Australian and regional regulatory responses to the key challenges of consumer protection in electronic commerce (March 2008)

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2. Harmonisation

Many multi-national organisations have an interest in harmonisation projects, where attempts are made to align individual member country laws to remove unwanted gaps, overlaps and duplication. E-commerce harmonisation projects aim to increase legal certainty for parties engaged with more than one country.

Harmonised domestic legislation is designed to overcome the legal uncertainty in international e-commerce transactions where contracting parties are from different countries. A more certain legal environment will increase confidence in conducting electronic transactions, and in turn participation in e-commerce.

Some commentators have noted the inconsistencies that have started to appear in national and regional approaches to e-commerce law:

A review of the electronic transaction legislation currently enacted or under consideration in many countries reveals that while there is agreement on where we ultimately want to go (facilitating e-commerce), there has been a divergence of approach regarding how to get there.

Country legislation ranges from a minimalist approach that simply authorises the use of electronic signatures in very limited circumstances, to legislation that establishes a very formal and highly regulatory approach governing the manner in which electronic transactions and signatures may be used and e-businesses may operate. Moreover, many developing countries have yet to enact any legislation. The net result has been a variety of different rules (or an absence of rules) governing global electronic commerce. For those engaging in international e-commerce, the resulting environment is problematic at best.[2]

Most legal harmonisation projects are ‘soft harmonisation’ projects, in that there is no intention or requirement for countries to adopt the same (or even model) laws and regulatory systems. All that is undertaken is training and capacity development activities, to ensure a common (or harmonised) understanding of e-commerce legal requirements.

Examples of soft harmonisation projects include e-commerce law harmonisation projects in the following forums:

• UNESCAP
  The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)[3] has 62 member countries. They are undertaking a soft harmonisation project called the Technical Assistance Project on Harmonised Development of Legal and Regulatory Systems for E-commerce in Asia and the Pacific: Current Challenges and Capacity Building Needs.[4]
• SAARC
  The South Asian Association for Regional Cooperation (SAARC)[5] has 8 member countries. They are undertaking a soft harmonisation project called Harmonization of Ecommerce Laws and Regulatory Systems in South Asia.[6]
• Pacific Islands Forum
  The Pacific Islands Forum (PIF)[7] has 16 member countries and has a Cyberlaws strategy (part of the Pacific Plan) that includes the harmonisation of e-commerce laws as one of its goals. Overall, the strategy is based on soft harmonisation, although some specific Cyberlaws (e.g. Spam legislation) may be based on sample laws and subject to hard harmonisation.

There are some benefits to the ‘soft harmonisation’ approach:

1. There is considerable potential for integration and coordination with other regional capacity building activities, resulting in low costs and useful collaboration with regional neighbours.

2. Some assistance is already available, in the form of training materials and kits on e-commerce laws. For example UNCITRAL is developing training materials regarding the UN Convention on Electronic Contracting.

3. In theory, consistency in training should deliver reasonable consistency in outputs, including the laws, regulations and other aspects of e-commerce legal infrastructure.

However, in practice, consistency in training has not always delivered consistency in outputs. The UNCITRAL Model laws, for example, have been implemented very differently in numerous countries, despite the availability of capacity building assistance. ASEAN was also concerned that it would not necessarily have control and ownership of the development and delivery of training and materials, especially implementation guides that could help to ensure consistency.

Examples of hard harmonisation projects include e-commerce law harmonisation projects in the following forums:

• ASEAN
  The Association of South East Asian Nations (ASEAN)[8] has 10 member countries. They are undertaking a major project known as the Harmonisation of E-commerce Legal Infrastructure in ASEAN project.[9] This is a hard harmonisation project based on formal Guidelines and implementation deadlines (the project is discussed in more detail below).
• SADC
  The Southern African Development Community (SADC)[10] has 14 member countries. They are undertaking a hard harmonisation project based on a customised Model E-Commerce Law[11].
• EU
  The European Union (EU)[12] has 27 member countries and has standardised domestic e-commerce legislation based on the EU Directive on electronic commerce 2000.[13] Despite this level of standardisation there is still some criticism that harmonisation has failed to achieve uniform results (especially in sanctions and enforcement) across all member countries.[14] The E-Commerce Directive is also currently under review[15].

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[2] American Bar Association, American Bar Association Recommendation 303, 7-8 August 2006, <http://www.abanet.org/intlaw/policy/investment/unelectroniccomm0806.pdf>

[3] <http://www.unescap.org>

[4] <http://www.unescap.org/tid/projects/ecom04_conclu.pdf>

[5] <http://www.saarc-sec.org>

[6] Harmonization of Ecommerce Laws and Regulatory Systems in South Asia, Pavan Duggal, Advocate, Supreme Court Of India, Regional Expert Conference on Harmonized Development of Legal and Regulatory Systems for E-Commerce, 7-9 July 2004, Bangkok, Thailand. <http://www.unescap.org/tid/projects/ecom04_s3dug.pdf>

[7] <http://www.forumsec.org/>

[8] <http://www.aseansec.org>

[9] <http://www.galexia.com/public/projects/projects-ASEAN.html>

[10] <http://www.sadc.int>

[11] <http://www.sadc.int>

[12] <http://europa.eu/>

[13] Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000, 8 June 2000, <http://europa.eu.int/eur-lex/pri/en/oj/dat/2000/l_178/l_17820000717en00010016.pdf>.

[14] <http://www.inderscience.com/storage/f102127691148315.pdf>

[15] <http://www.galexia.com/public/about/news/about_news-id98.html>

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