Taking only three weeks to draft and two hours for House approval, some detractors feel that Philippines' new e-commerce law may not hold water.
CEBU (ZDNetAsia) - Spurred in part by the recent LoveBug Virus and Philippines' rush to be viable for e-commerce, the recently approved E-Commerce Law may not have all the bases covered. While the new law was embraced by information technology (IT) enthusiasts, an advocate of the law warned of loopholes with serious ramifications.
The e-commerce law contains insertions that may be dangerous to the local economy, Philippine Internet commerce society founder Janette Toral says. "Certain provisions in the law may encourage money laundering and (fiscal) fraud," said Toral during an e-commerce seminar held at the Cafe Laguna Garden yesterday.
Snapshot of the Law
Toral has been actively lobbying for the approval of the law, considering it as essential for the new economy. The law gives legal recognition to electronic data messages, electronic documents, and electronic signatures. It also allows the formation of contracts in electronic form. Banking transactions can also be done through ATM switching networks.
Toral said there were some clauses in the law that needed review by the industry. She mentioned that banks whose ATM systems sometimes do not dispense cash for withdrawals but record it as having actually dispensed it should be wary of liabilities. They could not continue with their practice of failing to return the money or taking two weeks before crediting it to the depositor's account. "The problem there is the bank holds the bulk of evidence of the transaction," she said.
On the other hand, she voiced concern over the manner the House version of the law was passed, taking only two hours. "The legislators were under pressure to complete the passage of the law before the US visit of President Estrada," Toral said.
"They were one in the belief that for the President to be effective in selling the country as an e-commerce hub, he should bring the law with him," she added. It was in that two hours, Toral said, when certain insertions were incorporated in the final version of the law. Toral urged Internet users, especially entrepreneurs, to take care in trying out the provisions of the new law such as the acceptance of legal contracts in electronic form.
"The law features faster contracting with easy click-on devices for electronic signature that carries with it legal agreement," she explained in an earlier forum at the Cebu city Waterfront Hotel. She said this development required everyone to be circumspect in going through the provisions of any contract on the web before clicking on the agreement icon. "Even ATM or phone conversations are considered electronic transactions and are covered by this new law," she said.
Toral admitted that she was part of the team that came up with the implementing rules and regulations (IRR) of the law in a record three weeks. "It was the fastest IRR in history and the first to be done by the private sector," she said. Toral cautioned that in banking transactions through ATM networks, every transaction is absolute once consummated.
The law's immediate effect is penalizing hacking or any means of unauthorized access to electronic documents, data messages or signatures, including the introduction of computer viruses. Hacking is now punishable by a fine ranging from P100,000 to a maximum commensurate to the damage inflicted and with imprisonment from six months to three years. Piracy through the Internet also carries the same penalty.
The law also provides the mandate for the electronic implementation of transport documents to facilitate carriage of goods. It also mandates the government to have the capability to do e-commerce within two years or before June 19, 2002. The law took effect June 19.
Under the IRR, the Department of Trade and Industry (DTI) must supervise the development and monitoring of the law's compliance among users. For their part, the Department of Transport and Communications (DOTC) and National Telecommunications Commission (NTC) and the National Computer Centre are required to come up with policies and rules leading to substantial reduction of telecommunication costs in Internet facilities.