Changing laws for e-commerce push
By Rozana Sani
4th February 2002 (Computimes)

CONCERNS and uncertainties about existing legislations are slowing down electronic commerce (e-commerce) adoption in the country.

This is because parties transacting online need the certainty and predictability that their transactions would be legally recognised. Also required by them are adequate protection in the event of, for instance, non-performance, delays in delivery and breach of security.

The Government should take these issues into account in its efforts to establish a conducive legal and regulatory environment as part of the study, commissioned last year, on some 700 laws to weed out and review those which are inconsistent or hinder the development of e-commerce.

Professor Dr Khaw Lake Tee of Universiti Malaya's law faculty said businesses conducting online transactions need to know whether they have to comply with the same legal requirements affecting offline transactions.

"The shift to electronic government also requires that certain changes be made to existing laws, regulations and orders that regulate the manner in which transactions between Government departments, and between the Government and its citizens are conducted," she told Computimes.

While many existing legal principles are adaptable to the online environment, there are many statutory provisions which have been drafted with paper and physical transactions in mind, she added.

"These may raise questions in relation to their applicability to similar transactions conducted online, or there may be gaps for which existing provisions may not cater. Various statutory provisions may also have been drafted with certain policy considerations which may not necessarily be compatible with the online environment, or which may actually affect the competitiveness of our local business internationally," she said.

Khaw added that there are many new issues or issues which have assumed greater significance in the online environment. For instance, that of privacy and protection of personal data. "We do not have any laws that protect privacy or personal information as such. So there may be a need to consider these issues and legislate accordingly, if need be."

Deepak C. Pillai, partner at Rhagavji & Pillai Advocates & Solicitors' ICT practice, said it is always a challenge to see whether an existing piece of legislation is capable of being interpreted to extend to the online environment (for example, gaming legislation) as majority of the existing laws were not intended to address the online environment.

"One can never be certain of how it will be interpreted by another party (for example, Government authority). It unfortunately introduces an element of uncertainty which may have the effect of deterring businesses from going online. Further, enquiries with the authorities do not always guarantee a clear and convincing answer, which in turn reinforces this feeling of uncertainty," he explained.

"Even where the legislation is specifically meant for the online environment, it may no longer be feasible to implement or may require amendments to keep up with the realities of the rapidly changing Internet technology, or may even be out of sync with the legislative approach taken by the rest of the world, such as the Digital Signature Act."

There are also gaps which need to be filled, Deepak said. "The existing laws recognise the admissibility of electronic/computer documents in court as evidence and also recognise digital signatures. They effectively provide that electronic/computer documents and digital signatures are as good as (if not better) their physical counterparts. So in theory, transactions should be able to be done completely online and no document needs to be printed to prove the transaction. However, this has been defeated to some extent as most contracts needs to be 'stamped' by the stamp office and therefore need to be printed out."

Global Cyberlaw Institute project director A.J. Surin said legislation is only one issue in facilitating the right environment for e-commerce to take off. Other issues to be considered are bridging the digital divide and a creating a clear understanding of what a borderless world implicates, he added.

"Yes, the creation of new laws and/or the amendments to existing laws can be effective in creating this environment, if it is strategised by forward-looking people who can think out of the box and understand the implications of the use of technology. An accurate prediction of new technologies is not really necessary."