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Law as a Business Driver: Doing Business Under the Electronic Transactions Act

My information is that the response to the invitation to this forum was so overwhelming that the organizers have been forced to give serious consideration to having a second forum to accommodate those who could not be accommodated today.
As Minister with responsibility for electronic commerce, this makes me very happy. For it suggests that the business community is beginning to have a better appreciation for the critical importance which electronic commerce is playing in today’s world.
Before I continue though, I wish, on behalf of my Ministry, to express my deep thanks and gratitude to the Centre for International Services, at the University of the West Indies, Cave Hill Campus, and especially to the Director, Miss Lolita Applewhaite, for assisting us in planning and arranging this forum, and for doing so with such thoroughness, professionalism and excellence, and may I add, as usual.
And I want to use this opportunity to say that I am deeply impressed with the high level of support being provided by the Director and staff of the Centre for International Services to my Ministry in its efforts to promote the use and application of Information and Communications Technology in the business community in our country.
We in the Ministry value this support greatly and look forward eagerly to seeing this spirit of co-operation extended to other areas for which the Ministry has responsibility. For I believe that in a situation where one has to operate with resource constraints, the national interest can best be served through the adoption of a co-operative approach and a pooling of resources.
As you are aware we are living in an ever-changing world where technological development is taking place at a phenomenal rate. Unless businesses are able to appreciate this reality and structure themselves to cope with these changes, they are likely to find themselves falling on hard times.
As we look around us we can all see the effects of trade liberalization and globalization. With the setting up of the World Trade Organization in 1995, the international community agreed to the introduction of measures which would facilitate international trade by removing existing barriers to trade. Naturally, Barbados as a Member of the World Trade Organization, had to fall in line and remove a number of restrictive trade practices, thus opening up our domestic market to goods and services from other member states.
Coupled with this development was the tremendous development in the field of telecommunications such that businesses in remote areas, and countries in widely separated geographical locations can now communicate with each other in real time. This has served to facilitate business transactions and has resulted in what is often termed the “death of distance”.
The end result of all this is that the world is fast becoming one large global village. The implication is that businesses, both small and large, will face increasing competition, even in their domestic market, whether they like it or not. This means, therefore, that in order to be able to survive, it is important that all businesses pay close attention to their operational efficiency and look ahead with a view to reorganizing themselves so that they can properly meet the challenges which they are sure to have to confront in the future.
I wish to stress that the consequences of not preparing adequately for future developments are likely to be disastrous. Clearly the time for action is now.
I need not remind you that the changes taking place are impacting on our lives and driving the process of development. In the Financial Services Sector, for example, banks are using technology to reduce their operating cost and to provide greater customer satisfaction. Right here in Barbados, one has the choice of going to a bank teller to make a cash withdrawal or deposit. Alternatively, one can make use of the ATM, thus avoiding the need to join a long queue. Furthermore, one can check one’s account status from the comfort of one’s home through the use of a telephone.
Of course, banks are also broadening the services being offered to the public. Ravi Kulakota of the University of Rochester in New York in a paper entitled “The Impact of Cyber communication on Traditional Financial Services” noted that banks are entering an era in which “financial products are treated as information commodities and banks are in competition with non-banks to serve customers with the best bundle of information”. He further notes that cyberspace has enabled both customers and institutions to benefit from widely available and easy-to-use methods for exchanging financial data electronically, making their interactions more convenient, accurate and efficient.
And I would stress that in developed countries, such as Germany and Sweden, for example, a growing percentage of customers are choosing to undertake their banking transactions over the Internet. Let us not fool ourselves. Barbados will, and will have to, follow this trend.
Again, in the automobile industry, the impact of the Internet has been dramatic. Many consumers have opted to source cars directly from overseas suppliers, thus cutting out the middleman, and realizing considerable savings for themselves in the process. By such action, they have been able to benefit from wider choice and have significantly increased their personal welfare, and, I must say, much to the disappointment of established car dealers.
In the supermarket segment of our local retail sector, I am sure that you are all aware of at least one operator which has offered its services on line. This means that customers can use their computer in the comfort of their homes to order their groceries and can have them delivered right to their doorstep, thus obviating the need to physically visit the supermarket.
I have provided these examples in order to enable you to get a better understanding and appreciation of the impact which technological development is having on our lives. And I dare say that as businessmen and businesswomen you cannot afford to ignore these developments. More importantly, you must be prepared to reorganize and restructure your operations so that you can take advantage of the new technologies. This you must do if you are to maintain your competitiveness. For rest assured that your competitors will embrace the new technologies to better serve their customers, and sharpen their own competitiveness.
And let me say that it is my view that the private sector has a critical role to play in the development of electronic commerce in our country. Indeed I would be extremely happy to see the sector leading the way in this very important area.
Let me also say that Government is prepared to play its part in the development of this area of economic activity.
And one important area which government is championing is the area of training in Information Technology.
Under the Edutech Project the Ministry of Education is not only providing primary and secondary schools with computers and access to the Internet, but is also providing training for students and teachers in Information Technology. Also, through the Community Development Division, Government is equipping a number of community centres and sports pavilions with computer equipment as well as access to the Internet. The intention is to use these facilities as Resource Centres to offer Information Technology training to communities across the country, thus making the new technology available to, and usable by, persons who might not otherwise have had access to it.
Information Technology training is also being provided to interested persons under the Technical and Vocational Training Programme.
With respect to the Public Service, Government has for some time now been providing Information Technology training for Public Officers through the Training Administration Division of the Ministry of the Civil Service. This is an ongoing programme and is designed to ensure that the Public Service is computer literate and capable of functioning efficiently is this the information age.
Additionally, there are plans to upgrade the level of training currently being provided. Many of you would have heard our Prime Minister and Minister of Finance, in his Economic and Financial Statement which was delivered to Parliament in August last year, state that Government intends to set up a University College of Barbados. It is anticipated that that Institution will, among others things, provide training in computer programming and software development to the degree level. And this, of course, will complement the training currently being provided through the Barbados Institute of Management and Productivity and Barbados Investment and Development Corporation Information Technology Training Programme.
The most critical aspect of Government’s programme for the development of electronic commerce however is in the area of legislation. Government sees itself very much as a facilitator in the process of the development of electronic commerce. And I believe that that role can be carried out through the provision of the required legal framework.
Already, Government has enacted an Electronic Transactions Act which will be the focus of your deliberations this morning. There are also plans for the enactment of a Computer Misuse Act, which will seek to protect computer systems and the information contained therein from unauthorized access, and a Data Protection Act which will seek to protect the privacy of the individual. I expect that the provision of this additional legislation will help to give consumers and business persons greater confidence in the use of Information Technology, thus promoting its widespread usage.
With respect to the Electronic Transactions Act, I wish to point out that at Section 21, there are specific provisions for the Minister to make Regulations for encryption while at Section 28, there are provisions for the Minister to make Regulations “generally for the purpose of giving effect to the Act.” As you will appreciate, Regulations are critical for the proper administration of the Act.
I am pleased to be able to report therefore that the Ministry is at an advanced stage in the formulation of Regulations for this legislation and expect to be able to complete the exercise shortly.
I expect that the Regulations will include the following:
(a) the issuing and certification of electronic signatures;
(b) the licensing of Certification Authorities;
(c) the criteria for licensing;
(d) the revocation and suspension of a licence;
(e) the record keeping by Certification Authorities;
(f) Security;
(g) privacy of users;
(h) maintenance of quality of service; and
(i) the handling of encryption technology
The Regulations will also, I expect include provisions dealing with
(i) The payment of fees by Certification Authorities;
(ii) a Public Officer overseeing the provisions of the Regulations;
(iii) the imposition of penalties.
(iv) access to information by Law enforcement personnel; and
(v) reporting by Certification Authorities.
These regulations will promote public confidence with respect to the validity, integrity and reliability of conducting electronic transactions, especially since they will facilitate the use of accredited certificates. By making use of digital certificates, businesses and individuals will be able to:
(i) establish the identify of the opposite party in electronic transactions;
(ii) ensure the integrity and confidentially of electronic messages transmitted over open communications networks; and
(iii) safeguard the non-repudiation of electronic transactions.
Another area which government will be addressing is the area of standards. I am mindful of the fact that trade liberalization and globalization have heightened the need for greater attention to be paid to standards in the conduct of trade, whether at the domestic, regional or international level. Hence, it should be of no surprise that my Ministry, with the assistance of the Barbados National Standards Institution will be seeking to develop a standard for electronic transactions. This I believe will help to ensure that consumers and businesses making use of electronic commerce are better able to benefit from the provision of quality service from service providers.
I wish to remind you that the Government of Barbados is actively promoting this country as a Services Economy. Furthermore, trade negotiations taking place under the guidance of the World Trade Organization as well as the Free Trade Area of the Americas are likely to see significant progress being made in the liberalization of the services sector. Since there are numerous services which can be provided through electronic means it is going to be important for us to ensure that appropriate standards are in place to govern the provision of such services. A standard for electronic transactions can help in this regard.
Before I conclude my presentation I wish to extend a warm welcome to you the participants at this forum and to wish you every success in your deliberations.
I wish also to remind you that electronic commerce continues to grow at a phenomenal rate, with analysts speaking about sales for consumer goods and services reaching no less than $76 billion by the year 2005. Given that electronic commerce is not limited in any way by national borders, I wish to urge all of you to organize your business in such a way that that you can claim your share of this lucrative market.
I note with interest that according to the last population census, there were 83,000 occupied dwelling units in the country and of these some 18,000 were making use of computers while 12,000 had access to the Internet. This to my mind provides an excellent base for the growth and development of electronic commerce.
I now take much pleasure in declaring this forum open.
I thank you.