Response to EC Public consultation on ISDS in TAFTA/TTIP

Thanks to Glyn Moody and EDRi for alerting me to the European Commission's public consultation on the Investor State Dispute Settlement ISDS) process in the proposed EU-US trade agreement, the Trans-Atlantic Free Trade Agreement (TAFTA), also known as the Transatlantic Trade and Investment Partnership (TTIP). I've liberally plagiarised and very lightly edited EDRi's guide to answering the consultation in producing my responses to the consultation.

Given that the EC form only allows 90 minutes to answer the 13 complex questions and provides no facility for saving your responses as you go along, it's a good idea to draft your response in advance. Fortunately the good folk at EDRi have also provided a EC ISDS TTIP drafting tool for just that purpose.

Consultation text below and my answers are in the boxes. Short version - the EC think ISDS in TAFTA is a good thing. I disagree. I object to the whole idea of an ISDS system. It is an affront to the rule of law, the sovereignty of nation states and the whole notion of respect for fundamental human rights.

Public consultation on modalities for investment protection and ISDS in TTIP

VIEWS ON THE  PROPOSED TEXT TO BE USED AS THE BASIS FOR INVESTMENT NEGOTIATIONS WITH THE US

A. Substantive investment protection provisions

INTRODUCTION

Investment protection provisions consist of a limited number of standards guaranteeing that governments will respect certain fundamental principles of treatment that a foreign investor can rely upon when making a decision to invest. These fundamental principles of treatment are reflected in the rights that democratic governments grant to their own citizens and companies (such as no expropriation without compensation, access to justice, protection against coercion and harassment, non-discrimination), but they are not always guaranteed for foreigners or foreign companies. At the same time foreign investors, just as domestic ones, must fully respect the domestic legal regime of the host country.

The overall purpose of international investment agreements is to ensure that the country hosting an investment treats foreign investors in accordance with these fundamental principles, while maintaining the right to take measures for the public good according to the level of ambition that they deem appropriate.  

The specific EU objective in our trade and investment agreements, or in the investment protection section of the TTIP, is to strengthen the balance between investment protection and the right to regulate, through clarifying and improving the substantive investment protection provisions while at the same time preserving the right of States to take measures for legitimate public policy objectives.

More precisely, the EU is introducing modern and innovative provisions clarifying the meaning of those investment protection standards that have raised concerns in the past, notably: fair and equitable treatment (which in the EU's approach will be limited to a closed list of basic rights for investors) and indirect expropriation (which in the EU's approach will ensure that measures taken for legitimate public policy objectives cannot be considered to be an indirect expropriation). Under the EU's approach, the right to regulate is confirmed as a basic underlying principle. The EU also wants to ensure that all necessary exceptions and safeguards are in place, thus retaining essential public policy space for example to deal with a financial crisis.

The EU approach is further explained through the following background information and questions. For each relevant issue, we invite your comments and suggestions. Each issue is illustrated using reference texts as examples, taken from other investment agreements and from the approach developed in the EU-Canada (CETA) negotiations, which is the most recent text negotiated by the EU.

Question 1: Scope of the substantive investment protection provisions

Explanation of the issue

The scope of the agreement responds to a key question: What type of investments and investors should be protected? Our response is that investment protection should apply to those investments and to investors that have made an investment in accordance with the laws of the country where they have invested.

Approach in most investment agreements

Many international investment agreements have broad provisions defining “investor” and “investment”.

In most cases, the definition of “investment” is intentionally broad, as investment is generally a complex operation that may involve a wide range of assets, such as land, buildings, machinery, equipment, intellectual property rights, contracts, licences, shares, bonds, and various financial instruments. At the same time, most bilateral investment agreements refer to “investments made in accordance with applicable law”. This reference has worked well and has allowed ISDS tribunals to refuse to grant investment protection to investors who have not respected the law of the host state when making the investment (for example, by structuring the investment in such a way as to circumvent clear prohibitions in the law of the host state, or by procuring an investment fraudulently or through bribery).

In many investment agreements, the definition of “investor” simply refers to natural and juridical persons of the other Party to the agreement, without further refinement. This has allowed in some cases so–called “shell” or “mailbox” companies, owned or controlled by nationals or companies not intended to be protected by the agreement and having no real business activities in the country concerned, to make use of an investment agreement to launch claims before an ISDS tribunal.

The EU's objectives and approach

The EU wants to avoid abuse. This is achieved primarily by improving the definition of “investor”, thus eliminating so –called “shell” or “mailbox” companies owned by nationals of third countries from the scope: in order to qualify as a legitimate investor of a Party, a juridical person must have substantial business activities in the territory of that Party.

At the same time, the EU wants to rely on past treaty practice with a proven track record. The reference to “investments made in accordance with the applicable law” is one such example. Another is the clarification that protection is only granted in situations where investors have already committed substantial resources in the host state - and not when they are simply at the stage where they are planning to do so.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion of the objectives and approach taken in relation to the scope of the substantive investment protection provisions in TTIP?If you do not want to reply to this question, please type "No comment".

* (compulsory)

The European Commission"s proposal contains an excessively broad definition of investment, including intellectual property rights and even expectations of gain or profit. The proposed approach allows "forum shopping". For example, Australia does not have an ISDS agreement with the US, following its experience of how such agreements work in practice. US tobacco company Philip Morris sued Australia under a Hong Kong - Australia ISDS agreement, after setting up a subsidiary in Hong Kong. To stop forum shopping the EU wants to exclude so called "shell" or "mailbox" companies. According to the text on ISDS proposed in the EU-Canada trade agreement (CETA) - i.e. the first ISDS agreement the EU wants to conclude - a foreign company would first have to establish substantial business activities in Canada before this company can make use of the CETA agreement to sue the EU. This is a far smaller safeguard than it appears, as it will not stop multinationals since they are big enough to do this. ISDS systems are unbalanced: they give broad actionable rights to foreign investors but without any corresponding responsibilities. ISDS places obligations on states but not on foreign investors. ISDS systems give foreign investors greater rights than local investors. It gives them a bargaining power in relation to legislators, governments and courts. For example, a government that is planning environmental or consumer protection measures could be threatened with expensive and time-consuming ISDS cases if they do not respect the wishes of the foreign investors. I object to the whole idea of an ISDS system. It is an affront to the rule of law, the sovereignty of nation states and the whole notion of respect for fundamental human rights.

Question 2: Non-discriminatory treatment for investors

Explanation of the issue

Under the standards of non-discriminatory treatment of investors, a state Party to the agreement commits itself to treat foreign investors from the other Party in the same way in which it treats its own investors (national treatment), as well in the same way in which it treats investors from other countries (most-favoured nation treatment). This ensures a level playing field between foreign investors and local investors or investors from other countries. For instance, if a certain chemical substance were to be proven to be toxic to health, and the state took a decision that it should be prohibited, the state should not impose this prohibition only on foreign companies, while allowing domestic ones to continue to produce and sell that substance.

Non-discrimination obligations may apply after the foreign investor has made the investment in accordance with the applicable law (post-establishment), but they may also apply to the conditions of access of that investor to the market of the host country (pre-establishment).  

Approach in most existing investment agreements

The standards of national treatment and most-favoured nation (MFN) treatment are considered to be key provisions of investment agreements and therefore they have been consistently included in such agreements, although with some variation in substance.

Regarding national treatment, many investment agreements do not allow states to discriminate between a domestic and a foreign investor once the latter is already established in a Party’s territory. Other agreements, however, allow such discrimination to take place in a limited number of sectors.

Regarding MFN, most investment agreements do not clarify whether foreign investors are entitled to take advantage of procedural or substantive provisions contained in other past or future agreements concluded by the host country. Thus, investors may be able to claim that they are entitled to benefit from any provision of another agreement that they consider to be more favourable, which may even permit the application of an entirely new standard of protection that was not found in the original agreement. In practice, this is commonly referred to as "importation of standards".

The EU’s objectives and approach

The EU considers that, as a matter of principle, established investors should not be discriminated against after they have established in the territory of the host country, while at the same recognises that in certain rare cases and in some very specific sectors, discrimination against already established investors may need to be envisaged. The situation is different with regard to the right of establishment, where the Parties may choose whether or not to open certain markets or sectors, as they see fit.

On the "importation of standards" issue, the EU seeks to clarify that MFN does not allow procedural or substantive provisions to be imported from other agreements.

The EU also includes exceptions allowing the Parties to take measures relating to the protection of health, the environment, consumers, etc. Additional carve-outs would apply to the audio-visual sector and the granting of subsidies. These are typically included in EU FTAs and also apply to the non-discrimination obligations relating to investment. Such exceptions allow differences in treatment between investors and investments where necessary to achieve public policy objectives.

Link to reference text

Question:

Taking into account the above explanations and the text provided in annex as a reference, what is your opinion of the EU approach to non –discrimination in relation to the TTIP? Please explain.

If you do not want to reply to this question, please type "No comment".

* (compulsory)

Contrary to what it says in its consultation document, the Commission did not close a major well known loophole, known as the most favoured nation clause. It only closes it for procedural provisions, not for substantive provisions. Companies will not only be able to use the substantive investment protection provisions in TTIP, but they can cherry-pick protection from any other investment agreement the EU or EU Member States signed or will be signing.

Question 3: Fair and equitable treatment

Explanation of the issue

The obligation to grant foreign investors fair and equitable treatment (FET) is one of the key investment protection standards. It ensures that investors and investments are protected against treatment by the host country which, even if not expropriatory or discriminatory, is still unacceptable because it is arbitrary, unfair, abusive, etc. 

Approach in most investment agreements

The FET standard is present in most international investment agreements. However, in many cases the standard is not defined, and it is usually not limited or clarified. Inevitably, this has given arbitral tribunals significant room for interpretation, and the interpretations adopted by arbitral tribunals have varied from very narrow to very broad, leading to much controversy about the precise meaning of the standard. This lack of clarity has fueled a large number of ISDS claims by investors, some of which have raised concern with regard to the states' right to regulate. In particular, in some cases, the standard has been understood to encompass the protection of the legitimate expectations of investors in a very broad way, including the expectation of a stable general legislative framework.

Certain investment agreements have narrowed down the content of the FET standard by linking it to concepts that are considered to be part of customary international law, such as the minimum standard of treatment that countries must respect in relation to the treatment accorded to foreigners. However, this has also resulted in a wide range of differing arbitral tribunal decisions on what is or is not covered by customary international law, and has not brought the desired greater clarity to the definition of the standard.

An issue sometimes linked to the FET standard is the respect by the host country of its legal obligations towards the foreign investors and their investments (sometimes referred to as an "umbrella clause"), e.g. when the host country has entered into a contract with the foreign investor. Investment agreements may have specific provisions to this effect, which have sometimes been interpreted broadly as implying that every breach of e.g. a contractual obligation could constitute a breach of the investment agreement.

EU objectives and approach

The main objective of the EU is to clarify the standard, in particular by incorporating key lessons learned from case-law. This would eliminate uncertainty for both states and investors.

Under this approach, a state could be held responsible for a breach of the fair and equitable treatment obligation only for breaches of a limited set of basic rights, namely: the denial of justice; the disregard of the fundamental principles of due process; manifest arbitrariness; targeted discrimination based on gender, race or religious belief; and abusive treatment, such as coercion, duress or harassment. This list may be extended only where the Parties (the EU and the US) specifically agree to add such elements to the content of the standard, for instance where there is evidence that new elements of the standard have emerged from international law.

The “legitimate expectations” of the investor may be taken into account in the interpretation of the standard. However, this is possible only where clear, specific representations have been made by a Party to the agreement in order to convince the investor to make or maintain the investment and upon which the investor relied, and that were subsequently not respected by that Party. The intention is to make it clear that an investor cannot legitimately expect that the general regulatory and legal regime will not change. Thus the EU intends to ensure that the standard is not understood to be a “stabilisation obligation”, in other words a guarantee that the legislation of the host state will not change in a way that might negatively affect investors.

In line with the general objective of clarifying the content of the standard, the EU shall also strive, where necessary, to provide protection to foreign investors in situations in which the host state uses its sovereign powers to avoid contractual obligations towards foreign investors or their investments, without however covering ordinary contractual breaches like the non-payment of an invoice.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion of the approach to fair and equitable treatment of investors and their investments in relation to the TTIP?If you do not want to reply to this question, please type "No comment".

* (compulsory)

The Commission claims to have solved the issues with FET by introducing a closed list of rights. However, the list is not explicitly closed (does not mention "limited to" or similar). The elements of the FET list are open to interpretation, leaving it at the discretion of arbitrators. Experience of arbitration shows that the widest possible interpretation is often used. The FET standard contains a provision on the unpredictable "legitimate expectations" of investors. This protection goes beyond customary international law. The Commission claims that it intends to ensure that the fair and equitable standard ("legitimate expectations") is not understood to be a "stabilisation clause". If this is the intention of the Commission, it should be explicit in the text.

Question 4: Expropriation

Explanation of the issue

The right to property is a human right, enshrined in the European Convention of Human Rights, in the European Charter of Fundamental Rights as well as in the legal tradition of EU Member States. This right is crucial to investors and investments. Indeed, the greatest risk that investors may incur in a foreign country is the risk of having their investment expropriated without compensation. This is why the guarantees against expropriation are placed at the core of any international investment agreement.

Direct expropriations, which entail the outright seizure of a property right, do not occur often nowadays and usually do not generate controversy in arbitral practice. However, arbitral tribunals are confronted with a much more difficult task when it comes to assessing whether a regulatory measure of a state, which does not entail the direct transfer of the property right, might be considered equivalent to expropriation (indirect expropriation).

Approach in most investment agreements

In investment agreements, expropriations are permitted if they are for a public purpose, non-discriminatory, resulting from the due process of law and are accompanied by prompt and effective compensation. This applies to both direct expropriation (such as nationalisation) and indirect expropriation (a measure having an effect equivalent to expropriation).

Indirect expropriation has been a source of concern in certain cases where regulatory measures taken for legitimate purposes have been subject to investor claims for compensation, on the grounds that such measures were equivalent to expropriation because of their significant negative impact on investment. Most investment agreements do not provide details or guidance in this respect, which has inevitably left arbitral tribunals with significant room for interpretation.

The EU's objectives and approach

The objective of the EU is to clarify the provisions on expropriation and to provide interpretative guidance with regard to indirect expropriation in order to avoid claims against legitimate public policy measures.  The EU wants to make it clear that non-discriminatory measures taken for legitimate public purposes, such as to protect health or the environment, cannot be considered equivalent to an expropriation, unless they are manifestly excessive in light of their purpose. The EU also wants to clarify that the simple fact that a measure has an impact on the economic value of the investment does not justify a claim that an indirect expropriation has occurred.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion of the approach to dealing with expropriation in relation to the TTIP? Please explain.If you do not want to reply to the question, please type "No comment".

* (compulsory)

The scope of the substantive provision is very broad. Claims can be initiated after direct or indirect expropriation. Indirect expropriation is opening opportunities for an indefinite amount of claims - any investor could challenge any measure at any time based on any belief that profits were reduced by government actions. Creating open-ended rights to be sued by companies from a country as litigious as the United States is clearly a major risk. This protection has an exception which is limited to measures protecting "legitimate public welfare objectives". The problem is that ISDS arbitrators, whose expertise is generally investment and not public welfare, will decide on what legitimate public welfare objectives are and whether or not measures are manifestly excessive. The Commission proposal gives investors much stronger protection than Article 1 of Protocol 1 to the European Convention on Human Rights (ECHR). Under Article 1 of Protocol 1 to the ECHR every natural or legal person is entitled to the peaceful enjoyment of his possessions. This "shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties." In these circumstances it is up to the states to decide what is "deem[ed] necessary". However, under ISDS, the arbitrators will do the assessment.

Question 5: Ensuring the right to regulate and investment protection

Explanation of the issue

In democratic societies, the right to regulate of states is subject to principles and rules contained in both domestic legislation and in international law. For instance, in the European Convention on Human Rights, the Contracting States commit themselves to guarantee a number of civil and political rights. In the EU, the Constitutions of the Member States, as well as EU law, ensure that the actions of the state cannot go against fundamental rights of the citizens. Hence, public regulation must be based on a legitimate purpose and be necessary in a democratic society.

Investment agreements reflect this perspective. Nevertheless, wherever such agreements contain provisions that appear to be very broad or ambiguous, there is always a risk that the arbitral tribunals interpret them in a manner which may be perceived as a threat to the state's right to regulate. In the end, the decisions of arbitral tribunals are only as good as the provisions that they have to interpret and apply.

 Approach in most investment agreements

Most agreements that are focused on investment protection are silent about how public policy issues, such as public health, environmental protection, consumer protection or prudential regulation, might interact with investment. Consequently, the relationship between the protection of investments and the right to regulate in such areas, as envisaged by the contracting Parties to such agreements is not clear and this creates uncertainty.

In more recent agreements, however, this concern is increasingly addressed through, on the one hand, clarification of the key investment protection provisions that have proved to be controversial in the past and, on the other hand, carefully drafted exceptions to certain commitments. In complex agreements such as free trade agreements with provisions on investment, or regional integration agreements, the inclusion of such safeguards is the usual practice.

The EU's objectives and approach

The objective of the EU is to achieve a solid balance between the protection of investors and the Parties' right to regulate.

First of all, the EU wants to make sure that the Parties' right to regulate is confirmed as a basic underlying principle. This is important, as arbitral tribunals will have to take this principle into account when assessing any dispute settlement case.

Secondly, the EU will introduce clear and innovative provisions with regard to investment protection standards that have raised concern in the past (for instance, the standard of fair and equitable treatment is defined based on a closed list of basic rights; the annex on expropriation clarifies that non-discriminatory measures for legitimate public policy objectives do not constitute indirect expropriation). These improvements will ensure that investment protection standards cannot be interpreted by arbitral tribunals in a way that is detrimental to the right to regulate.

Third, the EU will ensure that all the necessary safeguards and exceptions are in place. For instance, foreign investors should be able to establish in the EU only under the terms and conditions defined by the EU. A list of horizontal exceptions will apply to non-discrimination obligations, in relation to measures such as those taken in the field of environmental protection, consumer protection or health (see question 2 for details). Additional carve-outs would apply to the audiovisual sector and the granting of subsidies. Decisions on competition matters will not be subject to investor-to-state dispute settlement (ISDS). Furthermore, in line with other EU agreements, nothing in the agreement would prevent a Party from taking measures for prudential reasons, including measures for the protection of depositors or measures to ensure the integrity and stability of its financial system. In addition, EU agreements contain general exceptions applying in situations of crisis, such as in circumstances of serious difficulties for the operation of the exchange rate policy or monetary policy, balance of payments or external financial difficulties, or threat thereof.

In terms of the procedural aspects relating to ISDS, the objective of the EU is to build a system capable of adapting to the states' right to regulate. Wherever greater clarity and precision proves necessary in order to protect the right to regulate, the Parties will have the possibility to adopt interpretations of the investment protection provisions which will be binding on arbitral tribunals.  This will allow the Parties to oversee how the agreement is interpreted in practice and, where necessary, to influence the interpretation.

The procedural improvements proposed by the EU will also make it clear that an arbitral tribunal will not be able to order the repeal of a measure, but only compensation for the investor.

Furthermore, frivolous claims will be prevented and investors who bring claims unsuccessfully will pay the costs of the government concerned (see question 9).Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion with regard to the way the right to regulate is dealt with in the EU's approach to TTIP?
If you do not want to reply to this question, please type "No comment".

* (compulsory)

I fundamentally oppose the fact that investment protection is placed above the sovereign right to regulate. Fundamental social rights and human rights must not be limited by economic freedoms Definitions are vague. A very broad definition of "investment" is being proposed. The right to regulate is only an exception to investment protection. The preamble mentions the right to regulate but as it is not binding, arbitrators have the right to disregard the preamble. The preamble limits the right to regulate to "legitimate" objectives: What are legitimate objectives? There is legal uncertainty. Ultimately, "legitimate" is a constraint on the arbitrators, but the arbitrators will decide on how narrowly this will be understood. Proposed safeguards to protect the right to regulate are not efficient and do not reduce the risk of chilling effect, as arbitrators will have the power of final interpretation. Companies will have the ability to use ISDS to prevent or lobby more effectively to change new legislation, influencing the state willingness to legislate. If, in practice, the interpretation made by the arbitrators is unbalanced, there seems to be no realistic possibility for the parties of the agreement to amend the agreement to create the balance that they currently claim to want. There is no safeguard to ensure respect of human rights. The Commission"s proposal does not provide proper protection for human rights. There seems to be no mention of human rights in the proposed text. The text refers to article 14 GATS, which mentions privacy but not as a human right and only as a exception limited to investment and trade rules. ISDS tribunals will be able to review decisions taken by national courts, but also the European Court of Human Rights and the European Court of Justice. This ensures compliance with investors" rights, but almost certainly to the detriment of human rights. People whose rights may be affected by the outcome of cases have no standing before the tribunals. For example, a Human Rights advocate cannot intervene in the ISDS system. Due to the lack of basic institutional safeguards ensuring the independence and impartiality of the ISDS mechanism, the respect for human rights is far from being ensured by the proposed text. The EU should absolutely NOT sign an agreement that would create a risk of nullifying or impairing the enjoyment of human rights. Experience shows that there are risks, highlighted for example the "Eli Lilly case" against Canada. Following a minor adjustment to Canadian patent law, to facilitate better access to medicine, the US pharmaceutical company Eli Lilly claimed $500 million of damages in ISDS arbitration. Eli Lilly lambasted the Canadian patent policy framework as "discriminatory, arbitrary, unpredictable and remarkably subjective", and accused Canada of expropriation. If a minor adjustment already leads to such accusations, bigger reforms will certainly be attacked. Threats will have a chilling effect, preventing democratically elected decision-makers from acting in the best interests of citizens. Innovation is at stake - if legislation cannot be changed (in fear of high damages being imposed by ISDS tribunals), this will prevent new models evolving, locking in existing and outdated legislation. Companies can challenge reforms using the MFN clauses. They may claim the treatment is not fair and equitable (manifestly arbitrary or abusive) or that the EU expropriates (manifestly excessive, the measure does not serve legitimate public welfare objectives) or discriminates against them. Leaving the decision in the hands of arbitrators who decide on investment rules and potential profit/loss, raises serious concerns regarding the states' ability to regulate.

B. Investor-to-State dispute settlement (ISDS)

INTRODUCTION

Investor-to-state dispute settlement (ISDS) is a legal instrument that allows investors to bring a claim before an arbitration tribunal that the host state has not respected the investment protection rules under TTIP. Domestic remedies would be preferable, but TTIP provisions cannot be invoked directly in front of a national court. Despite the general solidity of developed court systems such as the US and the EU, it is possible that investors will not be given effective access to justice, e.g. if they are denied access to appeal or due process, leaving them without any effective legal remedy. ISDS is therefore necessary to allow legitimate claims to be pursued. In such cases, the investors would have to prove that the measures have breached the investment protection provisions and that it caused them damage.  

The possibility for investors to resort to ISDS is a standard feature of virtually all the 3000 investment agreements in existence today, including the 1400 signed by EU Member States. Most of these agreements contain a standard paragraph stating that investors can to go to ISDS in case of a breach of the investment protection provisions. The agreements themselves do not contain any precise procedural framework for how an ISDS case should be handled by a tribunal. The ISDS tribunal must work on the basis of international arbitration rules that set a general procedural framework. The most common are the rules of the International Centre for the Settlement of Investment Disputes (“ICSID”, a World Bank body) or those of the United Nations Commission for International Trade Law (“UNCITRAL”). However, these rules only partially address the problems which have come to light over the last years with the ISDS system, notably on transparency, the conduct of arbitrators and the absence of any appeal mechanism. 

The EU is working to develop an efficient and modern ISDS mechanism which is equipped to deal with these problems. The EU will improve the ISDS mechanism under TTIP compared to existing investment agreements. The improvements are explained in the questions that follow where we ask you to comment and make suggestions. Through these improvements, the EU aims to ensure a transparent, accountable and well-functioning ISDS system that reflects the public interest and policy objectives. The EU will encourage the amicable settlement of disputes, through a required period for consultations, and the possibility of mediation. The EU also aims to enhance consistency of rulings, including by the establishment of an appeal mechanism and by allowing for the governments to provide guidance and interpretation so that their intentions are respected. A further consideration is how to avoid frivolous or unfounded claims; the EU will introduce mechanisms to allow for a quick dismissal of such claims. Transparency and the possibility for stakeholders to make their views heard in the process underpin these improvements and are essential for an accountable and credible ISDS system.   

Question 6: Transparency in ISDS

Explanation of the issue

In most ISDS cases, no or little information is made available to the public, hearings are not open and third parties are not allowed to intervene in the proceedings. This makes it difficult for the public to know the basic facts and to evaluate the claims being brought by either side.

This lack of openness has given rise to concern and confusion with regard to the causes and potential outcomes of ISDS disputes. Transparency is essential to ensure the legitimacy and accountability of the system. It enables stakeholders interested in a dispute to be informed and contribute to the proceedings. It fosters accountability in arbitrators, as their decisions are open to scrutiny. It contributes to consistency and predictability as it helps create a body of cases and information that can be relied on by investors, stakeholders, states and ISDS tribunals.

Approach in most existing investment agreements

Under the rules that apply in most existing agreements, both the responding state and the investor need to agree to permit the publication of submissions. If either the investor or the responding state does not agree to publication, documents cannot be made public. As a result, most ISDS cases take place behind closed doors and no or a limited number of documents are made available to the public.

The EU’s objectives and approach 

The EU's aim is to ensure transparency and openness in the ISDS system under TTIP. The EU will include provisions to guarantee that hearings are open and that all documents are available to the public. In ISDS cases brought under TTIP, all documents will be publicly available (subject only to the protection of confidential information and business secrets) and hearings will be open to the public. Interested parties from civil society will be able to file submissions to make their views and arguments known to the ISDS tribunal. 

The EU took a leading role in establishing new United Nations rules on transparency^[1] in ISDS. The objective of transparency will be achieved by incorporating these rules into TTIP.

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^[1] UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration http://www.uncitral.org/pdf/english/texts/arbitration/rules-on-transparency/Rules-on-Transparency-E.pdf

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, please provide your views on whether this approach contributes to the objective of the EU to increase transparency and openness in the ISDS system for TTIP. Please indicate any additional suggestions you may have. 

If you do not want to reply to this question, please type "No comment".

* (compulsory)

No it does not increase transparency and openness in the ISDS system for TTIP. The Commission proposes the adoption of the 2014 UNCITRAL rules on transparency. However these rules include a chapter on exceptions empowering an arbitration court to block the publication of documents related to a large variety of measures. Arbitrators will still be able to block access to documents or close the hearings in order to protect "the integrity of the arbitral process". While the Commission's proposals make a very bad situation less bad, we are still faced with a situation where the proposed rules will not solve the problem of opacity of the ISDS mechanism.

Question 7: Multiple claims and relationship to domestic courts

Explanation of the issue

Investors who consider that they have grounds to complain about action taken by the authorities (e.g. discrimination or lack of compensation after expropriation) often have different options. They may be able to go to domestic courts and seek redress there. They or any related companies may be able to go to other international tribunals under other international investment treaties.

It is often the case that protection offered in investment agreements cannot be invoked before domestic courts and the applicable legal rules are different. For example, discrimination in favour of local companies is not prohibited under US law but is prohibited in investment agreements. There are also concerns that, in some cases domestic courts may favour the local government over the foreign investor e.g. when assessing a claim for compensation for expropriation or may deny due process rights such as the effective possibility to appeal. Governments may have immunity from being sued. In addition, the remedies are often different. In some cases government measures can be reversed by domestic courts, for example if they are illegal or unconstitutional. ISDS tribunals cannot order governments to reverse measures.

These different possibilities raise important and complex issues. It is important to make sure that a government does not pay more than the correct compensation. It is also important to ensure consistency between rulings.

Approach in most existing investment agreements

Existing investment agreements generally do not regulate or address the relationship with domestic courts or other ISDS tribunals. Some agreements require that the investor choses between domestic courts and ISDS tribunals. This is often referred to as "fork in the road" clause.

The EU’s objectives and approach

As a matter of principle, the EU’s approach favours domestic courts. The EU aims to provide incentives for investors to pursue claims in domestic courts or to seek amicable solutions – such as mediation. The EU will suggest different instruments to do this. One is to prolong the relevant time limits if an investor goes to domestic courts or mediation on the same matter, so as not to discourage an investor from pursuing these avenues.  Another important element is to make sure that investors cannot bring claims on the same matter at the same time in front of an ISDS tribunal and domestic courts. The EU will also ensure that companies affiliated with the investor cannot bring claims in front of an ISDS tribunal and domestic courts on the same matter and at the same time. If there are other relevant or related cases, ISDS tribunals must take these into account. This is done to avoid any risk that the investor is over-compensated and helps to ensure consistency by excluding the possibility for parallel claims.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, please provide your views on the effectiveness of this approach for balancing access to ISDS with possible recourse to domestic courts and for avoiding conflicts between domestic remedies and ISDS in relation to the TTIP. Please indicate any further steps that can be taken. Please provide comments on the usefulness of mediation as a means to settle disputes.

If you do not want to repy to this question, please type "No comment".

* (compulsory)

There is no balance here. A) Independence National courts are independent, the ISDS tribunals are not. National courts are designed to be independent and impartial (principle of separation of powers). National courts have rules concerning procedural fairness such as legal standing of others whose rights or interests are affected by the outcome of a case. National legal systems have to balance actionable rights for investors but also actionable responsibilities for investors. ISDS systems lack conventional institutional safeguards for independence: tenure, prohibitions on outside remuneration by the arbitrator and neutral appointment of arbitrators. B) Detriment of national courts The European Commission is promoting ISDS, to the detriment of national courts. ISDS would allow companies to circumvent national courts. The Commission states it favours national courts, however, investors can start ISDS cases without any requirement to go through national courts. Once an investor chooses the ISDS system, it cannot go to a national court. However, investors are still allowed to opt for the ISDS system after seeking damages in national courts. ISDS takes precedence over a national court as investors are always able to use it as a final option. Under ISDS, arbitrators can review all national court decisions, including decisions of supreme courts and human rights courts. C) Unfair protection ISDS does not provide fair protection. In commercial arbitration, a party can appeal to a court if he/she considers that the legal interpretation done by the arbitrator(s) is wrong. This is not possible with the ISDS system, as arbitrators are the final interpreters of the investment protection rules. Arbitrators tend to interpret the rules very broadly, as this gives them the maximum amount of power under the existing rules. National courts should be able to protect investors of the other party to the agreement. This should be clearly stated in the international agreement. If a state does not implement investor protection, this can then be solved by state-to-state dispute settlement. In the EU, companies can use national courts where appeal mechanisms exist. Foreign investors are favoured over domestic investors: if foreign investors are being expropriated, they can use ISDS. However, domestic investors will not have this opportunity. ISDS arbitrators can award unlimited damages.

Question 8: Arbitrator ethics, conduct and qualifications

Explanation of the issue

There is concern that arbitrators on ISDS tribunals do not always act in an independent and impartial manner. Because the individuals in question may not only act as arbitrators, but also as lawyers for companies or governments, concerns have been expressed as to potential bias or conflicts of interest.

Some have also expressed concerns about the qualifications of arbitrators and that they may not have the necessary qualifications on matters of public interest or on matters that require a balancing between investment protection and e.g. environment, health or consumer protection.

Approach in existing investment agreements

Most existing investment agreements do not address the issue of the conduct or behaviour of arbitrators. International rules on arbitration address the issue by allowing the responding government or the investor to challenge the choice of arbitrator because of concerns of suitability.

Most agreements allow the investor and the responding state to select arbitrators but do not establish rules on the qualifications or a list of approved, qualified arbitrators to draw from.

 
The EU’s objective and approach 

The EU aims to establish clear rules to ensure that arbitrators are independent and act ethically. The EU will introduce specific requirements in the TTIP on the ethical conduct of arbitrators, including a code of conduct. This code of conduct will be binding on arbitrators in ISDS tribunals set up under TTIP.  The code of conduct also establishes procedures to identify and deal with any conflicts of interest.  Failure to abide by these ethical rules will result in the removal of the arbitrator from the tribunal. For example, if a responding state considers that the arbitrator chosen by the investor does not have the necessary qualifications or that he has a conflict of interest, the responding state can challenge the appointment. If the arbitrator is in breach of the Code of Conduct, he/she will be removed from the tribunal. In case the ISDS tribunal has already rendered its award and a breach of the code of conduct is found, the responding state or the investor can request a reversal of that ISDS finding.

In the text provided as reference (the draft EU-Canada Agreement), the Parties (i.e. the EU and Canada) have agreed for the first time in an investment agreement to include rules on the conduct of arbitrators, and have included the possibility to improve them further if necessary. In the context of TTIP these would be directly included in the agreement.

As regards the qualifications of ISDS arbitrators, the EU aims to set down detailed requirements for the arbitrators who act in ISDS tribunals under TTIP. They must be independent and impartial, with expertise in international law and international investment law and, if possible, experience in international trade law and international dispute resolution. Among those best qualified and who have undertaken such tasks will be retired judges, who generally have experience in ruling on issues that touch upon both trade and investment and on societal and public policy issues. The EU also aims to set up a roster, i.e. a list of qualified individuals from which the Chairperson for the ISDS tribunal is drawn, if the investor or the responding state cannot otherwise agree to a Chairperson. The purpose of such a roster is to ensure that the EU and the US have agreed to and vetted the arbitrators to ensure their abilities and independence.  In this way the responding state chooses one arbitrator and has vetted the third arbitrator.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, please provide your views on these procedures and in particular on the Code of Conduct and the requirements for the qualifications for arbitrators in relation to the TTIP agreement. Do they improve the existing system and can further improvements be envisaged?If you do not want to reply to this question, please type "No comment".

* (compulsory)

A not yet in existence code of conduct cannot solve the problem of the existing lack of independence and accountability of the arbitrators. Adjudicative processes need institutional safeguards for independence and a credible and enforceable code of conduct. A) Uncertainty about the code of conduct The Commission states that the EU aims to set down a code of conduct for the arbitrators, to be negotiated with USA. In the reference text, the Commission only mentions a possible future code of conduct. The Commission says that the planned code of conduct will be binding but how will we know for sure that it will be binding? How will they make sure that it is applied/implemented? Why is the Commission so certain that a credible, complete, enforceable code can be agreed with the USA? Not only the text does not provide a sample code of conduct to comment on but it also does not clearly state what will be addressed in this possible future code. The text allows a delay of two years after the implementation of the treaty to put a code of conduct in place. What will happen in the meantime? Will there ever be a code of conduct? There will be neither institutional safeguards for independence nor a code of conduct. How will conflict of interests be solved? B) Why we need institutional safeguards and a binding code of conduct? As previously stated, ISDS arbitrators have great power. They can review all decisions of the state, can award unlimited damages. Furthermore, ISDS systems lack conventional institutional safeguards for independence. The appointment of arbitrators is not neutral: - Each party chooses one arbitrator and the third one is appointed by the Secretary General of ICSID if the parties do not agree. The Secretary-General of ICSID also decides on conflicts of interest. - The ICSID Secretary-General is appointed by the President of the World Bank who is himself appointed by the President of the United States. Under ICSID rules the President of the World Bank appoints all three of the arbitrators in appeal cases. ISDS therefore gives the US an unfair advantage. Arbitrators are often investment lawyers who are lacking independence and impartiality. The large sums awarded to arbitrators create incentives to accept frivolous cases, let cases drag on, let the investor (the only party that can initiate cases) win to generate more cases.

Question 9: Reducing the risk of frivolous and unfounded cases

Explanation of the issue

As in all legal systems, cases are brought that have little or no chance of succeeding (so-called “frivolous claims”). Despite eventually being rejected by the tribunals, such cases take up time and money for the responding state. There have been concerns that protracted and frequent litigation in ISDS could have an effect on the policy choices made by states. This is why it is important to ensure that there are mechanisms in place to weed out frivolous disputes as early as possible.

Another issue is the cost of ISDS proceedings. In many ISDS cases, even if the responding state is successful in defending its measures in front of the ISDS tribunal, it may have to pay substantial amounts to cover its own defence.

Approach in most existing investment agreements:

Under existing investment agreements, there are generally no rules dealing with frivolous claims. Some arbitration rules however do have provisions on frivolous claims. As a result, there is a risk that frivolous or clearly unfounded claims are allowed to proceed. Even though the investor would lose such claims, the long proceedings and the implied questions surrounding policy can be problematic.

The issue of who bears the cost is also not addressed in most existing investment agreements. Some international arbitration rules have provisions that address the issue of costs in very general terms. In practice, ISDS tribunals have often decided that the investor and responding state pay their own legal costs, regardless of who wins or loses.

The EU’s objectives and approach

The EU will introduce several instruments in TTIP to quickly dismiss frivolous claims.

ISDS tribunals will be required to dismiss claims that are obviously without legal merit or legally unfounded. For example, this would be cases where the investor is not established in the US or the EU, or cases where the ISDS tribunal can quickly establish that there is in fact no discrimination between domestic and foreign investors. This provides an early and effective filtering mechanism for frivolous claims thereby avoiding a lengthy litigation process.

To further discourage unfounded claims, the EU is proposing that the losing party should bear all costs of the proceedings. So if investors take a chance at bringing certain claims and fail, they have to pay the full financial costs of this attempt.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, please provide your views on these mechanisms for the avoidance of frivolous or unfounded claims and the removal of incentives in relation to the TTIP agreement. Please also indicate any other means to limit frivolous or unfounded claims.

If you do not want to reply to this question, please type "No comment".

* (compulsory)

These mechanisms for the avoidance of frivolous or unfounded claims and the removal of incentives in relation to the TTIP agreement are likely to be completely ineffective. Contrary to what it says in its consultation document, the Commission did not close a major well known loophole, known as the most favoured nation clause. It only closes it for procedural provisions, not for substantive provisions. Companies will not only be able to use the substantive investment protection provisions in TTIP, but they can cherry-pick protection from any other investment agreement the EU or EU Member States signed or will be signing. The only means to limit frivolous or unfounded claims is to make the financial risks and penalties for pursuing them very high.

Question 10: Allowing claims to proceed (filter)

Explanation of the issue

Recently, concerns have been expressed in relation to several ISDS claims brought by investors under existing investment agreements, relating to measures taken by states affecting the financial sector, notably those taken in times of crisis in order to protect consumers or to maintain the stability and integrity of the financial system.

To address these concerns, some investment agreements have introduced mechanisms which grant the regulators of the Parties to the agreement the possibility to intervene (through a so-called “filter” to ISDS) in particular ISDS cases that involve measures ostensibly taken for prudential reasons. The mechanism enables the Parties to decide whether a measure is indeed taken for prudential reasons, and thus if the impact on the investor concerned is justified. On this basis, the Parties may therefore agree that a claim should not proceed.

Approach in most existing investment agreements

The majority of existing investment agreements privilege the original intention of such agreements, which was to avoid the politicisation of disputes, and therefore do not contain provisions or mechanisms which allow the Parties the possibility to intervene under particular circumstances in ISDS cases.

The EU’s objectives and approach

The EU like many other states considers it important to protect the right to regulate in the financial sector and, more broadly, the overriding need to maintain the overall stability and integrity of the financial system, while also recognizing the speed needed for government action in case of financial crisis.

Link to reference text

Question:

Some investment agreements include filter mechanisms whereby the Parties to the agreement (here the EU and the US) may intervene in ISDS cases where an investor seeks to challenge measures adopted pursuant to prudential rules for financial stability. In such cases the Parties may decide jointly that a claim should not proceed any further. Taking into account the above explanation and the text provided in annex as a reference, what are your views on the use and scope of such filter mechanisms in the TTIP agreement?If you do not want to reply to this question, please type "No comment".

* (compulsory)

The filter mechanism proposed by the Commission has a very limited scope as it solely focuses on financial issues. It is dependent on other parties and does not help against the chilling effect of anticipated cases or threats to sue the state. In order to filter out an undeserving claim, states will have to demonstrate that the public measure challenged by the investors was taken for "prudential reasons", establishing significant legal hurdles to state intervention in cases where, for example, investors are deliberately circumventing state regulations.

Question 11: Guidance by the Parties (the EU and the US) on the interpretation of the agreement  

Explanation of the Issue

When countries negotiate an agreement, they have a common understanding of what they want the agreement to mean. However, there is a risk that any tribunal, including ISDS tribunals interprets the agreement in a different way, upsetting the balance that the countries in question had achieved in negotiations – for example, between investment protection and the right to regulate. This is the case if the agreement leaves room for interpretation. It is therefore necessary to have mechanisms which will allow the Parties (the EU and the US) to clarify their intentions on how the agreement should be interpreted.

Approach in existing investment agreements

Most existing investment agreements do not permit the countries who signed the agreement in question to take part in proceedings nor to give directions to the ISDS tribunal on issues of interpretation.

The EU’s objectives and approach 

The EU will make it possible for the non-disputing Party (i.e. the EU or the US) to intervene in ISDS proceedings between an investor and the other Party. This means that in each case, the Parties can explain to the arbitrators and to the Appellate Body how they would want the relevant provisions to be interpreted.  Where both Parties agree on the interpretation, such interpretation is a very powerful statement, which ISDS tribunals would have to respect.

The EU would also provide for the Parties (i.e. the EU and the US) to adopt binding interpretations on issues of law, so as to correct or avoid interpretations by tribunals which might be considered to be against the common intentions of the EU and the US. Given the EU’s intention to give clarity and precision to the investment protection obligations of the agreement, the scope for undesirable interpretations by ISDS tribunals is very limited. However, this provision is an additional safety-valve for the Parties.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, please provide your views on this approach to ensure uniformity and predictability in the interpretation of the agreement to correct the balance? Are these elements desirable, and if so, do you consider them to be sufficient?If you do not want to reply to this question, please type "No comment".

* (compulsory)

No, the elements relating to ensuring uniformity and predictability in the interpretation of the agreement to correct the balance are not sufficient. The parties (i.e. the EU and the US) would be able to adopt interpretations of the investmen provisions. These are meant to be binding on ISDS tribunals. Under the North American Free Trade Agreement this possibility has hardly been used, and the arbitrators took minimal account of the interpretations. There is no enforcement procedure for the "binding interpretations". Moreover, the EU will be dependent on the other party. This is not comparable with the legislative feedback loop in a democratic society. It depends on the cooperation of the other party, moreover the executive will be in charge of the interpretation not the legislator. National supreme courts are embedded in a constitutional and legal culture, they tend to respect the legislator"s intentions. ISDS tribunals are mostly constituted by foreign arbitrators and have multiple motivations to use a broad interpretation of the texts.

Question 12: Appellate Mechanism and consistency of rulings

Explanation of the issue

In existing investment agreements, the decision by an ISDS tribunal is final. There is no possibility for the responding state, for example, to appeal to a higher instance to challenge the level of compensation or other aspects of the ISDS decision except on very limited procedural grounds. There are concerns that this can lead to different or even contradictory interpretations of the provisions of international investment agreements. There have been calls by stakeholders for a mechanism to allow for appeal to increase legitimacy of the system and to ensure uniformity of interpretation.

  

Approach in most existing investment agreements

No existing international investment agreements provide for an appeal on legal issues. International arbitration rules allow for annulment of ISDS rulings under certain very restrictive conditions relating to procedural issues. 

The EU’s objectives and approach 

The EU aims to establish an appellate mechanism in TTIP so as to allow for review of ISDS rulings. It will help ensure consistency in the interpretation of TTIP and provide both the government and the investor with the opportunity to appeal against awards and to correct errors. This legal review is an additional check on the work of the arbitrators who have examined the case in the first place.

In agreements under negotiation by the EU, the possibility of creating an appellate mechanism in the future is envisaged. However, in TTIP the EU intends to go further and create a bilateral appellate mechanism immediately through the agreement.

Link to reference text

Question:

Taking into account the above explanation and the text provided in annex as a reference, please provide your views on the creation of an appellate mechanism in TTIP as a means to ensure uniformity and predictability in the interpretation of the agreement.If you do not want to reply to this question, please type "No comment".

* (compulsory)

The ICSID rules have limited appeal possibilities. In appeal cases, all three arbitrators are appointed by the president of the World Bank. The president of the World Bank is appointed by the President of the United States. These ICSID rules will apply under the trade and investment agreements with Canada and other countries, unless the EU and Canada (or other country) agree otherwise later on. There is no certainty whether this will happen and the outcome is dependent on both parties. The EU aims to establish an appellate mechanism in TTIP. The outcome of such a new appeal mechanism is very uncertain as with the current system the US have a strong advantage that it has no reason to give up. There is uncertainty regarding the outcome of this objective. In this appellate mechanism, other arbitrators will decide on the basis of the same broken rules of the ISDS system.

C. General assessment

What is your overall assessment of the proposed approach on substantive standards of protection and ISDS as a basis for investment negotiations between the EU and US?

Do you see other ways for the EU to improve the investment system?  

Are there any other issues related to the topics covered by the questionnaire that you would like to address?

If you do not want to reply to these questions, please type "No comment". 

* (compulsory)

I object to the whole idea of an ISDS system. It is an affront to the rule of law, the sovereignty of nation states and the whole notion of respect for fundamental human rights. There are serious flaws in this consultation process. First: it fails to give European communities the possibility of responding to the proposed TTIP in its entirety. Second, the consultation is written in such a technical (and occasionally obscure) language that it excludes everyone but investment law experts. As most of these are arbitration practitioners, the questionnaire in effect invites ISDS-friendly responses by design. Third, the consultation is not in fact a consultation on the TTIP text but on a CETA text that was valid in March but has since progressed further in the CETA negotiations. In addition, the Commission says that it wants to build on CETA but also refer back to existing treaty practice. It is therefore a consultation on a non-existent text; given the significance of the details, this renders the consultation all but useless. Fourth, the consultation starts from the assumption that ISDS should be in the agreement. This is despite the fact that in the negotiating mandate it states that "the inclusion of investment protection and investor-to-state dispute settlement (ISDS) will depend on whether a satisfactory solution, meeting the EU interests concerning the issues covered by paragraph 23 is achieved". ISDS is a flawed mechanism and the measures proposed by the European Commission do not address the systemic risks of ISDS. The proposed text does not solve the problem of lack of conventional institutional safeguards for independence and impartiality of arbitrators, harmful incentives and risk for the right to regulate (see questions 5,7 and 8). The ISDS system gives the US a clear and unjustifiable advantage (see question 12). ISDS agreements concluded by EU member states are stand-alone investment agreements from which it is possible to withdraw. The EU considers adding ISDS to its trade agreements. This would create a lock-in, as it is almost impossible to withdraw from trade agreements. To avoid this lock-in, the EU should not deviate from standing European practice of stand-alone investment agreements, the EU should not add ISDS to trade agreements. So far ISDS has been more favourable to US companies, it is therefore to be expected that it is not in the EU best interests. Indeed, the US never lost an ISDS case so far. In the Commission"s proposal, the rights of investors trump human rights. This is fundamentally incompatible with Europe"s human rights system (see question 5). The Commission"s proposals threaten our privacy and reform of copyright and patent law (see question 5). The EU aims to create a global standard. Presently a minority of foreign investments is covered by ISDS, after ISDS agreements between the major capital exporting countries a majority of global foreign investments would be covered by ISDS. This seems unrealistic and dangerous. ISDS systems put the rule of law principle at risk. There are imperative reasons for the EU to exclude ISDS from its trade and investment agreements. In doing so, the EU would give direction to the debate and create room to strengthen alternatives. The EC has never provided a convincing answer to the question: why do we need ISDS? To honour its values, to comply with the Treaties, the EU has to acknowledge the ISDS"s fundamental flaws and act accordingly. The EU should endeavour to abolish and not strengthen this system. In doing so, the EU would give global leadership in the debate and create room to strengthen alternatives.

Doctorow's three law's

Cory Doctorow waxing lyrical about DRM, creators and publishers is always worth a listen.



First law: Any time someone puts a lock on something that belongs to you, and won't give you a key, they're not doing it for your benefit.

Second law: It's hard to monetize fame but it's impossible to monetize obscurity i.e. fame won't guarantee fortune, but no one has ever gotten rich by being obscure.

Third law: making it easy to censor and spy on everyone to protect copyright is a bad idea and bad practice i.e. information doesn't want to be free, people do.

Irish High Court refers Schrems Facebook privacy case to ECJ

The Irish High Court has this morning referred Max Schrems Facebook privacy case to the European Court of Justice. Judge Hogan (at p33) refers the following specific questions -

Whether in the course of determining a complaint which has been made to an independent office holder who has been vested by statute with the functions of administering and enforcing data protection legislation that personal data is being transferred to another third country (in this case, the United States of America) the laws and practices of which, it is claimed, do not contain adequate protections for the data subject, that office holder absolutely [sic] bound by the Community finding to the contrary contained in the Commission Decision of 26 July 2000 (2000/520/EC) having regard to Article 7 and Article 8 of the Charter of Fundamental Rights of the European Union (2000/C-364/01), the provisions of Article 25(6) of Directive 95/46/EC notwithstanding? Or, alternatively, may the office holder conduct his or her own investigation of the matter in the light of factual developments in the meantime since that Commission Decision was first published?

Judge Hogan's summary of overall conclusions runs from paragraphs 74 to 84.

"74... Mr Schrems' complaints are not "frivolous or vexatious"...

 75... Mr Schrems enjoys locus standi to bring this complaint and to bring these proceedings. It is irrelevant that Mr Schrems cannot show his own personal data was accessed in this fashion by the NSA, since what matters is the essential inviolability of the personal data itself. The essence of that right would be compromised if the data subject had reason to believe that it could be routinely accessed by security authorities on a mass and undifferentiated basis.

76... the evidence suggests that personal data of data subjects is routinely accessed on a mass and undifferentiated basis by the US security authorities.

77... as far as Irish law is concerned, s. 11(1)(a) of the 1988 Act forbids the transfer of personal data to a third country unless it is clear that that jurisdiction sufficiently respects and protects the privacy and fundamental freedoms of the data subjects. In this particular context of national law, the standards in question are contained in the Constitution.

78... the chief constitutional protections are those relating to personal privacy and the inviolability of the dwelling. The general protection for privacy, person and security which is embraced by the "inviolability"  of the dwelling in Article 40.5 of the Constitution would be entirely compromised by the mass and undifferentiated surveillance by State authorities of conversations and communications which take place within the home. For such interception of communications to be constitutionally valid, it would, accordingly, be necessary to demonstrate that this interception and surveillance of individuals or groups was objectively justified in the interests of suppression of crime and national security and, further, that any such interception was attended by appropriate and verifiable safeguards."

Just an aside on that last sentence in that paragraph - it could be interpreted as reading that surveillance would be justified "in the interests of suppression of ... national security". Let's just assume that's not what the good judge was attempting to convey.

"79... if the matter were to be measured solely by Irish law and Irish constitutional standards, then a serious issue would arise which the Commissioner would then have been required to investigate as to whether US law and practice in relation to data privacy, interception and surveillance matched those data standards."

(The "Commissioner" referred to is the Irish Data Protection Commissioner).

In paragraph 80 Judge Hogan explains, however, that Irish standards are effectively bypassed by the data protection directive and the European Commission's Safe Harbour agreement with the US; and the EC 2000/520/EC decision essentially declaring the US privacy-safe territory for EU personal data.

"81... it follows, therefore, that if [my emphasis] the Commissioner cannot look beyond the Commissions Safe Harbour decision of July 2000, then it is clear that the present application for judicial review must fail... because the Commission has already decided that the US provides an adequate level of data protection...

82... in holding that the complaint was unsustainable in law, the... Commissioner has ... demonstrated scrupulous steadfastness to the letter of the 1995 Directive and the 2000 Decision.

83... the applicant's objection is, in reality, to the terms of the Safe Harbour Regime itself rather than to the manner in which the Commissioner has applied the Safe Harbour Regime...

84... the critical issue which arises is whether the proper interpretation of the 1995 Directive and the 200 Commission decision should be re-evaluated in light of the subsequent entry into force of Article 8 of the Charter and whether, as a consequence, the Commissioner can look beyond or otherwise disregard this Community finding. It is for these reasons accordingly that I have decided to refer this question (and other linked questions) to the Court of Justice..."

My brief take -

The Irish High Court's decision amounts to a critique of mass and undifferentiated surveillance by state authorities, particularly the US. However, the much maligned Irish Data Protection Commissioner, Billy Hawkes, gets a pat on the back in rejecting Mr Schrems complaints, for "scrupulous steadfastness to the letter" of the data protection directive of 1995 and the EC Safe Harbour decision on the US in 2000. It appears, however, to constitute significant progress for Mr Schrems Europe v Facebook campaign and a small step in the right direction (nearly said "directive" there) for privacy in digital communications.

Note: Post above amended from earlier following access to full decision. 

Update: One other thought - Judge Hogan seems to think the Commissioner is boxed in by the data protection directive and the 2000 European Commission decision on Safe Harbour; but from my limited dealings with the Irish Data Protection Commissioner's office they seem to be more boxed in by a lack of resources and by their agreement with Facebook.

Privacy cost of Cadbury's "Joy" promotion

Inside a chocolate bar wrapper:

"Joyful jubilations!

You've won a FREE

chocolate bar!"

Visit Cadbury.co.uk or Cadbury.ie and enter the code below..."

They've got to be kidding? Right? Nope.

Ok, I'll bite (sorry, couldn't resist).

Pull up the Cadbury site. Promotion front and centre. Click on the enter the code for FREE chocolate bar button. Click on the enter the code button again on the next page. Enter the code. Click through.

"Oh JOY! You've won a free
chocolate bar.

Enter your details to get your Cadbury coupon for one of the bars below."

Now they want a name and email address and here we have it - the links to the 2378 word terms and conditions and 3134 word privacy policy. I'll try the privacy policy first. Not sure I could stomach the terms and conditions. (That one I'm not apologising for).

"Mondelez Privacy Policy

All content on this website is owned and operated by Mondelez UK Ltd ("MDLZ" or "we")..."

Ok so I'm not even dealing with Cadbury any more? Oh yeah I forgot. Mondelez manages Cadburys for Kraft. Move along.

"Your access to and use of this Site and its contents (the “Site”) is subject to the terms and conditions of this Privacy Policy... By accessing and using this Site, you (the “User” or “you”) accept and agree to these terms and conditions without any limitation or qualification."

Absolutely. Accept urrg ur I agree... After all  my FREEE (sic - given the privacy policy has a number of typos I figured I was entitled to one and you can have that one for FREE) chocolate bar is in your hands.

"What type of data do we collect?

Personally-Identifiable Information On our Site, we may collect certain personally-identifiable information, such as name, gender, telephone number and e-mail address...

We may use cookies, web beacons/pixel tags, log files, and other technologies to collect certain information...

We may obtain information about you from other sources, including commercially available sources, such as data aggregators and public databases. This information may include name, demographic information, interests, and publicly-observed data, such as from social media and shopping behavior... "

All that data? "FREE" chocolate bar?

How do you process and use my information? For "promotional offers, materials, and other communications and information about MDLZ", to respond to me, to contact me...

" In addition we may use such personal information:

• to respond to your questions and requests, to provide you with access to certain areas and features and to communicate with you about your activities on this Site;
• to share it with our Related Parties as required to perform functions on our behalf in connection with the Site (such as delivery of merchandise, administration of the website or promotions or other features on it, marketing, data analysis or customer services). To do so, it may be necessary for us to transmit your personal information to outside the above Jurisdiction, and, where the site is based within the European Economic Area (EEA), to outside the EEA, and you agree to this transfer. Further use or disclosure of the information by them for other purposes is not permitted. To provide you with product information or promotional and other offers from us or our Related Parties;
• if required by law, regulation or court order;
• for the purpose of or in connection with legal proceedings or necessary for establishing, defending or exercising legal rights; or
• in an emergency to protect the health or safety of website users or the general public or in the interests of national security."

So you are going to share my information with "Related Parties" including transmitting it outside the  European Economic Area (EEA) and I agree to this.

Dey don't know me vewy well do dey?

As if that extracting of the proverbial Michael Mouse wasn't enough, national security?!! I hereby put out a call to Bruce Schneier to include a special category in his 8th annual movie plot threat contest next year for plots centred on chocolate bars.

"How we share your information

We do not sell or otherwise disclose personally identifiable information about our website visitors..."

Hang on, you've just said exactly the opposite.

"... except as described here."

So when you say you don't sell or disclose personally identifiable information, what you mean is you do. Gotcha.

"We may share personally identifiable information among MDLZ and MDLZ brands and subsidiaries... with service providers... [who may] disclose the information as necessary... In addition, we may disclose information where we think it’s necessary... in response to a request from... government officials

We may share with our promotional partners (and their service providers)... "

Ok so you're giving my information to all and sundry. What about security?

"The security of personally-identifiable information is important to us... To the fullest extent permitted by law, we disclaim all liability and responsibility for any Damages you may suffer due to any loss, unauthorized access, misuse or alteration of any information"

Ah yes. The old security is important but it's never, ever going to be our fault if we muck it up routine.

Well at least I know what I'm signing up to. It's all clear and fixed at the time I claim my FREE chocolate bar.

"We may change or update parts of this Data Privacy Statement at any time and without prior notice to you."

 Er. You and only you can change the deal at any time after it is concluded?

Right then I demand to know how long you are going to keep all the data you will gather on me, in exchange for this FREE chocolate bar you are offering.

"Your personal data will be kept by Mondelez Europe ... for as long as is reasonably necessary for the purposes for which they are processed"

That's clear, except you can change the deal whenever you feel like it. And despite it being a breach of a fundamental data protection principle, the purposes for which you are collecting this data appear already to be pretty fluid, even before you decide to change them at some unspecified point in the future.

"Children

We take the protection of children’s privacy seriously. We operate this Site in compliance with all applicable law in the above Jurisdiction. Children under the age referred to below for the appropriate Jurisdiction for the Site should have a parent/guardian’s consent before providing any personal information to the website. We will not, as provided by applicable law, require or request children under this age to provide more personal information than is reasonably necessary to participate in the applicable activity on the Site. If we determine upon collection that a user is under this age, we will not use or maintain his/her personal information without the parent/guardian’s consent. Without such consent, though, the child may not be able to participate in certain activities. However, in certain circumstances, we may maintain and use such information (in accordance with the rest of this Policy and applicable law) in order to notify and obtain consent from the parent/guardian and for certain safety, security, liability and other purposes permitted under applicable law. A parent/ guardian can review, remove, change or refuse further collection or use of their child’s personal information by contacting us as provided above (include child’s name, address and e-mail address).

Site’s Jurisdiction/Applicable Age:

• United States & Australia: Under 13 years of age.
• Other Jurisdictions: Under 12 years of age."

In short you take children's privacy seriously. Parents or guardians should be involved if kids under 12 want to claim a FREE chocolate bar and they can chase you to alter or remove the child's details from your systems. But hey, if the the kid ticks the box to say s/he is 16 or over when claiming the FREE bar that's the parents/guardians' problem not yours.

Last question, what if a corporate raider comes a calling? Cadbury has been subject to hostile takeovers bids in the past after all.

"Transfer of assets

During the course of our business, we may sell or purchase assets. If another entity acquires us or all or substantially all of our assets, personally and non-personally identifiable information we have collected about the users of the Site may be transferred to such entity. Also, if any bankruptcy or reorganization proceeding is brought by or against us, such information may be considered an asset of ours and may be sold or transferred to third parties."

Right so when the asset stripper moves in all bets are off and previous and loosely prevailing privacy "protections" are even more worthless than the prior electronic paper they were written on.

Fair enough. An hour down the road, even though I have not perused your terms and conditions yet, I now feel like I'm finally in a position to decide whether to indulge in joyful jubilations and claim my  FREE chocolate bar! My response Ms Rosenfeld, Chairman and CEO of Mondelez International is -

NO THANK YOU!

In fairness, Mondelez are just asking for a name and email address and engagement with their website, rather than anything more invasive in the first instance. They then email the coupon for the FREE chocolate (a certain Michael Mouse will be getting mine). But the overreaching "privacy" policy is all too typical and yet another indicator that the sugar industry is also now in the surveillance business.

John Oliver on FCC proposals to kill Net Neutrality

John Oliver, doing more in 13 minutes for the cause of net neutrality than years of campaigning by digital rights NGOs, academics and certain brands of big tech...



I particularly liked his point (at about 10m 20s) about corporate America understanding that "if you want to do something evil put it inside something boring. Apple could put the entire text of Mein Kampf inside the iTunes user agreement and you'd just go urrg ur I agree..."

His call to arms to internet trolls to explain, in the abusive way only they do, their disapproval, at fcc.gov/comments, however, may well land him in trouble, after the FCC site reportedly went under with the weight of the response elicited.

Edward Snowden NBC interview

Edward Snowden's broadcast interview with NBC.

Note to Chairman of JCSI on copyright exceptions

Given the recent decision of the Joint Committee on Statutory Instruments (JCSI) to spend more time considering the implementation of private copying and parody copyright exceptions statutory instruments, I've written to the Chairman of the Committee, George Mudie. Copy of my note below.

Dear Mr Mudie,

As Chairman of the Joint Committee on Statutory Instruments (JCSI), I’m writing to you in relation to your committee’s recent consideration of the proposed five copyright exceptions statutory instruments (SIs). I note the Committee has concluded its consideration of three of the five but has some questions about the private copying and parody exceptions.

https://www.gov.uk/government/news/progress-of-the-exceptions-to-copyright-regulations

In light of the decision of JCSI to hold up the implementation of copyright exceptions SIs for private copying and parody, could I ask that you draw the Committee's attention again to the Consumer Focus report, 'The economic impact of consumer copyright exceptions'. It was first published in 2010, republished last year and is available at:

http://www.consumerfocus.org.uk/publications/the-economic-impact-of-consumer-copyright-exceptions-a-literature-review

The report itself may be accessed directly at:

http://www.consumerfocus.org.uk/files/2010/11/The-economic-impact-of-consumer-copyright-exceptions-Rogers-Tomalin-Corrigan.pdf.

Full disclosure - I am an academic at the Open University and was involved in producing the report, along with colleagues from Oxford University, Mark Rogers and Josh Tomalin. Mark was terminally ill at the time and sadly died in July 2011.

An Oxford University economist of international renown, Mark was a passionate advocate for evidence based policy making in the intellectual property arena. Down to earth family man, friend, academic and practical economist, optimist, writer, basketball coach and player, runner, cyclist, all round handyman and an infinite well of sound personal and professional advice, Mark was one of those impossibly nice, exceptionally talented and generous individuals you’d like your children to emulate. The dignity and positive outlook with which he faced his illness were genuinely awe inspiring. The simple fact that someone of Mark’s ilk devoted considerable energy, over many years, to the importance of evidence based intellectual property policy making speaks for itself. What he had to say about copyright exceptions should be of particular interest to the JCSI.

In relation to JCSI’s recent deliberations, our Consumer Focus report focused solely on copyright exceptions as they relate to non-commercial, consumer activities. It dealt specifically with private copy format shifting and parody. We concluded -

Investigating potential economic damage to rights-holders requires an analysis of how consumer copyright exception could affect the demand for the original creative work. The processes via which consumer copyright exceptions influence the demand curve for original creative work can be complicated. This said, a standard analysis of the demand for creative works must assume that consumers incorporate the benefit of copyright exceptions into their demand. A consumer’s decision to purchase is based on the benefits of the product, including – in the case of creative work – the value of any copyright exception. In this sense, it can be argued that a creator automatically extracts value from copyright exceptions, since these directly influence the demand for the original creative work.

The economic evidence that format-shifting, parody and user-generated content cause any kind of economic damage to rights-holders simply does not exist. Arguments that support tighter copyright law, or support Private Copying Remuneration (PCR) systems, tend to confuse economic damage with consumer value. Any future analysis on this issue needs to investigate the conditions under which the proposed consumer copyright exceptions would have any impact on demand for creative work.

I hope that you and the JCSI find the report helpful. If you have any questions or I can provide any further input to the Committee’s deliberations on copyright exceptions do let me know.

Yours sincerely,

Ray Corrigan

Ray Corrigan, Senior Lecturer in Maths, Computing and Technology, Open University;

The Clarkson crisis and mass surveillance

I will try and find some time to consider in detail and blog about the European Court of Justice decision imposing an obligation on Google to make an effort to respect what many are calling 'the right to be forgotten.'

Firstly though, on a parallel theme of our recorded digital pasts returning to haunt us, could I point you at an edited version of some thoughts I had on the recent crises Jeremy Clarkson found himself embroiled in, that the very good folks at The Conversation kindly published earlier this week. A more detailed edition of those thoughts resides below.

I see Jeremy Clarkson is in the soup again for saying the wrong thing. This time he's accused of using the reviled, offensive, racist N word, in a Top Gear out-take two years ago. The usual gang of anti-Clarksonites and more than a few others have lined up to demand the BBC fire him. Perhaps surprisingly members of the government and some in the media not otherwise known as Clarkson fans have offered him qualified support.

Elsewhere various sexists, racists, homophobes, hatemongers and other assorted flavours of humanity that dislike people not like them are attracting the attention of the news media and political opponents for being associated in some way with UKIP. The Prime Minister David Cameron has been condemned for saying recently Britain is a Christian country.

The thing is, respect for the principle of freedom of expression means letting people we disagree with speak. It means letting people who say offensive things speak. It means letting people who say nasty, unpleasant, unsavoury, distasteful, dreadful, objectionable, idiotic, mean, poisonous, hostile, malignant things speak.  It means letting people who mumble casual blokey racist comments, in ill-judged attempts at humour, speak.

Letting people speak doesn't mean we have to listen to them. It doesn't mean we have provide them with a platform to speak. It doesn't mean the media is obligated to draw attention to them. And it doesn't mean we have to laugh with them in a way that encourages casual blokey offensiveness.

I fully accept  Deborah Lipstadt's mantra that 'Reasoned dialogue has a limited ability to withstand an assault by the mythic power of falsehood' (p.25 Denying the Holocaust - a wonderful book btw). But when destructive speech does take hold we have to counteract it. We must be better at explaining, in widely accessible & persuasive ways, why hate speech is so harmful pernicious and noxious. And we must expose the falsehoods and malign intent and/or ignorance underlying it intelligently, accessibly, in a publicly appealing ways and preferably backed up with solid evidence.

The UK Human Rights Act makes the European  Convention on Human Rights part of UK law. Article 10 of the Convention says everyone has the right to freedom of expression. We have the legal right to freedom of expression in the UK. As a member of the EU, we also have the fundamental right to freedom of expression guaranteed by Article 11 of the Charter of Fundamental Rights of the EU.

To make life complicated, in the UK there are also criminal offences relating to offending or insulting someone, under a variety of statutes including s127 of the Communications Act 2003 and s4A and s5 of the Public Order Act 1986.

A number of social network users have found this out the hard way, most notably Paul Chambers of Twitter joke trial fame. Mr Chambers was convicted of sending, by a public electronic communication network, a message of a "menacing character" contrary to sections 127(1)(a) and (3) of the Communications Act 2003. He had joked on Twitter about blowing up Robin Hood airport after his flight to see his girlfriend got cancelled due to snow. He lost his job and another thereafter, subsequently found it difficult to get work and it took two and half years of legal wrangling and appeals before the High Court finally cleared his name.

The media, the public and public figures, we all love a good witch-hunt, as long as we are not the object of the hunt. Soundbite politics, the 24/7 news cycle and our world of short attention spans see words and phrases taken out of context and wielded as weapons to demonise and misrepresent opponents, shout insults past each other, blame and preferably punish someone. Public debate can't get past megaphone soundbites of the 'we're the goodies they're the baddies' variety.  This is an arena that is positively hostile to deep and informed engagement with any subject matter but a fertile place for mob rule.

Could any of us withstand the kind of scrutiny Mr Clarkson's misspoken offence, recognised at the time but resurrected two years later, or Mr Chamber's Twitter joke was subjected to? Well to be blunt we are going to have to.

Why?

Well for the best part of the past 25 years commercial entities have been recording, storing, processing and analysing everything we see and do on the world wide web, for how long, from where, with whom and with what equipment. Additionally telecommunications service providers, both fixed line and mobile, have been obliged for some time, under the 2006 EU data retention directive, to store details of and provide government access to everything everyone does on the telephone or internet; for a period of between 6 months and two years.

Invisible digital watchers follow and record everything we do on digital communications networks without our conscious knowledge or consent.

Article 5 of the 2006 directive specified the data that has been gathered by communications service providers throughout the EU. It covers names, addresses, who spoke to whom, where, when, for how long, on what device, how often, websites visited etc. etc. This all paints a very detailed picture and most people don’t know it has been going on. The who, where, why, how, what and when of individual lives is all there in this 'metadata.'

We've also discovered in the past year via the revelations of former NSA contractor, Edward Snowden, that governments, in particular the UK and US variety, have been going much further, watching and recording our networked lives in even more detail than previously realised. If we thought about it at all which most of us don't. Through clandestine programs like GCHQ's 'Tempora' and the NSA's 'PRISM' all telephone and internet traffic is being collected, processed and stored nominally for current or potential future use in the fight against terrorism or serious crime.

Anyone's complete online life history can be examined in forensic detail even though commerce and governments could not possibly examine everyone's life in detail. The UK intelligence services collect about 40 billion pieces of data per day, for example, and simply do not have the capacity to apply human intelligence to all of it.

Just one of the problems with these mass commercial and governmental silos of personal digital life histories is that small items taken out of context can constitute unexploded digital ordinance. Equivalent to the two year old misdemeanour of Jeremy Clarkson. Most of us don't have the public profile of Mr Clarkson or the interest of the public to anything like the same degree. But as Cardinal Richelieu is rumoured to have said about 500 years ago, "Give me six lines written by the most honest man and I'll show you the evidence to hang him."

Innocent ordinary people, not just celebrities of Mr Clarkson's ilk, have found themselves at the sharp end of media witch hunts.  And which of us knows what nefarious activities people connected to people connected to people connected to us via the internet might have engaged in at some time in that past or potentially in the future? I ask that particular question because the then deputy director of the NSA, Chris Inglis, testified before Congress, in July 2013, that you don't need to be a suspected bad guy to gain the attention of the intelligence services. The NSA track people "three hops" from their targets. If I had communicated with 200 people during my online lifetime I'd be three hops away from over 5 million people. Through my job at the Open University alone I've interacted directly with thousands of people over the past nineteen years. Three hops from thousands connects me to more than the entire population of the world.

I think it is fair to call this mass surreptitious collection of personal data mass surveillance.

Interestingly enough, in a historic decision, On 8 April 2014 the Grand Chamber of the Court of Justice of the European Union hinted at the same conclusion when they decided to invalidate the 2006 data retention directive discussed above. With what may be interpreted as half and eye on the Edward Snowden revelations, the Court, effectively condemned pre-emptive, suspicionless, warrantless mass surveillance and consequent "interference with the fundamental rights of practically the entire European population".

The case was the first major court decision on mass surveillance since the Snowden stories started to break in June 2013. Though high courts in Romania (2009), Germany (2010), Bulgaria (2010),  the Czech Republic (2011) and Cyprus (2011) had previously all declared the data retention directive unconstitutional and/or a disproportionate unjustified interference with the fundamental right to privacy, free speech and confidentiality of communications.

On 23 April 2014, the Slovak Constitutional Court, taking its lead from the Court of Justice, suspended of the Slovak implementation of the directive. The UK government, by contrast, has declared the UK data retention regulations remain in force despite the directive that requires them no longer being so. The Home Secretary, Theresa May, has stated elsewhere that the implications of the ECJ ruling were being assessed.  For the first time, on 9 May 2014, a UK parliamentary committee expressed concern at the oversight of the security and intelligence agencies in this context and asked for a prompt and clear resolution of the legal position on data retention.

The previous UK Labour government were one of the key driving forces behind the original implementation of the data retention directive. The current UK government is one of the biggest cheerleaders for and operators of mass surveillance standards and practices. Though the UK government was not involved directly in the case, (and are scrambling madly to find a way to circumvent the decision as, sadly, are the European Commission), both the current and the previous administrations' behaviour, in the data retention context, is considered so heinous in law that it should never have happened; and the laws facilitating that behaviour should never have existed.

Some commentators have also suggested the Court was firing a message not just to the UK but across the pond (2 min 40sec audio) to the effect that US mass surveillance standards are totally unacceptable in an EU context.

Now come full circle to the Clarkson furore. In their data retention decision, in passing (also known as 'obiter dicta'), the Court of Justice of the EU noted in paragraphs 27 and 28 of their decision the chilling effect of the knowledge that anything we say or do is being recorded and may be used against us -

"Those data, taken as a whole, may allow very precise conclusions to be drawn concerning the private lives of the persons whose data has been retained, such as the habits of everyday life, permanent or temporary places of residence, daily or other movements, the activities carried out, the social relationships of those persons and the social environments frequented by them.

In such circumstances... it is not inconceivable that the retention of the data in question might have an effect on the use, by subscribers or registered users, of the means of communication covered by that directive and, consequently, on their exercise of the freedom of expression"

I don't find casual laddish racist remarks at all funny. I find them offensive. Just as I find casual blokey demonisation/marginalisation/ but more particularly intentional-vicious-insult-dismissal and incitement of hatred, directed at [minority group of choice], offensive. It causes division, discrimination and tension and undermines equality, human rights, decency and collective care.

But Mr Clarkson misspoke, by accident, 2 years ago, when doing a recording for a popular TV programme. The trademark of said programme is three middle aged men, acting like big kids, mucking about with cars, playing pranks and laddishly insulting each other and other people and things for laughs.

Mr Clarkson has apologised for using a word he personally loathes. The motives of those who leaked the recording are not known.

I have no idea whether Mr Clarkson is racist though I suspect not. Intended or not, ill-used words do cause damage but it is the presence or absence of hateful intent behind such remarks rather than the words used that define the mindset of the speaker.  We can't read minds so interpret that intent, by proxy, from people's words.

Nevertheless, I would ask that s/he who wish to throw metaphorical stones at Mr Clarkson, to think also of their own many stored and detailed digital dossiers and how fragments thereof might well, one day, be held against you. Especially if, like a certain Open University academic, you might have a 3 hop connection to the population of the world.

General Hayden: "We kill people based on metadata"

The full video of the John Hopkins debate between David Cole and Michael Hayden is available on YouTube



For those interested in General Hayden's "We kill people based on metadata" quote -

Security Analysis of the Estonian E-Voting System

An international team of security experts, including Alex Halderman and Harri Hursti, have identified serious problems with Estonia's e-voting system and recommended its immediate withdrawal.
They've produced a neat short video explaining the issues -



And a couple of longer ones outlining the possible server malware attacks -



The team will be providing partial code for their proof-of-concept attacks after the conclusion of the May 2014 European Parliamentary elections.

Copyright exceptions for private copying and parody delayed

I've written to the intellectual property minister, Lord Younger of Leckie, regarding the decision, this week, to "delay" the implementation of copyright exceptions statutory instruments (SIs) for private copying and parody. These were scheduled for implementation on 1 June 2014.

I specifically draw his attention to the Consumer Focus report, 'The economic impact of consumer copyright exceptions'.

Dear Lord Younger of Leckie,

In light of the decision this week, of Joint Committee on Statutory Instruments (JCSI), to hold up the implementation of copyright exceptions statutory instruments for private copying and parody, could I ask that you draw the committee's attention to the Consumer Focus report, 'The economic impact of consumer copyright exceptions'. It was first published in 2010, republished last year and is available at:

http://www.consumerfocus.org.uk/publications/the-economic-impact-of-consumer-copyright-exceptions-a-literature-review

The report itself may be accessed directly at:

http://www.consumerfocus.org.uk/files/2010/11/The-economic-impact-of-consumer-copyright-exceptions-Rogers-Tomalin-Corrigan.pdf.

Full disclosure - I am an academic at the Open University and was involved in producing the report, along with colleagues from Oxford University, Mark Rogers and Josh Tomalin. Mark was terminally ill at the time and sadly died in July 2011. But he felt the absence of economic evidence informing copyright policy was hugely important, sufficiently so to merit a significant chunk of his considerable professional energy.

The report focused solely on copyright exceptions as they relate to non-commercial, consumer activities. It dealt specifically with private copy format shifting and parody. We concluded -

Investigating potential economic damage to rights-holders requires an analysis of how consumer copyright exception could affect the demand for the original creative work. The processes via which consumer copyright exceptions influence the demand curve for original creative work can be complicated. This said, a standard analysis of the demand for creative works must assume that consumers incorporate the benefit of copyright exceptions into their demand. A consumer’s decision to purchase is based on the benefits of the product, including – in the case of creative work – the value of any copyright exception. In this sense, it can be argued that a creator automatically extracts value from copyright exceptions, since these directly influence the demand for the original creative work.

The economic evidence that format-shifting, parody and user-generated content cause any kind of economic damage to rights-holders simply does not exist. Arguments that support tighter copyright law, or support Private Copying Remuneration (PCR) systems, tend to confuse economic damage with consumer value. Any future analysis on this issue needs to investigate the conditions under which the proposed consumer copyright exceptions would have any impact on demand for creative work.

I hope that you and the JCSI find the report informs your decision making in this area.

Yours sincerely,

Ray Corrigan

ECJ invalidate data retention directive

ECJ Invalidates data retention

On 8 April2014 the Grand Chamber of the European Court of Justice, (ECJ) in joined cases C-293/12 and C-594/12, issued a landmark decision declaring the 2006 data retention directive invalid.

The data retention directive was the instrument through which the EU required communications service providers, both fixed line and mobile, to store details of everything everyone does on the telephone or internet; for a period of between 6 months and two years. The details of what was required to be collected were laid out in article 5 of the directive and the only thing not permitted was recording of the content of calls or messages.

The ECJ decided that mass indiscriminate data retention interferes disproportionately and in a particularly serious manner with the fundamental rights to privacy and the protection of personal data.

The challengers

Digital Rights Ireland (DRI) and 11,130 Austrian citizens whose case was joined to that of DRI challenged the directive, ostensibly arguing it constituted an unlawful and unacceptable interference with fundamental rights to privacy and free speech. The Court focused on the effects of the data retention directive on articles 7 and 8 of the Charter of Fundamental Rights of the European Union - respect for private and family life and protection of personal data.

The Grand Chamber of the court proceeded to declare the directive invalid and effectively condemned pre-emptive, suspicionless, warrantless mass surveillance and consequent "interference with the fundamental rights of practically the entire European population".

Introduction and legal context

The Court opens by explaining Digital Rights Ireland challenged the implementation of the data retention directive into Irish law and the Austrian Constitutional Court, Verfassungsgerichtshof, was asked to consider the constitutionality of the Austrian implementation of the directive. They then set out the legal context.

The objective of the data protection directive, directive 95/46/EC, is to protect people's privacy. The aim of the directive on privacy and electronic communications, directive 2002/58/EC, is to harmonise privacy rights and allow sharing of data within and across the EU. Both these directives require appropriate technical and organisational measures to protect the security of personal data.  The 2002 directive prohibits surveillance without user consent, in theory. It has,however, the enormous loophole of article 15 which states any necessary, appropriate and proportionate measure can be used to bypass obligations to respect fundamental rights, when those measures are for national security or crime fighting reasons. Article 15 also specifically appears to approve of the retention of data.

The data retention directive itself obliged communications service providers to retain data. Under article 3, EU member state were required to adopt measures mandating data retention of categories of data specified in article 5. (Take a look at the list of information retained. It's almost unbelievable). Under article 4, access to this retained data would only be available to "competent national authorities" in specific cases and in accordance with national law. Article 6 specified the data should be retained for between 6 months and 2 years. Article 11 basically says when it comes to data retention the need to respect a basic level of fundamental rights theoretically noted in article 1 of the 2002 e-privacy directive could be ignored.

DRI and Austrian cases

The Court then outlines the Digital Rights Ireland and Austrian cases in paragraphs 17 to 22. DRI argued the directive constituted a disproportionate interference with fundamental rights to respect for privacy and family life, data protection and freedom of expression & information, guaranteed under articles 7, 8 and 11 of the Charter of Fundamental Rights of the European Union. Austrian citizens Mr Seitlinger, Mr Tschol et al sought the annulment of the Austrian law implementing data retention. The Austrian Court, took the view that data retention, because of the indiscriminate nature and scale of it, almost exclusively affects innocent people. The Verfassungsgerichtshof also felt data retention could not achieve its objectives and was disproportionate, so they also asked the European Court of Justice to review whether data retention constituted a disproportionate interference with fundamental rights guaranteed under articles 7, 8 and 11 of the Charter of Fundamental Rights of the European Union. Additionally the Verfassungsgerichtshof suggested the data protection directive and articles 52 and 53 of the Charter of Fundamental Rights presented barriers or at least limitations to data retention.

Next the ECJ considers the substance of the questions before them. They acknowledge (para 27) that the data mandated for retention taken as a whole provides a very rich picture of people's lives. Also that people might well adjust their behaviour and self censor due to the chilling effect of the knowledge of the mass data gathering (para 28). So there is a clear acceptance by the ECJ that freedom of expression protected by article 11 of the Charter could be on the line. They do not however pursue this to any solid conclusion and focus instead of matters of privacy and data protection, relating to articles 7 & 8 of the Charter.

Interference with privacy and data protection

The heavy lifting in the decision is then laid out from paragraph 32 to 71.

"32. ... Directive 2006/24... derogates from the system of protection of the right to privacy established by Directives 95/46 and 2002/58"

The data collected does not have to be sensitive or to inconvenience people in any way to establish the existence of an interference with the fundamental right to privacy. (Para 33). Data retention
"constitutes in itself an interference with the rights guaranteed by Article 7 of the Charter." (para 34). Access to the data retained by competent national authorities is an interference with the rights guaranteed by Article 7 of the Charter. (para 35). Likewise because the directive provides for the processing of personal data it is an interference with the fundamental right to data protection covered by article 8 of the Charter. (para 36). Paragraph 37 merits quotation in full:

"37.  It must be stated that the interference caused by Directive 2006/24 with the fundamental rights laid down in Articles 7 and 8 of the Charter is, as the Advocate General has also pointed out, in particular, in paragraphs 77 and 80 of his Opinion, wide-ranging, and it must be considered to be particularly serious. Furthermore, as the Advocate General has pointed out in paragraphs 52 and 72 of his Opinion, the fact that data are retained and subsequently used without the subscriber or registered user being informed is likely to generate in the minds of the persons concerned the feeling that their private lives are the subject of constant surveillance."

Justification for interference with fundamental rights

Having declared the interference with the fundamental rights to privacy and data protection particularly serious, the Court then must look at the justification for and proportionality of this interference. It finds the 2006 directive wanting on both counts.

Article 52(1) of the Charter of Fundamental Rights of the EU states that any circumvention of those rights must be proportionate, strictly limited and necessary to meet objectives of general interest or to protect the freedoms of others.

In paragraphs 39 and 40, the Court then makes a rather fuzzy attempt to step back from the absolutist stance it appears to have be shaping up to take against data retention.

"39... it must be held that, even though the retention of data required by Directive 2006/24 constitutes a particularly serious interference with those rights, it is not such as to adversely affect the essence of those rights given that, as follows from Article 1(2) of the directive, the directive does not permit the acquisition of knowledge of the content of the electronic communications as such."

This does not sit logically with the earlier acceptance in paragraphs 27 & 28 that metadata provides a very comprehensive picture of peoples' lives which could have a chilling affect on freedom of expression. It also seems something of a non sequitur - how must it be held that data retention constitutes a particularly serious interference with fundamental rights, yet not be such as to adversely affect the essence of those rights?

Paragraph 40 says the essence of article 8 data protection rights are not adversely affected because the text of data retention directive includes a note that says data protection must be respected. On that basis you could stick a token 'respect data protection' clause in every liberty bashing regulatory instrument and not "adversely affect" data protection.

The object of the the data retention is to fight serious crime and article 6 of the Charter of rights lays down the fundamental right to security. So fighting serious crime is a legitimate 'objective of general interest.' And communications technology is an important crime fighting tool. So

"44.  It must therefore be held that the retention of data for the purpose of allowing the competent national authorities to have possible access to those data, as required by Directive 2006/24, genuinely satisfies an objective of general interest."

Disproportionate nature of the data retention directive

The objective of data retention is acceptable. But is data retention a proportionate way to achieve that crime fighting objective? Proportionality requires acts of EU institutions to "not exceed the limits of what is appropriate and necessary in order to achieve" the objective in hand, in this case fighting serious crime.

The ECJ takes guidance from the European Court of Human Rights decision in 2008, S and Marper v UK, on the retention of DNA and fingerprints.

"47. ... the EU legislature’s discretion may prove to be limited, depending on a number of factors, including, in particular, the area concerned, the nature of the right at issue guaranteed by the Charter, the nature and seriousness of the interference and the object pursued by the interference (see, by analogy, as regards Article 8 of the ECHR, Eur. Court H.R., S. and Marper v. the United Kingdom [GC], nos. 30562/04 and 30566/04, § 102, ECHR 2008-V)."

Privacy and data protection are fundamental and so the discretion of EU legislature to interfere with them is reduced and any review of that discretion should be strict. (para 48). Data retention may be appropriate for crime fighting. (Para 49). The fight against serious crime requires modern techniques but that doesn't mean the kind of mass data retention required by the directive is necessary. (Para 51). Data protection is especially important for privacy.

"54. Consequently, the EU legislation in question must lay down clear and precise rules governing the scope and application of the measure in question and imposing minimum safeguards so that the persons whose data have been retained have sufficient guarantees to effectively protect their personal data against the risk of abuse and against any unlawful access and use of that data (see, by analogy, as regards Article 8 of the ECHR, Eur. Court H.R., Liberty and Others v. the United Kingdom, 1 July 2008, no. 58243/00, § 62 and 63; Rotaru v. Romania, § 57 to 59, and S. and Marper v. the United Kingdom, § 99)."

Data retention should have clear rule on scope and application and minimum safeguards against unlawful access. The unstated critique is that the directive fails on all counts.

"55.  The need for such safeguards is all the greater where, as laid down in Directive 2006/24, personal data are subjected to automatic processing and where there is a significant risk of unlawful access to those data (see, by analogy, as regards Article 8 of the ECHR, S. and Marper v. the United Kingdom, § 103, and M. K. v. France, 18 April 2013, no. 19522/09, § 35)."

Safeguards are particularly important with respect to the automatic large scale processing of data. Again the 2006 directive fails.

56. ... Directive 2006/24... entails an interference with the fundamental rights of practically the entire European population. [My emphasis]

"57.   In this respect, it must be noted, first, that Directive 2006/24 covers, in a generalised manner, all persons and all means of electronic communication as well as all traffic data without any differentiation, limitation or exception being made in the light of the objective of fighting against serious crime.." [My emphasis]

Paragraph 58 goes on to criticise Directive 2006/24's mandate to engage in the mass surveillance of innocent people not remotely connected to serious crime. Additionally it circumvents rules protecting privileged communications.

Then in recognition of the need for targeted rather than mass surveillance they state:

"59.  Moreover, whilst seeking to contribute to the fight against serious crime, Directive 2006/24 does not require any relationship between the data whose retention is provided for and a threat to public security and, in particular, it is not restricted to a retention in relation (i) to data pertaining to a particular time period and/or a particular geographical zone and/or to a circle of particular persons likely to be involved, in one way or another, in a serious crime, or (ii) to persons who could, for other reasons, contribute, by the retention of their data, to the prevention, detection or prosecution of serious offences."

That paragraph alone could be interpreted as a serious judicial uppercut to the UK government's mass surveillance practices revealed by Edward Snowden. At the risk of being boring I'm going to repeat my old mantra here.  It is unnecessary and completely disproportionate, not to mention dangerously ineffective, to collect innocent communications in order to find serious criminals. Finding a terrorist or serious criminal is a needle in a haystack problem – you can’t find the needle by throwing infinitely more needle-less electronic hay on the stack.  Law enforcement, intelligence and security services have to be able to move with the times. They need to use modern digital technologies intelligently in their work and through targeted data preservation regimes – not the mass surveillance regime they are currently operating – engage in technological surveillance of individuals about whom they have reasonable cause to harbour suspicion. That is not, however, the same as building an infrastructure of mass surveillance or facilitating the same through the legal architecture of directives like 2006/24 on data retention.

The ECJ follows up this mass surveillance critique with a clear declaration in paragraph 60 that the data retention directive has no limits on access to and use of retained data to the purpose of fighting serious crime and no criteria for determining such limits. In a way paragraphs 60 to 68 provide a blueprint for the Commission and particularly rabid surveillance addicted governments to re-write the data retention directive in a way that might be acceptable to the ECJ. Since these paragraphs spell out what is missing from the directive and might be read as suggesting 'make a token effort with these things next time and you'll be ok.'

Para 61 criticises Directive 2006/24's lack of procedures on determining access to data or its use or even limiting these to crime fighting. Para 62 notes the directive does not limit the number of people with access to the retained data to those strictly necessary. Nor does it subject access to the data to the prior review or oversight of a court, in order to limit access to that which is strictly necessary. Nor are member states obliged to set down such procedures.

Para 63 complains that the blanket data retention mandated doesn't make any distinction between categories of data. Para 64 says there is not even an attempt to justify the arbitrary period of retention chosen of between 6 months and 2 years.

Then comes the clincher.

"65.  It follows from the above that Directive 2006/24 does not lay down clear and precise rules governing the extent of the interference with the fundamental rights enshrined in Articles 7 and 8 of the Charter. It must therefore be held that Directive 2006/24 entails a wide-ranging and particularly serious interference with those fundamental rights in the legal order of the EU, without such an interference being precisely circumscribed by provisions to ensure that it is actually limited to what is strictly necessary." [My emphasis]

"66.   Moreover, as far as concerns the rules relating to the security and protection of data retained by providers of publicly available electronic communications services or of public communications networks, it must be held that Directive 2006/24 does not provide for sufficient safeguards, as required by Article 8 of the Charter, to ensure effective protection of the data retained against the risk of abuse and against any unlawful access and use of that data. In the first place, Article 7 of Directive 2006/24 does not lay down rules which are specific and adapted to (i) the vast quantity of data whose retention is required by that directive, (ii) the sensitive nature of that data and (iii) the risk of unlawful access to that data, rules which would serve, in particular, to govern the protection and security of the data in question in a clear and strict manner in order to ensure their full integrity and confidentiality. Furthermore, a specific obligation on Member States to establish such rules has also not been laid down." [My emphasis]

Para 67 says the 2006 directive doesn't specify a high enough data security threshold and doesn't require the irreversible destruction of data at the end of the retention period. Then in 68 the ECJ has serious concerns that the data retention directive does not require data to be retained within the borders of the EU. So control by independent authority of data protection and access to the retained data cannot be fully ensured. Such control is an essential corner stone of EU data protection law.

And that's the ballgame

They conclude:

"69. Having regard to all the foregoing considerations, it must be held that, by adopting Directive 2006/24, the EU legislature has exceeded the limits imposed by compliance with the principle of proportionality in the light of Articles 7, 8 and 52(1) of the Charter.

70. In those circumstances, there is no need to examine the validity of Directive 2006/24 in the light of Article 11 of the Charter.

71.  Consequently... Directive 2006/24 is invalid."

In short, the data retention directive presents a disproportionate interference with the fundamental rights to respect for private and family life and the protection of personal data. Consequently the directive is invalid, null and void. And because it is invalid on privacy grounds the ECJ don't see the need to pursue the question of whether it also might be invalid on the grounds of Article 11 of the Charter of Fundamental Rights relating to freedom of expression.

If the Charter of Fundamental Rights proves to have staying power as the legislative architecture protecting the rights of EU citizens into the distant future, then this ECJ decision could well prove to be historic. On a par with the civil rights cases of the US Supreme Court such as Brown v the Board of Education or the NYT v Sullivan. Only time will tell whether it achieves that fame or notoriety but it was certainly a welcome development in the battle to avoid a mass surveilled future.

Congratulations and thanks to TJ McIntyre, Simon McGarr and Digital Rights Ireland and to Mr Seitlinger, Mr Tschol et al and the Austrian Constitutional Court the Verfassungsgerichtshof in what was a long and difficult battle and a hard fought but very welcome victory in the end. 

US Supreme Court on patent trolls: make 'em pay when they lose

The US Supreme Court yesterday issued decisions in two cases essentially relating to patent trolls, Octane Fitness v. Icon Health & Fitness and Highmark Inc. v. Allcare Health Management System, Inc.
US law (35 USC § 285) says patent suit losers should pay the winners legal costs but only in "exceptional circumstances". In practice, in spite of the mountains of ridiculous patents and strategic business patent lawsuits, very few cases are held to be sufficiently exceptional for the court to award such costs. Which is a licence for patent trolls to pursue their extortion rackets with relish.

The decisions in the Octane and Highmark cases theoretically make the awarding of legal costs to winners easier. Take the Octane decision:

"No. 12–1184. Argued February 26, 2014—Decided April 29, 2014

The Patent Act’s fee-shifting provision authorizes district courts toaward attorney’s fees to prevailing parties in “exceptional cases.” 35 U. S. C. §285. In Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F. 3d 1378, 1381, the Federal Circuit defined an “exceptional case” as one which either involves “material inappropriate conduct” or is both “objectively baseless” and “brought in subjective bad faith.” Brooks Furniture also requires that parties establish the “exceptional” nature of a case by “clear and convincing evidence.” Id., at 1382.

Respondent ICON Health & Fitness, Inc., sued petitioner Octane Fitness, LLC, for patent infringement. The District Court granted summary judgment to Octane. Octane then moved for attorney’s fees under §285. The District Court denied the motion under the Brooks Furniture framework, finding ICON’s claim to be neither objectively baseless nor brought in subjective bad faith. The Federal Circuit affirmed.

Held: The Brooks Furniture framework is unduly rigid and impermissibly encumbers the statutory grant of discretion to district courts.Pp. 7–12.

(a) Section 285 imposes one and only one constraint on district courts’ discretion to award attorney’s fees: The power is reserved for“exceptional” cases. Because the Patent Act does not define “exceptional,” the term is construed “in accordance with [its] ordinary meaning.” Sebelius v. Cloer, 569 U. S. ___, ___. In 1952, when Congress used the word in §285 (and today, for that matter),“[e]xceptional” meant “uncommon,” “rare,” or “not ordinary.” Webster’s New International Dictionary 889 (2d ed. 1934). An “exceptional” case, then, is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is “exceptional” in the case-by-caseexercise of their discretion, considering the totality of the circumstances. Cf. Fogerty v. Fantasy, Inc., 510 U. S. 517. Pp. 7–8.
(b)
The Brooks Furniture framework superimposes an inflexible framework onto statutory text that is inherently flexible. Pp. 8–11."

Justice Sotomayor, writing for the Court in the unanimous decision, goes on (p7-8):

"We hold, then, that an “exceptional” case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances.6 As in the comparable context of the Copyright Act, “‘[t]here is no precise rule or formula for making these determinations,’ but instead equitable discretion should be exercised ‘in light of the considerations we have identified.’” Fogerty v. Fantasy, Inc., 510 U. S. 517, 534 (1994)."

So district courts can be confident that decisions (to award legal costs to those successfully defending themselves from bogus patent troll lawsuits) in "exceptional" cases won't be overturned as long as "exceptional" is construed as:

• “in accordance with [its] ordinary meaning” (in 1952)
• "uncommon"
• "rare"
• "not ordinary"

and now, in the wake of the Supreme Court decision yesterday, 29 April, 2014,

• "stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated."

I doubt adding "stands out from to the list of "ordinary" meanings of "exceptional" will make a great deal of difference either to patent trolling or to the US Federal Appeals Court judges willingness to overturn lower court decisions they disapprove of in this area. Call me a skeptic but given the money and power embodied in such patent suits, I suspect it will take something stronger to break the cycle of legitimate patent applicants and defendants paying the price; whilst the well-resourced, wielding sharp-suited lawyers and huge portfolios of often indefensible patents, make off with the prizes.

Free is a lie - Aral Balkan at TNW

Take 32 mins and listen to Indie phone's Aral Balkan's talk at the recent TNW conference.



Balkan opens with a simple thought experiment. He's setting up a hypothetical business, Schnail Mail, which will solve the problem of mail delivery by delivering letters and parcels of all shapes and sizes anywhere in the world for free. He asks his audience how many of them would sign up for it. Sounds like an attractive enterprise so many would. In the interests of full disclosure he then explains that by the way Schnail mail will open and forensically examine all letters and parcels to learn about their customers, obviously in the interests only of offering them a better service. How many would now sign up? Not very many though there were still a hard core half a dozen or so. In any case the Schnail Mail business model is the Google, Facebook, [big tech co of choice] "free" service business model.

The business model of "free" is the business model of mass surveillance. We effectively hand over quarries of personal data for these corporations to mine for their own ends. He quotes Eric Schmidt noting Google knows who you are, where you are and what you are thinking; and Facebook knowing people are on the path to a relationship before those people possibly even know it themselves.

He also quotes the Google executive chairman saying:

"If you have something you don't want everyone to know maybe you shouldn't be doing it in the first place."

That's not the kind of world Balkan wants. Privacy is not about whether you have something to hide. It's about having control of what you want to share and what to keep to yourself. But in the world of "free" mass surveillance you don't have that control. The corporations do and they have acquired that control by deceit because consumers largely have no idea of the information they have surrendered/bartered in exchange for "free" services.  If we make the panopticon the default that leads to a society where anything we want to keep private has an association of guilt attached. Privacy becomes only about hiding bad things. Balkan rejects that notion.

Ordinary consumers currently have no choice - all roads lead to digital feudalism regardless of which corporate walled garden is chosen. Techies say use free and open source alternatives. But ordinary mortals have not got the time, skills or resources to architect or build our own FOSS, experience-led digital privacy assured shells to shield our rich personal data quarries / digital personas, thereby enabling us to participate in the information society without compromising our privacy. So techies, entrepreneurs, the market have to start to provide custom built user friendly privacy enhanced technologies. One such effort is Balkan's indie phone.

The true cost of "free" he says is our privacy, our civil liberties, our human rights.

Good luck to Mr Balkan with his indie phone venture. His success will likely depend on the degree to which he can manage the pathological calculus that is -

Privacy vs Convenience/attraction/gratification/access/community/conformity/convenience

- in addition to the small matter of taking on the power of the mass surveillance addicted market incumbents.

Feynman, education & public engagement on digital rights

This Horizon programme on Richard Feynman is full of terrific engaging Feynman observations.



I'll just pick out two that are close to home at the moment.

Feynman talks about teaching and how he didn't really know how to do it. To hook everyone with our different interests and different learning styles and aptitudes the teacher has to take a chaotic approach. Otherwise the teaching will only reach or appeal to one kind of person. The implication is that all the rest are locked out. He gives a lovely example of the stories he used to make up for his son exploring wood-like worlds which turned out to be tiny people living in a carpet land; and caves where the air flowing in was cold and air flowing out was warm - this turned out to be the dog's nose; then they could explore the respiratory systems and learn all kinds of real world things in a fun way. His daughter, on the other hand, didn't like him making up stories. She liked him to read proper stories from proper books. She had a different personality and different way of taking on the world

The top down superficial dogmatic ill-informed rhetoric driving formal education systems in the UK at the moment (and which has been doing so for a long time) has lead to systems that fail most of the people most of the time. They fail the teachers/lecturers trying to make them work against all the odds and they fail the children and older students that get processed from year to year, standardised widgets all.

The second thing that struck me was Feynman's ruse for avoiding the drudgery of academic administration. He would refuse to do it by claiming he was irresponsible and by implication could not be relied upon to do it properly. So every time he was asked e.g sit on an admissions committee he would say he didn't care about students (he did) and couldn't be bothered and anyway would be irresponsible. He'd say to himself let so and so do it - it was selfish but it left him time to do physics.

To do any kind of substantive work it takes absolute solid lengths of time. If you're working on something complex, he describes it like a house of cards. It's wobbly. All the ideas holding it together are like the cards. If you forget one or lose it the whole thing collapses and you have to start all over. If you are weighed down with administration you'll never have the time to do anything deep.

Well I've had three books in draft for several years and not had a substantive run at any of them. Much though I'd like to offload or avoid a chunk of my admin duties, Feynman style, that's not a realistic option in the short to medium term. The privilege of working at an amazing institution like The Open University brings with it the duty to engage in the requisite battles to protect its core values and terrific students and staff. I have an equivalent duty, however, to engage deeply with my academic areas of interest - including the digital rights arena - particularly when they have an impact that extends way beyond the boundaries of a single institution.

So something has to give and I've decided, no doubt to the collective background sigh of relief from organisational behaviour theorists, to abandon one of my draft books. Perhaps a little ironically it is the one on the convergent evolutionary bureaucratic cancerous insanity of large organisations. It is incredible the degree to which care, trust, goodwill, decency, simple understanding of the difference between right and wrong - the fundamentals of providing a good product or service - can get completely decimated in the labyrinth of tightly coupled, complex, often mutually exclusive and diametrically opposed rules, regulations, procedures, good intentions, sociopathic ambitions, agendas and ignorant digital Taylorism that constitute modern large mature organisations. Both in the private and public sectors. NASA's 'Criticality 1' waiver system - a procedure for bypassing safety procedures which had determined space shuttle components/systems were so dangerous as to be life threatening - is a classic example. The working title was The Insanity of Bureaucracy and the sound bite description, 'if large organisations were people they'd be diagnosed clinically insane.'

Will the dropping of the Insanity of Bureaucracy give me more space to work my tome on systems failure in the regulation of the Net? We'll see. The latter began as a collection of case studies on the emergent effects of the scientific and technical ignorance of policymakers. But in a world of mass surveillance these real life stories are not really enough. There is an urgent need for academics, techies, lawyers, engineers, scientists, educators to be better at explaining - through as many forums, physical and virtual, political and institutional, mass media, social networks and any other social, physical, technological, economic, environmental or cognitive construct of influence -  the maths, science and technology that forms the infrastructure of our information society. In ways and through narratives that are engaging, convincing, evidence based, entertaining (if necessary), chaotically as Feynman says, widely accessible and with memes that stick -

• privacy AND security NOT privacy OR security
• mass surveillance doesn't work
• mass surveillance is sinister
• mass surveillance is odious
• mass surveillance is monstrous
• mass surveillance is wrong
• mass surveillance is poisonous
• mass surveillance is corrosive
• did I say mass surveillance doesn't work
• we need intelligence lead targeted technological surveillance of individuals about whom there is reasonable cause to harbour suspicion NOT mass surveillance ... ok now you can see why I'd never get a job in PR or politics... (Marcus Lipton MP in 1957 (at 1min 50s) declared phone tapping of a suspected gangster "most sinister", "odioius" and "montrous", as did the outraged mainstream media at the time. How times have changed.)
• censorship is odious...
• hate mongering is poisonous...
• demonisation of [minority target of choice] is monstrous...
• Extraordinary rendition is odious, monstrous, wrong...
• torture is odious, monstrous, wrong... 
• enclosure of the public domain is wrong...
• the best network is the hardest to monetise...
• communications infrastructure is a public good...
• concentration of control of communications infrastructure is contrary to the public good...
• sound bite attack dog 'public debate' undermines our capacity to engage in informed, enlightened, collective, democratic policy making in the public good ... see - I can't do PR...
• and just to prove I can't do PR... complex corporate welfare regulatory instruments built into secretly negotiated international trade agreements, which undermine both the sovereignty of nation states and fundamental liberties, and which are substantively written by the industries they are tailored to benefit, are contrary to the public good...

One book is a drop in ocean of this kind of essential public engagement but it is a drop I really need to carve out some time and space to deliver. Then when the grandkids, if I'm lucky enough to have any and supposing they can cope with the dysfunctional world we bequeath them, ask what the hell I was doing when my generation was so busy normalising the destruction fundamental liberties in the metaphorical blink of a historical eye, I may at least have a story or two to tell and a battered old monograph to point to on the shelf.

The third book in the Corrigan cognitive hinterland is a young adult novel with a Cory Doctorow type Little Brother / Homeland theme but in a sporting context. That's simply proving very difficult to write and has given me a greater respect than ever for children's authors who do an incredible job. (Cory's books are terrific btw and should be required reading for teens and adults everywhere). My kids sometimes encourage me to stop, rewind and repeat in short sentences using words of preferably no more than two syllables. I naturally point out that 'sentences', 'preferably and 'syllables' breach those rules... but writing for young adults is a much more challenging task than I had expected it to be.

The wet Friday afternoon contemplative musing will have to stop there for now, as the relentless clamour of the zombiecrats for boxes to be ticked, forms to be filled and meetings to be attended must be soothed. That's this evening. Tomorrow real students in a real classroom await and though there are reports to be filed in the aftermath, OU students almost invariably cheer me up.

Russia's surveillance state

The autumn 2013 issue of the World Policy Journal has the best outline of Russian mass surveillance I've seen to date By Andrei Soldatov and Irina Borogan. Not so long ago, Western media and politicians would have been all over this, condemning the unethical behaviour of the Russian state. But I guess that's difficult and/or potentially embarrassing when you've spent a lot of effort defending the same behaviour on the part of Western governments.

"In March 2013, the Bureau of Diplomatic Security at the U.S. State Department issued a warning for Americans wanting to come to the Winter Olympics in Sochi, Russia next February: Beware of SORM. The System of Operative-Investigative Measures, or SORM, is Russia’s national system of lawful interception of all electronic utterances—an Orwellian network that jeopardizes privacy and the ability to use telecommunications to oppose the government. The U.S. warning ends with a list of “Travel Cyber Security Best Practices,” which, apart from the new technology, resembles the briefing instructions for a Cold War-era spy...

But the Russian surveillance effort is not limited to the Sochi area, nor confined to foreigners. For years, Russian secret services have been busy tightening their hold over Internet users in their country, and now they’re helping their counterparts in the rest of the former Soviet Union do the same. In the future, Russia may even succeed in splintering the web, breaking off from the global Internet a Russian intranet that’s easier for it to control.

Over the last two years, the Kremlin has transformed Russia into a surveillance state—at a level that would have made the Soviet KGB (Committe for State Security) envious. Seven Russian investigative and security agencies have been granted the legal right to intercept phone calls and emails. But it’s the Federal Security Service (FSB), the successor to the KGB, that defines interception procedures...

...In Russia, FSB officers are also required to obtain a court order to eavesdrop, but once they have it, they are not required to present it to anybody except their superiors in the FSB. Telecom providers have no right to demand that the FSB show them the warrant. The providers are required to pay for the SORM equipment and its installation, but they are denied access to the surveillance boxes.

The FSB has control centers connected directly to operators’ computer servers. To monitor particular phone conversations or Internet communications, an FSB agent only has to enter a command into the control center located in the local FSB headquarters. This system is replicated across the country. In every Russian town, there are protected underground cables, which connect the local FSB bureau with all Internet Service Providers (ISPs) and telecom providers in the region. That system, or SORM, is a holdover from the country’s Soviet past and was developed by a KGB research institute in the mid-1980s. Recent technological advances have only updated the system. Now, the SORM-1 system captures telephone and mobile phone communications, SORM-2 intercepts Internet traffic, and SORM-3 collects information from all forms of communication, providing long-term storage of all information and data on subscribers, including actual recordings and locations."

They are still working on how to deal with social networks but see mass surveillance, threats, net filtering, structural Balkanization of the net and the amoral self interest of the big tech companies (including Facebook and Google) as the key drivers of the evolution towards a much more controlled future.