Reviews on Taiwan Constitutional Court's Judgment no. 13 of 2022
2022/11/24
I.Introduction
In 2012, the Taiwan Human Rights Promotion Association and other civil groups believe that the National Health Insurance Administration released the national health insurance database and other health insurance data for scholars to do research without consent, which may be unconstitutional and petitioned for constitutional interpretation.
Taiwan Human Rights Promotion Association believes that the state collects, processes, and utilizes personal data on a large scale with the "Personal Data Protection Law", but does not set up another law of conduct to control the exercise of state power, which has violated the principle of legal retention; the data is provided to third-party academic research for use, and the parties involved later Excessive restrictions on the right to withdraw go against the principle of proportionality.
The claimant criticized that depriving citizens of their prior consent and post-control rights to medical data is like forcing all citizens to unconditionally contribute data for use outside the purpose before they can use health insurance. The personal data law was originally established to "avoid the infringement of personality rights and promote the rational use of data", but in the insufficient and outdated design of the regulations, it cannot protect the privacy of citizens' information from infringement, and it is easy to open the door to the use of data for other purposes.
In addition, even if the health insurance data is de-identified, it is still "individual data" that can distinguish individuals, not "overall data." Health insurance data can be connected with other data of the Ministry of Health and Welfare, such as: physical and mental disability files, sexual assault notification files, etc., and you can also apply for bringing in external data or connecting with other agency data. Although Taiwan prohibits the export of original data, the risk of re-identification may also increase as the number of sources and types of data concatenated increases, as well as unspecified research purposes.
The constitutional court of Taiwan has made its judgment on the constitutionality of the personal data usage of National Health Insurance research database. The judgment, released on August 12, 2022, states that Article 6 of Personal Data Protection Act(PDPA), which asks “data pertaining to a natural person's medical records, healthcare, genetics, sex life, physical examination and criminal records shall not be collected, processed or used unless where it is necessary for statistics gathering or academic research by a government agency or an academic institution for the purpose of healthcare, public health, or crime prevention, provided that such data, as processed by the data provider or as disclosed by the data collector, may not lead to the identification of a specific data subject” does not violate Intelligible principle and Principle of proportionality. Therefore, PDPA does not invade people’s right to privacy and remains constitutional.
However, the judgment finds the absence of independent supervisory authority responsible for ensuring Taiwan institutions and bodies comply with data protection law, can be unconstitutional, putting personal data protection system on the borderline to failure. Accordingly, laws and regulations must be amended to protect people’s information privacy guaranteed by Article 22 of Constitution of the Republic of China (Taiwan).
In addition, the judgment also states it is unconstitutional that Articles 79 and 80 of National Health Insurance Law and other relevant laws lack clear provisions in terms of store, process, external transmission of Personal health insurance data held by Central Health Insurance Administration of the Ministry of Health and Welfare.
Finally, the Central Health Insurance Administration of the Ministry of Health and Welfare provides public agencies or academic research institutions with personal health insurance data for use outside the original purpose of collection. According to the overall observation of the relevant regulations, there is no relevant provision that the parties can request to “opt-out”; within this scope, it violates the intention of Article 22 of the Constitution to protect people's right to information privacy.
II.Independent supervisory authority
According to Article 3 of Central Regulations and Standards Act, government agencies can be divided into independent agencies that can independently exercise their powers and operate autonomously, and non- independent agencies that must obey orders from their superiors. In Taiwan, the so-called "dedicated agency"(專責機關) does not fall into any type of agency defined by the Central Regulations and Standards Act. Dedicated agency should be interpreted as an agency that is responsible for a specific business and here is no other agency to share the business.
The European Union requires member states to set up independent regulatory agencies (refer to Articles 51 and 52 of General Data Protection Regulation (GDPR)). In General Data Protection Regulation and the adequacy reference guidelines, the specific requirements for personal data supervisory agencies are as follows: the country concerned should have one or more independent supervisory agencies; they should perform their duties completely independently and cannot seek or accept instructions; the supervisory agencies should have necessary and practicable powers, including the power of investigation; it should be considered whether its staff and budget can effectively assist its implementation. Therefore, in order to pass the EU's adequacy certification and implement the protection of people's privacy and information autonomy, major countries have set up independent supervisory agencies for personal data protection based on the GDPR standards.
According to this research, most countries have 5 to 10 commissioners that independently exercise their powers to supervise data exchange and personal data protection. In order to implement the powers and avoid unnecessary conflicts of interests among personnel, most of the commissioners are full-time professionals. Article 3 of Basic Code Governing Central Administrative Agencies Organizations defines independent agency as "A commission-type collegial organization that exercises its powers and functions independently without the supervision of other agencies, and operates autonomously unless otherwise stipulated." It is similar to Japan, South Korea, and the United States.
III.Right to Opt-out
The judgment pointed out that the parties still have the right to control afterwards the personal information that is allowed to be collected, processed and used without the consent of the parties or that meets certain requirements. Although Article 11 of PDPA provides for certain parties to exercise the right to control afterwards, it does not cover all situations in which personal data is used, such as: legally collecting, processing or using correct personal data, and its specific purpose has not disappeared, In the event that the time limit has not yet expired, so the information autonomy of the party cannot be fully protected, the subject, cause, procedure, effect, etc. of the request for suspension of use should be clearly stipulated in the revised law, and exceptions are not allowed.
The United Kingdom is of great reference. In 2017, after the British Information Commissioner's Office (ICO) determined that the data sharing agreement between Google's artificial intelligence DeepMind and the British National Health Service (NHS) violated the British data protection law, the British Department of Health and Social Care proposed National data opt-out Directive in May, 2018. British health and social care-related institutions may refer to the National Data Opt-out Operational Policy Guidance Document published by the National Health Service in October to plan the mechanism for exercising patient's opt-out right. The guidance document mainly explains the overall policy on the exercise of the right to opt-out, as well as the specific implementation of suggested practices, such as opt-out response measures, methods of exercising the opt-out right, etc.
National Data Opt-out Operational Policy Guidance Document also includes exceptions and restrictions on the right to opt-out. The Document stipulates that exceptions may limit the right to Opt-out, including: the sharing of patient data, if it is based on the consent of the parties (consent), the prevention and control of infectious diseases (communicable disease and risks to public health), major public interests (overriding) Public interest), statutory obligations, or cooperation with judicial investigations (information required by law or court order), health and social care-related institutions may exceptionally restrict the exercise of the patient's right to withdraw.
What needs to be distinguished from the situation in Taiwan is that when the UK first collected public information and entered it into the NHS database, there was already a law authorizing the NHS to search and use personal information of the public. The right to choose to enter or not for the first time; and after their personal data has entered the NHS database, the law gives the public the right to opt-out. Therefore, the UK has given the public two opportunities to choose through the enactment of special laws to protect public's right to information autonomy.
At present, the secondary use of data in the health insurance database does not have a complete legal basis in Taiwan. At the beginning, the data was automatically sent in without asking for everyone’s consent, and there was no way to withdraw when it was used for other purposes, therefore it was s unconstitutional. Hence, in addition to thinking about what kind of provisions to add to the PDPA as a condition for "exception and non-request for cessation of use", whether to formulate a special law on secondary use is also worthy of consideration by the Taiwan government.
IV.De-identification
According to the relevant regulations of PDPA, there is no definition of "de-identification", resulting in a conceptual gap in the connotation. In other words, what angle or standard should be used to judge that the processed data has reached the point where it is impossible to identify a specific person. In judicial practice, it has been pointed out that for "data recipients", if the data has been de-identified, the data will no longer be regulated by PDPA due to the loss of personal attributes, and it is even further believed that de-identification is not necessary.
However, the Judgment No. 13 of Constitutional Court, pointed out that through de-identification measures, ordinary people cannot identify a specific party without using additional information, which can be regarded as personal data of de-identification data. Therefore, the judge did not give an objective standard for de-identification, but believed that the purpose of data utilization and the risk of re-identification should be measured on a case-by-case basis, and a strict review of the constitutional principle of proportionality should be carried out. So far, it should be considered that the interpretation of the de-identification standard has been roughly finalized.
V.Conclusions
The judge first explained that if personal information is processed, the type and nature of the data can still be objectively restored to indirectly identify the parties, no matter how simple or difficult the restoration process is, if the data is restored in a specific way, the parties can still be identified. personal information. Therefore, the independent control rights of the parties to such data are still protected by Article 22 of the Constitution.
Conversely, when the processed data objectively has no possibility to restore the identification of individuals, it loses the essence of personal data, and the parties concerned are no longer protected by Article 22 of the Constitution.
Based on this, the judge declared that according to Article 6, Item 1, Proviso, Clause 4 of the PDPA, the health insurance database has been processed so that the specific party cannot be identified, and it is used by public agencies or academic research institutions for medical and health purposes. Doing necessary statistical or academic research complies with the principles of legal clarity and proportionality, and does not violate the Constitution.
However, the judge believes that the current personal data law or other relevant regulations still lack an independent supervision mechanism for personal data protection, and the protection of personal information privacy is insufficient. In addition, important matters such as personal health insurance data can be stored, processed, and transmitted externally by the National Health Insurance Administration in a database; the subject, purpose, requirements, scope, and method of providing external use; and organizational and procedural supervision and protection mechanisms, etc. Articles 79 and 80 of the Health Insurance Law and other relevant laws lack clear provisions, so they are determined to be unconstitutional.
In the end, the judge found that the relevant laws and regulations lacked the provisions that the parties can request to stop using the data, whether it is the right of the parties to request to stop, or the procedures to be followed to stop the use, there is no relevant clear text, obviously the protection of information privacy is insufficient. Therefore, regarding unconstitutional issues, the Constitutional Court ordered the relevant agencies to amend the Health Insurance Law and related laws within 3 years, or formulate specific laws.
I.Introduction Having sustained the negative repercussions following the global financial crisis of 2008, Taiwan’s average economic growth rate decreased from 4.4 percent (during 2000-2007 years) to 3 percent (2008-2012). This phenomenon highlighted the intrinsic problems the Taiwanese economic growth paradigm was facing, seen from the perspective of its development momentum and industrial framework: sluggish growth of the manufacturing industries and the weakening productivity of the service sector. Moreover, the bleak investment climate of the post-2008 era discouraged domestic investors injecting capital into the local economy, rendering a prolonged negative investment growth rate. To further exacerbation, the European Debt Crisis of 2011 – 2012 has impacted to such detriment of private investors and enterprises, that confidence and willingness to invest in the private sector were utterly disfavored. It can be observed that as Taiwan’s industrial core strength is largely concentrated within the the manufacturing sector, the service sector, on the other hand, dwindles. Similarly, the country’s manufacturing efforts have been largely centered upon the Information & Communications Technology (ICT) industry, where the norm of production has been the fulfillment of international orders in components manufacturing and Original Equipment Manufacturing (OEM). Additionally, the raising-up of society’s ecological awareness has further halted the development of the upstream petrochemical and metal industry. Consumer goods manufacturing growth impetus too has been stagnated. Against the backdrop of the aforementioned factors at play as well as the competitive pressure exerted on Taiwan by force of the rapid global and regional economic integration developments, plans to upgrade and transform the existing industrial framework, consequently, arises out as an necessary course of action by the state. Accordingly, Taiwan’s Executive Yuan approved and launched the “Industrial Upgrading and Transformation Action Plan”, on the 13th of October 2014, aiming to reform traditional industries, reinforcing core manufacturing capacities and fostering innovative enterprises, through the implementation of four principal strategies: Upgrading of Product Grade and Value, Establishment of Complete Supply Chain, Setting-up of System Integration Solutions Capability, Acceleration of Growth in the Innovative Sector. II.Current challenges confronting Taiwanese industries 1.Effective apportionment of industrial development funds Despite that Research and Development (R&D) funds takes up 3.02% of Taiwan’s national GDP, there has been a decrease of the country’s investment in industrial and technology research. Currently Taiwan’s research efforts have been directed mostly into manufacturing process improvement, as well as into the high-tech sector, however, traditional and service industries on the other hand are lacking in investments. If research funds for the last decade could be more efficiently distributed, enterprises would be equally encouraged to likewise invest in innovation research. However, it should be noted that Taiwan’s Small and Medium Enterprises (SME) based on their traditional developmental models, do not place research as their top priority. Unlike practices in countries such as Germany and Korea, the research fund input by private enterprises into academic and research institutions is still a relatively unfamiliar exercise in Taiwan. With regards to investment focus, the over-concentration in ICTs should be redirected to accommodate growth possibilities for other industries as well. It has been observed that research investments in the pharmaceutical and electric equipment manufacturing sector has increased, yet in order to not fall into the race-to-the-bottom trap for lowest of costs, enterprises should be continually encouraged to develop high-quality and innovative products and services that would stand out. 2.Human talent and labor force issues Taiwan’s labor force, age 15 to 64, will have reached its peak in 2015, after which will slowly decline. It has been estimated that in 2011 the working population would amount to a meager 55.8%. If by mathematical deduction, based on an annual growth rate of 3%, 4% and 5%, in the year 2020 the labor scarcity would increase from 379,000, 580,000 to 780,000 accordingly. Therefore, it is crucial that productivity must increase, otherwise labor shortage of the future will inevitably stagnate economic growth. Notwithstanding that Taiwan’s demographical changes have lead to a decrease in labor force; the unfavorable working conditions so far has induced skilled professionals to seek employment abroad. The aging society along with decrease in birth rates has further exacerbated the existing cul-de-sac in securing a robust workforce. In 1995 the employment rate under the age of 34 was 46.35%, yet in 2010 it dropped to a daunting 37.6%. 3.Proportional land-use and environmental concerns Taiwan’s Environmental Impact Assessment (EIA) is a time-consuming and often unpredictable process that has substantially deterred investor’s confidence. Additionally, there exists a disproportionate use of land resources in Taiwan, given that demand for its use predominantly stems from the northern and middle region of the country. Should the government choose to balance out the utilization of land resources across Taiwan through labor and tax policies, the situation may be corrected accordingly. III.Industrial Upgrading and Transformation Strategies The current action plan commences its implementation from October 2014 to end of December 2024. The expected industrial development outcomes are as follows: (1) Total output value of the manufacturing sector starting from 2013 at NTD 13.93 trillion is expected to grow in 2020 to NTD 19.46 trillion. (2) Total GDP of the service sector, starting at 3.03 trillion from 2011 is expected to grow in 2020 to 4.75 trillion NTD. 1.Strategy No.1 : Upgrading of product grade and value Given that Taiwan’s manufacturing industry’s rate for added value has been declining year after year, the industry should strive to evolve itself to be more qualitative and value-added oriented, starting from the development of high-end products, including accordingly high-value research efforts in harnessing essential technologies, in the metallic materials, screws and nuts manufacturing sector, aviation, petrochemical, textile and food industries etc. (1) Furtherance of quality research Through the employment of Technology Development Program (TDP) Organizations, Industrial TDP and Academic TDP, theme-based and pro-active Research and Development programs, along with other related secondary assistance measures, the industrial research capability will be expanded. The key is in targeting research in high-end products so that critical technology can be reaped as a result. (2) Facilitating the formation of research alliances with upper-, mid- and downstream enterprises Through the formation of research and development alliances, the localization of material and equipment supply is secured; hence resulting in national autonomy in production capacity. Furthermore, supply chain between industrial component makers and end-product manufacturers are to be conjoined and maintained. National enterprises too are to be pushed forth towards industrial research development, materializing the technical evolution of mid- and downstream industries. (3) Integrative development assistance in Testing and Certification The government will support integrative development in testing and certification, in an effort to boost national competitive advantage thorough benefitting from industrial clusters as well as strengthening value-added logistics services, including collaboration in related value-added services. (4) Establishment of international logistics centre Projection of high-value product and industrial cluster image, through the establishment of an international logistics centre. 2.Strategy No.2 : Establishment of a Complete Supply Chain The establishing a robust and comprehensive supply chain is has at its aim transforming national production capabilities to be sovereign and self-sustaining, without having to resort to intervention of foreign corporations. This is attained through the securing of key materials, components and equipments manufacturing capabilities. This strategy finds its application in the field of machine tool controllers, flat panel display materials, semiconductor devices (3D1C), high-end applications processor AP, solar cell materials, special alloys for the aviation industry, panel equipment, electric vehicle motors, power batteries, bicycle electronic speed controller (ESC), electrical silicon steel, robotics, etc. The main measures listed are as follows: (1) Review of industry gaps After comprehensive review of existing technology gaps depicted by industry, research and academic institutions, government, strategies are to be devised, so that foreign technology can be introduced, such as by way of cooperative ventures, in order to promote domestic autonomous development models. (2) Coordination of Research and Development unions – building-up of autonomous supply chain. Integrating mid- and downstream research and development unions in order to set up a uniform standard in equipment, components and materials in its functional specifications. (3) Application-theme-based research programs Through the release of public notice, industries are invited to submit research proposals focusing on specific areas, so that businesses are aided in developing their own research capabilities in core technologies and products. (4) Promotion of cross-industry cooperation to expand fields of mutual application Continuously expanding field of technical application and facilitating cross-industry cooperation; Taking advantage of international platform to induce cross-border technical collaboration. 3.Strategy No.3 : Setting-up of System Integration Solutions capability Expanding turnkey-factory and turnkey-project system integration capabilities, in order to increase and stimulate export growth; Combination of smart automation systems to strengthen hardware and software integration, hence, boosting system integration solution capacity, allowing stand-alone machinery to evolve into a total solution plant, thus creating additional fields of application and services, effectively expanding the value-chain. These type of transitions are to be seen in the following areas: turnkey-factory and turnkey-project exports, intelligent automated manufacturing, cloud industry, lifestyle (key example: U-Bike in Taipei City) industry, solar factory, wood-working machinery, machine tools, food/paper mills, rubber and plastic machines sector. Specific implementation measure s includes: (1) Listing of national export capability – using domestic market as test bed for future global business opportunities Overall listing of all national system integration capabilities and gaps and further assistance in building domestic “test beds” for system integration projects, so that in the future system-integration solutions can be exported abroad, especially to the emerging economies (including ASEAN, Mainland China) where business opportunities should be fully explored. The current action plan should simultaneously assist these national enterprises in their marketing efforts. (2) Formation of System Integration business alliances and Strengthening of export capability through creation of flagship team Formation of system integration business alliances, through the use of national equipment and technology, with an aim to comply with global market’s needs. Promotion of export of turnkey-factory and turnkey-projects, in order to make an entrance to the global high-value system integration market. Bolstering of international exchanges, allowing European and Asian banking experts assist Taiwanese enterprises in enhancing bids efforts. (3) Establishing of financial assistance schemes to help national enterprises in their overseas bidding efforts Cooperation with financial institutes creating financial support schemes in syndicated loans for overseas bidding, in order to assist national businesses in exporting their turnkey-factories and turnkey-solutions abroad. 4. Strategy No.4 : Acceleration of growth in the innovative sectors Given Taiwan economy’s over-dependence on the growth of the electronics industry, a new mainstream industry replacement should be developed. Moreover, the blur distinction between the manufacturing, service and other industries, presses Taiwan to develop cross-fields of application markets, so that the market opportunities of the future can be fully explored. Examples of these markets include: Smart Campus, Intelligent Transportation System, Smart Health, Smart City, B4G/5G Communications, Strategic Service Industries, Next-Generation Semiconductors, Next-Generation Visual Display, 3D Printing, New Drugs and Medical Instruments, Smart Entertainment, Lifestyle industry (for instance the combination of plan factory and leisure tourism), offshore wind power plant, digital content (including digital learning), deep sea water. Concrete measures include: (1) Promotion of cooperation between enterprises and research institutions to increase efficiency in the functioning of the national innovation process Fostering of Industry-academic cooperation, combining pioneering academic research results with efficient production capability; Cultivation of key technology, accumulation of core intellectual property, strengthening integration of industrial technology and its market application, as well as, establishment of circulation integration platform and operational model for intellectual property. (2) Creating the ideal Ecosystem for innovation industries Strategic planning of demo site, constructing an ideal habitat for the flourishing of innovation industries, as well as the inland solution capability. Promotion of international-level testing environment, helping domestic industries to be integrated with overseas markets and urging the development of new business models through open competition. Encouraging international cooperation efforts, connecting domestic technological innovation capacities with industries abroad. (3) Integration of Cross-Branch Advisory Resources and Deregulation to further support Industrial Development Cross-administrations consultations further deregulation to support an ideal industrial development environment and overcoming traditional cross-branch developmental limitations in an effort to develop innovation industries. IV. Conclusion Taiwan is currently at a pivotal stage in upgrading its industry, the role of the government will be clearly evidenced by its efforts in promoting cross-branch/cross-fields cooperation, establishing a industrial-academic cooperation platform. Simultaneously, the implementation of land, human resources, fiscal, financial and environmental policies will be adopted to further improve the investment ambient, so that Taiwan’s businesses, research institutions and the government could all come together, endeavoring to help Taiwan breakthrough its currently economic impasse through a thorough industrial upgrading. Moreover, it can be argued that the real essence of the present action plan lies in the urge to transform Taiwan’s traditional industries into incubation centers for innovative products and services. With the rapid evolution of ICTs, accelerating development and popular use of Big Data and the Internet of Things, traditional industries can no longer afford to overlook its relation with these technologies and the emerging industries that are backed by them. It is only through the close and intimate interconnection between these two industries that Taiwan’s economy would eventually get the opportunity to discard its outdated growth model based on “quantity” and “cost”. It is believed that the aforementioned interaction is an imperative that would allow Taiwanese industries to redefine its own value amidst fierce global market competition. The principal efforts by the Taiwanese government are in nurturing such a dialogue to occur with the necessary platform, as well as financial and human resources. An illustration of the aforementioned vision can be seen from the “Industrie 4.0” project lead by Germany – the development of intelligent manufacturing, through close government, business and academic cooperation, combining the internet of things development, creating promising business opportunities of the Smart Manufacturing and Services market. This is the direction that Taiwan should be leading itself too. References 1.Executive Yuan, Republic of China http://www.ey.gov.tw/en/(last visited: 2015.02.06) 2.Industrial Development Bureau, Ministry of Economic Affairs http://www.moeaidb.gov.tw/(last visited: 2015.02.06) 3.Industrial Upgrading and Transformation Action Plan http://www.moeaidb.gov.tw/external/ctlr?PRO=filepath.DownloadFile&f=policy&t=f&id=4024(last visited: 2015.02.06)
An Analysis of the Recusal Mechanism in the Latest Revision of the Government Procurement Act and Regulations Governing Procurements for Scientific and Technological Research and DevelopmentAn Analysis of the Recusal Mechanism in the Latest Revision of the Government Procurement Act and Regulations Governing Procurements for Scientific and Technological Research and Development 1. Introduction Article 1 of the Government Procurement Act (hereinafter referred to as the Act) reveals that “This Act is enacted to establish a government procurement system that has fair and open procurement procedures, promotes the efficiency and effectiveness of government procurement operation, and ensures the quality of procurement.” Therefore, a recusal mechanism for reviewing qualification/disqualification of tenders and bidders is highly essential, for example, the head of the agency or its related persons should disclose the conflict of interests. After amended and promulgated on May 22, 2019 (Presidential Decree Hua-tzung-1 Yi No. 10800049691), the Act was revised with the identical legislative principle of the Act on Recusal of Public Servants Due to Conflicts of Interest. In other words, a more flexible and transparent mechanism has been adopted, which is more advanced and ideal for both procurement authority and external supervisors. 2. The New Recusal Mechanism of the Act Enhances the Flexibility and Transparency The revision struck out the Paragraph 4, Article 15 of the Act, and the regulation related to the recusal mechanism shall be comply with the Act on Recusal of Public Servants Due to Conflicts of Interest, especially the qualification/disqualification provision of the “related persons.” The new government procurement procedure adopted a more flexible and transparent practice, “disclosure in advance and publication afterwards.” The detailed analysis is as follows. (1) Before the Act amended, the personnel of a procuring entity and its related persons shall withdraw themselves from the procurement. Before the Act amended, the personnel of a procuring entity and its related persons shall withdraw themselves from the procurement. According to the previous Paragraph 4 of Article 15 (4), “Suppliers or persons in charge shall not participate in the procurement if they have connections with the agency’s head described in Paragraph 2. However, if the implementation of this paragraph is against fair competition or public interest, the exclusion can be exempted with the authority’s approval.” The Paragraph 2 mentioned specified, “The personnel of a procuring entity shall withdraw themselves from procurement and all related matters thereof if they or their spouses, relatives by blood or by marriage within three degrees, or family members living together with them have interests involved therein.” Simply put, legislators considered that suppliers or persons in charge shall not participate in an agency's procurement if they have conflict of interests with its head. For instance, the spouses, all the relatives within the third degree by consanguinity (blood) or by affinity (marriage), or family members living together with the head of the agency, cannot involve in the procurement of the agency. Furthermore, if a legal entity or an organization is directed by the relatives of the head of a government agency mentioned, it is disqualified from the procurement. (2) After the Act amended, the recusal of related persons substituted by self-disclosure and information publication norms According to the Amendment, the Act was amended because the content of the article is existed in Article 9 of Act on Recusal of Public Servants Due to Conflicts of Interest; thus, Article 15 of the Act is hereby deleted. Recalling Article 9 of the previous Act on Recusal of Public Servants Due to Conflicts of Interest, “A public servant and his related persons shall not conduct transactions such as subsidizing, sales, lease, contracting, or other transactions conducted with consideration with the organ with which the public servant serves or the organs under his supervision.” For this reason, the amendment to Article 15 of Government Procurement Act is to regulate the mechanism of withdrawal of relevant parties by Article 14 of the existing Act on Recusal of Public Servants Due to Conflicts of Interest. However, the amendment of this article is greatly affected by the interpretation of judicial court no. 716, so it is necessary to briefly describe its key points as follows. On the basis of the Judicial Yuan Justice Interpretation No. 716 [Transactions between public officials and their associates and service agencies shall be prohibited), adopting a constitutional interpretation of Article 9 of Act on Recusal of Public Servants Due to Conflicts of Interest, grand justice agreed this article does not contradict the proportion principle of article 23 of Constitution of the Republic of China (Taiwan), and it does not violate Article 15 “The right of existence, the right of work, and the right of property shall be guaranteed to the people” and Article 22 “All other freedoms and rights of the people that are not detrimental to social order or public welfare shall be guaranteed under the Constitution”, either. However, for public officials, if they are not allowed to participate in trading competition, it will result in the monopoly of other minority traders, which is not conducive to the public interest. Therefore, this interpretation holds that if the agency has conducted open and fair procedures in the transaction process, and there is sufficient anti-fraud regulation, whether there is still a risk of improper benefit transmission or conflict of interest, and it is necessary to prohibit the transaction of public officials' associates, the relevant authorities should make comprehensive review and improvement as soon as possible. Accordingly, following interpretation no. 716, Act on Recusal of Public Servants Due to Conflicts of Interest was amended and published with 23 articles on 13 June, 2018. The withdrawal of interested parties is provided for in Article 14 and an additional six exceptions are provided, including: (1) The procurement carried out by public notice under the Government Procurement Act or pursuant to Article 105 of the same Act. (2) The property right in interest created for the procurement, sale by tender, lease by tender or tender solicitation carried out by public notice in a fair competitive manner pursuant to laws. (3) Subsidy requested in the legal capacity under laws; the subsidy to the public servant’s related person in an open and fair manner pursuant to laws, or the subsidy which might be against the public interest if it is prohibited and is granted subject to the competent authority’s approval. (4) The subject matter of the transaction is provided by the organ with which the public servant serves or the organs under his supervision, and traded at the official price. (5) The lease, acquisition, discretionary management, improvement and utilization of national non-public real estate requested by the state-owned enterprise in order to execute the national construction projects or public policies, or for the purpose of public welfare. (6) The subsidy and transaction under the specific amount. The above amendments make the transactions between public officials and related parties that should be avoided in the past partially flexible now. In accordance with Paragraph 2 of the same article, in the case of the first three paragraphs of the proviso of Paragraph 1, the applicant or bidder shall voluntarily state his/her identity in the application or tender documents. After the subsidy or transaction is established, the agency shall disclose it together with its identity. That is to say, the self-disclosure is required beforehand and the information will go public afterwards to meet public expectations of transparency. This is also conducive to the supervision of all sectors, and conforms to the intention of the grand justice’s interpretation. The reason why there is no need for government procurement to withdrawal is that the announcement process of the procurement is made in accordance with Government Procurement Act (including open tendering, selective tendering and restricted tendering through the announcement). There are strict procedures to follow and there is no conflict between the conflict of interest of public officials and the spirit of legislation. As to Paragraph 2 of other legal orders, the property right in interest created for the procurement, sale by tender, lease by tender or tender solicitation carried out by public notice in a fair competitive manner pursuant to laws. The legislative explanations are exemplified by the procurement (e.g. procurements for scientific and technological research and development) handled by the announcement in accordance with Fundamental Science and Technology Act. 3. Conclusion: It is suggested that relevant withdrawal regulations should be amended as soon as possible in procurements for scientific and technological research and development The strike-out of the recusal provision of the Act does not mean that government procurement stoke out the recusal mechanism. The recusal mechanism is still stated in Article 14 of Act on Recusal of Public Servants Due to Conflicts of Interest. In addition to the advantages of the same regulations on the prohibition of transactions between related parties, it also enables the regulators with open and fair procedures and sufficient prevention of fraud, such as government procurement, to avoid evading so as not to harm the public interest. At the same time, supplemented by open and transparent disclosure, the amendment is a positive change of legislation. Meanwhile, this paper believes that Government Procurement Act has adopted the mechanism of flexibility and transparency requirements for the procurement object avoidance regulations, and procurements for scientific and technological research and development should revise relevant withdrawal regulations as soon as possible. In accordance with Paragraph 4 of Article 6 of Fundamental Science and Technology Act and the authorization, Regulations Governing Procurements for Scientific and Technological Research and Development (hereinafter referred to as the regulatory regulations) is established. According to Article 8 (2) and (3) of the regulation, a responsible person, partner, or representative of the public school, public research institute (organization), or juristic person or entity performing the scientific research procurement may not serve as a responsible person, partner, or representative of the supplier. The supplier and the juristic person or entity performing the scientific research procurement may not at the same time be affiliated with each other, or affiliated to the same other enterprise. From the perspective of the article structure, the withdrawal regulation for scientific research procurement is within the norm of Article 15 of Government Procurement Act before the amendment, but it includes regulations for affiliated enterprises, which is not included in Article 15. The amendment to Article 14 of Act on Recusal of Public Servants Due to Conflicts of Interest also states that the proviso of Paragraph 1 of scientific research procurement “other procurements that are regulated by fair competition and by means of an announcement procedure” can also prove that the mechanism for scientific research procurement should adopt this provision. Therefore, it is recommended that the original procurements for scientific and technological research that is independent from Government Procurement Act should be amended by the competent authority as soon as possible in order to comply with the relevant provisions of Article 8 of Regulations Governing Procurements for Scientific and Technological Research and Development and to comply with the original intention of the Regulations Governing Procurements for Scientific and Technological Research and Development, and to avoid stricter regulations on scientific procurement than government procurement. Meanwhile, it is in accordance with the spirit of the grand justice’s interpretation No. 716.
Executive Yuan Promotes Free Economic Demonstration ZoneI.Background To promote more liberal and internationalized development of Taiwan economy, Premier of Executive Yuan approved the “Free Economic Demonstration Zone Plan” on April 26, 2013. Meanwhile, an Executive Yuan Working Group on Promotion of Economic Demonstration Zone is set up to accelerate the mapping out of the promotion programs as well as detailed action plans. The first phase of the Free Economic Demonstration Zone is to be officially initiated in July. According to the “Free Economic Demonstration Zone Plan”, the relevant laws and provisions regarding the flowing of human and financial capitals, and of logistics, will be loosen up to a great degree, based on the core ideas of liberalization, internationalization, and forwardness. Other related measures such as offering of lands and taxation would also be made, in order to attract capitals from both the inside and outside of the country. In addition, the Free Economic Demonstration Zone will first develop economic activities such as intelligent computing, international medicine services, value-added agriculture and cooperation among industries, to accelerate the transformation of the industrial structure of Taiwan. In order to construe an excellent environment for business of full liberalization and internationalization, the promotion strategies will be focused on “break-through of legal frameworks and innovations of management mechanisms”. II.Content of the Plan To accelerate the promotion process, the Free Economic Demonstration Zone will be conducted in two phases. The first phase is centered on the existing free trade port areas, including five ports and one airport, incorporated with the nature of “being inside the country border but outside the tariff zone”. All the industrial parks in the near counties and cities will also be integrated. The promotion will be set out simultaneously in the north, middle and south of Taiwan. The effects of the promotion are expected to be magnified by fully utilizing the resources and the unique characters of industries of each region. Moreover, the promulgation of a special legislation on the Free Economic Demonstration Zone would be facilitated in the future. 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. According to the Executive Yuan, the Free Economic Demonstration Zone will be beneficial in terms of creating positive conditions for Taiwan to participate in regional trade organizations and attract both local and foreign investment, injecting new movement into the economic growth of Taiwan. III.Recent Development In addition, on August 8, 2013, relevant discussions on “Furtherance Plan for Free Economic Demonstration Zone Phase One” are further unfolded in the Executive Yuan conference. In addition, the Premier also indicates, that the furtherance of the Free Economic Demonstration Zone (hereafter: FEDZ) is divided into two phases. The first phase starts from the moment that the Plan is approved till the related special legislation is passed and promulgated. In this phase, the relevant tasks can be achieved through the ways of promulgation of administrative orders. On the other hand, the tasks concerning taxation benefits and other parts that involve legislation will not able to be initiated till the second phase of the Plan. For those tasks, the Council for Economic Planning and Development is asked to complete the drafting of this special legislation and related procedures for registering it into the Executive Yuan, together with the Ministry of Economic Affairs and other concerned agencies, in the hope that the related legislation works of the Executive Yuan can be completed before the end of this year. In respect of “Furtherance Plan for Free Economic Demonstration Zone Phase One”, Premier Jiang further points out, that FEDZ is a model incorporates the concept of “being inside the country border but outside the tariff zone” and the idea of “combining the stores upfront and the factories behind, outsourcing manufactures”. In this way, the hinterland of a port can be expended and magnified effects to be achieved through using the resources provided by the factory in behind. Under this pattern, the expansion effects that cities and counties such as New Taipei City and Changhua Country fight for, can be further extended by this concept of “factories in the back”. As for Port of Anping, over which Tainan City government has proactively fought for, can be listed as a demonstration zone once the Executive Yuan approved it as free trade port zone. In the future, other places that are with forward-looking industry and suitable can still be enlisted. Premier Jiang further expresses that, there are four demonstration industries in the first phase, including intelligent computing, international medicine services, value-added agriculture and cooperation among industries. Yet, he also points out that the demonstration of liberalized economy is a concept of “4+N”. It means that the demonstration will not be limited to the scope of these four industries. Other industries that match up with the idea of liberalization, internationalization and foresight can all be incorporated into FEDZ through continuing examination. Moreover, Premier Jiang later mentions on August 14th, that FEDZ is a crucial task for the government at this moment. He thus requests the Ministry of Economic Affairs, Ministry of Transportation and Communications, Ministry of Health and Welfare, and the Council of Agriculture, to enhance the training and service quality of staffers of the single service window of furtherance of FEDZ. Moreover, Premier Jiang additionally indicated in November, that the scope of the FEDZ will include Pingtung Agricultural Biotechnology Park and Kaohsiung Free Trade Port Area. The combination of the two will facilitate adding value to the agriculture in Taiwan and put momentum into quality agriculture, making the high-quality agricultural products of our country being sold to all over the world with swift logistic services. Premier Jiang also mentioned, that in order to avoid Taiwan being marginalized amid regional integrations of global economies, the government is facilitating industries of potentials by proactively promote the FEDZ. The current approach is to expend the original free trade port area with legislative bases, creating the demonstration zones of free economy by combing original establishments such as Pingtung Agricultural Biotechnology Park. If this approach and system is proved feasible, the next step would be promoting it to island-wide, making the whole nation open-up. IV.Conclusion In the past decade, the economic development in Taiwan, compared to neighboring economic zones such as Hong Kong, Korean or Singapore, was indeed stagnant. It is thus a positive move for the government to put great efforts in promoting FEDZ, in the hope that the liberalization and internationalization of the economy of this country can therefore be significantly improved. Yet, some commentators are of slightly more skeptical opinions, reminding that in terms of the tax relaxation in the Plan, similar approach was already taken by the government before, which did not lead to the expected outcome. In sum, it still remains as a continuing task for us and for the administration as well, to ponder on how Taiwan can find out its own unique strength in the face of global competition. How we can attract more international partners, to create mutual economic benefits. The FEDZ is undoubtedly a first step. Nevertheless, challenges are still ahead of the government, as to how to take many more steps in the future, in order to make Taiwan to march on the stage of the world again.
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.