Geneva, 25 September 2013 – Countries belonging to the Association of Southeast Asian Nations (ASEAN), already well advanced in using e-commerce, should boost the development payoff of these technologies by taking steps to build consumer trust (see table 1 below), address payment fraud, and overcome difficulties in assessing the quality of products offered online, a new UNCTAD report recommends.

The report, entitled Review of E-commerce Legislation Harmonization in the Association of Southeast Asian Nations,also urges that attention be paid to harmonization concerns related to online privacy, identity theft, and the currently limited access to complaint systems. The report was published today and can be downloaded free by clicking on this link.

The review notes that the policy challenges for many ASEAN countries include how to increase Internet penetration to levels that will make e-commerce a more viable option for enterprises.

ASEAN was the first region in the developing world to adopt a harmonized legal framework for e-commerce. Ten years later, it is the most advanced developing region regarding the implementation of harmonized e-commerce laws. However, in a region as diverse as Southeast Asia, the approach taken by countries has been to refer to international instruments without having binding e-commerce laws for the whole region, the review says. The harmonization process focuses on achieving predictability in the use of e-commerce.

Country-to-country disparities in the uptake of information and communication technology (ICT) remain substantial, the study notes, especially in terms of Internet use and fixed broadband deployment. Mobile penetration is generally high, except in Myanmar. The report says that mobile devices offer considerable potential for commerce, as well as for mobile financial services which have already been adopted widely in some ASEAN countries.

The review’s proposals are intended to accelerate the process of regional integration and harmonization as outlined in the ASEAN ICT Masterplan 2015.

Electronic commerce is seen as a key component for ASEAN to realize its vision of a regionally integrated economy. Having a single e-commerce market will enable ASEAN member States to take advantage of the rapid economic development within the region and in other neighbouring countries. The harmonization of e-commerce laws is essential for driving further regional integration via e-commerce, trade facilitation, tourism, outsourcing, e-government, cloud computing, mobile commerce, and social networking, the report says.

Among UNCTAD’s recommendations:

• An ASEAN roadmap for e-commerce should be commissioned, and a multi-year project set up to tie together regional, bilateral and national activities in one coordinated package. This approach would help individual member States as well as the ASEAN secretariat to monitor progress against the 2015 targets for e-commerce.

• Steps should be taken to build the capacities of policymakers and users in relevant areas of e-commerce, especially to address cybersecurity concerns and to build trust among potential consumers.

• A common training and resource facility on e-commerce should be established, and 24/7 national contact points should be set up to enforce laws prohibiting cross-border cybercrime.

• The handling of cross-border consumer complaints should be harmonized – a step that will require an agreement between national consumer protection regulators, complemented by appropriate investigation and referral tools.

• ASEAN member States should consider becoming participants in the International Consumer Protection and Enforcement Network (to date, only the Philippines and Viet Nam are members).

• An ASEAN mutual recognition agreement should be developed, which would detail minimum acceptable standards for electronic signatures and related “trust” services to facilitate cross-border e-commerce.

Progress in the region, as shown in tables 2 and 3, has been the strongest in regard to electronic transactions and cybercrime. Nine and eight – respectively – of the ten member countries now have relevant legislation in place in these two areas.

With regard to data protection/privacy laws, there has also been much progress, although there is scope for more harmonization, the report contends. Three countries (Malaysia, the Philippines and Singapore) have passed privacy legislation, and Indonesia and Viet Nam have partial privacy legislation in place, while Brunei Darussalam and Thailand are discussing draft legislation.

Progress in the area of consumer protection for online transactions in the region is mixed. Six out of 10 countries already have legislation in place. Two have partial laws (Brunei Darussalam and Indonesia). The Lao People’s Democratic Republic has draft laws, while Cambodia has yet to commence work in this area.

The need to address legal and infrastructure challenges is accentuated by the emergence of cloud computing, the report says. Greater reliance on cloud services adds urgency to issues of data protection and data security. ASEAN countries recognize the importance of striking a balance between risks to privacy and cybersecurity on the one hand, and cloud computing opportunities on the other. At the moment, cloud adoption is at different stages around the region. Singapore already has a range of policy, investment and tax initiatives to boost the adoption of cloud services in the country, while other ASEAN members are moving more slowly towards the cloud.

The barriers to an effective harmonized e-commerce legal framework include a lack of capacity-building on legal issues surrounding e-commerce, among policymakers as well as users; a lack of coordination between the different ministries involved in e-commerce; a lack of coordination at the regional level on the design and implementation of relevant legislation; and a lack of strong enforcement institutions, the report says.

About UNCTAD’s work on e-commerce

UNCTAD has long supported ASEAN countries in their efforts to harmonize e-commerce. This cooperation takes place as part of UNCTAD’s work programme on E-commerce and Law Reform, which is housed in the ICT Analysis Section of the organization’s Division on Technology and Logistics. UNCTAD has also assisted other developing regions to build their capacities to support e-commerce law harmonization. UNCTAD often works in partnership with relevant international organizations such as the International Telecommunication Union (ITU) and the United Nations Commission on International Trade Law (UNCITRAL). UNCTAD’s work on e-commerce law reform is supported financially by the Government of Finland.