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ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
Part Two of the Economic and Social Survey of Asia and the Pacific, 1999
Asia and the Pacific into the Twenty-first Century: Information Technology, Globalization, Economic Security and Development
V. ELECTRONIC COMMERCE
Box V.1. ICT developments in the maritime industry
With more than one third of world trade either originating in or destined for the ESCAP region and with most countries having easy access to ocean routes, the performance of the maritime sector is of vital importance. Regional member countries operate more than 40 per cent of the world's fleet and the region is home to 11 of the world's top 20 container shipping operators. Half of the world's 24 busiest container ports are in Asia.
The transport sector of the ESCAP region is going through a container revolution that began in the late 1970s. Cargo ships that used to stay in port for three weeks to load and discharge are now being replaced by container vessels with port stays measured in hours. This has put considerable pressure on transport operators to ensure the speedy transfer of essential information and documentation to avoid delaying cargo movements and tightly scheduled shipping services. Also, with containerization has come the development of multimodal transport, which has facilitated the international movement of goods door-to-door by sea, land and air within countries and across national borders. Containerization, which has already had an enormous impact on the physical aspects of maritime cargo movements between ports, is now penetrating deep into hinterland areas. At the same time, multimodal transport, with its single liability contract, is changing the institutional process of transport. Shipping authorities and companies are faced with a whole range of new challenges and opportunities facilitated by parallel developments in ICT.
The shipping industry has to operate in a highly globalized, regulated and complex trading environment. With the top 10 Asian container ports handling more than 50 million containers annually, and each container sometimes carrying 50 or more separate consignments, the documentation required is enormous. The maritime industry already relies heavily on EDI to communicate order and logistics information electronically. Unfortunately, while the development of EDI has already increased efficiency in the transport sector by speeding up the transfer of information, the progress in creating an international paperless environment has been quite disappointing. As a result, the maritime industry is gradually turning to the World Wide Web for certain business functions in order to take advantage of the Internet's simplicity and universal access.
The development of the Internet provides an easy means of gathering, organizing and disseminating information at a global level on maritime-related products, services, regulatory requirements, experience and research. Already, shipping lines and ports around the world are creating "homepages" on the Internet to provide information on their services and charges which can be accessed by the global market 24 hours a day. Sea Land Service Inc., one of the world's largest container shipping companies, started accepting orders on its Web site in 1998. In 1999, it will introduce a system in the United States that will let truckers avoid long lines at distribution centres by going to a Sea Land Web site to reserve a time to pick up their cargo.a
An important factor encouraging the use of ICT is the process of deregulation in the shipping sector and newly formulated legal obligations to publish information widely. For example, in the United States, the Ocean Shipping Reform Act of 1998 requires shipping companies to maintain an automated tariff system showing all of their rates, terms and charges. These tariffs are to be made available electronically to any person through appropriate access from remote locations.b It is anticipated that the Internet will be the vehicle of choice. With prices for transporting cargo around the world posted on the Web, shipping and logistics companies are already considering how to tie that information to other systems in order to provide functions such as clearing customs, but the absence of a common document format on the Web is keeping manufacturers and service providers from moving more quickly.
A new initiative to overcome these critical problems will be launched in Asia in 1999. A system known as Bolero is being designed to harness the accessibility and relative simplicity of the Internet under a joint venture comprising the Through Transport Club, and the interbank clearing network (SWIFT). The connectivity offered by the Internet, coupled with standardized procedures proposed within the Bolero system, will facilitate easy international access and exchange of messages between carriers, freight forwarders, suppliers, export agencies, banks, customs authorities and buyers. To overcome the problems related to electronic signatures, a Bolero rule book will be issued to provide a contractual framework for users which, in countries using common law modalities, will ensure acceptability of digital signatures.
Unfortunately, many developing countries in the region have been slow to exploit even the more evident benefits and cost savings of using ICT applications. To assist regional ports and shipping companies to gain access to the global markets that the Internet can offer, ESCAP has recently taken the initiative to implement a project known as MARINET (Maritime Information Network). Easily navigated and comprehensive maritime Web site templates have been developed for ports and shipping companies. They provide an attractive, common format for the display of commercial and technical information on the Internet. Included in the Web site are pages for the display of tariff rates, capacities, schedules/services, contact points and performance information. For the more advanced port and shipping companies, the templates already provide the possibility of interactive responses to cargo-tracking enquiries made by shippers and freight forwarding operators. All this information would normally have to be despatched in hard copy by mail, so enormous savings in time and cost can be made. Through this simple approach, ports and shipping companies in the ESCAP region will be able to make available to the whole world details of their services and costs through their own Web pages.
a See "Launch for e-commerce", Information Week Online, 23 November 1998 <http://www.informationweek.com/710/10iueco.htm> (26 January 1999).
b See "Ocean Shipping Reform Act of 1998 overhauls transportation system for U.S. exports and imports", MLB White Papers (October 1998) <http://www.mlb.com/wp102198.htm> (26 January 1999).
Box V.2. Use of EDI for customs purposes in selected countries of the ESCAP region
The material below summarizes the status of use of EDI for exports and imports and other functions undertaken by customs authorities in a selection of developing countries in the region.
China has an EDI duty system in use by Shanghai Customs and the Department of Communications, using a Swedish electronic gateway system to link a number of ports and shippers. EDI applications are relatively advanced in Shanghai, Tianjin, Qingdao and Ningbo, with UN/EDIFACT messages in place. There are two existing UN/EDIFACT applications developed by customs staff; the first is an EDI cargo clearance system and the other an EDI system for express consignments. Other systems are planned to support import and export controls. The government has announced that 44 EDI service centres or nodes will be constructed throughout China. In addition, a comprehensive customs Intranet and Extranet will be created by the implementation of more than 40 regional EDI clearing centres for China customs.
Hong Kong, China has systems for import/export declarations, air cargo manifests and textile licences in place. An international consortium has created CargoNet, an electronic gateway into Hong Kong, China, based upon Web technology for all trade documentation. The system is able to handle some 250 million messages a year across the full trade spectrum. Customs has implemented two UN/EDIFACT applications; the first is a system to process licence applications for textile exports, the second a system to collect import/export declarations via EDI. Two more EDI systems are scheduled for implementation in early 2000, namely dutiable commodities permits and manifests for air, sea and rail. Customs recently launched its Internet homepage providing users with customs information, as well as with a mailbox for enquiries.
Indonesia has customs EDI in Jakarta (port and airport), Surabaya, Bandung and Semarang, using UN/EDIFACT to capture data about imports. There is also an EDI interface with the banks to provide payment notices. A client software module has been developed and provided for importers to generate and process the EDIFACT messages. A similar system is being planned for exports. Customs has a World Wide Web page which is used to provide information for the public.
In Malaysia, EDI is used by the Port Klang Authority (responsible for all ports). Malaysia (Dagang *Net) has completed re-mapping of the export system into UN/EDIFACT D95B, including code values, and this has been successfully tested. Implementation will begin once a legal framework is put in place.
Papua New Guinea uses the ASYCUDA system to capture declarations and manifest data. An older version is not yet capable of handling EDI. There were plans to implement ASYCUDA ++ late in 1998.
In the Philippines, a customs EDI gateway system and other services (such as translation, data validation, etc.) using ASYCUDA ++ is being implemented. Systems are in place for air and sea imports, but only partial systems for air and sea exports. Work is proceeding on systems for taxes and drawbacks, excise, data warehousing and internal administration, as well as airport passenger facilities. Implementation of full EDI is planned over the next three years. The air express company DHL signed a memorandum of understanding with the Bureau of Customs in August 1998 as a basis for participation in ACOS, the automated customs operations system which uses EDI to process import manifest information and trigger the billing and releasing process.
In the Republic of Korea, EDI systems are being used to capture data on imports, exports and drawbacks. There are some 30,000 registered EDI users in the Republic of Korea including trading firms, shipping lines, banks, transportation sectors, customs brokers, retail and wholesale, and warehousing, steel and medical institutions.
Singapore, since implementing TradeNet in January 1989 (a Web-based version of which is now available), has put in place a number of electronic systems to facilitate trade: ACCESS, an advanced clearance for courier and express shipment system for pre-clearance for express consignments; ACES, an air cargo EDI system for the submission of manifest reconciliation status; StoreLink, a system linking warehouse operators to customs; TRS, a trade registration system; GlobaLink, a system which provides international markets with business and trade-related information on Singapore; and ELVIS, an electronic textile verification system.
Thailand has implemented a UN/EDIFACT system to capture export declarations and an import UN/EDIFACT system is to be implemented by the end of 1998. Export systems are in place for air and sea. Systems also exist for compensation, budgets, human resources and inventory management. Passenger processing and express consignment systems are planned for the future. The customs authority has a Web homepage to provide information for the public, as well as for some customs transactions.
Source: The information for this box was taken from the paper by John M. Simon, "APEC customs initiatives on electronic commerce", presented at the Expert Group Meeting of Trade Promotion Policy Experts, Bangkok, 2 and 3 December 1998.
Box V.3. The development of Internet character sets in local languages
The development of the Thai character set (TIS620)
The development of the coded character set for the Thai language and the registration of the character set with the Internet Assigned Number Authority in 1998 has enabled Web browsers to display the Thai language properly. TIS620 is the standard Thai character set used in Thailand. The standard was issued by the Thai Industrial Standards Institute, the Thai national standards body, in 1986 and reissued in 1990. It has been in wide use among the Thai population since then.
Development of the Tamil character set (TSCII)
ISCII, India's national encoding standard has been in existence for more than a decade now, but has been used little in the computing world. One of the reasons for this is the predominantly English-speaking business community in India. However, all major Indian languages have many software packages catering to the data processing market. It is estimated that in Tamil itself at least 50 different encodings exist. A document created in one software cannot therefore be used in another. The disadvantages can be glaring on the Internet. For example, at least 10 newspapers/periodicals are already on-line, but each time a site is visited, one needs to download the font of that site to view it. This also creates added difficulties when communicating via e-mail.
Despite these limitations, there has been considerable progress and e-mails are being exchanged in Tamil using Tamil-based mailing lists (<http://www.tamil.net/list/>). These use fonts with proprietary encoding. To eliminate this confusion, a global conference arranged by the National University of Singapore was organized in early 1997, with high-level participation from the Tamil Nadu government. Two working groups were formed. The first was the Internet working group for standardizing a character-encoding scheme, and the second was the keyboard standardization committee formed by the Tamil Nadu government for discussing possible standardization of encoding and keyboard layouts. The government of Tamil Nadu released its recommendations, which can be found at: <http://www.cir.nus.edu.sg/tamilweb/tamilnet97/doc-draft/keyboard-layout.html>. In August 1998, the Internet working group, after deliberating for a year and a half through a mailing list, released an encoding standard named TSCII. After a few months of existence there are already 10 fonts, a couple of keyboard drivers for Windows and Mac, two Windows word-processing tools, and a Tcl/Tk-based editor (usable under Unix/Win/Mac), all freely downloadable from the Web. Links for these tools, mailings list archives and the standards document can be found at the TSCII Web site <http://www.tamil.net/tscii>.
The standard was also submitted to the Tamil Nadu government's Technical Committee for Information Technology for possible adoption. TSCII is being promoted as an interim standard for Tamil computing until Unicode-based tools are widely available. It is designed in such a way that it is usable in most of the existing English software packages without any special hardware, and very little software (only for keyboard input). The keyboard drivers are available free of charge. Since Tamil has relatively few glyphs, it was possible to design a reasonable, bilingual, 8-bit encoding. It is not certain if this will work for other Indian languages. However, such efforts can go a long way towards developing local language computing and content creation on the Web.
Box V.4. Electronic government information technology policy and standards in Malaysia
The Multimedia Supercorridor (MSC) was created to accelerate Malaysia's entry into the information age. Catalysing MSC are seven flagship applications: electronic government, multi-purpose cards, smart schools, telemedicine, R and D cluster, worldwide manufacturing Web and borderless marketing. Electronic government is one of the seven applications that is perceived to present an opportunity for the civil service, businesses and citizens working together and exploiting the potential of electronic commerce and multimedia technology for the benefit of all citizens.
Common standards and interoperability
Creativity and collaboration among all parties were considered essential to ensure success in realizing the vision embodied in MSC. Collaboration requires compatibility between different systems and processes, whether of government, business or citizens. In order to create the required platform, a minimum set of required standards, or common elements, needed to be defined. This was spelled out in the document entitled "Electronic government information technology policy and standards" to be used specifically in the implementation of electronic government. It outlines the minimum level of commonality designed to provide appropriate levels of interworking and interoperability between governments systems and processes, without placing undue constraints on integrating existing legacy systems and new technological solutions.
The "standards" document
The "standards" document establishes the definition and concept of ICT systems based upon widely accepted non-proprietary standards for the Government of Malaysia. It further establishes policies to implement an infrastructure that can support electronic government information technology policy and a common set of technologies that will allow personal computers, network devices and clients to work with servers over any network. These policies are expected to protect the government's investment by allowing mainframes, clients/servers, Internet and Intranets, as well as distributed software, to work together. The document also provides a framework to protect the government from being locked into specific technologies or from adopting a dead-end solution. Firms and citizens will no doubt find the adoption of these standards to be of great advantage in communicating seamlessly with government systems and with each other. The policies to be adopted emphasize a network-centric approach to computing, which leverages both Internet/Intranet and component-based technology. Focus is also directed towards the integration of different platforms into a seamless architecture.
Source: The information in this box was taken from a paper by Anuar Maarof, "Interoperability and standards in the multimedia supercorridor", presented at the Expert Group Meeting of Trade Promotion Policy Experts, Bangkok, 2 and 3 December 1998.
Box V.5. The legal policy framework for electronic commerce in Singapore
The Electronic Commerce Hotbed Policy Committee was formed in early 1997 by the Government of Singapore with a charter to commission policy research studies and to propose solutions on policy matters related to electronic commerce. It consisted of members from the National Computer Board and other relevant government agencies, with the National University of Singapore and Nanyang Technological University providing research and advisory support. The Policy Committee appointed a study group on legal, regulatory and enforcement issues arising from electronic commerce. The results of the study were publicly announced on 13 April 1998 and led to the adoption of the Electronic Transactions Act, 1998 and the Computer Misuse (Amendment) Act, 1998.
The key recommendations of the study group were:
(1) That a commercial code should be enacted along the lines of the UNCITRAL Model Law on Electronic Commerce to govern electronic transactions (electronic transactions bill).
(2) That legislation should be enacted to provide for the recognition of digital signatures and for a public key infrastructure with certification authorities.
(3) That legislation should be enacted to clarify the liability of service providers for third-party content.
(4) That legislative support should be provided for acceptance of electronic filing by government agencies and statutory boards.
(5) That penalties should be increased and distinctions made between various levels of computer crimes in the computer misuse act (amendment) bill.
(6) That law enforcement agencies should be provided with powers of investigation and gathering evidence in relation to computer data.
(7) That the Rules of Court should be amended to enhance the court's jurisdiction in relation to cross-boundary electronic commerce (proposed amendment to Order 11 of the Rules of Court).
(8) That the intellectual property laws should be reviewed to deal with difficulties caused by the application of traditional legal principles to new technology.
Most of the proposals were given legislative effect in an electronic transactions bill drafted by the study group. The Electronic Transactions Act, which came into force on 10 July 1998, provides the legal framework to address issues posed by electronic transactions in general and electronic commerce in particular. It covers authentication of the identity of the originator of electronic records and messages; the legal recognition of electronic signatures; the retention of records by electronic means; the integrity of electronic records transmitted over networks; the legal responsibility of service providers; the formation and validity of electronic contracts; the legislative framework for certification authorities and digital signatures; cross-certification of foreign digital signatures; government use of electronic records and signatures, in particular, the acceptance of electronic filing by government departments and statutory boards; and miscellaneous enforcement and investigation powers tailored for electronic transactions.
Source: The information in this box was taken from a paper by Charles Lim Aeng Cheng, "A legal policy framework for electronic commerce: the Singapore model", presented at the Expert Group Meeting of Trade Promotion Policy Experts, Bangkok, 2 and 3 December 1998.
Box V.6. Promoting electronic commerce in Thailand
The Department of Business Economics, Ministry of Commerce, is the lead agency in Thailand to coordinate with other government agencies and private sector associations on matters relating to international trade. The Department also represents Thailand in international trade negotiations, including those on trade facilitation and electronic commerce, in various multilateral and regional forums such as WTO, APEC, ASEAN, ASEM and BIMSTEC. On the domestic front, the Department has taken initiatives in creating awareness and has been a driving force in promoting both trade facilitation measures and the use of electronic commerce.
To date, electronic commerce has not been widely used in Thailand. Even though the number of Thai Internet users is estimated to have risen from 9,500 in 1994 to 550,000 in 1997, this is considered low compared with high-technology countries. Thailand has yet to develop a solid foundation for electronic commerce based on necessary elements such as access to a global electronic network, extensive telecommunications and ICT infrastructure, and qualified human resources. In order to address various policy issues relating to the implementation of electronic commerce, several subcommittees have been established. A subcommittee on electronic commerce chaired by the Deputy Prime Minister and Minister of Commerce was set up to encourage the implementation of electronic commerce and to make recommendations to the government on Thailand's position in electronic commerce negotiations in international forums. In June 1998, this subcommittee set up an advisory body chaired by the Director-General of the Department of Business Economics to conduct a pilot project on electronic commerce for Thai exports. In addition, another subcommittee to coordinate policies and the implementation of electronic commerce among relevant agencies was set up in July 1998.
The objectives of the pilot project were to promote trade (both business-to-business and business-to-consumer) via the Internet, stimulate exports and enhance trade opportunities for SMEs through electronic commerce. Feedback from the pilot project on problems will be used to improve the application in Thailand, as well as to amend Thailand's positions in international trade negotiations. This pilot project is being carried out with the support of various government agencies, Internet service providers, commercial banks and traders. Seven working groups have been formed to tackle specific problems: public relations, telecommunication services and training; marketing; consumer protection; customs and taxation; shipping and insurance; payment and security; and law and digital signature. The groups are working together to select 100 exporters with good business records to participate in the project. Each exporter will be given a free homepage on the Ministry of Commerce's Web site to promote and export his or her products. The project will run for one year from October 1998.
Several agencies are active in promoting electronic commerce. The Department of Export Promotion (www.exporter.moc.go.th; www.thaitradefair.com) and the Board of Investment (www.boi.go.th) have their own Web sites to publicize trade and investment information. The National Electronics and Computer Technology Centre has drafted laws relating to electronic commerce and information technology, namely the Internet Promotion Act, Computer Security Law, Computer Privacy Law, Data Protection Law, Electronic Data Interchange Law, Electronic Funds Transfer Law and Digital Signature Law. In addition, the Ministry of Justice (Arbitration Office) has been designated by the cabinet to draft an electronic commerce law based on the UNCITRAL Model Law.
Source:The information in this box was taken from a paper by Srirat Rastapara, "Initiatives in creating awareness and introducing trade facilitation and electronic commerce in Thailand", presented at the Seminar on Enhancing Integration of New Members into the ASEAN Process through Economic Cooperation and Trade Facilitation", Bangkok, 28 and 29 September 1998.