Recommendation of the Regulations on the Legal and Effective Access to Taiwan’s Biological Resources
Preface
Considering that, many countries and regional international organizations already set up ABS system, such as Andean Community, African Union, Association of Southeast Asia Nations (ASEAN), Australia, South Africa, and India, all are enthusiastic with the establishment of the regulations regarding the access management of biological resources and genetic resources. On the other hand, there are still many countries only use traditional and existing conservation-related regulations to manage the access of biological resources.
Can Taiwan's regulations comply with the purposes and objects of CBD? Is there a need for Taiwan to set up specific regulations for the management of these access activities? This article plans to present Taiwan's regulations and review the effectiveness of the existing regulations from the aspect of enabling the legal and effective access to biological resources. A recommendation will be made on whether Taiwan should reinforce the management of the bio-resources access activities.
Review and Recommendation of the Regulations on the Legal and Effective Access to Taiwan's Biological Rersearch Resources
（1）Evaluate the Needs and Benefits before Establishing the Regulation of Access Rights
When taking a look at the current development of the regulations on the access of biological resources internationally, we discover that some countries aggressively develop designated law for access, while some countries still adopt existing regulations to explain the access rights. Whether to choose a designated law or to adopt the existing law should depend on the needs of establishing access and benefit sharing system. Can the access and benefit sharing system benefit the functioning of bio-technological research and development activities that link closely to the biological resources? Can the system protect the interests of Taiwan's bio-research results?
In Taiwan, in the bio-technology industry, Agri-biotech, Medical, or Chinese Herb Research & Development are the key fields of development. However, the biological resources they use for the researches are mainly supplied from abroad. Hence, the likelihood of violating international bio-piracy is higher. On the contrary, the incidence of international research houses searching for the biological resources from Taiwan is comparatively lower, so the possibility for them to violate Taiwan's bio-piracy is very low.
To look at this issue from a different angle, if Taiwan establishes a separate management system for the access of biological resources, it is likely to add more restrictions to Taiwan's bio-tech R&D activities and impact the development of bio-industry. Also, under the new management system, international R&D teams will also be confined, if they wish to explore the biological resources, or conduct R&D and seek for co-operation activities in Taiwan. Not to mention that it is not a usual practice for international R&D teams to look for Taiwan's biological resources. A new management system will further reduce their level of interest in doing so. In the end, the international teams will then shift their focus of obtaining resources from other countries where the regulation on access is relatively less strict.
Before Taiwan establishes the regulations on the legal and effective access to bio-research resources, the government should consider not only the practical elements of the principal on the fair and impartial sharing of the derived interests from bio-research resources, but also take account of its positive and negative impacts on the development of related bio-technological industries.
Even if a country's regulation on the access and benefit sharing is thorough and comprehensive enough to protect the interests of bio-resource provider, it will, on the contrary, reduce the industry's interest in accessing the bio-resources. As a result, the development of bio-tech industry will be impacted and the resource provider will then be unable to receive any benefits. By then, the goal of establishing the regulation to benefit both the industry and resource provider will not be realized.
To sum up, it is suggested to evaluate the suitability of establishing the management system for the access to biological resources through the cost-effect analysis first. And, further consider the necessity of setting up regulations by the access the economic benefits derived from the regulation for both resource provider and bio-tech industry.
（2）The Feasibility of Managing the access to Bio-research Resources from existing Regulations
As analysed in the previous paragraphs, the original intention of setting up the Wildlife Conservation Act, National Park Law, Forestry Act, Cultural Heritage Preservation Act, and Aboriginal Basic Act is to protect the environment and to conserve the ecology. However, if we utilize these traditional regulations properly, it can also partially help to manage the access to biological resources.
When Taiwan's citizens wish to enter specific area, or to collect the biological resources within the area, they need to receive the permit from management authority, according to current regulations. Since these national parks, protection areas, preserved areas, or other controlled areas usually have the most comprehensive collections of valuable biological resources in a wide range of varieties, it is suggested to include the agreements of access and benefit sharing as the mandatory conditions when applying for the entrance permit.
Therefore, the principal of benefit sharing from the access to biological resources can be assured. Furthermore, the current regulations already favour activities of accessing biological resources for academic research purpose. This practice also ties in with the international trend of separating the access application into two categories - academic and business.
Australia's practice of access management can be a very good example of utilizing the existing regulations to control the access of resources. The management authority defines the guidelines of managing the entrance of control areas, research of resources, and the collection and access of resources. The authority also adds related agreements, such as PIC (Prior Informed Consent), MTA (Material Transfer Agreement), and benefit sharing into the existing guidelines of research permission.
In terms of scope of management, the existing regulation does not cover all of Taiwan's bio-research resources. Luckily, the current environmental protection law regulates areas with the most resourceful resources or with the most distinctive and rare species. These are often the areas where the access management system is required. Therefore, to add new regulation for access management on top of the existing regulation is efficient method that utilizes the least administrative resources. This could be a feasible way for Taiwan to manage the access to biological resources.
（3）Establish Specific Regulations to Cover the Details of the Scope of Derived Interests and the Items and Percentage of Funding Allocation
In addition to the utilization of current regulations to control the access to biological resources, many countries establish specific regulations to manage the biological resources. If, after the robust economic analysis had been done, the country has come to an conclusion that it is only by establishing new regulations of access management the resources and derived interests of biological resources can be impartially shared, the CBD (Convention of Bio Diversity), the Bonn Guidelines, or the real implementation experiences of many countries can be an important guidance when establishing regulations.
Taiwan has come up with the preliminary draft of Genetic Resources Act that covers the important aspects of international access guidelines. The draft indicates the definition and the scope of access activities, the process of access applications (for both business and academic purpose), the establishment of standardized or model MTA, the obligation of disclosing the sources of property rights (patents), and the establishment of bio-diversity fund.
However, if we observe the regulation or drafts to the access management of the international agreements or each specific country, we can find that the degree of strictness varies and depends on the needs and situations. Generally speaking, these regulations usually do not cover some detailed but important aspects such as the scope of derived interests from biological resources, or the items and percentage of the allocation of bio-diversity fund.
Under the regulation to the access to biological resources, in addition to the access fee charge, the impartial sharing of the derived interests is also an important issue. Therefore, to define the scope of interests is extremely important. Any interest that is out of the defined scope cannot be shared. The interest stated in the existing regulation generally refers to the biological resources or the derived business interests from genetic resources. Apart from describing the forms of interest such as money, non-money, or intellectual property rights, the description of actual contents or scope of the interests is minimal in the regulations.
However, after realizing the importance of bio-diversity and the huge business potential, many countries have started to investigate the national and international bio-resources and develop a database system to systematically collect related bio-research information. The database comprised of bio-resources is extremely useful to the activities related to bio-tech developments. If the international bio-tech companies can access Taiwan's bio-resource database, it will save their travelling time to Taiwan. Also, the database might as well become a product that generates revenues. The only issue that needs further clarification is whether the revenue generated from the access of database should be classified as business interests, as defined in the regulations.
As far as the bio-diversity fund is concerned, many countries only describe the need of setting up bio-diversity funds in a general manner in the regulations. But the definition of which kind of interests should be put into funds, the percentage of the funds, and the related details are not described. As a result, the applicants to the access of bio-resources or the owner of bio-resources cannot predict the amount of interests to be put into bio-diversity fund before they actually use the resources. This issue will definitely affect the development of access activities.
To sum up, if Taiwan's government wishes to develop the specific regulations for the access of biological resources, it is advised to take the above mentioned issues into considerations for a more thoroughly described, and more effective regulations and related framework.
Conclusion
In recent years, it has been a global trend to establish the regulations of the access to and benefit sharing of bio-resources. The concept of benefit sharing is especially treated as a useful weapon for the developing countries to protect the interests of their abundant bio-research resources.
However, as we are in the transition period of changing from free access to biological resources to controlled access, we are facing different regulations within one country as well as internationally. It will be a little bit disappointing for the academic research institution and the industry who relies on the biological resources to conduct bio-tech development if they do not see a clear principal direction to follow. The worse case is the violation of the regulation of the country who owns the bio-resources when the research institutions try to access, exchange, or prospect the biological resources without thorough understanding of related regulations.
For some of Taiwan's leading fields in the bio-tech industry, such as Chinese and herbal medicine related products, agricultural products, horticultural products, and bio-tech products, since many resources are obtained from abroad, the incidence of violation of international regulation will increase, and the costs from complying the regulations will also increase. Therefore, not only the researcher but also the government have the responsibility to understand and educate the related people in Taiwan's bio-tech fields the status of international access management regulations and the methods of legally access the international bio-research resources.
Currently in Taiwan, we did not establish specific law to manage the access to and benefit sharing of bio-resources. Comparing with the international standard, there is still room of improvement for Taiwan's regulatory protection to the provider of biological resources. However, we have to consider the necessity of doing so, and how to do the improvement. And Taiwan's government should resolve this issue.
When we consider whether we should follow international trend to establish a specific law for access management, we should always go back to check the potential state interests we will receive and take this point into consideration. To define the interests, we should always cover the protection of biological resources, the development of bio-tech industry, and the administrative costs of government. Also the conservation of biological resources and the encouragement of bio-tech development should be also taken into consideration when the government is making decisions.
In terms of establishing regulations for the access to biological resources and the benefit sharing, there are two possible solutions. The first solution is to utilize the existing regulations and add the key elements of access management into the scope of administrative management. The work is planned through the revision of related current procedures such as entrance control of controlled areas and the access of specific resources. The second solution is to establish new regulations for the access to biological resources. The first solution is relatively easier and quicker; while the second solution is considered to have a more comprehensive control of the issue. The government has the final judgement on which solution to take to generate a more effective management of Taiwan's biological resources.
Taiwan Has Passed “Statute of Human Biobank Management” to Maintain Privacy and Improve Medicine Industries Due to lack of regulations, divergent opinions abounded about the establishment of Biobanks and collection of human biological specimen. For example, a researcher in an academic research organization and a hospital-based physician collected biospecimens from native Taiwanese. Although they insisted that the collections were for research only, human rights groups, ethics researchers, and groups for natives´ benefits condemned the collections as an invasion of human rights. Consequently, the Taiwanese government recognized the need for Biobanks regulation. To investigate the relationship between disease and multiple factors and to proceed with possible prevention, The Legislative Yuan Social Welfare and Healthy Environment Committee has passed "the draft statute of human biobank management" through primary reviewing process on December 30, 2009 and subsequently passed through entire three-reading procedure on January 7, 2010. Therefore, the medical and research institute not only can set up optimal gene database for particular disease curing, but also can collect blood sample for database establishment, legally. However, the use of sample collections will be excluded from the use of judiciary purpose. In the light of to establish large scale biobank is going to face the fundamental human right issue, from the viewpoint of biobank management, it is essential not only to set up the strict ethics regulation for operational standard, but also to make the legal environment more complete. For instance, the Department of Health, Executive Yuan had committed the earlier planning of Taiwan biobank establishment to the Academic Sinica in 2006, and planned to collect bio-specimen by recruiting volunteers. However, it has been criticized by all circles that it might be considered violating the Constitution article 8 provision 1 front paragraph, and article 22 rules; moreover, it might also infringe the personal liberty or body information privacy. Therefore, the Executive Yuan has passed the draft statute of human biobank management which was drafted and reviewed by Department of Health during the 3152nd meeting, on July 16, 2009, to achieve the goal of protecting our nation’s privacy and promoting the development of medical science by management biomedical research affairs in more effective ways. Currently, the draft statute has been passed through the primary review procedure by the Legislative Yuan. About the draft statute, there are several important points as following: (1) Sample Definition: Types of collected sample include human somatic cell, tissues, body fluids, or other derivatives; (2) Biobank Establishment: It requires not only to be qualified and permitted, but also to set up the ethical reviewing mechanism to strengthen its management and application; (3)Sample Collection and Participant Protection: In accordance with the draft statute, bio-specimen collecting should respect the living ethics during the time and refer to the "Medical Law" article 64 provision 1; before sample collection, all related points of attention should be kept in written form , the participant should be notified accordingly, and samples can only be collected with the participant’s consent. Furthermore, regarding the restrained read right and setting up participants’ sample process way if there were death or lost of their capacity; (4) Biobank Management: The safety regulation, obligation of active notification, free to retreat, data destruction, confidentiality and obligation, and termination of operation handling are stipulated; and (5) Biobank Application: According to the new draft statute, that the biological data can’t be used for other purposes, for example, the use of inquisition result for the "Civil law", article 1063, provision 2, prosecution for denying the parent-child relationship law suit", or according to the "Criminal law", article 213, provision 6. This rule not only protects the participants’ body information and their privacy right, but also clearly defines application limits, as well as to set up the mechanism for inner control and avoid conflict of interests to prevent unnecessary disputes. Finally, the Department of Health noted that, as many medical researches has shown that the occurrence of diseases are mostly co-effected by various factors such as multiple genes and their living environment, rather than one single gene, developed countries have actively devoted to human biological sample collection for their national biobank establishment. The construction and usage of a large-scale human bank may bring up the critical issue such as privacy protection and ethical problems; however, to meet the equilibrium biomedical research promotion and citizen privacy issue will highly depend on the cooperation and trust between the public and private sectors. Taiwan Department of Health Announced the Human Biobanks Information Security Regulation The field of human biobanks will be governed by the Act of Human Biobanks (“Biobanks Act”) after its promulgation on February 3, 2010 in Taiwan. According to Article 13 of the Biobanks Act, a biobank owner should establish its directive rules based on the regulation of information security of biobanks announced by the competent authority. Thus the Department of Health announced the draft of the Human Biobanks Information Security Regulation (“Regulation”) for the due process requirement. According to the Biobanks Act, only the government institutes, medical institutes, academic institutes, and research institutes are competent to establish biobanks (Article 4). In terms of the collecting of organisms, the participants should be informed of the relevant matters by reasonable patterns, and the collecting of organisms may be conducted after obtaining the written consent of the participants (Article 6). The relative information including the organisms and its derivatives are not allowed to be used except for biological and medical research. After all the protection of biobanks relative information above, the most important thing is the safety regulations and directive rules of the database administration lest all the restrictions of biobanks owners and the use be in vain. The draft Regulation aims to strengthen the safety of biobanks database and assure the data, the systems, the equipments, and the web circumstances are safe for the sake of the participants’ rights. The significant aspects of the draft are described as below. At first, the regulation should refer to the ISO27001, ISO27002 and other official rules. Concerning the personnel management, the security assessment is required and the database management personnel and researchers may not serve concurrently. In case some tasks are outsourced, the contractor should be responsible for the information security; the nondisclosure agreement and auditing mechanism are required. The application system should update periodically including the anti-virus and firewall programs. The biobanks database should be separated physically form internet connection, including the prohibition of information transforming by email or any other patterns through internet. The authorizing protocol of access to the biobanks should be established and all log files should be preserved in a period. The system establishment and maintenance should avoid remote control. In case the database system is physically out of the owner’s control, the authorization of the officer in charge is required. If an information security accident occurred, the bionbanks owner should contact the competent authority immediately and inform the participants by adequate tunnel. The biobanks owner should establish annual security auditing program and the project auditing will be conducted subject to the necessity. To sum up, while the biobanks database security regulation is fully established, the biobanks owners will have the sufficient guidance in connection with the biobank information security to comply with in the future.
The EU's New Legal Framework for European Research InfrastructureRecognized that Research infrastructures (RIs) are at the centre of the knowledge triangle of research, education and innovation and play an increasingly important role in the advancement of knowledge and technology, the EU began to finance for the establishments of RIs by its Framework Programmes (FPs) since the start of FP2 of 1987. On the other hand, the EU also assigned the European Strategy Forum on Research Infrastructures (ESFRI) to develop a coherent and strategy-led approach to policy-making on RIs between Member States and to facilitate the better use and development of RIs at EU and international level. Based on those efforts, the European Commission understood that a major difficulty in setting up RIs between EU countries is the lack of an adequate legal framework allowing the creation of appropriate partnerships and proposed a legal framework for a European research infrastructure adapted to the needs of such facilities. The new legal framework for a European Research Infrastructure Consortium (ERIC) entered into force on 28 August 2009. An successfully-set-up ERIC will have the legal personality based on EU law, and can benefit from exemptions from VAT and excise duty in all EU Member States and may adopt its own procurement procedures to get rid of the EU's public procurement procedures. It is predicted that the Biobanking and Biomolecular Resources Research Infrastructure (BBMRI) will apply to become a BBMRI-ERIC in the near future. The EU also seeks to lead in Energy, Food and Biology through the reforms of ERICs to assist the high quality of activities of European scientists and attract the best researchers from around the world. Besides, in order to connect the knowledge triangle effectively, the European Commission also established the European Institute of Innovation and Technology (EIT) on March 2008. It hopes through the research development partnership network to gather all the advantages from the science and technology chains of multiple areas, and make an effort for the strategy of EU innovation development jointly；Meanwhile, extends its roadmap to the objectives and practices of the Knowledge and Innovation Communities (KICs) of the EIT. Contrast with the EU's advance, it is necessary to our government to concentrate and contemplate whether it is the time to reconsider if our existing legal instruments available to domestic research facilities and infrastructures are sufficient enough to reach our science and technology development goals.
Adopting Flexible Mechanism to Promote Public Procurement of Innovation—the Amendment of Article 27 of the Statute for Industrial InnovationAdopting Flexible Mechanism to Promote Public Procurement of Innovation—the Amendment of Article 27 of the Statute for Industrial Innovation I.Introduction To further industrial innovation, improve industrial environment, and enhance industrial competitiveness through a systematic long-term approach, the Statute for Industrial Innovation (hereinafter referred to as the Statute) has been formulated in Taiwan. The central government authority of this Statute is the Ministry of Economic Affairs, and the Industrial Development Bureau of the Ministry of Economic Affairs (henceforth referred to as the IDB) is the administrative body for the formulation of this Statute. Since its formulation and promulgation in 2010, the Statute has undergone four amendments. The latest amendment, passed by the Legislative Yuan on November 3, 2017, on the third reading, is a precipitate of the international industrial development trends. The government is actively encouraging the investment in industrial innovation through a combination of capital, R&D, advanced technologies and human resources to help the promotion of industrial transformation, hence this large scale amendment is conducted. The amendment, promulgated and enacted on November 22, 2017, focuses on eight key points, which include: state-owned businesses partaking in R&D (Article 9-1 of the amended provisions of the Statute), the tax concessions of the limited partnership venture capital businesses (Article 2, Article 10, Article 12-1 and Article 23-1 of the amended provisions of the Statute), the tax concessions of Angel Investors (Article 23-2 of the amended provisions of the Statute), applicable tax deferral of employees' stock compensation (Article 19-1 of the amended provisions of the Statute), tax deferral benefit of stocks given to research institution creators (Article 12-2 of the amended provisions of the Statute), the promotion of flexible mechanism for innovation procurement (Article 27 of the amended provisions of the Statute), the establishment of evaluation mechanism for intangible assets (Article 13 of the amended provisions of the Statute), and forced sale auction of idled land for industrial use (Article 46-1 of the amended provisions of the Statute). This paper focuses on the amendment of Article 27 of the Fourth Revision of the Statute, which is also one of the major focuses of this revision—promoting flexible mechanism for innovation procurement, using the mass-market purchasing power of the government as the energetic force for the development of industrial innovation. II.Explanation of the Amendment of Article 27 of the Statute 1.Purposes and Descriptions of the Amendment of Article 27 of the Statute The original intent of Article 27 (hereinafter referred to as the Article) of the Statute, prior to the latest amendment (content of the original provisions is shown in Table 1), was to encourage government agencies and enterprises to give a priority to using green products through the "priority procurement" provisions of Paragraph 2, which allow government agencies to award contracts to green product producers using special government procurement procedures, so as to increase the opportunities for government agencies to use green products, and thereby promote the sustainable development of the industry. In view of the inherent tasks of promoting the development of industrial innovation, and considering that, using the large-scale government procurement demand to guide industrial innovation activities, has become the policy instrument accepted by most advanced countries, the IDB expects that, with the latest amendment of Article 27, the procurement mechanism policy for software, innovative products and services, in addition to the original green products, may become influential, and that "innovative products and services" may be included in the scope of "Priority Procurement" of this Article namely, make “priority procurement of innovative products and services” as one of the flexible mechanisms for promoting innovation procurement. A comparison of the amended provisions and the original provisions is shown in Table 1, and an explanation of the amendment is described as follows:[1] Table 1 A Comparison of Article 27 Amendment of the Statute for Industrial Innovation Amended Provisions Original Provisions Article 27 (I) Each central government authority in charge of end enterprises of a specific industry shall encourage government organizations (agencies) and enterprises to procure software, innovative and green products or services. (II) To enhance the procurement efficiencies, as effected by supply and demand, the central government authority shall offer assistance and services to the organizations (agencies) that handle these procurements as described in the preceding paragraph; wherein, Inter-entity Supply Contracts that are required for the aforesaid procurements, the common requirements shall be decided, in accordance with policy requirements, upon consultation between the central government authority and each central government authority in charge of end enterprises of a specific industry. (III) Where the software, innovative and green products or services, as described in Paragraph 1, must be tested, audited, accredited and certified, their associated fees and charges may be reduced, exempted, or suspended. (IV) Government organizations (agencies) may specify in the tender document the priority procurement of innovative and green products or services that have been identified to meet the requirements of paragraph 1. However, such a specification shall not violate treaties or agreements that have been ratified by the Republic of China. The measures concerning specifications, categories, and identification procedures of software, innovative and green products or services as prescribed in Paragraph 1; the testing, auditing criteria, accreditation and certification as prescribed in paragraph 3; and the Priority Procurement in paragraph 4 and other relevant items, shall be established by each central government authority in charge of end-enterprises of a specific industry. Article 27 (I) Each central government authority in charge of end enterprises shall encourage government agencies and enterprises to give priority to green products that are energy/resources recyclable/renewable, energy and water saving, non-toxic, less-polluting, or able to reduce the burden on the environment. (II) Agencies may specify in the tender documents that priority is given to green products meeting the requirement set forth in the preceding Paragraph. (III) The regulations governing the specifications, categories, certification procedures, review standards, and other relevant matters relating to the green products as referred to in the preceding Paragraph shall be prescribed by the central government authorities in charge of end enterprises. Source: The Ministry of Economic Affairs (I).Paragraph 1 In order to compel each central government authority in charge of end enterprises of a specific industry to motivate industrial innovation activities and sustainable development on the basis of requirements, and to support the development of the software industry in Taiwan, the provision, that such an authority should encourage government organizations (agencies) and enterprises to procure software and innovative products and services, is added in paragraph 1. (II).Paragraph 2 This procurement, as described in paragraph 1, is different from the property or services procurement of general affairs as handled by various organizations. To enhance procurement efficiencies, as effected by supply and demand, the central government authority, i.e., the Ministry of Economic Affairs, shall provide relevant assistance and services to organizations (agencies) handling these procurements, hence the added provisions in paragraph 2. For purchases using inter-entity supply contracts, which are bound by the requirements of this Article, due to their prospective nature, and that the common demand of each organization is difficult to make an accurate estimate by using a demand survey or other method, the Ministry of Economic Affairs shall discuss the issues with each central government authority in charge of end-enterprises of a specific industry, who consult or promote policies, and are in charge of end enterprises of a specific industry, and then make decisions in accordance with the policy promotion requirements. (III).Paragraph 3 The fee schedule for testing, auditing, accrediting and certifying software, innovative and green products or services is covered by Article 7, Administrative Fees of the Charges And Fees Act. The authorities in charge should determine relevant fee standards.However, considering that the test, audit, accreditation and certification may be conducted during a trial or promotional period, or circumstances dictate that it is necessary to motivate tenderer participation, the fee may be reduced, waived or suspended; hence, paragraph 3 is added. (IV).Paragraph 4 Paragraph 2 of the original provision is moved to paragraph 4 with the revisions made to paragraph 1, accordingly, and the provision for using Priority Procurement to handle innovative products or services is added. However, for organizations covered by The Agreement on Government Procurement (GPA), due to Taiwan's accession to the WTO, ANZTEC, and ASTEP, their procurement of items covered in the aforesaid agreements with a value reaching the legislated threshold, shall be handled in accordance with the regulations stipulated in the aforesaid agreements; hence the stipulation in the proviso that the procurement must not violate the provisions of treaties or agreements ratified by the Taiwan government. (V).Paragraph 5 Paragraph 3 of the original Article is moved to paragraph 5 with the revisions made to paragraph 1, accordingly, and the provision, that authorizes each central government authority in charge of end enterprises of a specific industry to determine appropriate measures concerning the methods of defining software, innovative and green products and services, as well as matters relating to test, accreditation, certification and priority procurement, is added. 2.The Focus of the Amendment of Article 27 of the Statute—Promoting a Flexible Mechanism for Innovation Procurement As previously stated, the amendment of this Article aims to stimulate activities of industrial innovation by taking advantage of the huge demand from government agencies. With the government agencies being the users of the innovative products or services, government's procurement market potential is tapped to support the development of industrial innovation. The original intention of amendment is to incorporate the spirit of Public Procurement of Innovation[2] into this Article, and to try to introduce EU's innovation procurement mechanism[3] into our laws. So that, a procurement procedure, that is more flexible and not subject to the limitation of procurement procedures currently stipulated by the Government Procurement Act, may be adopted to facilitate government sector action in taking the lead on adopting innovative products or services that have just entered their commercial prototype stage, or utilizing the demand for innovation in the government sector to drive industry's innovative ideas or R&D (that can not be satisfied with the existing solutions in the marketplace). However, while it is assessing the relevant laws and regulations of our government procurement system and the practice of implementation, the use of the current government procurement mechanism by organizations in the public sector to achieve the targets of innovation procurement is still in its infancy. It is difficult to achieve the goal, in a short time, of establishing a variety of Public Procurement of Innovation Solutions (PPI Solutions) as disclosed in the EU's Directive 2014/24 / EU, enacted by the EU in 2014, in ways that are not subject to current government procurement legislation. Hence, the next best thing: Instead of setting up an innovative procurement mechanism in such a way that it is "not subject to the restrictions of the current government procurement law", we will focus on utilizing the flexible room available under the current system of government procurement laws and regulations, and promoting the "flexible mechanism for innovation procurement” paradigm. With the provisions now provided in Article 27 of the Statute for Industrial Innovation, the government sector is authorized to adopt the "Priority Procurement" method on innovative products and services, thus increasing the public sector's access to innovative products and services. With this amendment, in addition to the "green products" listed in the original provisions of paragraph 1 of the Statute, "software" and "innovative products or services"[4] are now incorporated into the target procurement scope and each central government authority in charge of end enterprises of a specific industry should now encourage government organizations and enterprises to implement; however, the provisions of this paragraph do not have the specific effect of law, they are declaratory provisions. Two priorities are the１ primary focus of the provisions of paragraph 2 and paragraph 4 of this Article for promoting flexible mechanism for innovation procurement: (I)The procurement of software, innovative and green products or services that uses Inter-entity Supply Contracts may rely on the "policy requirement" to establish the common demand. According to the first half of the provisions of paragraph 2 of this Article, the Ministry of Economic Affairs, being the central government authority of the Statute, may provide assistance and services to organizations dealing with the procurement of software, innovative and green products and services.This is because the procurement subjects, as pertaining to software, products or services that are innovative and green products (or services), usually have the particularities (especially in the software) of the information professions; different qualities (especially in innovative products or services), and are highly profession-specific. They are different from the general affairs goods and services procured by most government agencies. Hence, the Ministry of Economic Affairs may provide assistance and service to these procurement agencies, along with the coordination of relevant organizations, in matters relating to the aforesaid procurement process in order to improve procurement efficiency as relates to supply and demand. Pursuant to the second half of Paragraph 2 of this Article, if the inter-entity supply contract method is used to process the procurement of software, innovative products and services, green products (or services) and other related subjects, there could be "Commonly Required" by two or more organizations concerning the procurement subjects, so in accordance with the stipulations of Article 93 of the Government Procurement Act, and Article 2 of the Regulations for The Implementation of Inter-entity Supply Contracts[5], an investigation of common requirements should be conducted first. However, this type of subject is prospective and profession-specific (innovative products or services in particular), and government organizations are generally not sure whether they have demand or not, which makes it difficult to reliably estimate the demand via the traditional demand survey method[6], resulting in a major obstacle for the procurement process. Therefore, the provisions are now revised to allow the Ministry of Economic Affairs to discuss procurement with each central government authority in charge of end enterprises of a specific industry, who consult or promote policies (such as the National Development Council, or central government authority in charge of end enterprises of a specific industry relevant to the procurement subjects), and then make decisions based on the quantities of goods and services of common requirements in accordance with the demand for promoting the policy. The provisions explicitly stipulate such flexibility in adopting methods other than the "traditional demand survey" method, as is required by laws for the common demand of Inter-entity Supply Contracts. Thus, agencies currently handling procurement of prospective or innovative subjects using inter-entity supply contracts, may reduce the administrative burden typically associated with conducting their own procurement. In addition, with a larger purchase quantity demand, as generated from two or more organizations, the process can more effectively inject momentum into the industry, and achieve a win-win situation for both supply and demand. (II)Government organizations may adopt "Priority Procurement" when handling procurement of innovative and green products or services. Prior to the amendment, the original provision of paragraph 2 of this Article stipulates that organizations may specify in the tender document Priority Procurement of certified green products; Additionally, a provision of paragraph 3 of the original Article stipulates that each central government authority in charge of end enterprises of a specific industry is authorized to establish the specifications, categories and other relevant matters of the green products[7] (according to the interpretation of the original text, it should include "Priority Procurement" in paragraph 3 of the Article).After the amendment of the Article, paragraph 2 of the original Article is moved to paragraph 4. In addition to the original green products, "innovative products or services" are included in the scope of "Priority Procurement" that organizations are permitted to adopt (but, the "software" in paragraph 1 was not included[8]). However, for organizations covered by The Agreement on Government Procurement (GPA), due to Taiwan's accession to the WTO, ANZTEC, and ASTEP, their procurement of items covered by the aforesaid agreements with a value reaching the stated threshold, shall be handled in accordance with the regulations stipulated in the aforesaid agreements; hence the stipulation in the proviso that the procurement must not violate the provisions in treaties or agreements ratified by the Taiwan government. Additionally, paragraph 3 of the original Article is moved to paragraph 5. Each central government authority in charge of end enterprises of a specific industry is authorized to use their own judgment on matters concerning the specifications, categories, certification processes of software, innovative and green products or services and the method for Priority Procurement of paragraph 4. In accordance with the authorization in paragraph 5 of the amended provision of this Article, each central government authority in charge of end enterprises of a specific industry may, depending on the specific policy requirement that promotes innovation development of its supervised industry, establish methods of identification and the processes of Priority Procurement for “Specific categories of innovative products or services", especially on products or services fitting the requirements of the method of using the demands of government organizations to stimulate industrial innovation. The established "Regolations for priority procurement of Specific categories of innovative products or services" is essentially a special regulation of the government procurement legislation, which belongs to the level of regulations, that is, it allows the organizations to apply measures other than the government procurement regulations and its related measures to the procurement process, and adopt "Preferential Contract Awarding" for qualified innovative products or services. Any government agency that has the need to procure a particular category of innovative product or service may, in accordance with the provisions of paragraph 4 of this Article, specify the use of Priority Procurement in the tender document, and administer the procurement, in accordance with the process of this particular category of innovative products, or priority procurement. The agency is now enabled to follow a more flexible procurement process than that of the government procurement regulations to more smoothly award contracts for qualified innovative products or services. Citing two examples of this applied scenario: Example one, "innovative information services": The central government authority in charge of information services is IDB. Thus, IDB may, according to the authorization provided for in paragraph 5 of the Article, establish the identification methods for innovative information services (the purpose of which is to define the categories and specifications of innovative services covered in the scope of priority procurement) and priority procurement processes, pertaining to emerging information services that are more applicable to the requirements of government agencies, such as: cloud computing services, IoT services, and Big Data analysis services.Example two, "Innovative construction or engineering methods": The central government authority in charge of construction affairs is the Construction and Planning Agency of the Ministry of the Interior. Since the agency has already established the "Guidelines for Approval of Applications for New Construction Techniques, Methods, Equipment and Materials", the agency may establish a priority procurement process for new construction techniques, methods or equipment, in accordance with the stipulations in paragraph 5 of the Article. Government agencies may conduct procurement following any of these priority procurement practices, if there is a requirement for innovative information services, or new construction techniques, methods or equipment. In addition to the two aforementioned flexible mechanisms for innovation procurement, where government agencies are granted flexible procedures to handle the procurement of innovative products or services via the use of the flexible procurement mechanism, paragraph 3, concerning the incentive measures of concessionary deductions, is added to the Article to reduce the bidding costs for tenderers participating in the tender. For the Procurement of software, innovative and green products or services encouraged by each central government authority in charge of end-enterprises of a specific industry (not limited to those handled by the authorities themselves, using inter-entity supply contracts or priority procurement methods), if the procurement subjects are still required to be tested, audited, accredited and certified by the government agencies, such a process falls under the scope of administrative fees collection, pursuant to paragraph 1 Article 7 of the Charges And Fees Act. However, considering that the item subject to test, audit, accreditation and certification may be in a trial or promotional period, or that it may be necessary to motivate tenderer participation, the provisions of paragraph 3 are thusly added to the Article to reduce, waive, or suspend the collection of aforementioned fees. Executive authorities in charge of collecting administrative fees shall proceed to reduce, waive, or suspend the collection pursuant to the stipulations of paragraph 3 of the Article and Article 12 subparagraph 7 of the Charges And Fees Act.[9] III.The direction of devising supporting measures of flexible mechanism for innovation procurement The latest amendment of the Statute for Industrial Innovation was promulgated and enacted on November 22, 2017, it is imperative that supporting measures pertaining to Article 27 of the Statute be formulated. As previously stated, the flexible mechanism for innovation procurement, as promoted in this Article, is designed specifically for the products or services that are pertinent to the government procurement requirements and are capable of stimulating industrial innovation, and providing a more flexible government procurement procedure for central authorities in charge of a specific industry as a policy approach in supporting industry innovation. Thus, the premise of devising relevant supporting measures is dependent on whether the specific industry, as overseen by the particular central authority, has a policy in place for promoting the development of industrial innovation, and on whether it is suitable in promoting the flexible mechanism for innovation procurement as described in this Article. The purpose of this Article is to promote the flexible mechanism for innovation procurement. Supporting measures pertaining to this Article will focus on the promotion of devising an "Innovation Identification Method", and of the "Priority Procurement Process" of the innovative products or services of each industry that central government authorities oversee. The former will rely on each central government authority in charge of a specific industry to charter an industry-appropriate and profession-specific planning scheme; while, for the latter, the designing of a priority procurement process, in accordance with the nature of the various types of innovative products or services, does not have to be applicable to all. However, regardless what type of innovative products or services the priority procurement process is designed for, the general direction of consideration should be given to - taking the different qualities of innovative products or services as the core consideration. Additionally, the attribute of the priority procurement procedures focusing specifically on the different qualities of the innovative subjects relates to the special regulation relevant to the government procurement regulations. Thus, the procurement procedures should follow the principle that if no applicable stipulation is found in the special regulation, the provisions of the principal regulation shall apply. The so-called "Priority Procurement" process refers to the "Preferential Contract Awarding" on tenders that meet certain criteria in a government procurement procedure. The existing Government Procurement Act (GPA, for short) and its related laws that have specific stipulations on "Priority Procurement" can be found in the "Regulations for Priority Procurement of Eco-Products" (Regulations for Eco-Products Procurement, for short), and the "Regulations for Obliged Purchasing Units / Institutions to Purchase the Products and Services Provided by Disabled Welfare Institutions, Organizations or Sheltered Workshops" (Regulations for Priority Procurement of Products or Services for Disabled or Shelters, for short). After studying these two measures, the priority procurement procedures applicable to criteria-conformed subjects can be summarized into the following two types: 1.The first type: Giving preferential contract awarding to the tenderer who qualifies with "the lowest tender price”, as proposed in the tender document, and who meets a certain criteria (for example, tenderers of environmental products, disabled welfare institutions, or sheltered workshops). There are two scenarios: When a general tenderer and the criteria-conformed tenderer both submit the lowest tender price, the criteria-conformed tenderer shall obtain the right to be the "preferential winning tender" without having to go through the Price Comparison and Reduction Procedures. Additionally, if the lowest tender price is submitted by a general tenderer, then the criteria-conformed tenderers have the right to a "preferential price reduction” option, that is, the criteria-conformed tenderers can be contacted, in ascending order of the tender submitted, with a one time option to reduce their bidding prices. The first tenderer who reduces their price to the lowest amount shall win the tender. Both the Regulations for Eco-Products Procurement[10] and Regulations for Priority Procurement of Products or Services for Disabilities or Shelters[11] have such relevant stipulations. 2.The second type: It is permitted to give Preferential Contract Awarding to a criteria-conformed tenderer, when the submitted tender is within the rate of price preference. When the lowest tenderer is a general tenderer, and the tender submitted by the criteria-conformed tenderer is higher than the lowest tender price, the law permits that if the tender submitted is "within the rate of price preference ", as set by the procuring entity, the procuring entity may award the contract preferentially to "the tender submitted by the criteria-conformed tenderer." The premise for allowing this method is that the tender submitted by the criteria-conformed tenderer must be within the preferential price ratio. If the submitted tender is higher than the preferential price ratio, then the criteria-conformed tenderer does not have the right to preferential contract awarding. The contract will be awarded to theother criteria-conformed tenderer, or to a general tenderer. This method is covered in the provisions of the Regulations for Eco-Products Procurement[12]. However, the important premise for the above two priority procurement methods is that the nature of the subject matter of the tender is suitable for adopting the awarding principle of the lowest tender (Article 52, Paragraph 1, Subparagraphs 1 and 2 of the Procurement Act), that is, it is difficult to apply these methods to the subjects if they are different qualities. Pursuant to the provisions of Article 66 of the Enforcement Rules of the Government Procurement Act, the so-called "different qualities" refers to the construction work, property or services provided by different suppliers that are different in technology, quality, function, performance, characteristics, commercial terms, etc. Subjects of different qualities are essentially difficult to compare when based on the same specifications. If just looking at pricing alone it is difficult to identify the advantages and disadvantages of the subjects, hence, the awarding principle of the lowest tender is not appropriate. The innovative subjects are essentially subjects of different qualities, and under the same consideration, they are not suitable for applying the awarding principle of the lowest tender. Therefore, it is difficult to adopt the lowest-tender-based priority procurement method for the procurement of innovative subjects. In the case of innovative subjects with different qualities, the principle of the most advantageous tender should be adopted (Article 52 Paragraph 1 Subparagraph 3 of the Procurement Act) to identify the most qualified vender of the subjects through open selection. Therefore, the procedure for the priority procurement of innovative subjects with different qualities should be based on the most advantageous tender principle with focus on the "innovativeness" of the subjects, and consideration on how to give priority to tenderers, who qualify with the criteria of innovation. Pursuant to the provisions of Article 56 Paragraph 4 of the Procurement Act, the Procurement and Public Construction Commission has established the "Regulations for Evaluation of the Most Advantageous Tender". The tendering authorities adopting the most advantageous tender principle should abide by the evaluation method and procedures delineated in the method, and conduct an open selection of a winning tender. According to the Regulations for Evaluation of the Most Advantageous Tender, in addition to pricing, the tenderers' technology, quality, function, management, commercial terms, past performance of contract fulfillment, financial planning, and other matters pertaining to procurement functions or effectiveness, maybe chosen as evaluation criteria and sub-criteria. According to the three evaluation methods delineated in the provisions of Article 11 of the Regulations for Evaluation of the Most Advantageous Tender (overall evaluation score method, price per score point method, and ranking method), pricing could not been included in the scoring. That is, "the prices of the subjects" is not the absolute criterion of evaluation of the most advantageous tender process. The priority procurement procedures designed specifically for innovative subjects with different qualities may adopt an evaluation method that excludes "pricing" as part of the scoring criterion so as to give innovative subject tenderers the opportunity to be more competitive in the bidding evaluation process, and due to the extent of their innovativeness, obtain the right to preferential tenders. If it must be included in the scoring, the percentage of the total score for pricing should be reduced from its usual ratio[13], while stipulating explicitly that "innovation" must be included as part of the evaluation criteria. In addition, its weight distribution should not be less than a ratio that highlights the importance of innovation in the evaluation criteria. Furthermore, when determining how to give preference to tenderers who meet certain innovation criteria in the contract awarding procedures, care should be taken to stay on focus with the degree of innovation of the subject (the higher the degree of innovation, the higher the priority), rather than giving priority to arbitrary standards. In summary, with consideration of priority procurement procedures designed specifically for innovative subjects with different qualities, this paper proposes the following preliminary regulatory directions: 1.Adopt the awarding principle of the most advantageous tender. 2.Explicitly stipulate the inclusion of "innovation" in the evaluation criteria and sub-criteria, and its ratio, one that indicates its importance, should not be less than a certain percentage of the total score (for example 20%). 3.Reduce the distributed ratio of "price" in the scoring criteria in the open selection. 4.After the members of the evaluation committee have concluded the scoring, if more than two tenderers have attained the same highest overall evaluated score or lowest quotient of price divided by overall evaluated score, or more than two tenderers have attained the first ranking, the contract is awarded preferentially to the tenderer who scores the highest in the "innovation" criterion. 5.When multiple awards (according to Article 52 Paragraph 1 Subparagraph 4 of the Procurement Act) are adopted, that is, there is more than one final winning tender, the procuring entity may select the tenderers with higher innovation scores as the price negotiation targets for contract awarding, when there are more than two tenderers with the same ranking. Using the above method to highlight the value of innovative subjects will make these suppliers more competitive, because of their innovativeness ratings in the procurement procedures, and not confine them to the limitation of price-determination. So that, subject suppliers with a high degree of innovation, may attain the right to the preferential contract awarding that they deserve due to their innovativeness, and the procuring entity can purchase suitable innovative products in a more efficient and easy process. It also lowers the threshold for tenderers with innovation energy to enter the government procurement market, thus achieving the goal of supporting industrial innovation and creating a win-win scenario for supply and demand. [1] Cross-reference Table of Amended Provisions of the Statute for Industrial Innovation, The Ministry of Economic Affairs, https://www.moea.gov.tw/MNS/populace/news/wHandNews_File.ashx?file_id=59099 (Last viewed date: 12/08/2017). [2] According to the Guidance for public authorities on Public Procurement of Innovation issued by the Procurement of Innovation Platform in 2015, the so-called innovation procurement in essence refers to that the public sector can obtain innovative products, services, or work by using the government procurement processes, or that the public sector can administer government procurement with a new-and-better process. Either way, the implementation of innovation procurement philosophy is an important link between government procurement, R & D and innovation, which shortens the distance between the foresighted emerging technologies/processes and the public sector/users. [3] The EU's innovative procurement mechanism comprises the "Public Procurement of Innovation Solutions" (PPI Solutions) and "Pre-Commercial Procurement" (PCP). The former is one of the government procurement procedures, explicitly regulated in the new EU Public Procurement Directive (Directive 2014/24 / EU), for procuring solutions that are innovative, near or in preliminary commercial prototype; The latter is a procurement process designed to assist the public sector in obtaining technological innovative solutions that are not yet in commercial prototype, must undergo research and development process, and are not within the scope of EU Public Procurement Directive. [4] The "software, innovative and green products or services", as described in paragraph 1 of Article 27 of the amended Statute for Industrial Innovation, refers to, respectively, "software", "innovative products or services", and "green products or services" in general. There is no co-ordination or subordination relationship between the three; the same applies to "innovative and green products or services" in paragraph 4. [5] Article 93 of the Government Procurement Act stipulates: "An entity may execute an inter-entity supply contract with a supplier for the supply of property or services that are commonly needed by entities." Additionally, Article 2 of the Regulations for The Implementation of Inter-entity Supply Contracts stipulates: "The term 'property or services that are commonly needed by entities' referred to in Article 93 of the Act means property or services which are commonly required by two or more entities. The term 'inter-entity supply contract (hereinafter referred to as the “Contract”)' referred to in Article 93 of the Act means that an entity, on behalf of two or more entities, signs a contract with a supplier for property or services that are commonly needed by entities, so that the entity and other entities to which the Contract applies can utilize the Contract to conduct procurements." Therefore, according to the interpretation made by the Public Construction Commission, the Executive Yuan (PCC, for short), organizations handling inter-entity supply contracts should first conduct a demand investigation. [6] In general, organizations in charge of handling the inter-entity supply contracts will disseminate official documents to applicable organizations with an invitation to furnish information online about their interests and estimated requirement (for budget estimation) at government's e-procurement website. However, in the case of more prospective subjects (such as cloud services of the emerging industry), it may be difficult for an organization to accurately estimate the demand when filling out the survey, resulting in a mismatch of data between the demand survey and actual needs. [7] In accordance with the authorization of paragraph 3 of the Article, the IDB has established "Regulations Governing Examination and Identification of Advanced Recycled Products by Ministry of Economic Affairs" (including an appendix: Identification Specification for Resource Regenerating Green Products), except that the priority procurement process was not stipulated, because the Resource Regenerating Green Products, that meet the requirements of the Ministry of Economic Affairs, are covered by the "Category III Products" in the provisions of Article 6 of the existing "Regulations for Priority Procurement of Eco-Products", set forth by the PPC and The Environmental Protection Administration of the Executive Yuan. Hence, organizations that have the requirement to procure green products, may proceed with priority procurement by following the regulations in the "Regulations for Priority Procurement of Eco-Products". [8] After the amendment of the Article, the "software" in the provisions of paragraph 1 was excluded in paragraph 4, because the objective of paragraph 4 is to promote industry innovation and sustainable development with the use of a more flexible government procurement procedure. Thus, the subjects of the priority procurement mechanism are focused on "innovative" and "green" products or services, which exclude popular "software" that has a common standard in the market. However, if it is an "innovative software", it may be included in the "innovative products or services" in the provisions of paragraph 4. [9] According to the provisions of Article 12 of the Charges And Fees Act: "In any of the following cases, the executive authority in charge of the concerned matters may waive or reduce the amount of the charges and fees, or suspend the collection of the charges and fees: 7. Waiver, reduction, or suspension made under other applicable laws." [10] Refer to Article 12, Paragraph 1, Subparagraphs 1 and Article 13, Paragraph 1 and 2 of Regulations for Priority Procurement of Eco-Products. [11] Refer to Article 4 of Regulations for Obliged Purchasing Units / Institutions to Purchase the Products and Services Provided by Disabled Welfare Institutions, Organizations or Sheltered Workshops. [12] Refer to Article 12, Paragraph 1, Subparagraphs 2 and Article 13, Paragraph 3 of Regulations for Priority Procurement of Eco-Products. [13] The provisions of paragraph 3 Article 16 of the Regulations for Evaluation of the Most Advantageous Tender stipulates: Where price is included in scoring, its proportion of the overall score shall be not less than 20% and not more than 50%.
Executive Yuan roll-out The Policy of “The Free Economic Pilot Zones”Executive Yuan roll-out The Policy of “The Free Economic Pilot Zones”1.Executive Yuan approved a Bill titled “The Free Economic Pilot Zones Special Act”The “Free Economic Demonstration Zones” (hereinafter as FEDZs) is a critical part to improve the liberalization and internationalization of the economy of Republic of China (R.O.C). By deregulation, FEDZs was conceived as trial zones. Once the results of the program were promising, it would be expanded to the entire country. In order to engage in the regional economic and trade integration, the Executive Yuan approved a Bill titled “The Free Economic Pilot Zones Special Act” (hereinafter as Bill) on April 26th, 2013.On Mar 6th, 2014, the Joint Economic, Internal Administration , and Finance Committee of the Legislation Yuan (the Congress) discussed the Bill for reports and questions. By the end of the March, 2014, the Congress will hold five public hearings. Not until the discussion of the Bill item by item and the passage in the Congress, the second stage of the FEDZ program would not be initiated. There are five main points, including the treatments on foreigners and people from mainland China, tax incentives for Taiwanese businessman, foreign professionals and foreign companies, regulations on untaxed goods and labor, regulations on industrial development, such as the agriculture and the medical, and certain new items on education and professional services.For the reason that the government considered the need of human resources to sustain the operation of the industries, the Executive Yuan is trying to promote innovative education in FEPZs. Since the education requirements for both of public and private universities are unified in local, colleges and universities were restrained and missed some great opportunities to discover their own niches in education. Hence, innovative education in FEPZs is trying to help higher education system to introduce foreign education resources and foresight concepts, and to attract more international students. The innovative educational projects within FEPZs will also facilitate the cooperations among domestic and foreign universities, and set up experimental branch campuses, colleges, degree programs or professional courses. Besides, the financial service sector is also included. Since FEDZs is an important pusher for R.O.C to move forward in regional economic integration, accordingly, the most significant liberate item for the financial industry in the FEPZs is to allow offshore banking units and offshore security units to provide financial products and service (e.g. OSU and OBU). Meanwhile, the financial industry is predicted to receive an NTD$140 billion or more in revenues over the next five year.In summary, FEPZs is regarded as a engine propelling liberalization and internationalization. To gain the international competitiveness, the government will continue to promote policies and measures. By establishing the free economic demonstration zone, it is expected to create innovative effects into the education system and to create more job opportunities.2.Legislation Yuan has reviewd “The Free Ecomonic Pilot Zones Special Act”The Republic of China (R.O.C) have been carried out “free economic” recent years, by promoting “Free Economic Pilot Zone” (hereinafter as FEPZs) to encourage every industrial and foreign investment. Besides, FEPZs will not only keep talents and technologies in R.O.C but also liberalize and internationalize our economic.The Executive Yuan had approved a Bill titled “The Free Economic Pilot Zones Special Act” (hereinafter as the Bill) on Dec. 26th, 2013. At the end of May, the Joint Economic, Internal Administration, and Finance Committee of the Legislation Yuan (the Congress) have taken five public hearings for the Bill, and amended the Bill according to the advices proposed by specialists. Not until the deliberation of the Bill item by item and its passage in the Congress, the second stage of the FEDZ program would not be initiated. There are five main points, including the treatments on foreigners, tax incentives for R.O.C businessman, foreign professionals and foreign companies, regulations on untaxed goods and labor, regulations on industrial development, such as the agriculture and the medical service, and certain new items on education and professional services.The government considers that there have to be enough human resource to sustain the opened industries, so Executive Yuan is trying to promote innovative education in FEPZs. The core concept of FEPZs is foresight, liberalization and internationalization, the premier said, and the higher education systems belong to high-end service and have much more marketability and variability compared to other education systems. Through innovative and efficient way to manage the school could let University being much more liberalized. Furthermore, the higher education systems in R.O.C. have to connect with international education to avoid being marginalized. Our first stage of education innovation will promote to set up “degree programs” and “professional courses”. The first phase for the Ministry of Education is going to found “degree programs” or “professional courses” through collaboration way. The Ministry of Education will also draw up related regulations or guidance on standards for school cooperation, co-regulation, setup conditions, supervision, enrolling new student, and recruiting staff.? Once the Bills pass, The Ministry of Education plans to establish “branch school” and “independence campus” helping R.O.C. higher education goes internationalized.On the other hand, Our medical service also has strong international competitiveness. R.O.C is engage in developing international medical and health industry. The premier said, the Ministry of Health and Welfare have proposed some measures, such as limitation to the number of medical centre, medical personnel working hours, and NHI is not allow to use in the zones.The premier added, on the extemporaneous sittings, “The Free Economic Pilot Zones Special Act” will be the priority bills and be deliberated in the end of June By establishing the free economic demonstration zone, it is expected to propel R.O.C take part in Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).3.Executive Yuan’s rapid roll-out of “The Free Economic Pilot Zones”, and has published a report concerning the legal and economic implications of its the BillThe “Free Economic Pilot Zones” (hereinafter as FEPZs) plays a pivotal role in promoting market liberalization, especially at an international level. Premier of the Executive Yuan, Mr. Jiang Yi-Hua has stated that the “market economy” and “innovation economy” allows for tremendous economic prosperity to be embraced by the Republic of China (hereinafter as R.O.C). The seizing of such opportunity has been the goal of government efforts, which can be attested by the recent proposal of the “The Free Economic Pilot Zones Special Act” (hereinafter as the Bill), currently undergoing review and consultation proceedings. The Premier further stressed that the national economy should not be left excluded from international commerce, on the other hand, it is imperative that closer economic bonds with other nations are forged, therefore allowing itself open up to wider scope of opportunities for growth. The key in rendering this possible is through the enactment of laws. At a time, when Trans-Pacific nations, including the United States of America, Japan and countries from Southeast Asia, are working towards regional economic cooperation, if R.O.C. is to be left out, it is feared that its position in the global market would further be marginalized.The core innovative strengths of the FEPZs include “Smart Logistics”, “International healthcare services”, “Value added agriculture”, “Financial Services”, “Education Innovation”, all of which are implemented by employing R.O.C.’s finest workforce, knowledge, information and communications technology (ICT), geographical position and cross-strait relationship advantages, leading way for an advantageous basis for pioneering economic development. The first stage of development will be based on 6 locations proximal to the sea (including Keelung Port, Taipei Port, Kaohsiung Port, Suao Harbor, Anping Port, Taichung Port) and Taoyuan Aerotropolis and Pingtung Agricultural Biotech Park. The second stage of development would only commence after the Bill have been approved by the legislative Yuan, which would attract much capital investment, hence boosting high employment rates. Presently, besides the aforementioned regions opened up for the FEPZs, other cities and industrial sites (including those from offshore islands), are striving to gain membership of the FEPZs, or applying for empirical research of the FEPZs.The Executive Yuan has published a report concerning the legal and economic implications of its the Bill on May 2014. The report largely consists of assessments made by varying governing bodies, such as Ministry of Home Affairs, Financial Supervisory Commission etc., on the implications of the draft concerning real estate, employment, fiscal income, logistics, conditions for medical care, agriculture, higher education, social environment and social wealth redistribution etc.Furthermore, international attention has been closely centered on the progress of FEPZs. During the “The third review of the trade policies and practices of Chinese Taipei” after R.O.C accession to the World Trade Organization (WTO) held on the 17th of September 2014 in Geneva, each member state has demonstrated expectations arising out of the direction and planning undertaken for the FEPZs. National economic and international commercial reforms are under way and have seen much progress in further promoting the overall strength of the economic system, in an effort to respond to the rapid global political and economic developments, for example, through the signing of Economic Cooperation Framework Agreement (ECFA), and the implementation of FEPZs policies. In the future, it will be expected that R.O.C. will strive for a more integral international commercial system, allowing much capital investment inflows as well as the cultivating of high-caliber human resources.To promote more liberal and internationalized development of Taiwan economy, government of Republic of China (R.O.C) approved the “Free Economic Pilot Zone (FEPZ) Plan,” which the Bill is currently censored in Legislation Yuan and the measures would be implemented in two phases. The first phase of FEPZs would be initiated within six free trade ports, Taoyuan airport free trade zone, and Pingtung Agricultural Biotechnology Park; other industries that match up with the idea of liberalization, internationalization and foresight can all be incorporated into FEPZ through continuing examination under Execution Yuan. After this special legislation is passed, the set-ups of demonstration zones can be applied by authorities either of central or of local government and the related promotion works of the second phase will be unfolded immediately.Heading to the target of becoming Kin-Xiao (Kinmen and Xiaomen) Free Trade Zone, Kinmen government planned to apply to be one of the FEPZs and thus cooperated with Taiwan Institute of Economic Research (TIER) on December 11, for a commissioned research (which was later released on the conference of accelerating Kin-Xia FTZ on December 19) on evaluating if Kinmen is qualified for an application of FEPZs. Kinmen’s critical location and the featured industries have composed a perfect environment complying with the ideas such as value-added agriculture, international healthcare and innovative education for FEPZ. For instance, the white liquor industry in Kinmen represents the international management and promotion of agricultural products, and is the best example for value-added agriculture. “Long-term Healthcare Village in Kinmen,” which is currently developing in Kinmen, would also be a drive for international healthcare industry. Based on the Taiwan-featured culture, “International Education City” could be developed with a liberal and innovative atmosphere, which would attract famous schools in world to set up their branch school in Kinmen. Above all, Kinmen County vice Mayor, Wu Yo-Chin, indicated that Kinmen would be the first choice for FEPZ and would hold the key to open a new gate for the Cross-Strait. The vice Mayor emphasized that Kinmen government has well budgeting and financial management, which needn’t the extra aids from central government, yet Kinmen was excluded in the first phase of FEPZs. Although Kinmen would apply to be a FEPZ in the second phase after the special legislation passed, Kinmen still strived for taking part in the first phase of FEPZs due to the uncertain schedule for implementation of regulations on FEPZs.National Development Council (NDC), however, gave an opinion on issue of Kinmen applying to be in the first phase of FEPZs, which declared again the original plan for the first phase only included six free trade ports, Taoyuan airport free trade zone, and Pingtung Agricultural Biotechnology Park. NDC also suggested Kinmen could still follow after the first phase and apply to be a FEPZ in the second phase.
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