finds, "Human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries." According to their regression analyses, for example, the rule of law explains 57 percent of countries' intangible capital. Education accounts for 36 percent.

Average per capita wealth in OECD countries is $440,000, consisting of $10,000 in natural capital, $76,000 in produced capital, and a whopping $354,000 in intangible capital. (Switzerland has the highest per capita wealth, at $648,000. The U.S. is fourth at $513,000.)

By comparison, total wealth for the low income countries averages $7,216 per person consisting of $2,075 in natural capital, $1,150 in produced capital and $3,991 in intangible capital. The countries with the lowest per capita wealth are Ethiopia ($1,965), Nigeria ($2,748), and Burundi ($2,859). In fact, some countries are so badly run, that they actually have negative intangible capital. Through rampant corruption and failing school systems, Nigeria and the Democratic Republic of the Congo are destroying their intangible capital and ensuring that their people will be poorer in the future.

It's really about the people, not the nature.

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Genes as essential facilities?

Sunday, September 16, 2007

I've been quite busy recently doing my university papers. But when I browsed the net just now, I discovered an interesting article which argues that genes might be regarded as an 'essential facilities'. So, I thought you might be interested. Here's an abstract:

With the IMS Health case before the ECJ, the essential facilities doctrine has taken centre stage in Europe. A recent report by the JFTC seems to suggest that Japan is serious about invoking this doctrine. However the parameters of this doctrine are far from settled. Antitrust authorities do not enough guidance on issues such as determining appropriate license fees for access, optimal number of licensees etc. In keeping with my focus on blocking and disease gene patents, I have dealt mainly with one aspect of this doctrine-namely the question of “essentiality”. Essentiality would in most cases help in a determination of ‘blocking’ i.e. if the facility is a non-essential one, then there can possibly be no blocking. However the converse need not always be true-i.e. if the facility is an essential one, but is widely licensed, then it is quite possible that there would be no blocking.
Read more here.

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Concession markets in Indonesia

Monday, September 10, 2007

Here's a link to an OECD article on the role of KPPU in supervising concession markets in Indonesia and other set of regulatory framework. This article only discusses the peripherals, but is nevertheless not bad as a start.

Download here.

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Regulating Google

Sunday, September 2, 2007

An article from the economist said that Google has made publishers, telecom companies, libertarian and privacy defenders worried (if not 'upset'). I would put news agencies on the list.

So far however, the article said, Google is clean. No violations of copyright laws nor competition laws. The alchilles heel might be on privacy law.

Supposed google failed (either deliberately or by omission) to show my blog in its search results, or it reduces my page rank unfairly, on what bases can I sue Google, other than through their Terms of Services?

BTW, here's an excerpt from the economist's article:
Ironically, there is something rather cloudlike about the multiple complaints surrounding Google. The issues are best parted into two cumuli: a set of “public” arguments about how to regulate Google; and a set of “private” ones for Google's managers, to do with the strategy the firm needs to get through the coming storm. On both counts, Google—contrary to its own propaganda—is much better judged as being just like any other “evil” money-grabbing company.
Google is a capitalist tool, I agree. But it represents the new form of capitalism. The legal infrastructure we have today regulates the 'old' capitalism. It may not be adequate to 'catch' google.


Poor water infrastructure in Kupang?

Tuesday, August 28, 2007

Have a look at this reader's comment on the Jakarta Post 28/08:

Money from the water budget seems to be spent improperly every year. Kupang does not have even the simplest water treatment plant, while poor maintenance has caused the deterioration of old PDAM infrastructure for years.

The result is that people have to buy water from tanker trucks that has been pumped from highly polluted rivers and wells.

Several tests have shown this water is not fit for human consumption. But it's still being sold by the Kupang city administration.

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Living with the Other Fishes

Monday, August 27, 2007

Finally I could meet Mr. P yesterday, after getting his rushed phone at the mid of this week. Currently, he dedicates his life to a mid-size law firm in Jakarta which hold an affiliation with the south-east law firm and America continent law firm.

Yesterday’s appointment was promised to him in order to clarify an important case. The case was, Ms. Z his boss, a foreign citizen got panic and little bit shocked with the news that appeared in the Jakarta Post dated 21 August 2007 with the title "lawyers meet to discuss roles in global arena". Under the news, president of the Indonesian Advocates Association (“Peradi”), Otto Hasibuan commented some following issues:

a. the Ministry of Law and Human Rights as the authority to issue work permits for foreign lawyer shall send report on foreign lawyers which has received the working permits in Indonesia to Peradi;

b. Peradi suspected that in addition to 37 registered foreign lawyers working in Indonesia, there are more foreign lawyers who work in Indonesia; and

c. Peradi suspected that there are some law firms actually owned by foreign lawyers while the Indonesian staffs only act as puppets.

Therefore, while she was abroad last week, unless something happened then she would not come back to Indonesia. He asked P whether she and her colleague have already a proper license to work in Indonesia as a foreign lawyer. Besides her query, she also noted that in this globalization era, Indonesian government has committed to become a member of World Trade Organization (as ratified in Law Number 7 Year 1994). Also, it is advisable for giving concern more on the development of domestic capability rather than putting the blame on foreign aspect. In line with the gathering that held in Jakarta by 10 lawyer associations i.e. from Indonesia, India, Thailand, Japan, China, Vietnam, Malaysia, Philippines and Australia, she thought that Peradi must also give a positive contribution to harmonize the role of lawyers in this era of inclusiveness instead of keep standing on the exclusivity.

After we ordered calamari to indulge us, Mr. P continued telling his experience during this week. Basically, it is so irresistible that an Indonesian law firm have an association with an international or regional law firm which already exists in some other countries through opening of branches or affiliations. It is merely a business action conducted by some firms’ owner to be affiliated (not be owned for sure) for the purpose of grabbing the potential market being captured by those regional law firm. Mr. P said, Ms. Z often receive the client that referred by the “affiliation” in which such client has trusted that his investment in Indonesia shall be backed-up by qualified legal assistancship as the client receive in their own country. Sometimes, Mr. P added, he should introduce himself as a lawyer from the “affiliation” instead of the “local firm” solely for assuring the client that they are not treated with the wrong person.

Yesterday, both of us had the same main course to satisfy our tongue in savoring the juicy half-done US ribs. While I was busy with cutting and chopping, he started again. It may be based on a true story that Peradi come up with the indication that there are some law firms which owned by the foreign lawyers and afterwards Peradi wants to do the direct investigation to catch them. Peradi’s stance is the consequence of prohibition stipulated under Article 23 Paragraph 1 of Law Number 18 Year 2003 regarding advocates in which foreign lawyers may not appear in court hearings, practice and/or open legal services office or representatives in Indonesia. However, in Paragraph 2 of the same Law, it is stated that the law firm may employ foreign lawyers as employee or expert staff in the field of foreign law based upon permit from Indonesian government with recommendation from organization of advocates. In addition to that, foreign lawyers who provide a legal services in Indonesia may be subject to criminal sanctions including imprisonment. Mr. P said, Ms. Z seems still in the corridor of stipulated laws and regulations. She only does the advisory role and provide her expertise in cases where prospective client from her country must be convinced that Indonesian law is quite different with their legal system. That Indonesian company must has a board of commissioners while theirs not, for example. In addition, Mr. P told that Ms. Z is employed by his Indonesian partner to become a marketing agent, to anchor client or as the receiver of referrals from the “affiliation” which coincidently has same citizenship with Ms. Z.

Then my hot pancake with vanilla ice cream and his single espresso became the end session of our yesterday’s meeting. Mr. P said, her boss is one of the 37 foreign lawyers that has been registered on Peradi. Also, as required by the Decree of Minister of Manpower and Transmigration Number Kep-20/MEN/III/2004 regarding the procedure in the obtainment of Permit To Employ The Expatriate Worker (Izin Mempekerjakan Tenaga Kerja Asing or “IMTA”), his law firm already obtained the IMTA for employing Ms. Z as the legal expert in Indonesia, furthermore Ms. Z consequently has obtained the limited stay permit card (Kartu Izin Tinggal Terbatas or “KITAS”) too. And, I am quite surprised that every expatriate who wants to work here shall pay in advance a monthly fee of USD 100 of skill and development fund levy (Dana Pengembangan Keahlian dan Ketrampilan or “DPKK”). Usually, the expatriate will apply for 1 year period of working and stay permit. It then translates to USD 1,200 (or equivalent to approx. 10 million Rupiah) per expatriate to be stored in the Department of Manpower and Transmigration’s account. If every month, for instance, such Department approves application from 100 expatriates, it means that there is 1 billion Rupiah in its account to be utilized and reported in accordance with accountabilty and transparency principle on every single month. What a great asset then. Mr. P also don't know if such financial report must be opened or closed to public.

In spite of worries towards Ms. Z’ permits, Mr. P actually really concerned about Peradi’s contribution to expedite the process for foreign lawyers who applies his application to work in Indonesia legally. Still fresh in his mind, that he needed 1 month only in order to obtain Peradi’s recommendation. When Mr. P pushed the lowest person in such organizational pyramid, they only keep saying that the required recommendation still has not been signed by the relevant authority because of his occupation as an active lawyer in addition to the activity in the Peradi’s organization. And, once the Peradi’s recommendation is obtained, it does not means that his job has completed even for a half way. The recommendation from Minister of Law and Human Rights shall be signed first by the Director of Public Administration Law from the Ministry prior to process the manpower utilization plan (Rencana Penggunaan Tenaga Kerja Asing orRPTKA”). From his experience, the Ministry recommendation will take 2 to 3 weeks to be obtained. One other thing that I knew from yesterday’s appointment is beside 2 main recommendations that must be obtained by each law firm, they must also secure the entire 13 other documents to be permitted working and staying in Indonesia.

The last slurp of his espresso had signaled me that Yesterday’s appointment must be continued some other time. Lastly, Mr. P said, it is quite awkward when Peradi utters that the Ministry of Law and Human Rights must coordinate with Peradi pertaining the report of all working permit already issued by the Ministry to each foreign lawyer. Because, the scheme is already clear that prior to holding the IMTA, that the local law firm sponsoring its foreign lawyer shall apply to Peradi for obtaining the recommendation is the first thing to do.


Some predictions

Sunday, August 26, 2007

Here's to start your monday, some predictions. Most of the information, we already know. But I like the graphic. Oh, and it predicts that supercomputer will exceed the capability of human brain by 2013, btw. (Created by Karl Fisch)

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Stratfor on Nanotechnology

Saturday, August 25, 2007

Startfor issued a short article on regulating nanotechnology. There's nothing in this article that we have not discuss, it seems, but one conclusion captures my attention:
Many see REACH as more protective of public health and the environment than TSCA. As such, there is a growing movement in the United States for the adoption of REACH-like chemical regulations. For those calling for a complete reassessment of TSCA, the revolution in nanotechnology has come at the right time. They argue that TSCA cannot cope with the challenges of nanotechnology, so therefore the law should be revamped to prepare for the next wave of technology. A number of states are currently considering their own REACH-like laws, and the "opening" of TSCA (Capitol Hill-speak for rewriting the law) seems increasingly likely in the coming years.
We have discussed this possibility on the EU-US "gap" post, but we see that if this conclusion is correct, then the US is moving towards filling the gap somewhere in the future.

The rest of the article is worth to read. It provides a good introduction in problems surrounding present-day nanotech regulation. Read more here.

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Longing for Corporate Social Responsibility's (CSR) implementing regulation

Wednesday, August 22, 2007

Now that corporate social responsibility (CSR) is obligated under the new company law (for companies which its core business is Natural Resources or in one way or another related to the environment), business community in Indonesia awaits its implementing regulation. There are still some confusion about the nature of CSR obligation. For example, how should "Natural Resources or in one way or another related to the environment"be defined?

Noke Kiroyan explained this complexities on his article:
Almost as an afterthought, in verbal explanations by lawmakers, those industries producing hazardous waste such as hospitals are also included. What about state-owned and other hospitals that are not incorporated as limited liability companies, as the law regulates this legal form only?

Everyone is entitled to make up his or her own definition, but why go to the trouble of doing comparative studies outside the country if we end up going our own merry way?

Article 74(2) of the Company law specifically stated that the CSR will be accounted as a "cost". This may not be a good news for public service companies which are related to the environment. The cost will be reflected in the price, and thus the price of universal services (such as water and energy) might raise.

I'd say that the government must exclude USO companies from CSR obligation in its implementing regulation. I don't think it's a good idea to raise water, electricity and health bills in a country where these services remained poor.

(For a comparison, check also the Investment law's CSR clause)

Prioritizing EHS research needs

NSCT issued a document for the public to comment. The document listed several research priorities to address Environmental, Health and Security concerns. See more here.

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Responsible NanoCode

Tuesday, August 21, 2007

Alliance of UK institutions (Royal Society is one of them) plan to publish a self-regulatory guideline for nano industry. The project is aimed to be launched in 2008. This is from their website:

The Code will be a voluntary code. Like other principles-based codes, it will illustrate expected behaviours and processes, not standards of performance. Indicators of compliance could be developed at a later stage. The Code is not intended, however, to be an auditable standard, it will not detail levels of performance expected of companies, nor will it give guidance on definitions, characterisation and measurement.

It is not intended that this Code supersedes or replaces the development of future legislation and regulation for nanotechnologies; however, given the absence of comprehensive appropriate legislation at present, it aims to provide clear guidance about the expected behaviour of companies in relation to their nanotechnology activities. It is hoped that the Code and the process of its development might assist with the evolution of such legislation by clarifying the principles which may underpin more detailed, verifiable, standards.

I have not find any further details on the expected code. It only says there "...expected behaviour of companies in relation to their nanotechnology activities" so my guess is that it would relate to OSHA (Occupational Safety and Health) issues. I don't know if this "code" would extends itself into environmental issue such as labeling and waste management. Nor did I find any information to the extent of "nano"-ness there, does it refer only to "material" science or future nanotechnologies will also be addressed?

Various organizations has issued "best practice" recommendations (click the tags below).

Find out more on Responsible Nanocode here.

Introducing a co-blogger

Dear friends, relatives, neighbors, readers...

I'd like to introduce you to a new co-blogger from Jakarta's "legal underworld". He told me that he's going to blog some -- uhm -- sensitive issues on Indonesia's law enforcement. I know that you are longing to know what this person will write. So, without no further waste of time, let me introduce indolawreport's co-blogger,


Water war is a class war

Monday, August 20, 2007

That one is column at The Globalist. The author wrote:

For some, water is effectively granted as a right, provided at low cost by the state. For many others — usually those who can least afford it — it is treated as a commodity that must be bought. Access to water is in fact much more closely tied to social class than to climate. In this sense, the conflicts arising from water scarcity are class wars.

He also explained that urbanization will be the main cause for water conflict:

First, there are real engineering challenges: the scale and pace of contemporary urbanization is much greater than in the past. And many slums are growing in places vulnerable to catastrophic change: floodplains or steep hillsides.

Second, because urbanization today is in many places occurring without economic growth, governments in the Global South often lack the resources to undertake such large infrastructure projects and are dependent on global markets for financing. But the global political climate today is much less friendly to large state-driven projects.

I have discussed the link between urbanization and water infrastructure here.

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"Your" water, "their" tribunal. BITs in water privatizations

You don't believe me? There is more than one case, really. I want to get back to that Tanzanian water privatization case, as reported by the Guardian:

Lawyers for Tanzania's government, whose participation in such a tribunal process is among the terms of a bilateral investment treaty signed with Britain in 1994, argue that Biwater failed in its contractual obligations, performing worse than its inefficient state-owned predecessor. If the government was to meet its citizens' need for safe water, it too had no choice, they claim, but to terminate the City Water arrangement just 22 months into what was meant to be a 10-year contract.

Now, you think the government can do anything once such dispute arises?
Despite the secrecy of proceedings - the tribunal is closed to the public, and Biwater sought and was granted a ruling that both parties refrain from speaking publicly to the media during the week-long hearing that finally began in The Hague in April - a host of interested parties will be closely monitoring the outcome in the wake of final arguments submitted as proceedings wrapped up in July.The World Bank, which pressed Tanzania to enter into the contract, now faces the possibility of seeing the country penalised in a tribunal of the bank's own creation.
Voila. "Your" water, "their" tribunal. A state is not that 'sovereign' when dealing with investors.

And check this info too:
According to a new report published by the Washington-based Institute for Policy Studies, and Food and Water Watch, there are more than 2,500 bilateral investment treaties today, compared to 385 in 1989. And of the 255 investor-state lawsuits filed under these treaties, more than two-thirds have been lodged in the past four years.
There is a way to get around BIT, withdraw! But of course, other investors might pull back too. So this could be a middle way: Can we create a non applicability clause in BITs for water privatisation?


Will nanotechnology reduces the 'natural monopoly' character in water industry?

The answer is likely to be yes, but if the question is how, maybe the its the engineers that should answer. What is relevant to be discussed is, "what is the legal implication"?

Most water industries are heavily regulated, because it is a natural monopoly (i.e. more seller means higher price, one seller is optimum price). I have red a research indicating that the scale of natural monopolies in the water industry varies. In the developed economy and high-tech countries, the scale of the natural monopoly reduces.

Thus, a reduction in the character of natural monopoly will allow more competitor to enter the market. For example, in water industry, more water supplier might be able to enter the common carriage through an economically feasible schemes. Regulators and network owners should not prevent them from entering these 'essential facilities' because it could amount to a violation of competition law.

This also implies that governments may need to adjust its regulatory mechanism.

But before we discuss this further, I'd like to hear from the engineers. In what way would nanotech makes water purification/treatment cheaper?

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Company Law to be Judicially Reviewed

Sunday, August 19, 2007

Still an unconfirmed news (will be confirmed if they log their case on the Court's registrar). Chairman of Apindo Sofjan Wanandi planned to submit a Judicial Review of the newly enacted Company Law to the Constitutional Court. He argued (link in Bahasa) that the Merger Rules on the new law -- which obligates companies to announce its merger decision prior to general meeting of shareholders-- was unfair.

I still don't know how it can violate the Constitution. Article 33 of the Constitution expressed that the economy is built upon a 'common endeavour' based on familial principles. I suppose, the families here could mean the workers too.


What 'natural resources'? CSR clause in the new Company Law

Saturday, August 18, 2007

Just to start the conversation, there's a nice article from CSR Asia discussing the controversy surrounding the Corporate Social Responsibility (CSR) clause under the newly enacted Company Law. Here's a snippet:
Indonesian company law states that companies with an impact on natural resources must implement CSR which is to be budgeted for as a cost. Beyond that we await further regulations – both to define CSR in this context and to determine how it should be implemented and to clarify which companies are actually affected. Currently the law applies to companies ‘engaged in natural resources or those in business in connection with natural resources’, but it isn’t clear what is covered by the term ‘natural resources’.

Click here to read.

Some note on Indonesian Investment Law

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


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.


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?


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.


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.

What kind of blogpost would you like to read?

Monday, July 23, 2007

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Safeguarding a water contract

If you are representing a municipality or a central government, and you have to deal with water MNCs in concluding an agreement, what will you do?

I wrote a paper on this issue for a conference held by the IELRC in Geneva, last April. Here's the abstract:

Due to financial and technological reasons, water undertakings are often being conducted by large scale Multi National Corporations (MNC). Governments often positioned Regional Authorities as a regulator to these MNCs, and at the same time engaged in water contracts with them through State Owned Enterprise (SOE).

However, the relationship between Water MNC and Governments is asymmetrical as MNCs can move their assets overnight, transfer their ownership to third parties, seek various means of redress through bilateral, regional or international investment treaties and avoid confiscation by reallocating their assets. These are often done by hiding behind multiple jurisdictions enjoyed either by their parent companies, subsidiaries or shareholders.

The positions of Governments are the opposite as they do not have the flexibilities enjoyed by MNCs. This paper attempts to prescribe issues that need to be highlighted in safeguarding water contracts in Indonesia.

The first part discusses the legal relationship between institutions involved in a water undertaking. The second part listed down regulatory mechanisms in Indonesian context, more specific towards the impact of Constitutional Court’s review of the Water Law (2004). The third part of the paper examines the provisions existing normally in water contracts between a local subsidiary of MNC and regional authorities and presents a point of view in drafting the clauses.

Note that all laws mentioned there are as of March, 2007. The investment law has been modified recently. See the paper here.

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Indonesia needs a good squatting law?

Sunday, July 22, 2007

I have just watched Robert Neuwirth's presentation at the 2005 TED Talk. He explained that in 2030, there will be 2 billion squatters, or one in every people in the planet is a squatter. In his presentation, he explained some squatter laws in several countries, for example the 24-hour rule in Turkey which established that if a person manages to erect a building in 24 hours, they cannot be evicted without court orders.

What Neuwirth has elaborated is enermously significant, my latest newspaper article also discussed this issue:
In a recent report, the United Nations Family Planning Agency (UNFPA) predicted half the world's population would be living in cities by next year, with the figure expected to grow.

This presents challenges for more effective land use, transportation and the fulfillment of minimum daily subsistence. Cities that fail to meet these challenges will become "failed cities", marked by the rise of megaslums.

In addition to the focus towards FEW (Food-Energy-Water) laws and infrastructure, these developments requires a reformulation of property rights, which can be in the form of (i) limitation of land-ownership period, (ii) redistribution of land-ownership in cities after several generations, (iii) developing squatting laws, (iv) access to local politics.

As for the squatting law part, Neuwirth mentioned the Russian example which passed a law to allow rural land occupants to gain legal title to their holdings, as advocated by Hernando de Soto.

To get a grip on this issue, watch Neuwirth's TED presentation here:

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Using nanotech to prevent pollution - EPA Conference

Friday, July 20, 2007

EPA will hold a conference in utilizing nanotechnology to prevent pollution. These are the three main questions to be addressed to the participants:

1. Which nanotechnologies show the greatest promise for preventing pollution?


  • This question should be viewed through the lens of life-cycle thinking to minimize the possibility of unintended consequences.
  • Which pollution prevention applications are the most likely to find real-world applications?
  • What barriers exist to the adoption of nanotechnology-enabled pollution prevention applications?

2. What are the most promising areas of research on pollution prevention applications of nanotechnologies?


  • Which research areas could improve our understanding of the full life-cycle of nanomaterials?
  • How can the beneficial properties of engineered products of nanotechnology such as increased surface activity, greater conductivity, improved strength-weight ratio, altered optical properties (changes in color or opacity), and flame retardancy be used to improve materials and products and reduce the production of pollutants at their source?

3. What recommendations do conference participants have for promoting and encouraging pollution prevention in the development and application of nanotechnology?


  • What actions could be taken, and by whom?
  • What mechanisms, programs, or associations could promote the research, development, and adoption of such applications?
  • What role can EPA programs play?
Check the conference's website here.


Microsatellites in the sky

Nanotechnology enabled the creation of cheaper and smaller satellites: microsatellites. These satellites weighed less than 100kg, GPS-nav, weather predictions, and Earth observation just like normal satellites, it cost as little as 10 million and so far around 400 have been launched for various purposes.

But because they are small, they can be use to spy on other spacecraft or other space structure:

"If someone interferes with another satellite, or even if the interference is caused accidentally by a piece of debris, this kind of event is likely to start a war, because this can be confused for a satellite attack."

"We really would like to see is a law against satellite destruction, any testing and usable weapon that does that. It is really time to regulate what is going on in space, the regulation that we have is pretty rusty."

The legal principles regulating peaceful uses of outer-space is actually already in place. Take for example, Article III of the Space Treaty:
States Parties to the Treaty shall carry on activities in the exploration and use of outer space, including the moon and other celestial bodies, in accordance with international law, including the Charter of the United Nations, in the interest of maintaining international peace and security and promoting international co-operation and understanding.
The treaty does not mention anything about satellites or space structures. Nuclear weaponry and other form of WMD is strictly prohibited in space. Howbout nano-weapon? Well, as long as they are not categorized as WMD, it can be OK. There could be a loophole here.


Nanoethics Journal

Thursday, July 19, 2007

The nanoethics journal has been available since last june. VOA issued a report on the journal yesterday:

Most nanotechnologies are still at the early stages of development, and Nanoethics' editor John Weckert says now is the best time to be anticipating problems that might arise, "so it won't be necessarily a matter of just waiting to see what the problems are and then trying to solve them."

Leading science publisher Springer describes its new journal as "the watchdog of a new technology." Weckert hopes the publication can foster a better understanding of the risks and benefits of nanotechnology among scientists, policy makers and the general public.

Listen to the podcast here. Check the Journal in SpringerLink here.


Click-wrap agreement unenforceable in Secondlife

Last May I had an interesting discussions with Priyadi and others on the enforceability of Creative Commons license in Indonesia. In that previous post, I mentioned the example of Comb v PayPal (US District Court of San Jose), in which the Court find the agreement unenforceable.

Recently, in the case of Marc Bragg v Linden, the Court also finds Secondlife's wraps agreement unenforceable:
Linden presents the TOS on a take-it-or-leave-it basis. A potential participant can either click “assent” to the TOS, and then gain entrance to Second Life’s virtual world, or refuse assent and be denied access. Linden also clearly has superior bargaining strength over Bragg. Although Bragg is an experienced attorney, who believes he is expert enough to comment on numerous industry standards and the ‘rights’ or participants in virtual worlds, … he was never presented with an opportunity to use his experience and lawyering skills to negotiate terms different from the TOS that Linden offered.
Creative Commons license is of course, different from these wraps. Nevertheless the same question remain, can it be declared unconscionable?


Inadequate regulation of nanotech in food and farming?

ABC reported that nano-agrifood industry will be worth more than US$20 billion by 2010, with giant companies like Syngenta, Monsanto, Kraft Foods and Heinz probably investing.

There could be a significant market for "nanopesticide". The emulsion from Nano-sized versions of pesticide molecules are more stable, more toxic to pests and better absorbed into plants, however, at the same time could also pose new risks to humans or the environment.

The ability for nanoparticles to penetrate the surface of plants may mean they also penetrate into edible parts of the crop and their ability to dissolve may create new kinds of contamination in soils, waterways or the food chain.


Privacy is dead?

Wednesday, July 18, 2007

Have a look at Mike Treder's post titled "Is Privacy Overrated?" here:

We agreed with author, scholar, and transparency advocate David Brin, who asserts that we are not required to choose between freedom and security; that, in fact, history shows us that the most open or "transparent" societies -- those with the least emphasis on secrecy and control -- also are the safest.
I have the impression that law and economics scholars tends to restrict privacy uses for economical purposes, hence, privacy is protected insofar as the total outcome of its protection outweighed its costs of protections. Secondly, privacy shall not be protected if it hinders people to commence beneficial economic transactions. Posner said in his blog:
The particular concern I have with defenders of privacy arises when they argue for legal rights to blanket concealment not of communications, and not of embarrassing facts, but of facts that would be material to the willingness of other persons to transact with the concealer on terms favorable to him.
Posner seemed to defend organizational value of privacy (in terms of trade secret, for example) compared to its individual value. (I must put a note here, that I doubted that protecting privacy in organizations is all good, if they are too much protected, then it can also hamper developments.)

From the human rights approach, privacy is also troublesome. Is privacy a sub-right or a fundamental human rights? I think privacy could be an interrelation between the two. Not all concepts under privacy rights are negative rights.

See my previous discussion on this issue here.

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Nanotechnology and Transnational Governance, the case of China and US

Tuesday, July 17, 2007

On my other post, we have discussed the idea of establishing an international nanotechnology arms treaty, aimed at reducing negative impacts of nano arms race. There is another article at GMU which also discusses the transnational governance of nanotech, this time by focusing on China and US. Here's a quote:
Though nanotechnology R&D is currently an effort based largely upon chemistry and materials science, the high priority placed on it in both the United States and China will quickly lead nanotechnology to interact with other fields of study—such as biotechnology, information technology, and cognitive science—that could further quicken the pace of both basic research and product development. This convergence of technologies could cause an even greater set of governance challenges than nanotechnology alone, further impacting institutions tasked with the responsibility of managing new technological advances. Since developments in nanotechnology are at the forefront of these potentially radical innovations, the United States and China have the chance to think and operate proactively, and work collectively, toward getting the governance system “right” from the start.

The author signaled that Chinese Nanotechnology will be booming, saying that the Chinese government spent $250 million on nanotechnology in 2005 -- when adjusted for purchasing-power parity -- places China’s nanotechnology investment second only to the United States. He stated that the number of scientific papers on nanotech, pubslihed by China is catching up with the US, and that from 2000 to 2002, "China ranked third behind only the United States and Japan in terms of the number of nanotechnology patents held." Given those tendencies, a coordinated risk-research endeavours would be required.

Well... China, together jointly with US discussing the policies of a general purpose technology that could inverted the world's balance of power? Hmmm...what would you do if you were Chinese?

Oh, read the paper yourself here. And a link to my previous post on Chinese nanotech in comparison with India here.

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Regulating Nanotechnology Wihtin Precautionary Principle

A Report from the Institut fuer oekologische Wirtschaftsforschung for the European Parliament benchmarked precutionary principle embodied in several environmental legislations, from the REACH in EU to TSCA in the US.

From the report, you can tell which side of the world advocates stronger precautionary principle and how it affects future nanotechnology regulation. Read the report here.

A Nanotechnology Arms Control Treaty?

Sunday, July 15, 2007

Mike Treder's idea for an International Nanotechnology Arms Control Treaty (INTACT) is intriguing:
Existing arms treaties may not apply to nanotechnology-based weapons, and there are important intellectual property, commercial confidentiality, and national security issues involved in addressing this challenge. One option is to brief and consult with relevant organizations for the next draft of the White Paper, with the goal of encouraging the eventual creation of an International Nanotechnology Arms Control Treaty (INTACT).
History recorded that a revolution on general purpose manufacturing capabilities tends to end in arms race. That's what happened in WWI. Arms limitation would be one interesting alternative for preventing a future nano-war.

But there is a difference: nano is small, conventional weaponries are big. How are we supposed to watch non proliferation of small things such as that? Well, I suppose the future sensors would develop.

There is a second difference. If a weapon is big, it would take a group of people to operate. This is the function of army groups. But if the weapon is small, and its destruction capability is as big as conventional weapons, then it can be operated in small groups. This is likely to be the function of terrorist cells. What I am trying to say is this: smaller weapons makes wars easier. Large scale wars will be obsolete, small scale "terrorism" would be likely. Terrorism requires effective intelligence and policing. Policing is the keyword for future non proliferation treaty.

What is the implication? The INTACT, if it is later designed, should be formed both as an inter-state treaty and as a "policing treaty". The current Nuclear nPT is an inter state treaty, because state is an actor of every nuclear policy. But what about nanotech weaponries? The actors are not only states, but also corporations and individual people. That is why I said above that INTACT should be a "policing treaty". A treaty that lies its emphasis on individual people, as well as the state.

Click here on my previous posts on "Unrestricted Warfare" and "Lawfare".

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EPA's Nano Program -- open for public comment

Saturday, July 14, 2007

EPA has issued Federal Register (FR) notices seeking public comment on a concept paper and other materials related to its Nanoscale Materials Stewardship Program.

The debate still hovers around the issue if nanomaterials are to be considered as a 'new' material under the TSCA. J.C. Davies said:
“The agency’s current practice is inadequate to deal with nanotechnology. It is essential that EPA move quickly to recognize the novel biological and ecological characteristics of nanoscale materials. It can do this only by using the ‘new uses’ provisions of TSCA, a subject not mentioned in the EPA’s inventory document. With the approach outlined by EPA and because of the weaknesses in the law, the agency is not even able to identify which substances are nanomaterials, much less determine whether they pose a hazard.”
EPA also issued papers for public comment on Nanoscale Materials Stewardship Program (NMSP)—in order to encourage industry to provide a voluntary scientific information about the risk management practices currently applied.

The EPA's official website on the program is here. Project on Emerging Nanotech website containing a March 2007 Report (titled Nanotech: Oversight for 21st Century) plus a webscast is available here. To get a glimpse on the application of TSCA to nanomaterials, read a March 2007 paper from Lynn L Bergeson here. You might also want to read Scott Deatherage's discussion in his blog on this issue here.

H.T: Gregor Wolbring


Nanotechnology's Risk Governance

Thursday, July 12, 2007

You might want to read Swiss Re's report on its latest Conference "The Risk Governance of Nanotechnology: Recommendations for Managing a Global Issue" held on the 6th and 7th of July 2006.

Some of the report highlighted the need of differentiating the risk posed by developed vs developing nations.

Download the report yourself here.

(hat tip: Mike Treder, CRN)

CRN to host a nano-bio-techno conference

Tuesday, July 10, 2007

The Center for Responsible Nanotechnology will host Molecular Manufacturing Conference, "Challenges & Opportunities: The Future of Nano & Bio Technologies" to be held September 9-13, 2007 at the Radisson Hotel and Suites in Tucson.

From its press release:

Day one of the conference will focus on biotechnology, including both the underlying science and key applications. Day two will focus on nanotechnology, with an emphasis on the path to molecular manufacturing. Day three will look at the societal and environmental implications of nano/bio manufacturing. On the fourth day there will be assisted tours of Tucson area biotech and nanotech facilities.

The program will feature speakers covering a number of topics including: Tuberculosis and Bird Flu - New Epidemics in 2007; How to Build a Nanofactory; Military, Security, and Surveillance Issues; and more.

Click here to apply

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The right to water must be explicitly stated in the Constitution

Monday, July 9, 2007

JP has just published my Article on the right to water today:

Access to water is a fundamental human right

Mohamad Mova Al 'Afghani, Jakarta

Enough has been said about the depletion of our supply of fresh water from industrialization, deforestation and climate change. Now, the rise of megacities is also complicating the problem.

In a recent report, the United Nations Family Planning Agency (UNFPA) predicted half the world's population would be living in cities by next year, with the figure expected to grow.

This presents challenges for more effective land use, transportation and the fulfillment of minimum daily subsistence. Cities that fail to meet these challenges will become "failed cities", marked by the rise of megaslums.

The problem with water is that it is complicated by the fact that policy in this area is highly intertwined with other sectors. More food requires fine agriculture, which can also mean more water. More clothing requires industrialization, which can involve the use of more groundwater and the pollution of water sources. Housing can also cause problems if built above water catchment areas.

Failure by states to provide their populations with adequate water for drinking and sanitation can be considered a violation of international law.

Under Indonesia's current system, access to "water sources" is guaranteed by the Water Resources Law. Articles five and 16 of the law stipulate that every municipality must fulfill the minimum daily basic water needs of its local community.

However, the Constitution is silent on the right to water. The Water Resources Law for example -- due to the absence of the right to water in the Constitution -- only cites Article 33 of the Constitution, part of the economic chapter regulating natural resources.

This could be a problem, since water rights could then be perceived as existing only as derived from the economic provisions of the Constitution. Contrary to this interpretation, the international community now regards the right to water to be a part of the language of human rights.

The Constitutional Court acknowledged that access to water is a human right in its decision on the judicial review of the Water Resources Law. However, the court's decision does not bear the same weight as a provision of the Constitution.

Explicitly incorporating the right to water in the Constitution does not appear to be helpful at first glance. Adding more words to the Constitution will not provide more fresh water. But that's not how the legal system works.

The law, operating in the language of rights and obligations, helps answer questions on how to prioritize the allocation and use of existing resources. If, for example, there is a conflict between the right of an individual and the right of a company to exploit water, who should prevail? Does an individual have the right to challenge a factory because the water in his or her well is being depleted?

With the rise of megacities, the problem most likely to emerge will be disconnections from the water network. Imagine that in the future -- all at the same time -- the quality of groundwater worsens, reserves drop thanks to interference with catchment areas and urbanization drives up demand for water.

More and more people will rely on water networks for their supplies. Will water companies be able to disconnect those unable to pay?

Here is the question of whether we should see water consumers as mere actors in the market economy (who get their water as long as they pay) or as citizens (who are entitled to water regardless of whether they can come up with the money). If such a cases were brought to local courts where judges were not aware that access to water was a human right under international law, there is the danger that judgments will end up reflecting the narrow, market-oriented view of the consumer.

If, once again, the water resources law is perceived as only a derivative of economic chapters of the Constitution (Article 33), then the outcome of cases such as the hypothetical above would likely follow what has happened with other natural resources such as oil, gas and minerals.

But the way people need water is not the same as the way they need oil, gas or coal. So it is not adequate to argue about the right to water within the realm of Article 33. The right to water must stem from the human rights provisions of the Constitution, and that can only occur if it is expressly stated.

This does not mean that processed water should be available to everyone for free. A price should be associated with it to encourage people to conserve available resources. However, the provision of water and sewerage should be from the perspective of being a public service.

Individuals receiving the service are not mere consumers purchasing goods in the marketplace. They should be treated as citizens receiving services from the state. Their entitlement to water should be guaranteed by the government even if they are unable to pay.

It is the state's duty to respect, protect and fulfill the right to water. The quality and quantity of the amount of water individuals are entitled to must be clearly stipulated in law and not left to market mechanisms to decide. Water companies will have to be efficient and sustainable but at the same time pay due regard to prevailing regulations. Therefore, regulations on subsidies to the poor as well as speedy and cheap dispute resolution mechanisms when it comes to water disconnections must be in place.

Putting the right to water in the Constitution will not directly solve our water problems, but it will clarify to the government that they have a constitutional responsibility to provide this most essential of resources.

I think water issue should be given a substantial proportion during the current constitutional amendment process. The present law on water resources is not clear with regards to conflict between water exploitation right (used by companies) vs water use right (used by individual for daily subsistence). The best way is to state in the constitution that water is a fundamental human right.

Colombia, Ecuador, Eritrea, Gambia, Ethiopia, South Africa, Uganda, Uruguay and Zambia have provisions on the right to water in their constitutions.


Law 2.0 business model: filtering and aggregation

Sunday, July 8, 2007

I have discussed the application of the long tail quite lengthy in several post. Recently David Hornik said in his blog that those who will gain money from the long tail phenomenon are aggregators and filterers:

The aggregators are those web businesses that seek to collect up as much of the Long Tail content as is possible, so as to make their "stores" a one stop shop for content no matter how popular or obscure. The value to consumers from these content aggregators is that they need not shop in dozens of places on the web in order to acquire a diverse set of content. As a result, aggregators are able to extract a disproportionate amount of value for the sale of each individual piece of content.

The filterers are those businesses that make it easier to find the content in which we are interested, despite the increasing proliferation of content creators, hosts, aggregators, etc. Again, while these different filtering technologies may make it slightly more likely that an end user finds his or her way to a piece of obscure content, it will not likely be sufficient to catapult an artist into the mainstream. The beneficiary of the filtering is the end user and the filterer, not the content owner per se.
I have discussed the value of filtering in my previous post:

More choice = more freedom
More freedom = more welfare

# More choice = more welfare (False?)

Barry Schwartz, a psychologist at Swarthmore suggest that the syllogism above could be false. In his book, "The Paradox of Choice", he argued that more choices are essentially good as it reflects improvements, but, there are dark sides of having more choices:

1. Paralysis. We don't choose at all. Many people stays single, right? :)
2. Poor decisions and performance quality. We made bad choices.
3. Dissatisfaction, dissappointment. We are not happy despite our choices.
4. Opportunity costs. The cost in choosing stuff could even be greater than the stuff itself!
5. Time Pressure. Too many choice makes us feel like we are being rushed.
6. Escalation of expectation. When we spent lots of time in choosing, we expect that the stuff we finally choose is a good stuff. When we turned out wrong, we become dissapointed.
7. Self Blame. Good feelings gradually reduces. Bad feelings escalates and change forms.

More choices is better, only if it occurs in any of these two situations. First, Preference Articulation. If you really know hat you want, more choice is better. Most people never have this. Or, second, Alignable Option. If the options can be scaled down to the similar size. Most people never have this too.

How would this be applicable to the legal business? Well, I see several opportunities. First, there are many blogs out there preaching about the law. There are quite so many boilerplates provisions available for free and listing documents (containing contracts) available also for free. The point is how to aggregate them. Some have been doing this through blog aggregators.

Filtering is done by making the best recommendations for clients, which blawgs or which legal service, or which legal form is preferable.

Both arguments above however, comes up with several assumptions:
  1. The legal society willingly shares its content (some fact: nobody shares boilerplates provisions freely, its not like uploading photos in flickr)
  2. Big lawfirms disagregates and legal business is conducted as a small-business (some fact: web 2.0 does not seem to have the power to "disagregate" giant lawfirms, yet)
  3. There is a web 2.0 social networking tool that would enable "small-business" lawyers to collaborate with people from other lawfirms. (some fact: it may not be in the nature of lawyers to collaborate with each other, except when they are defending the same client, of course)


Is there a right to click?

Saturday, July 7, 2007

There is a right to development, to food, to adequate housing and living standard and to water. But, is there a right to broadband? The right to information? The right to click? Stephen's web put it nicely:
Other museums ban photography (like the museum in Taiwan, that wouldn't allow me to photograph 6,000 year old artifacts - I really really think the expiry date has passed, and I doubt that the creators will be motivated into creating any new 6,000 year old artifacts). Come on now - curators of the world, give us our heritage back.
I have discussed this problem in my previous post:
What about information?

Information is originally a non-excludable Good. If I write a song, I cannot prevent you from singing it or changing my melody. Information is also a non-rival good. I can sing as much as I want, but it doesn't consume it. Einstein had 'consumed' Newton's theory, but he does not dminish it instead but develop something else from it. So ideally, information is a public good.

But, since generating information takes cost, the Law changes the attributes of information into "non-rivalrous but excludable". So, it is the excludability that the Law changes. How? By installing the intellectual property regime. If I write a song, that song is mine, "excludable" from others. If you take my notations and sell it to a music recorder, I can sue you because it is my right (and will still be my right until 50 years of my death according to the Berne Convention and even 70 years according to EU Directive).

Since IP protection of the goods in museum had elapsed, I think as a rule, there shouldn't be any reason to prevent people from photographing it.



Democratizing Technologies

Friday, July 6, 2007

You might want to read a report from Nanotechnology Engangement Group. Here's a snippet:
The power of technology is clear, but its governance is not. Who or what makes these world-shaping decisions? And in whose interests are they made? These are the questions posed by a growing number of researchers, NGOs, citizens, politicians and scientists who seek to challenge the way that science and technology is governed and invent new ways to democratise the development of new technologies.
Read the rest yourself here.


The New Negative List of Investment

Thursday, July 5, 2007

Jakarta Post issued an editorial discussing the new investment's negative list:
It's true these sectors -- telecommunications and insurance -- became more restrictive, with foreign ownership in telecommunication companies (telcos) now restricted to 65 percent for mobile services and 49 percent for fixed network, with the insurance industry at 80 percent. The good news is however the new regulation is not retroactive so those foreign investors should rest assured their controlling ownership in those companies would not be contested.

In total, there are 11 sectors becoming more restrictive

While it's true some sectors would become more restrictive for foreign investors, more and more sectors are widened further to foreign ownership, including oil and gas exploration, the pharmaceutical industry and construction services. Some sectors, previously partially or wholly closed, are now opened to foreign investment, including health and education -- two of the most important sectors for the well being of the people. And we welcome this.

Drinking water is opened for investment with a condition that the maximum capital ownership of the foreign investor is 95%. To me this gives an impression that the Govt would like boost foreign investment in the infrastructure sectors. From one point of view, this is good. From another point of view, privatizing a Universal Service Obligation (USO) must be conducted with a great care, for the reasons I have explained here.

See the negative list yourself here (only in Bahasa for now, sorry).


Global Technology Regulation

Tuesday, July 3, 2007

From James Hughes (et.al) new book:

The regulation of the threats of potentially apocalyptic technologies thus requires not only that the safety of emerging technologies be addressed by transnational agreements, but that these agreements create and support agencies capable of engaging in surveillance and verification at both the national and transnational level, with triggers for compelling enforcement mechanisms, from economic sanctions to military force.
What we need then, is a political globalization, and this is not occurring yet. Economy and Technology is becoming global but politics remained local.