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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.

Abstract:

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

Abstract:

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.