BACKGROUND:

 

SPEECH –

An example of “public speech”, in this context, would be an open and notorious change to one’s LinkedIn profile, such as adding a project, an interest, or a competency and skill; and then positively choosing to publicize these profile changes to one’s network.

 

WHISPER –

An example of a “public whisper”, in this context, would be changing one’s skills or communication preferences to show openness to career opportunities, thereby letting recruiters know that one might be interested in opportunities; willingly sharing one’s LinkedIn profile with potential recruiters; or making a public speech as above, but then “specifically” choosing to not announce this profile change to one’s network or to members of the general public.

 

LINKEDIN

LinkedIn    (“LinkedIn”) is a very widely-used networking site that allows users to choose between making such public speech and public whispers, in their settings preferences.

 

hiQ

hiQ Labs, Inc. (“hiQ”), is a data analytics entity that has developed and deployed automated “bots” that can access public speech and that last definitional element of a public whisper[1] (hushed or stealthy profile changes) on LinkedIn in a Skill Mapper, allegedly not always in accordance with LinkedIn user-selected visibility preferences,[2] and then further share, publicize or sell the results whether in the raw or aggregated formats to its own customer base of interested employers and parties and persons attempting to contact such job-seeking, job-interested, and passively job interested LinkedIn users.

 

“Companies like LinkedIn, Twitter and Facebook view scraping of the data generated by their users not just as theft – they sometimes charge to license data (to higher level business users) – but a violation of their users’ privacy, because some information can be limited so not all users can view it”[3] [additional words in parentheses].

 

Understandably, LinkedIn, “which charges recruiters, salespeople and job hunters for higher levels of access to profile data”,[4] issued a 3-page cease-and-desist letter to hiQ on May 23, 2017,[5] advising the recipient that it was in violation of the LinkedIn user agreement with those behaviours, notifying  the recipient that additional security precautions had been implemented to prevent any recurrence, demanding that the recipient delete and destroy all such “improperly obtained material” in its possession or custody or control, and putting the recipient on notice that any further such behaviour would be in violation of applicable state and federal laws, with citation to a leading 2015 case in that jurisdiction of the United States federal District Court for the Northern District of California (USDC, NDCA), in which the court had barred similar “website data scraping” conduct.[6]

 

hiQ promptly filed for a Temporary Restraining Order (TRO) in California federal court (USDC, NDCA),[7] to bar any actual application of that cease-and-desist language pending ultimate determination of the underlying matters in a court of competent jurisdiction.  And so it was, that on Monday, August 14, 2017, the court granted hiQ its TRO.[8]

 

 

ANALYSIS:

 

CRAIGSLIST

In the case that LinkedIn cited within its cease-and-desist letter to hiQ, Craigslist, Inc., had filed a Complaint against the defendant, but the defendant had not timely answered.  As a result, Craigslist then applied for and was granted, a Default Judgement.[9]  According to the ruling, a certain Brian Niessen, a Craigslist user, had answered a Craigslist advertisement posted by another Craigslist user, for a “Skilled Hacker at Scraping Web Content”.[10]  Niessen had described himself as a hacker, and professed that he was already scraping several thousand websites, including “[c]raigslist, Twitter, Groupon, Zagat, and others.”[11]  3taps then entered into a business relationship with Niessen to continue his scraping, for them, which Craigslist stated was in violation of its terms of use (TOU) and constituted a breach of contract because Niessen, as a registered Craigslist user, had agreed to the TOU on several occasions.[12]

 

“The TOU prohibit, among other things, “[a]ny copying, aggregation, display, distribution, performance or derivative use of craigslist or any content posted on craigslist whether done directly or through intermediaries, […]”[13]

 

Craigslist did secure injunctions against the Niessen co-defendants, including Lovely, PadMapper, and 3taps.[14]  However, Niessen – named along with those co-defendants in the Amended Complaint with its 17 Claims for Relief,[15] was somewhat more elusive; as he was first difficult to effectively serve with the Complaint, and then after being served, he failed to provide an answer within the specified time.[16]  As a result, the Clerk of Court first entered a Notice of Default against Niessen, and then Craigslist made Motion for a Default Judgement against Niessen, which the court granted.[17]

 

 

LINKEDIN –

LinkedIn had sought a response by May 31, 2017 to its cease-and-desist letter of May 23, 2017.[18]  However, hiQ filed its Complaint for Declaratory and Injunctive relief against LinkedIn on June 7, 2017.[19]  In summary, with the first paragraph of the Introduction for same, hiQ writes:

 

“This is an action for declaratory relief under the Declaratory Judgment Act, 28 U.S.C. § 2201 and 2202, and for injunctive relief under California law.  hiQ seeks a declaration from the Court that hiQ has not violated and will not violate federal or state law by accessing and copying wholly public information from LinkedIn’s website.  hiQ further seeks injunctive relief preventing LinkedIn from misusing the law to destroy hiQ’s business, and give itself a competitive advantage through unlawful and unfair business practices and suppression of California Constitutional free speech fair guarantees.  hiQ also seeks damages to the extent applicable.”[20]

 

hiQ did promptly and appropriately seek and retain counsel to engage in discussions with LinkedIn upon receipt of the cease-and-desist letter, in order to better understand LinkedIn’s position and seek an accommodative solution to their serious differences.[21]  LinkedIn argued through counsel that it was protecting the interests of its users and seeking to remedy violations of state and federal laws; and hiQ argued through counsel that not only did LinkedIn lack any proprietary interests in the posted data, which was still owned by its users, but that LinkedIn was therefore attempting to “pervert the purpose of the laws at issue by using them to destroy putative competitors, engage in unlawful and unfair business practices and suppress the free speech rights of California citizens and businesses.”[22]

 

On May 30, 2017, hiQ then sent its own letter to LinkedIn seeking the ongoing interim website access that would allow it to persist as a going concern – because “complying with LinkedIn’s demands would essentially destroy hiQ’s business”,[23] while continuing discussions towards “a mutually amicable resolution” of their impasse.  However, on receiving no response, hiQ filed its Complaint for declaratory and injunctive relief.[24]

 

 

HIQ –

The parties entered into a standstill agreement that preserved hiQ’s access to the public LinkedIn data, and agreed to convert hiQ’s original motion into one for a preliminary injunction, after the court had heard the initial party arguments on the hiQ complaint on July 27, 2017.[25]  In California federal District Court, “[a] plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.[26]  Within the United States Court of Appeals for the Ninth Circuit, which lays-down controlling precedent for United States Federal District Courts in California and several other states and territories,[27] there is a sliding scale for the standard of proof on these elements; which means “a stronger showing of one element may offset a weaker showing of another.”[28]

 

The court also grappled, inter alia, with the language of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030,[29] which prohibits and sanctions unauthorized (whether lacking authorization ab initio or with authorization later revoked), or improperly elevated or improperly applied access to a computer or computer system, because although the LinkedIn profiles were public, they rested on one or more private servers, which were computers.[30]  However, as the court finally opined, “[…] hiQ has, at the very least, raised serious questions as to applicability of the CFAA to its conduct.[31]

 

“The CFAA must be interpreted in its historical context, mindful of Congress’ purpose. The CFAA was not intended to police traffic to publicly available websites on the Internet – the Internet did not exist in 1984. The CFAA was intended instead to deal with “hacking” or “trespass” onto private, often password-protected mainframe computers.”[32]

 

With regard to hiQ‘s claims that the LinkedIn conduct had violated applicable California free speech laws, the court was more circumspect.  hiQ had cited to Robins v. Pruneyard Shopping Ctr.,[33] a case involving attempts to curtail political speech in a privately-owned shopping mall, to analogize that the LinkedIn site was a public forum akin to a shopping mall with guaranteed free access, free speech, and free association, because “[…] the state’s guarantee of free expression may take precedence over the rights of private property owners to exclude people from their property.”[34]

 

The court was very loathe to start traveling down this most slippery of slopes, stating that: no court had, as yet, extended Pruneyard to the internet in so complete a manner; unlike a shopping mall, the Internet had no single controlling authority; there may result significant repercussions on the capacity of social media hosts to curate posted materials in such a public forum; and there was a lingering question as to whether the same rules would apply to the websites of small, medium, and large entities, alike.[35]  The court therefore concluded, that “[i]n light of the potentially sweeping implications discussed above and the lack of any more direct authority, the Court cannot conclude that hiQ has at this juncture raised “serious questions” that LinkedIn’s conduct violates its constitutional rights under the California Constitution.[36]

 

On the balance, the court agreed that hiQ had raised enough of a question as to whether LinkedIn’s actions against it had violated the provisions of California’s Unfair Competition Law (UCL)[37] by “leveraging its power in the professional networking market for an anticompetitive purpose”;[38] disagreed that hiQ had either claimed to be a third-party beneficiary of LinkedIn’s promise to its users that they could control the publicity of their profiles, or shown that a third-party could assert such a claim of promissory estoppel in the first instance;[39] and agreed that the public interest favoured a granting of hiQ’s injunction, because “[i]t is likely that those who opt for the public view setting expect their public profile will be subject to searches, date (sic) mining, aggregation, and analysis.”[40]

 

 

CONCLUSION:

 

Of note, regarding all of its claims and especially the estoppel claim, hiQ had also argued that LinkedIn had long acquiesced to its usage of the website and publicly available user data in this way; including attending hiQ conferences where the host thoroughly explained its methodology and business model, and even gave at least one LinkedIn employee an award.[41]  Indeed, some industry commentators have opined that LinkedIn has merely had a change in policy subsequent to its acquisition by Facebook which the courts should not enjoin, and they foresee several other negative repercussions from the outcome of this case if hiQ prevails, and they expect LinkedIn to appeal the District Court ruling.[42]  However, there are also several strong voices supporting hiQ that see negative repercussions if LinkedIn prevails.[43]

 

Suffice it so say that for now, LinkedIn has been Ordered to withdraw its cease and desist letters to hiQ, and stop blocking hiQ, both with immediate effect from the August 14, 2017 date of the Order of Edward M. Chen, United States District Judge.[44]

 

We await LinkedIn’s appeal,[45] if any, but in the interim …… all who so do, are advised to publicly shout, and to publicly whisper, with caution, because they never know who might be cataloguing their words – and where those words that they own might land; (or more specifically, land the originator of those very words) in this Gig e-conomy[46] that exemplifies the gentle admonition that “sharing is daring!

 

 

*********************************************************************

 

Author:

Ekundayo George is a lawyer and sociologist.  He is a keen student of organizational and micro-organizational behavior and has gained significant experience in regulatory compliance, litigation, and business law and counseling.  He has been licensed to practise law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America.  See, for example: http://www.ogalaws.com.  A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services and Public Finance, Public Procurement, Healthcare and Public Pensions, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors.

 

Of note, Mr. George has now worked at the municipal government, provincial government, and federal government levels in Canada, as well as at the municipal government, state government, and federal government levels in the United States.  He is also a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and enjoys complex systems analysis in legal, technological, and societal milieux.

 

Trained in Legal Project Management (and having organized and managed several complex projects before practising law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams.  Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: healthcare; education and training; law and regulation; policy and plans; statistics, economics, and evaluations including feasibility studies and business cases; infrastructure; and information technology/information systems (IT/IS) – also sometimes termed information communications technologies (ICT).  See, for example: http://www.simprime-ca.com.

 

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

 

This article creates no lawyer-client relationship, and is not intended or deemed legal advice, business advice, the rendering of any professional service, or attorney advertising where restricted or barred.  The author and affiliated entities specifically disclaim and reject any and all loss claimed, no matter howsoever resulting as alleged, due to any action or inaction done in reliance on the contents herein.  Past results are no guarantee of future success, and specific legal advice should be sought for particular matters through counsel of your choosing, based on such factors as you deem appropriate.

 

 

[1] See Infra note 7 at Introduction, ¶2.  hiQ does specifically state in its Complaint, that: “hiQ does not analyze the private sections of LinkedIn, such as profile information that is only visible when you are signed-in as a member, or member private data that is visible only when you are “connected” to a member. Rather, the information that is at issue here is wholly public information visible to anyone with an internet connection.”  But See HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-EMC (N.D. Cal. August 14, 2017).  Order Granting Plaintiff’s Motion for Preliminary Injunction, issued by Edward M. Chen, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA), at 6.  Web: <https://assets.documentcloud.org/documents/3932131/2017-0814-Hiq-Order.pdf>…

“LinkedIn maintains that […] while the information that hiQ seeks to collect is publicly viewable, the posting of changes to a profile may raise the risk that a current employee may be rated as having a higher risk of flight under Keeper even though the employee chose the Do Not Broadcast setting. hiQ could also make data from users available even after those users have removed it from their profiles or deleted their profiles altogether. LinkedIn argues that both it and its users therefore face substantial harm absent an injunction; if hiQ is able to continue its data collection unabated, LinkedIn members’ privacy may be compromised, and the company will suffer a corresponding loss of consumer trust and confidence” [emphasis added].

[2] Id. at Introduction, ¶5.  On this point, hiQ writes to specify LinkedIn’s 5 levels of profile visibility preference, and emphasize its own limited access to and use of same:

“LinkedIn members can choose to (1) keep their profile information private; (2) share only with their direct connections; (3) share with connections within three degrees of separation; (4) allow access only to other signed-in LinkedIn members, or (5) allow access to everyone, even members of the general public who may have no LinkedIn account and who can access the information without signing in or using any password. It is only this fifth category of information – wholly public profiles – that is at issue here: hiQ only accesses the profiles that LinkedIn members have made available to the general public.”

[3] Thomas Lee.  LinkedIn, HiQ Spat Presents Big Questions for Freedom, Innovation.  Published July 8, 2017 on sfchronicle.com.  Web: <http://www.sfchronicle.com/business/article/LinkedIn-HiQ-spat-presents-big-questions-for-11274133.php#comments>

[4] Ibid.

[5] LinkedIn Corporation.  RE: Demand to Immediately Cease and Desist Unauthorized Data Scraping and other Violations of LinkedIn’s User Agreement.  Letter dated May 23, 2017.  Web: <https://static.reuters.com/resources/media/editorial/20170620/hiqvlinkedin–ceaseanddesist.pdf>

[6] Craigslist, Inc v. 3Taps, Inc et al, 12-cv-03816-CRB (N.D. Cal. October 9, 2015).  ORDER Granting Application for Default Judgment, issued by Charles R. Breyer, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA).  Web: <http://law.justia.com/cases/federal/district-courts/california/candce/3:2012cv03816/257395/280/>

[7] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-LB (N.D. Cal. June 7, 2017).  COMPLAINT FOR DECLARATORY JUDGMENT UNDER 22 U.S.C. § 2201 THAT PLAINTIFF HAS NOT VIOLATED: (1) THE COMPUTER FRAUD AND ABUSE ACT (18 U.S.C. § 1030); (2) THE DIGITAL MILLENNIUM COPYRIGHT ACT (17 U.S.C. §1201);(3) COMMON LAW TRESPASS TO CHATTELS; OR (4) CAL. PENAL CODE § 502(c); INJUNCTIVE RELIEF TO ENJOIN: (1) INTENTIONAL INTERFERENCE WITH CONTRACT AND PROSPECTIVE ECONOMIC ADVANTAGE; (2) UNFAIR COMPETITION (CAL. BUS. & PROF. CODE § 17200); (3) PROMISSORY ESTOPPEL; AND (4) VIOLATION OF CALIFORNIA FREE SPEECH LAW; AND RELATED MONETARY RELIEF. Filed 2017, in the United States District Court for the Northern District of California (USDC, NDCA).  Web: <https://www.unitedstatescourts.org/federal/cand/312704/1-0.html>

[8] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-EMC (N.D. Cal. August 14, 2017).  Order Granting Plaintiff’s Motion for Preliminary Injunction, issued by Edward M. Chen, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA).  Web: <https://assets.documentcloud.org/documents/3932131/2017-0814-Hiq-Order.pdf>

[9] Craigslist, Inc v. 3Taps, Inc et al, 12-cv-03816-CRB (N.D. Cal. October 9, 2015).  ORDER Granting Application for Default Judgment, issued by Charles R. Breyer, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA).  Web: <http://law.justia.com/cases/federal/district-courts/california/candce/3:2012cv03816/257395/280/>

[10] Id. at 2.

[11] Ibid.

[12] Id. at 3.

[13] Id. at 2.

[14] Craigslist, Inc v. 3Taps, Inc et al, 12-cv-03816-CRB (N.D. Cal. October 9, 2015).  ORDER Granting Application for Default Judgment, issued by Charles R. Breyer, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA), at 3.  Web: <http://law.justia.com/cases/federal/district-courts/california/candce/3:2012cv03816/257395/280/>

[15] Craigslist, Inc v. 3Taps, Inc et al, 12-cv-03816-CRB (N.D. Cal. November 20, 2012).  First Amended Complaint.

Web: <http://www.3taps.com/images/pics/430_Amended Compalint .pdf>

[16] Supra note 14 at 3.

[17] Ibid.

[18] LinkedIn Corporation.  RE: Demand to Immediately Cease and Desist Unauthorized Data Scraping and other Violations of LinkedIn’s User Agreement.  Letter dated May 23, 2017.  Web: <https://static.reuters.com/resources/media/editorial/20170620/hiqvlinkedin–ceaseanddesist.pdf>

[19] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-LB (N.D. Cal. June 7, 2017). COMPLAINT FOR DECLARATORY JUDGMENT UNDER 22 U.S.C. § 2201 THAT PLAINTIFF HAS NOT VIOLATED: (1) THE COMPUTER FRAUD AND ABUSE ACT (18 U.S.C. § 1030); (2) THE DIGITAL MILLENNIUM COPYRIGHT ACT (17 U.S.C. §1201);(3) COMMON LAW TRESPASS TO CHATTELS; OR (4) CAL. PENAL CODE § 502(c); INJUNCTIVE RELIEF TO ENJOIN: (1) INTENTIONAL INTERFERENCE WITH CONTRACT AND PROSPECTIVE ECONOMIC ADVANTAGE; (2) UNFAIR COMPETITION (CAL. BUS. & PROF. CODE § 17200); (3) PROMISSORY ESTOPPEL; AND (4) VIOLATION OF CALIFORNIA FREE SPEECH LAW; AND RELATED MONETARY RELIEF.  Filed 2017, in the United States District Court for the Northern District of California (USDC, NDCA).  Web: <https://www.unitedstatescourts.org/federal/cand/312704/1-0.html>

[20] Id. at Introduction, ¶1.

[21] Id. at ¶¶27-8.

[22] Id. at ¶28.

[23] Id. at ¶¶34, 38, 46.

[24] Id. at ¶29.

[25] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-EMC (N.D. Cal. August 14, 2017).  Order Granting Plaintiff’s Motion for Preliminary Injunction, issued by Edward M. Chen, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA), at 3.  Web: <https://assets.documentcloud.org/documents/3932131/2017-0814-Hiq-Order.pdf>…

[26] Id. at 4.

[27] The United States Court of Appeals for the Ninth Circuit covers Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, the Northern Mariana Islands, Oregon, and Washington state.  See generally Geographical Boundaries of United States Courts of Appeals and United States District Courts.  Online: <https://www.supremecourt.gov/about/Circuit Map.pdf>

[28] Supra note 25 at 4.

[29] Congress of the United States, United States Code18 USC 1030: Fraud and related activity in connection with computers.  Title 18: Crimes and Criminal Procedure; Part I: Crimes; Chapter 47: Fraud and False Statements. Web: <uscode.house.gov/browse/prelim@title18/part1/chapter47&edition=prelim>

[30] Supra note 25 at 10.

[31] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-EMC (N.D. Cal. August 14, 2017).  Order Granting Plaintiff’s Motion for Preliminary Injunction, issued by Edward M. Chen, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA), at 16.  Web: <https://assets.documentcloud.org/documents/3932131/2017-0814-Hiq-Order.pdf>

[32] Id. at 10.

[33] See Robins v. Pruneyard Shopping Ctr., 23 Cal. 3d 899, 905 (1979).

[34] Supra note 31 at 18

[35] Id. at 19.

[36] Id. at 20-21.

[37] See Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §17200 et seq.

[38] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-EMC (N.D. Cal. August 14, 2017).  Order Granting Plaintiff’s Motion for Preliminary Injunction, issued by Edward M. Chen, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA), at 21.  Web: <https://assets.documentcloud.org/documents/3932131/2017-0814-Hiq-Order.pdf>

[39] Id. at 23.

[40] Id. at 24.

[41] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-LB (N.D. Cal. June 7, 2017). COMPLAINT FOR DECLARATORY JUDGMENT UNDER 22 U.S.C. § 2201 THAT PLAINTIFF HAS NOT VIOLATED: (1) THE COMPUTER FRAUD AND ABUSE ACT (18 U.S.C. § 1030); (2) THE DIGITAL MILLENNIUM COPYRIGHT ACT (17 U.S.C. §1201);(3) COMMON LAW TRESPASS TO CHATTELS; OR (4) CAL. PENAL CODE § 502(c); INJUNCTIVE RELIEF TO ENJOIN: (1) INTENTIONAL INTERFERENCE WITH CONTRACT AND PROSPECTIVE ECONOMIC ADVANTAGE; (2) UNFAIR COMPETITION (CAL. BUS. & PROF. CODE § 17200); (3) PROMISSORY ESTOPPEL; AND (4) VIOLATION OF CALIFORNIA FREE SPEECH LAW; AND RELATED MONETARY RELIEF. Filed 2017, in the United States District Court for the Northern District of California (USDC, NDCA), at ¶7.  Web: <https://www.unitedstatescourts.org/federal/cand/312704/1-0.html>

[42] See generally Tristan Greene.  The future of your data could rest in the outcome of LinkedIn vs HiQ case.  Posted August 24, 2017 on thenextweb.com.  Web: <https://thenextweb.com/insider/2017/08/24/hiq-is-the-david-to-linkedins-goliath-in-legal-battle-over-user-data/#.tnw_Q1Tn05Hv>…

[43] Id.

[44] HiQ Labs, Inc. v. LinkedIn Corporation, 17-cv-03301-EMC (N.D. Cal. August 14, 2017).  Order Granting Plaintiff’s Motion for Preliminary Injunction, issued by Edward M. Chen, United States District Judge, United States District Court for the Northern District of California (USDC, NDCA), at 21.  Web: <https://assets.documentcloud.org/documents/3932131/2017-0814-Hiq-Order.pdf>

[45]  – Reserved

[46] For a general overview of the Gig e-conomy and its monopoly potential, see e.g. Ekundayo George.  Monopolies and Market Dominance in the “GIG” e-conomy: What Might These Look Like / Are We There Yet?  Published July 16, 2017 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2017/07/16/monopolies-and-market-dominance-in-the-gig-e-conomy-what-might-this-look-like-are-we-there-yet/>

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INTRODUCTION:

I will not get into legalese, as this is but a conceptual take on the topic.  I came across the following New York Times article,[1] which posed the question “Is It Time to Break Up Google?”  That article had been cited by a more recent one that spoke of the dominant market positions of the so-called FAAAN stocks (described as Facebook, Amazon, Alphabet, Apple and Netflix) or sometimes FAANG stocks (Facebook, Amazon, Apple, Netflix and Google), and the potential need to limit or dismantle them for such reasons as to protect the consumer, or to better protect against the loss or misuse of personal data, or to maintain market integrity, investment and productivity, and dynamism through vigorous multiparty competition.[2]  I will use FAAAN and FAANG interchangeably.

 

This is the language of competition regulators – avoiding monopolies, carefully watching oligopolies, and protecting the consumer from any entity that would abuse its dominant position in the market to take advantage of them.  There are competing schools in different regulator domains, however, as one side says that competition spurs innovation (European Union stance), whilst the other side appears more comfortable with FAAAN entity market shares than it was with those in telecommunications, oil and gas, and railways (United States stance).[3]  The Standard Oil Company, which maintained a 90% market share for twenty years, is often cited as the posterboy for monopoly power in the United States – but was it really so villainous?[4]  In any case, before we apply a solution, we must first answer 3 essential questions:

 

  1. What, exactly, are these FAAAN entities allegedly dominant in?
  • Facebook has a leading position in social media, through its control of Facebook Messenger, WhatsApp, and Instagram (and now sharing control, with Alphabet/Google, of approximately 56% of the U.S. market for mobile advertising).[5]
  • Amazon has a leading position in e-commerce, with its ubiquitous shopping portal (now handling approximately 30% of all U.S. e-commerce sales),[6] and in the provision of cloud hosting and data centre services.
  • Alphabet/Google has a leading position in online search, online video through its control of Youtube, and in the revenue yield from online advertising (now earning approximately 78% of all U.S. search advertising revenues).[7]
  • Apple has a leading position in smartphones wearables, and tablets, through its iPhone (now accounting for approximately 60% of global smartphone sales),[8] iPad, Watch, Mac, and MacBook lines.
  • Netflix also has a leading position in “over the top” (OTT) movie, performance, and documentary streaming (now reaching approximately 75% of all U.S. streaming service viewers).[9]

 

Are these indications of dominance, we ask, or just a solid and perhaps (for now) unassailable lead in markets resoundingly disrupted?

 

“Movies and television could become like opera and novels, because there are so many other forms of entertainment. Someday, movies and TV shows will be historic relics. But that might not be for another 100 years.”[10]

 

For example, all of these FAAAN stocks, other than Apple, may be especially dominant in the United States, but with the U.S. share of global e-commerce expected to fall from 20.7% in 2016 to 16.9% in 2020, while China’s share of it rises from 47% to 59.5% in the same period,[11] then given the restrictions on market entry into China,[12] how can any current such “dominance”, persist?

 

Microsoft is also sometimes mentioned as a market dominator, with its leading positions in operating system software, desktops and mobile, cloud hosting, big data, analytics, and online storage through its data centres; as is Uber, with its stated goal to dominate the ride-hailing space on a global scale.

 

  1. What, precisely, is the market or who, precisely, is the consumer that these FAANG entities are allegedly dominating?

Let us now start to break things down a little further, step by step.

 

VERTICALS –

I think we can all agree that there are three consumer verticals: government, business, and generic consumers – meaning neither of the preceding two verticals.  From there, however, things can get quite tricky, with this hierarchy of 3 verticals, then 5 sectors, then 30 groups, and finally, their many included elements.  Of course, each regulator or group of regulators assessing these entities, has its own domain, such as the United States (with its long tradition of Antitrust regulation), Canada (with its long experience in near oligopolies for financial services and telecommunications), Russia and China (with growing experience in competition regulation, and where Uber recently partnered with Yandex in Russia,[13] and earlier with Didi Chuxing in China,[14] for ride-hailing, or “on-demand transportation”), and the European Union (where Facebook,[15] Alphabet/Google,[16] Apple,[17] and Microsoft,[18] have all had run-ins with the local Competition regulator).

 

In the investing community, there are a number of ways to segment the market.  The diversified Standard & Poor’s 500 Index uses 11 market sectors,[19] and the NASDAQ (technology-heavy) index follows the Industry Classifications Benchmark (ICB) system, to create ten market sectors.[20]  There is some overlap between these two, but the Toronto Stock Exchange (energy and financial services- heavy) index has just seven market sectors.[21]  Personally, I have long used a modified schema of about 16 sectors, but I think it is time to change the whole approach because these FAAAN / FAANG entities have disrupted much, will continue to do so, and have spawned a whole series of ecosystems of disruptors that cross sectoral boundaries, serve multiple verticals, and make a mockery of most if not all commonly used methods of market and competition analysis, including clear regulatory categorization, for purposes of finding and assessing the impact of a dominant position.  This is collectively the “gig” -economy of on-demand piecework, tempwork, and peer-to-peer transacting that circumvents big businesses, with “gig” now having a U.S. labor market share now estimated at 34% and projected to rise to 43% by 2020.[22]

 

Hence, my analytical proposal is this:

 

 

SECTORS –

We start with 5 very broad sectors, and then break things down further.  Those five sectors, are: General Goods and Services; Specialized Goods and Services; Digital Tools, Applications and Services; Social Infotainment; and the Gig e-conomy.

 

GENERAL GOODS AND SERVICES SECTOR:

Here, I have placed the 8 key groups of Government, Manufacturing and Industry, Materials, Oil and Gas, Retail and Wholesale, Security, Transportation, and Utilities.

Government, is further divided across the 5 elements of: regulation; education and tutoring; standard setting; libraries and archives; and dispute resolution and keeping the peace.

Manufacturing and Industry, are further divided across the 5 elements of: aerospace and defence; construction and engineering; transportation and utilities infrastructure; technology, hardware, communications equipment and components and peripherals; and services.

Materials, are further divided across the 5 elements of: paper and forest products; metals and mining; construction materials and components; advanced materials; and CAD-CAM, and GIS and other services.

Oil and Gas, are further divided across the 5 elements of: oil and gas services; drilling and equipment; transportation and storage; refining, trade, plastics and chemicals; and other.

Retail and Wholesale, are further divided across the 5 elements of: leisure; household durable and furniture; household discretionary and personal products; retail (multiline and specialty); and luxury goods, apparel, and textiles.

Security, is further divided across the 5 elements of: national security and defence; societal security and emergency management; physical and industrial safety and security, and emergency management; personal safety and security, and incident response; and virtual security, and incident and event management.

Transportation, is further divided across the 5 elements of: public transportation networks; commercial transportation networks; carriage for hire and ride-hailing; personal and shared mobility properties; and drones and autonomous vehicles.

Utilities, are further divided across the 5 elements of: electric and gas; wind, solar, and water; nuclear; biomass and multi-utility; and other.

 

 

SPECIALIZED GOODS AND SERVICES SECTOR:

Here, I have placed the 8 key groups of Conglomerates, Financial Services, Food, Health and Wellness, Information Communications Technologies, Information and Data Techniques, Personal Services,  and Shelter.

Conglomerates, are further divided across the 5 elements/variants of: food, beverage, and consumer products; information communications technologies and information and data techniques; leisure, property, and transportation; technology, industry, and manufacturing; and services.

Financial Services, are further divided across the 5 elements of: consumer, trade, and business banking and finance, and cash and payment provision and processing; mortgages, home equity lines of credit, and real estate investment trusts; financial planning and advising, and portfolio and asset management; trusts and estates; and insurance and reinsurance.

Food, is further divided across the 5 elements of: crops; kept animals and kept animal products; beverages and other consumables; wholesale, retail, and restaurant; and processing, packaging, and distribution.

Health and Wellness, is further divided across the 5 elements of: medical and surgical services; medical and surgical equipment; pharmacology; mental and spiritual health; and fitness and alternatives.

Information Communications Technologies, are further divided across the 5 elements of: publishing, and printed media; cable, over-air, over the top, and satellite television; radio and satellite radio; fiber optics, telephone, and voice over internet protocol; and audio-visual and peripherals.

Information and Data Techniques, are further divided across the 5 elements of: collection and collation; privacy, security, and anonymization; storage and retrieval; transactions and analysis; and disposal.

Personal Services, are further divided across the 5 elements of: professional services; personal assistants, managers, and agents; virtual assistants; crisis, wardrobe, image and media consultants; and household staff.

Shelter, is further divided across the 5 elements of: single family; multi-family; mobile accommodations; hotel, motel, cruise and resort; and plant, office, maintenance and janitorial.

 

 

DIGITAL TOOLS, APPLICATIONS, AND SERVICES SECTOR:

Here, I have placed 8 key groups, and without any further division across elements because the developed and developing options are still far too broad to be coherently and comprehensively captured, if ever.  These 8, are:

  • Consumer Software, and Productivity applications.
  • eBooks, eNews, and other eMedia.
  • eCommerce.
  • eLearning.
  • Employment and Contracting.[23]
  • Entity Clouds and data centres for Big Data, storage, hosting, managed solutions, and analytics.
  • Online advertising, including by profile, location, nearfield communication, and radiofrequency identification;
  • Online search, mapping and geo-tagging or tracking, and navigation.

 

 

SOCIAL INFOTAINMENT SECTOR:

Here, I have placed the 2 key groups of Hardware; and Services.

Hardware, is further divided across the 5 elements of: phones; tablets; desktop devices; virtual and augmented reality; and content creation through interactive and autonomous devices with and without artificial intelligence.

Services, are further divided across the 5 elements of: standard and streaming live theatre, motion pictures, and video; standard and streaming live concerts, performance arts, and audio; social and chat, and introductions and networking; gaming, group casts, and similar interactions; and content creation, experiential learning, and immersive transactions.

 

 

GIG E-CONOMY SECTOR:

So now, let us use a “gig” e-conomy approach to assess the dominance issue across the preceding market sectors.  I think that you may well find yourself agreeing that there is no dominance at play, and that the competition is still quite healthy across the board.  Here, I have placed those “on demand” goods and services available through rapidly advancing technology that are or may be applicable.  Please note that no single person can possibly name all members of any subgroup and the Apps and Bots of competitors, as they multiply, morph, and merge on both daily and intraday bases; but I will, however, try to give sufficient coverage to convey the depth, breadth, and scope of offerings available.[24]

 

On-demand General Goods and Services, and their related providers or aggregators would be found here, such as Baidu Baike, The Canadian Encyclopedia, Encyclopedia Britannica, Encyclopedia.com, The Free Dictionary.com, Wikipedia and World Book Online (Government: libraries and archives); 3D printers (Materials: CAD-CAM, and GIS and other services); Alibaba, Amazon, Costco, WalMart, and Yandex (Retail and Wholesalewhole group); AppRiver, Bitdefender, Symantec/Norton, Kaspersky, McAfee, and Webroot SecureAnywhere Antivirus (Security: virtual security); and Uber, Lyft, Ourbus, Didi Chuxing, BlaBlaCar, and Yandex (Transportation: carriage for hire and ride-hailing).

 

On-demand Specialized Goods and Services, and their related providers or aggregators would be found here, such as Apple, Alphabet and Microsoft (Conglomerates: Information communications technologies – smartphones of iPhone, Pixel and Lumia, along with Watch, Mac, iPad, Surface, OneNote, and the operating systems of iOS, macOS, Linux, Android, Windows, and other solutions based on non-proprietary or open-source code); Amazon and Microsoft (Conglomerates: information and data techniques – cloud services); Consumer, trade, and business banking and finance (Financial Services: portals and standalone Apps of the major banks, worldwide, along with Fintech disruptors like rate.com and Kreditech); Android Pay, Apple Wallet, Bitcoin, Etherium, LG Pay, Microsoft Wallet, Samsung Pay or Samsung Pay Mini, Yandex Money, Alipay, PayPal and Stripe[25] (Financial Services: smartphone-based and web-based cash and payment provision and processing); Fund Razr, Indiegogo, Kickstarter, GoFundMe, AngelList, and CrowdCube (Financial Services: Consumer, trade, and business banking and finance); AlphaStreet, MyLo, Robinhood, and WealthBar (Financial Services: financial planning and advising, and portfolio and asset management); Deliveroo, Grubhub, Just-eat, Postmates, Door-Dash, UberEATS, Amazon, and Instacart (Food: processing, packaging, and distribution); SiriusXM and free AM/FM radio around the world[26] (Information Communications Technologies: radio and satellite radio); Netflix, Spotify, NotJustOk, YouTube, Hulu, Sling, HBO, and Amazon (Information Communications Technologies: cable, over-air, over the top, and satellite television); Google, Alibaba, Yandex, Amazon Web Services, Facebook, Tencent, Microsoft Cloud/Azure (Information and Data Techniqueswhole group, as also listed in Conglomerates, above); Monster, LinkedIn, Upwork, TaskRabbit (Personal Services: – whole group); Airbnb, Love Home Swap, Onefinestay (Shelter: hotel, motel, cruise and resort); and Handy, Homejoy, Merry Maids, Molly Maid, Life Maid Easy, and Bee Clean (Shelter: plant, office, maintenance and janitorial).

 

On-demand Digital Tools, Applications, and Services, and their related providers or aggregators would be found here, such as Apple’s App Store, Google’s Play Store, Adobe, Corel, Microsoft/Windows, Etherium, Intuit and QuickBooks (Consumer software and productivity applications); Amazon Kindle, Voyage, and Oasis, Barnes & Noble Glowlight, Nook, and Touch, and the Kobo and Aura (eBooks); Amazon, Alibaba, Costco, Craigslist, DaWanda, eBay, Etsy, Shopify, WalMart and Yandex (eCommerce); ADrive, Apple iCloud, Box, Dropbox, Google Drive, iDrive, Media Fire, Mozy, Microsoft OneDrive, and PhotoBucket (Entity Clouds – storage); Accenture Cloud Hosting Services, Amazon Web Services, CSC Cloud Computing Services, Canadian Cloud Hosting, Canadian Web Hosting, CenturyLink, Cloud Sigma, Dimension Data Cloud Surround, Distil Networks, Fujitsu Cloud Solutions, Google App Engine/Cloud Platform, Helion Public Cloud, Lunacloud, Microsoft Azure/Cloud, OpenShift, OpenStack Cloud, Rackspace, Softlayer, Verizon Terremark, ViaWest KINECTed Cloud, and VMware (Entity Clouds and Data Centres for Big Data, hosting, managed solutions, and analytics); Google, Facebook, Snap, Twitter and Youtube (online advertising, including by profile, location, nearfield communication, and radiofrequency identification); and Google, Baidu, and Yandex (online search, mapping and geo-tagging or tracking, and navigation).

 

On-demand Social Infotainment, and their related providers or aggregators would be found here, such as Apple iOS/macOS ecosystems, Blackberry smartphones and data centres, Facebook Oculus Rift, Google Android ecosystem along with Cardboard, Daydream Viewer, and robotics and autonomy, HTC Vive, Huawei smartphones, LG smartphones, Microsoft Windows ecosystem along with HoloLens and Windows Mixed reality, Samsung Gear and robotics and autonomy, Sony Playstation VR and robotics and autonomy, Linux, and other environments and platforms created using open source or non-proprietary code (Hardwarewhole group); Netflix, NotJustOk, Spotify, YouTube, Hulu, Sling, HBO, Pokemon, and Amazon (Serviceswhole group); and Facebook, WhatsApp, Tencent, WeChat, Vodi, Instagram, LinkedIn, Monster, Match.com, Lavalife, eHarmony, and Zoosk (Services – social, chat, and introductions and networking; gaming, group casts, and similar interactions; and content creation, experiential learning and immersive transactions.  You may have noticed that “on-demand Social Infotainment” anticipates content creation by both the hardware makers and the service providers with ever more collaboration, hence the lines become consumers and producers of content have become irrevocably blurred and blended.  Similarly, the gig e-conomy’s “on-demand social infotainment” and “on-demand digital tools, applications, and services” sectors rely upon one another for continuity – the social infotainment needs all that the digital has to offer, and the digital feeds the rising ubiquity of the social infotainment.

 

  1. Considering the above and now fuller picture of the competitive landscape, is any one of these FAAN/FAANG entities really dominant in any meaningful way?

The answer to this, must therefore be a resounding No. There are a number of groups in which a few players have literally occupied the entire field.  However, in no place is there only one entity.  Clearly, then, competition is alive and fierce in all sectors and groups, as laid out in this analytical scheme.

Any Facebook domination alleged for social media fades away with the diversity of competitors and offerings found within the converged gig e-conomy’s “on-demand social infotainment”;

Any Amazon domination alleged for e-commerce and for search, fades away with the diversity of competitors and offerings under the converged gig e-conomy Sector’s “on-demand general goods and services”, and “on-demand specialized goods and services”.

Any Alphabet/Google domination alleged for online search, online video, and online advertising revenue yield, fades away with the diversity of competitors and offerings under the converged gig e-conomy’s “on demand digital tools, applications, and services”.

Similarly, any Apple domination alleged in smartphones, wearables and tablets, fades away with the diversity of manufacturers and operators found in the converged gig e-conomy sector’s “on-demand specialized goods and services”, as conglomerates offering information and communications technologies, and undertaking information and data techniques.

Finally, any Netflix domination alleged for “over-the-top” (OTT) movie, performance, and documentary streaming, fades away with the diversity of entities competing to deliver services within the converged gig e-conomy’s “on-demand social infotainment”.

 

 

SUMMARY:

It is only if, and when, well-funded market operators start to occupy whole sectors (in the new schema laid out here), taking out whole swathes of their competitors and content providers[27] in Pacman “gig”-abites to become the sole players in many of the specific groups within those sectors, that we should start to worry about abuse of dominant positions, monopolies, and over-concentration in the control of personal data[28] – incessant data breaches[29] and global ransomware events,[30] notwithstanding.

 

Perhaps, you agree now?!

 

********************************************************************

 

Author:

Ekundayo George is a lawyer and sociologist.  He has also taken courses in organizational and micro-organizational behavior, and gained significant experience in regulatory compliance, litigation, and business law and counseling.  He has been licensed to practise law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America.  See, for example: http://www.ogalaws.com.  A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, e-commerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors.  He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux.

 

Trained in Legal Project Management (and having organized and managed several complex projects before practising law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams.  Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: healthcare; education and training; law and regulation; policy and plans; statistics, economics, and evaluations including feasibility studies and business cases; infrastructure; and information technology/information systems (IT/IS) – also sometimes termed information communications technologies (ICT).  See, for example: http://www.simprime-ca.com.

 

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

 

This article creates no lawyer-client relationship, and is not intended or deemed legal advice, business advice, the rendering of any professional service, or attorney advertising where restricted or barred.  The author and affiliated entities specifically disclaim and reject any and all loss claimed, no matter howsoever resulting as alleged, due to any action or inaction done in reliance on the contents herein.  Past results are no guarantee of future success, and specific legal advice should be sought for particular matters through counsel of your choosing, based on such factors as you deem appropriate.

 

[1] Jonathan Taplin.  Is It Time to Break Up Google?  Published on nytimes.com, April 22, 2017.  Web: >https://www.nytimes.com/2017/04/22/opinion/sunday/is-it-time-to-break-up-google.html?_r=2<

[2] David McLaughlin.  Are Facebook and Google the New Monopolies?: QuickTake Q&A.  Published on Bloomberg.com, July 12, 2017. Web: >https://www.bloomberg.com/news/articles/2017-07-13/antitrust-built-for-rockefeller-baffled-by-bezos-quicktake-q-a<  See also Ayanna Alexander.  Mobile App Location Sharing Brings Awesome Opportunities, Privacy Fears.  Published on bna.com, July 11, 2017.  Web: >https://www.bna.com/mobile-app-location-b73014461529/<

[3] Ramsi Woodcock.  EU’s Antitrust ‘War’ on Google and Facebook Uses Abandoned American Playbook.  Published on observer.com, July 14, 2017.  >http://observer.com/2017/07/eus-antitrust-war-google-facebook-uses-american-playbook-margrethe-vestager-european-union/<

[4] Alex Epstein.  Vindicating Standard Oil, 100 years later.  Published on dailycaller.com, May 13, 2011.  Web: >http://dailycaller.com/2011/05/13/vindicating-standard-oil-100-years-later/2/<

[5] David McLaughlin.  Are Facebook and Google the New Monopolies?: QuickTake Q&A.  Published on Bloomberg.com, July 12, 2017. Web: >https://www.bloomberg.com/news/articles/2017-07-13/antitrust-built-for-rockefeller-baffled-by-bezos-quicktake-q-a<

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] Sarah Perez.  Netflix reaches 75% of US streaming service viewers, but YouTube is catching up.  Published on techcrunch.com, April 10, 2017.  Web: >https://techcrunch.com/2017/04/10/netflix-reaches-75-of-u-s-streaming-service-viewers-but-youtube-is-catching-up/<

[10] Joe Nocera.  Can Netflix Survive in the New World It Created?  Published on nytimes.com, June 15, 2016.  Web: >https://www.nytimes.com/2016/06/19/magazine/can-netflix-survive-in-the-new-world-it-created.html<

Quoting Reed Hastings – Chairman of the Board, President, Chief Executive Officer, Netflix.

[11] Patrick Seitz.  Move Over FANGs, China’s BAT Stocks Go From Copycats To Fat Cats.  Published on investors.com, July 14, 2017.  Web: >http://www.investors.com/research/industry-snapshot/move-over-fangs-chinas-bat-stocks-go-from-copycats-to-fat-cats/?src=A00220&yptr=yahoo<

[12] IdSee also infra, note 14.

[13] Eric Auchard and Anastasia Teterevleva.  Uber and Yandex to combine ride-hailing in Russia and beyond.  Published on reuters.com, July 13, 2017.  Web: >http://www.reuters.com/article/us-uber-tech-m-a-yandex-idUSKBN19Y10V<  The new entity will operate regionally, in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan.

[14] Scott Cendrowski.  Uber Had No Way Out of China Except Through a Merger With Didi.  Published on fortune.com, July 31, 2016.  Web: >http://fortune.com/2016/08/01/uber-didi-merger/<

[15] Jason Aycock.  Facebook eases into crosshairs of EU antitrust watchdogs.  Published on seekingalpha.com, July 3, 2017.  Web: >https://seekingalpha.com/news/3276761-facebook-eases-crosshairs-eu-antitrust-watchdogs<

[16] Peter Sayer.  EU Competition Commissioner spells out priorities: Google as Alphabet is still under investigation.  Published on pcworld.com, October 26, 2015.  Web: >http://www.pcworld.com/article/2997529/android/eu-competition-commissioner-spells-out-priorities-google-as-alphabet-is-still-under-investigation.html<

[17] Sean Farrell and Henry McDonald.  Apple ordered to pay €13bn after EU rules Ireland broke state aid laws.  Published on theguardian.com, August 30, 2016.  Web: >https://www.theguardian.com/business/2016/aug/30/apple-pay-back-taxes-eu-ruling-ireland-state-aid<

[18] Charles Arthur.  Microsoft loses EU antitrust fine appeal.  Published on theguardian.com, June 27, 2012.  Web: >https://www.theguardian.com/technology/2012/jun/27/microsoft-loses-eu-antitrust-fine-appeal<

[19] These 11 S&P 500 market sectors are: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health care, Financials, Real Estate, Information Technology, Telecommunications Services, and Utilities.

See S&P 500 Factsheet – Sector Breakdown.  Published on ca.spindices.com and visited on July 13, 2017.  Web: >http://ca.spindices.com/indices/equity/sp-500<

[20] These 10 NASDAQ market sectors are: Oil and Gas, Basic materials, Industrials, Consumer Services, Consumer Goods, Healthcare/Financials, Technology, Telecommunications, and Utilities.  See NASDAQ Composite Index – COMP Fact Sheet – Industry Breakdown.  Published on nasdaqomx.com and visited July 13, 2017.  Web: >https://indexes.nasdaqomx.com/Index/Overview/COMP<

[21] These 7 TSE market sectors are: Clean Technology, Diversified Industries, Energy and Energy Services, Life Sciences, Mining, Real Estate, and Technology.  See The Toronto Stock Exchange, Sector and Product Profiles.  Published on tsx.com and visited July 13, 2017.  Web: >http://tsx.com/listings/listing-with-us/sector-and-product-profiles<

[22] Patrick Gillespie.  Intuit: Gig economy is 34% of US workforce.  Published on money.cnn.com, May 24, 2017.  Web: >http://money.cnn.com/2017/05/24/news/economy/gig-economy-intuit/index.html<

[23] Including this as a standalone group has become a necessity, thanks to the enabling rise of the “gig” e-conomy.  See e.g. Nick Wells. The ‘gig economy’ is growing — and now we know by how much.  Published on cnbc.com, October 13, 2016.  Web: >http://www.cnbc.com/2016/10/13/gig-economy-is-growing-heres-how-much.html<

[24] All names and marks mentioned herein are and remain the property of their respective owners, and no good or service or provider of same that is mentioned or omitted or referenced whether in whole or in part within this article or within its attached notes is either endorsed or disdained.

[25] Memberful.  Stripe vs PayPal: Who should you choose?  Published on memberful.com and visited on July 15, 2017.  Web: >https://memberful.com/blog/stripe-vs-paypal/<

[26] John-Erik Koslosky.  Sirius XM’s Strongest Competition May Surprise You.  Published on fool.com, September 12, 2015.  Web: >https://www.fool.com/investing/general/2015/09/12/sirius-xms-strongest-competition-may-surprise-you.aspx<

[27] Nick Wingfield and Michael J. de la Merced.  Amazon to Buy Whole Foods for $13.4 Billion.  Published on nytimes.com, June 16, 2017.  Web: >https://www.nytimes.com/2017/06/16/business/dealbook/amazon-whole-foods.html<

[28] Business Leader.  Google dominates search. But the real problem is its monopoly on data.  Published on theguardian.com, April 19, 2015.  Web: >https://www.theguardian.com/technology/2015/apr/19/google-dominates-search-real-problem-monopoly-dataSee also Ben Thompson.  Facebook and the Cost of Monopoly.  Published on stratechery.com, April 19, 2017.  Web: >https://stratechery.com/2017/facebook-and-the-cost-of-monopoly/<

[29] Dave Burton.  Minimize “Dwell Time” to Cut the Cost of Data Center Breaches.  Published on infosecisland.com, October 20, 2016.  Web: >http://www.infosecisland.com/blogview/24835-Minimize-Dwell-Time-to-Cut-the-Cost-of-Data-Center-Breaches.htmlSee also Jessica Davis.  Former Bupa employee posts 1 million records for sale on dark web.  Published on healthcareitnews.com, July 14, 2017.  Web: >http://www.healthcareitnews.com/news/former-bupa-employee-posts-1-million-records-sale-dark-web<   See Generally Ekundayo George.  Cybersecurity: Its not just about “B” for Bob, but also eCommerce, Structure, and Trust.  Published on ogalaws.wordpress.com, November 3, 2014  Web: >https://ogalaws.wordpress.com/2014/11/03/cybersecurity-its-not-just-about-b-for-bob-but-also-ecommerce-structure-and-trust/<

[30] Jesse McKenna.  WannaCry: How We Created an Ideal Environment for Malware to Thrive, and How to Fix It.  Published on infosecisland.com, July 12, 2017.  Web: >http://www.infosecisland.com/blogview/24941-WannaCry-How-We-Created-an-Ideal-Environment-for-Malware-to-Thrive-and-How-to-Fix-It.html<

PREFACE:

The British Prime Minister, the Right Honourable Theresa May, presented her government’s plan for Brexit negotiations in a speech to the nation on Tuesday, January 17, 2017.[1]  Consisting of 12 distinct points,[2] the plan makes it quite clear that the U.K. does indeed want a clean break from the European Union and the freedoms and rights to control its own immigration and make its own laws,[3] but, at the same time, the U.K. wants to enjoy a good deal of continued access to the E.U. common market.[4]  This is quite some progress since: (i) the High Court ruling of Thursday, November 3, 2016 that the prime minister could not unilaterally trigger the Brexit process[5] – which is still pending on appeal to the U.K. Supreme Court[6] that many knowledgeable Members of Parliament fear the government might ultimately lose;[7] and (ii) the overwhelming 448:75 vote in the U.K. House of Commons on Wednesday, December 7, 2016 to endorse and follow the prime minister’s plan to trigger the Brexit process by or before the end of March, 2017 – providing, of course, that both houses of the U.K. Parliament see and consider the final deal reached.[8]  That parliamentary accord was effectuated and made public in point 1 of the Prime Minister’s Brexit plan.[9]

 

 

ANALYSIS:

In my original Brexit post,[10] made shortly after the June 23, 2016 vote, I had posited 7 actual, and 1 potential and as then undefined, model of what the UK’s future relationship with Europe might be.[11]  Now, looking to the full transcript of prime minister May’s speech,[12] we can clearly see that several of these models – with all of them working well for their adherent nations, were rejected outright.

 

Model I: Full membership[13]

This model, the prior status quo, is rejected by the seeking of a full exit from the European Union and self-determination within the U.K. under both point 1 and point 2, as stated by the prime minister.[14]

 

Model II: Norway[15]

This model, used by Norway, is rejected in the fact that the U.K. will no longer make significant and blanket contributions to the E.U. budget and programs, but retains the right to make limited contributions on select E.U. initiatives on which it has a vote and in which it acknowledges a continuing stake: “There may be some specific European programmes in which we might want to participate.  If so, and this will be for us to decide, it is reasonable that we should make an appropriate contribution.  But the principle is clear: the days of Britain making vast contributions to the European Union every year will end.”[16]

 

Model III: Switzerland[17]

This model, used by Switzerland, involves free movement but it is rejected in point 5 and the U.K. prime minister’s stated desire to “[…] get control of the number of people coming to Britain from the EU.[18]

 

Model IV: Turkey[19]

This model, used by Turkey, also involves acceptance of cash contributions from the E.U. with mandatory enforcement of certain E.U. trade laws in Turkey, and the right of Turkish nationals to access E.U. welfare structures.  As implied by the rejection of all the above models and as specified by the prime minister, this option is also off the table as it would not accomplish the full split from the E.U. that Britons want: ““European leaders have said many times that membership means accepting the “four freedoms” of goods, capital, services and people.  And being out of the EU but a member of the Single Market would mean complying with the EU’s rules and regulations that implement those freedoms, without having a vote on what those rules and regulations are.  It would mean accepting a role for the European Court of Justice that would see it still having direct legal authority in our country.””[20]

 

Model V: Canada (signed on Sunday October 30, 2016)[21]

This model, used by Canada, eliminates duties on most exports for each counterparty and gives Canada access to the E.U. market at a time when access to the U.S. market to Canada’s immediate south, is under strong query by the incoming Trump administration.[22]  Signed by Canada and the E.U. on October 30, 2016, it does still require approval by each and every one of the parliaments of the “current” E.U. member states, including the U.K.[23]  That requirement could therefore still pose some problems regarding the deal’s entering into full force and effect.  The prime minister also rejected this model in the preamble of her speech: “Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out.  We do not seek to adopt a model already enjoyed by other countries.  We do not seek to hold on to bits of membership as we leave.[24]

 

Model VI: Hong Kong and Singapore[25]

The unilateral free trade policies adopted by Hong Kong and Singapore are not an option for the U.K., as the domestic economy would not be able to withstand the onslaught of cheap goods from all corners of the globe.  On the contrary, the prime minister stressed the renewed U.K. desire to be and remain global and pursue as many free trade deals with as many free trading partner nations and groups of nations, as possible, in point 9: “We want to get out into the wider world, to trade and do business all around the globe.  Countries including China, Brazil, and the Gulf States have already expressed their interest in striking trade deals with us.  We have started discussions on future trade ties with countries like Australia, New Zealand and India.  And President Elect Trump has said Britain is not “at the back of the queue” for a trade deal with the United States, the world’s biggest economy, but front of the line.[26]

 

Model VII: WTO Default Rules[27]

WTO default rules are generally used by trading nations where there is no existing trade agreement between them.  Considering the prime minister’s intent in point 9 to set U.K. tariff lines at the WTO, and her call for a “phased approach” to implementation in point 12, it is quite likely that some form of WTO regime will be applied during the transition process: “But the purpose is clear: we will work to avoid a disruptive cliff-edge, and we will do everything we can to phase in the new arrangements we require as Britain and the EU move towards our new partnership.[28]  On the other hand, if the U.K. Parliament votes against the final deal as tabled, seeking amendments or issuing a total rejection of same, then advisable best practices of having WTO Rules ready to fill the void while that was all sorted out, and the stated and mutual intention for a phased implementation of the Brexit and its successor conventions would prevent one or a few hiccups from ending or permanently handicapping the process altogether.

 

Model IIX: the “unknown unknown”[29]

As is now abundantly clear, the overall intention of Mrs. May’s government is to craft a relationship with the E.U. that does not fit squarely within the parameters of any of the foregoing options, but includes: significant customs and regulatory cooperation (but not full integration) with the E.U. through a broad free trade agreement; strong cooperation and integration with the E.U. in matters of science and technology; deep security cooperation with the E.U.; a plethora of free trade agreements with other nations; maintaining the free movement of Britons within the U.K. as well as a somewhat semi-porous E.U. border through the Irish Republic; greater worker rights and protections within the U.K.; and solidification of the ties binding the UK’s constituent parts together by means of greater power devolution of powers from England to local lawmakers in Wales, Scotland, and Northern Ireland.[30]

 

In any case, the eventual model must achieve Mrs. May’s overarching vision for the future Britain:

 

“I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before.  I want us to be a secure, prosperous, tolerant country – a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead.  I want us to be a truly Global Britain – the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too.  A country that gets out into the world to build relationships with old friends and new allies alike.”[31]

 

To underline that fact and to let both the European nations and the British voters at home know that she and her staffers would be very serious, deliberate, and focused in their approach to and conduct of those Brexit negotiations, the prime minister also made it abundantly clear that she would walk away from a bad deal for Britain if that were the last or sole option that the Europeans put on the table: “I am equally clear that no deal for Britain is better than a bad deal for Britain.”[32]

 

 

PROGNOSIS:

While the path ahead for prime minister May and her party is fraught with dangers, today’s inauguration of Donald J. Trump as the 45th president of the United States of America,[33] has left many nations queasy, uneasy, and seeking free trade deals of their own – Canada with 70% of pre-Trump exports going to the United States,[34] will now likely consider deeper ties with China, Japan and India,[35] and China is already considering and sealing deals with everyone.[36]  As a result of this deal frenzy, the Britons will therefore find very many parties willing to talk trade with them.  Indeed, China’s President, Xi Jinping, best summed-up the current global thinking on trade[37] amidst the tweet-fuelled apprehension caused by Mr. Trump and his protectionist leanings,[38] when the former said:

 

““Pursuing protectionism is like locking oneself in a dark room, [w]ind and rain may be kept outside, but so is light and air.””[39]

 

Once again, then, the “great game”[40] for geopolitical and economic leverage is on.  This time, however, the landscape is global, and Britain and Russia – the protagonists of yore trying to shoulder their way back-in, have given significant ground to the new prime movers of China, the E.U., and at least until now, the United States of America.

 

Let us therefore wait and see what the British Supreme Court has to say on Brexit, which nations end-up locking themselves into those dark, and which nations throw open their doors and windows to get the best access to the shared light and air of trade that gives jobs, mutually assured security, and life itself.[41]

 

**********************************************************************

 

Author:

Ekundayo George is a lawyer and sociologist.  He has also taken courses in organizational and micro-organizational behavior, and gained significant experience in regulatory compliance, litigation, and business law and counseling.  He is licensed to practise law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America.  See, for example: http://www.ogalaws.com.  A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors.  He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux. Trained in Legal Project Management (and having organized and managed several complex projects before practising law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams.  Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: healthcare; education and training; law and regulation; policy and plans; statistics, economics, and evaluations including feasibility studies; infrastructure; and information technology/information systems (IT/IS) – also sometimes termed information communications technologies (ICT).  See, for example: http://www.simprime-ca.com.

 

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

 

This article creates no lawyer-client relationship, and is not intended or deemed legal advice, business advice, the rendering of any professional service, or attorney advertising where restricted or barred.  The author and affiliated entities specifically disclaim and reject any and all loss claimed, no matter howsoever resulting as alleged, due to any action or inaction done in reliance on the contents herein.  Past results are no guarantee of future success, and specific legal advice should be sought for particular matters through counsel of your choosing, based on such factors as you deem appropriate.

 

[1] Dan Bloom.  Theresa May’s 12-point plan for Brexit in full: PM finally reveals basis for EU exit negotiation.  Posted January 17, 2017 on mirror.co.uk.  Web: <http://www.mirror.co.uk/news/uk-news/theresa-mays-12-point-plan-9637039>

[2] Id.

[3] Id at point 2: “Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast.  And those laws will be interpreted by judges not in Luxembourg but in courts across this country.

[4] Id at points 8 and 9: “Instead we seek the greatest possible access to it through a new, comprehensive, bold and ambitious Free Trade Agreement“.  “Whether that means we must reach a completely new customs agreement, become an associate member of the Customs Union in some way, or remain a signatory to some elements of it, I hold no preconceived position”.  “I have an open mind on how we do it.  It is not the means that matter, but the ends“.

[5] Sky News.  Brexit court case: Government loses, May cannot trigger Article 50.  Posted November 3, 2016 on sky.com.  Web: <http://news.sky.com/story/may-cannot-trigger-brexit-government-loses-high-court-case-10642756>

[6] Anushka Asthana and Heather Stewart.  Government will lose Brexit supreme court case, ministers believe.  Posted January 11, 2017 on theguardian.com.  Web: <https://www.theguardian.com/politics/2017/jan/11/government-brexit-supreme-court-theresa-may-article-50>

[7] Id. “Losing”, in this context, means that a majority of the 11 Supreme Court judges will rule that the government “must” seek parliamentary approval to trigger a Brexit.  “Losing badly” means said majority of judges will either (a) specify what the government must seek or achieve from Brexit negotiations; or (b) that the government must secure “specific” approvals from Scotland and Ireland (which voted to remain) – and which would require advance concessions to secure that approval; or (c) that a patchwork of other conditions or preconditions must be met, and which would both severely constrain the government in its negotiations, and publicize its strategy to its detriment.

[8] Tim Ross and Alex Morales.  U.K. Lawmakers Back Theresa May’s March 2017 Brexit Schedule.  Posted December 7, 2016 on bloomberg.com.  Web: <https://www.bloomberg.com/news/articles/2016-12-07/u-k-weighs-swiss-norwegian-style-eu-customs-deals-davis-says>

[9] Time Staff.  Posted January 17, 2017 on time.com.  Read Theresa May’s Speech Laying Out the U.K’s Plan for Brexit.  Web: <http://time.com/4636141/theresa-may-brexit-speech-transcript/> at Point 1: “I can confirm today that the government will put the final deal that is agreed between the UK and the E.U. to a vote in both Houses of Parliament, before it comes into force.”

[10] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/>

[11] Id.

[12] Time Staff.  Posted January 17, 2017 on time.com.  Read Theresa May’s Speech Laying Out the U.K’s Plan for Brexit.  Web: <http://time.com/4636141/theresa-may-brexit-speech-transcript/>

[13] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Online: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 89 (full E.U. membership).

[14] See Supra note 12 at points 1 and 2.

[15] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 90 (Norway model).

[16] See Supra note 12 at point 8.

[17] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 91 (Switzerland model).

[18] Time Staff.  Posted January 17, 2017 on time.com.  Read Theresa May’s Speech Laying Out the U.K’s Plan for Brexit.  Web: <http://time.com/4636141/theresa-may-brexit-speech-transcript/> at point 5.

[19] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 92 (Turkey model).

[20] See Supra note 18 at point 8.

[21] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 93 (Canada model).

[22] Jared Bernstein.  Trump promises to tear up trade deals. Here’s what he should do.  Posted November 14, 2016 on washingtonpost.com.  Web: <https://www.washingtonpost.com/posteverything/wp/2016/11/14/trump-promises-to-tear-up-trade-deals-heres-what-he-should-do/?utm_term=.7ba295aa5e94>

[23] Robert-Jan Bartunek and Philip Blenkinsop.  EU, Canada sign free trade deal but battle not over.  Posted October 30, 2016 on reuters.com.  Web: <http://www.reuters.com/article/us-eu-canada-trade-idUSKBN12U0HU>

[24] Time Staff.  Posted January 17, 2017 on time.com.  Read Theresa May’s Speech Laying Out the U.K’s Plan for Brexit.  Web: <http://time.com/4636141/theresa-may-brexit-speech-transcript/> at A message from Britain to the rest of Europe.

[25] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 94 (Hong Kong and Singapore model).

[26] See Supra note 24 at point 9.

[27] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 95 (World Trade Organization default rules).

[28] See Supra note 24 at point 12.

[29] Ekundayo George.  Analyzing the 2016 Brexit: A Classically Complex Conundrum.  Posted June 30, 2016 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2016/06/30/analyzing-the-2016-brexit-a-classically-complex-conundrum/> at note 96 (the hitherto unknown model, yet to be developed).

[30] See generally Time Staff.  Posted January 17, 2017 on time.com.  Read Theresa May’s Speech Laying Out the U.K’s Plan for Brexit.  Web: <http://time.com/4636141/theresa-may-brexit-speech-transcript/>

[31] Time Staff.  Posted January 17, 2017 on time.com.  Read Theresa May’s Speech Laying Out the U.K’s Plan for Brexit.  Web: <http://time.com/4636141/theresa-may-brexit-speech-transcript/> at the preamble.

[32] Id. at A new partnership between Britain and Europe.  See also Peter Dominiczak, Political Editor and Michael Wilkinson, Political Correspondent.  The 12-point Brexit plan explained: Theresa May warns EU she will walk away from a ‘bad deal’ for Britain.  Posted January 17, 2017 on telegraph.co.uk  Web: <http://www.telegraph.co.uk/news/2017/01/17/theresa-may-warns-eu-will-walk-away-bad-deal-britain/>

[33] USA.Gov.  Presidential Inauguration 2017.  Posted on usa.gov.  Visited January 18, 2017.  Web:

<https://www.usa.gov/inauguration-2017>

[34] David Israelson, Special to The Globe and Mail.  Canada’s trade alternatives post-Trump and Brexit.  Posted December 6, 2016 on theglobeandmail.com.  Web: <http://www.theglobeandmail.com/report-on-business/international-business/canadas-trade-alternatives-post-trump-and-brexit/article33208634/>

[35] Id.

[36] Zhong Nan.  China eyes more FTA deals in 2017.  Posted December 28, 2016 on chinadailyasia.com.  Web: <http://www.chinadailyasia.com/business/2016-12/28/content_15548398.html>

[37] Larry Elliott and Graeme Wearden in Davos.  Xi Jinping signals China will champion free trade if Trump builds barriers.  Posted January 18, 2017 on theguardian.com.  Web: <https://www.theguardian.com/business/2017/jan/17/china-xi-jinping-china-free-trade-trump-globalisation-wef-davos>

[38] Jurek Martin.  Apprehension ahead of President Trump’s first words.  Posted January 18, 2017 on ft.com.  Web: <https://www.ft.com/content/b4cba008-dcda-11e6-86ac-f253db7791c6>

[39] Supra note 37.

[40] See Wikipedia.  The Great Game.  Visited January 18, 2017.  Web: <https://en.wikipedia.org/wiki/The_Great_Game>

[41] *Reserved*

WHAT JUST HAPPENED? (a quick summary):

Comprising England, Wales, Scotland and Northern Ireland, the United Kingdom of Great Britain and Northern Ireland (being much more commonly known as “the U.K.” or “Britain”),[1] voted in a national referendum on Thursday, June 23, 2016 to leave the European Union,[2] despite prior predictions of some rather dire consequences if the outcome was a “leave” vote.[3]  The voter turnout was 72.2%, and the final result was 51.9% in favour of leaving and 48.1% in favour of staying.[4] In accordance with the E.U. founding principles, the U.K. has up to 2 (“two”) years to negotiate and complete its exit, once it has officially notified the E.U of its intention to so do.[5]

However, this very close result has already had significant repercussions: the British Prime Minister, the Honourable David Cameron, has announced his pending resignation – to be done by October, 2016 at the latest,[6] ahead of the October 2-5, 2016 Conservative Party conference where a new party leader will be chosen;[7] the Honourable Jeremy Corbyn who leads the U.K. Labour Party, may yet be forced out of office after he fired one of his shadow cabinet ministers and more than ten others promptly resigned shortly thereafter, with the result that a confidence vote on his leadership of the party loomed large;[8] the British Pound (never abolished during decades of E.U. membership) has been driven to a 30-year low in global foreign currency markets[9] and the UK credit outlook and rating have also been adversely hit;[10] the European Union which does not want a lingering (and possibly contagious) exit crisis[11] has already and swiftly appointed a high-level negotiator to lead the U.K. withdrawal;[12] dissenting voices to the “yes”/ “exit”/ “leave” vote have called for a re-run of the Referendum with a petition for same adding signatures now into the millions,[13] a further referendum in Scotland, which voted to remain in the E.U., is likely – with additional rumblings of a possible re-unification call for Northern Ireland (which also voted to remain) and the Republic of Ireland (which is already an E.U. member);[14] and finally, even one of those voices most strongly in favour of Brexit, has now called for a slow and measured exit process.[15]  The question remains, thought, whether that is due to his desire to avoid turmoil and undue haste in the nation at large, or to his playing for time until he can make a credible push for the Conservative Party leadership?

Of note, nevertheless, business leaders in the U.K. also and generally caution against too hasty an exit from the E.U.[16] However, global banks with significant footprints in London may soon need to make some very tough decisions in light of a potential isolation of London from the lucrative E.U. financial markets amidst what may or may not be posturing threats to that effect from one very credible voice at the European Central Bank (ECB), who happens to be both the governor of the Central Bank of France (which nation may stand to gain banks and bankers fleeing a Brexit),[17] and a member of the ECB governing council.[18]

 

WHY DID IT HAPPEN? (the big picture):

By way of some initial disclosure, I lived and studied in the U.K. for several years, and so I do have some insights (albeit dated) into the local politics, the highly-varied economic landscape, and local moods across different regions – vibrant financial hubs v. depressed coal producing and manufacturing regions; struggling farmers; jobless, student loan debt-laden graduates[19] and inner city youths competing for scarce jobs, and even scarcer public financial support against both senior citizens who feel that they have paid their dues and can now get help from the state, and new immigrants without the credit histories that would enable bank and building society loans, but who nevertheless seek state assistance for settlement, integration and retraining, and setup costs to establish themselves in their new U.K. home.  Nevertheless, although this is more of an independent analytical exercise than a legal commentary, I might still catch some flak for this article from “old friends”, as the feelings for and against Brexit are and remain, “quite” heated, with one senseless death to date.[20]

 

SOVEREIGNTY: The stated reason for a majority “leave” over “remain” vote is a desire for sovereignty over E.U. domination.  But what does that very old concept mean in and for the U.K.?  Chanelling the 900+ year-old Yoda,[21] from Star Wars, one might sum it all up to make a sovereignty definitional statement of: “FIRST, AM I !”[22]  So, with that starting point, let us then examine each of the 8 (“eight”) letters of that definitional statement as an independent element that further represents, and as listed in that same sequence: Farms, Immigration, Resources, Security, Trade, Appearance, Monetary, and Incidents.

 

(a) FARMS – There is a farm crisis in the U.K.  This ranges from a base history of intensive over-farming leading to warnings of declining yields and declining biodiversity;[23] through a canopy of over-leveraged dairy farmers with up to 20% of their number projected to be forced out of the farming business just in 2016 – on top of a 50% drop in the head count of dairy farmers in England and Wales over the last decade, alone;[24] to the four sides of a box comprising rising input costs, falling “farm gate” prices for produce including beef, pork, chicken, mutton and dairy products alike, delayed E.U. subsidies, and a lingering and very costly agricultural spat with Russia over its actions in Ukraine.[25] Freedom from the E.U. would allow the U.K. to set its own agricultural policies, help farmers, and make its own trade deals.

 

(b) IMMIGRATION – Stricter limits on access to the U.K. by Commonwealth Citizens[26] have been more than compensated-for by easier access for E.U. Citizens, especially Bulgarians and Romanians.[27] Currently powerless to: (i) exercise more than its limited Schengen opt-outs from European asylum laws, or go beyond imposing immigration access controls over non-E.U., third-country nationals;[28] (ii) put the immigration issue before its citizens[29] and make and enforce its own immigration policy at odds with those of the European common market; or (iii) do much more than grumble at a perceived “benefit tourism”[30] that attracts too many foreigners to the U.K. in efforts to milk what many perceive as a generous welfare state, the U.K. would be free after leaving the E.U. to set its own rules, make its own way, and free up jobs for its own indigenes as foreigners were either required to first leave and then re-apply for visas from their home countries, saddled with quotas or other preclusive conditions, or simply expelled.  That last policy choice, however, can cut both ways, and so most governments with workable alternative options would likely choose against facing a sudden retaliatory influx from far and wide of large numbers of similarly deported and “quite” irate Britons.

 

(c) RESOURCES – The U.K. has been developing significant wind power projects with a Q1 2014 installed capacity of 10.5 gigawatts that was the third highest in Europe behind Germany (34 gigawatts), and Spain (23 gigawatts).[31]  In addition, and at least until the recent commodity price decline, it had long-relied on abundant North Sea oil for both steady jobs and government revenues,[32] and the U.K. has long been both a producer and consumer of its own coal – whether for power generation or steel production.[33]  Today, the coal industry is declining as the trade in carbon offsets grows,[34] and the U.K. steel industry remains stymied by high energy costs and loses ever more jobs to lower cost producers in China and subsidized producers in mainland Europe that the U.K. was slow to emulate.[35]  This, and tariff inequities between the U.S., China, and E.U. continue to confuse hapless U.K. steelworkers who expected more support from their government for what they consider to be a strategic industrial sector.[36]  Unfortunately, steel is not one of the U.K. top industrial sectors, as it ranks 11th in revenue (by rounded £billions) after: Motor vehicles (£45b), Air and spacecraft (£20.6b), Meat (£12b), Pharmaceuticals (£10.1b), Dairies & cheese making (£7.5b), Printing (£6.3b), Bread, pastries and cakes (£6b), Metal structures (£5.9b), Measuring instruments (£5.5b), Machining (£5.5b), and finally Steel (£1.6b).[37]  Given this discrepancy in what the steelworkers and the government respectively felt that their jobs and livelihoods were worth, it should be little wonder that high steelworker job loss areas corresponded closely (if not matched perfectly), with those areas voting to leave the E.U. for a more “sovereign” future.[38]

 

(d) SECURITY – Unlike U.S. citizens who, for the most part, remain strongly opposed to unbridled government surveillance of the populace, as ironically echoed in a recent congressional action on enhancing the privacy of emails and other stored communications,[39] the majority of U.K. citizens (60%) were found in a recent Comparitech poll to support government surveillance of private communications for reasons of national security.[40]  While 65% of respondents agreed with intercepting communications to tackle criminal activity, this rate jumped to 77% when queried in relation to combating acts of terrorism and thwarting terrorist actors.[41]  With regard to participation in E.U. security structures, policy-making, and security postures around the world, a February, 2016 U.K. Commons Briefing Paper discussing likely pros and cons of a Brexit,[42] summarizes that the E.U. would lose more than the U.K. on a Brexit, as: (i) the U.K. and France were the only two major military powers within the E.U. and so the U.K. would lose no supporting security structures, given its remaining within NATO; (ii) the U.K. could easily step back from a role in helping to formulate E.U. security policies and do the same, perhaps even more credibly so, within NATO and on the United Nations Security Council (UNSC); and (iii)  the U.K. had long played a role in key areas such as the Middle East, Asia, and Africa, gaining valuable foreign policy experience and foreign influence that the E.U. – except France with its similarly long colonial history, was still working to match.  In those areas where the U.K. was lacking, its “special relationship” with the United States would fill the gap as the two nations often acted in concert.  Essentially, the U.K. would lose nothing security-wise in a Brexit and could set its own security agenda outside the E.U., but still act as a third-party state helping to ensure the success of the E.U. Common Security and Defence Policy (CSDP).[43]

 

(e) TRADE – The E.U. Common Commercial Policy (CCP) precludes its members from entering into their own bilateral trade negotiations and relationships.[44]  Let us therefore look at actual trade figures.  In 2014, services accounted for 38% of U.K. exports to the E.U. and 48% of imports from the E.U., and in 2015, goods accounted for 47% of exports to the E.U. and 54% of imports from the E.U.[45]  Yes, it is true that the U.K. might free itself from the CCP restraints after Brexit, and move to rekindle relationships amongst its Commonwealth members as a resurgent leader of same.  However, the world has not stood still in the interim and many of these former staunch trading partners have already secured trading deals with the three central BRICs members (Russia, India, and China), the United States, and the E.U. as a whole. The E.U. has already negotiated a trade deal with Canada, a strong U.K. trading partner, and is working on finalizing a far-reaching one – the Transatlantic Trade and Investment Partnership (TTIP), with the United States of America.[46] Of the U.K.’s top 7 export markets for both goods and services in 2014, Germany was first (12.8%), the U.S.A. was second (9.4%), China was third (7.0%), France was fourth (6.7%), the Netherlands was fifth (6.6%), Spain was sixth (4.7%), and Belgium was seventh (4.4%).[47]  This 51.6% total of all 2014 U.K. exports had only 16.4% of its footprint (1/3) outside the E.U. and fully 35.2% (2/3) in.  Considering the foregoing, and lacking any guarantee that the E.U. markets can be easily replaced, if at all, the U.K. would do well to negotiate continued trading access to the E.U.[48]

 

(f) APPEARANCE – Whether we like it or not, there has been a backlash in the U.K. over the changing appearance of a society that includes more and more “foreigners” – those who do not look like so-called classic Britons (despite centuries of colonialism, in-migration, and mixed marriages), and those who do not dress like so called classic Britons.  Unlike the United States and Canada where many have – and may still even be able to trace through written records and DNA, an ultimate ancestry that started far away from where they are now, there are, one concedes, millions of Britons in the British Isles who can trace their roots to “indigenous”  Angles and Saxons, Scots and Norsemen, Welshmen, and the Irish.  Student ranks in U.K. educational institutions continue to comprise increasing numbers of Chinese, Brazilian, and Malaysian nationals,[49] and the “student route” remains the prime suspect in a leaky immigration system of visa overstays and welfare cheats, despite the fact that many non-E.U. national students still return home after completing their studies, or stay and start families and legitimate jobs in the U.K. in full compliance with all of the applicable rules.[50]  “This” appearance issue, however, centers on E.U. citizens, as opposed to refugees in mainland Europe and peoples of African and Caribbean descent.

 

Last year, net migration to Britain — the difference between inflows and outflows — hit a record high at 336,000. Of those, 180,000 were E.U. citizens, who can move to Britain simply by hopping aboard a plane or a train.  Unlike in countries across continental Europe, refugees made up only a relatively small portion of the inflow in Britain.[51]

 

(…) Jackson, the member of Parliament, said his constituents aren’t naturally prejudiced toward foreigners. But he said they have been poorly served by governments that cheer the overall economic benefits of immigration without accounting for the downside: Hospitals and schools are strained, waiting lists for public housing grow longer, and workers — particularly those with low skills — are squeezed out of the labor market.[52]

 

Where people feel, rightly or wrongly, that foreigners are willing to take their jobs for less pay, including those jobs that the locals might not even want, then the impetus to change appearances and the lingua franca back to something more immediately local, becomes that much harder to overcome or reverse.

 

(g) MONETARY – The U.K. contributed a net amount (in £billions) of £10.5b (2013), £9.8b (2014), and £8.5b (2015) to the E.U. budget in each of those years, respectively.[53]  The U.K. net contribution has clearly been decreasing, but the overall E.U. budget growth (in €billions) has remained quite stable at €144b (2013), €143b (2014), €145b (2015), and €155b (2016).[54]  While understanding the details of inner E.U. money mechanics requires a more detailed understanding of fiscal matters, the average Briton who watches, listens to, or browses the news can likely point to one of three apparent conundrums or clear contradictions in the E.U. machinery of governance, that may well have been highlighted by a “leave” campaigner, or been enough to move the individual himself or herself, to consider a clearer and less convoluted sovereign path.  The first contradiction, is how to reconcile an unceasing promotion of individual rights with the use of a bail-in that taxed innocent holders of deposits in Cyprus’ banks, when the fault lay with bankers and bureaucrats?[55]  The second contradiction, is how to reconcile the promotion of fiscal responsibility and austerity for member states on the one hand, with conditioning the infusion by bailout (good money chasing bad) of more public funds from E.U. members, on ending price controls, deregulating markets, and forced privatizations of public assets and services, on the other,[56] when the “known, known” result is market domination by deep-pocketed foreigners,[57] and public benefits that get delayed or cancelled as part of a bailout or for simple lack of funds, which ends up causing even greater suffering?[58] The third contradiction, is how to reconcile a push for growth and the individual savings that will enable the lending that spurs business investments and growth, with negative interest rates that penalize commercial banks for depositing their excess funds with a central bank,[59] discourage bond buying (corporate, municipal and treasury) and equities trading in financials as banks find it harder to make money,[60] and as one major asset manager concludes, defeat the purpose?[61] Endangering the core profitability of the world’s most systemically important financial institutions by eliminating the spreads between “lending and borrowing rates” or “investment returns and funding rates”, may simply create another banking crisis.[62]  The U.K., being a global banking centre with several options other than negative rates,[63] may now break free of the ECB and start making its own monetary policy.

 

(h) INCIDENTS – A number of incidents have now come to characterize membership in the E.U. and its way of life.  Immigration and appearance have been central, with incessant migrant flows that leave thousands dead at sea,[64] crises at E.U. borders,[65] and rampant lawlessness by non-Europeans – including swarming sexual assaults, in the staunchest E.U. “law and order” member and migration champion, which seemed powerless to stop them.[66]  These are things that Britons just do not want at home.  Further seeing the monetary inequity in grossly imbalanced healthcare funds transfers between the U.K. and E.U for citizen healthcare abroad,[67] a trade hindering mid-summer blockade of the port of Calais by disgruntled French ferry workers,[68] and the security failings of multiple incidents of terror in France[69] and then Belgium,[70] many in the U.K. would doubtless be happier with a sovereign and independent collection of “home-made” health, immigration, and security policies for the U.K. that include such sometimes contentious measures as (robust) border controls, (stricter) asylum restrictions, (greater) controls on the acquisition and removal of citizenship, and (more frequent) use of deportation orders.[71]

 

 

WHO HAS THE LEVERAGE?:

Now that we are a lot clearer on what just happened, and now that we have considered some of the most likely reasons that many of those who chose U.K. independence, voted to leave, let us undertake a truncated SWOT analysis (strengths, weaknesses, opportunities and threats) of the major parties, their anticipated and dynamic agendas, and their respective degrees of leverage in this very fast-moving situation.

 

“S-W-O-T” ANALYSIS:

 

(I) STRENGTHS – England and Wales have a long history of togetherness, and they both voted as a whole to leave, which further cements them together.  Scotland, with a population of 5.2 million that wants to remain, retains the North Sea oil, but depended (in 2013 figures) on the E.U. for 46% of its export market, with top destinations therein being the Netherlands, Germany, and France.[72] Additionally, the bulk of exports (49.3%) were concentrated in only 5 (“five”) sectors (food and beverage manufacture at 18%, coke, refined petroleum, and refined chemicals manufacture at 12.6%, legal and accounting at 6.7%, machinery at 6.3%, and electronic products at 5.7%),[73] and fully 49% of all Scottish exports were destined for the United States.[74]  Similarly, Northern Ireland, which also wants to remain, has significant strengths in several key areas.  With a population of 1.8 million, Northern Ireland hosts 12,000 construction companies and over 60 companies in aerospace and defence – with the latter including Bombardier, Thales, and ThyssenKrupp Aerospace; there are 32,000 people employed in financial services – including with Citigroup, Allstate, Lloyds and Santander, 20,000 people employed in food and drink, and 13,000 employed in business services – including at contact centres for Concentrix and Convergys; and it has additional and solid clusters in ICT and electronics, life and health sciences, renewable energy, and cybersecurity.[75]  On the other hand, however, the E.U. which has the carrot of a large local market of 508 million consumers[76] that the U.K. and its constituent parts have become accustomed to accessing and servicing, also has the strength of making and imposing the rules of access, and the stick of sanctions or suspensions against rule-breakers.

 

(II) WEAKNESSES – Scotland and Northern Ireland want continued access to the E.U. and are likely prepared to make deep concessions to get it.  The U.K. as a whole is weakened, and England and Wales will be trying to negotiate continued market access but without accepting all of the rules that they have voted to avoid.  With slightly fewer Citizens in England and Wales alone, they also apparently have less of a carrot to offer as enticement for negotiating a continued market access deal that favours them, overall. The E.U. currently has the upper hand and can push a hard bargain.  However, as time goes on and England and Wales either appear to strengthen or just play for time, the E.U.’s hand will weaken as others among its 27 remaining members[77] the citizens of which, now well aware of the reasons behind the successful U.K. referendum on leaving, also start to agitate for their own referendum options.[78]  If too many choose that path or push back against the E.U. for real changes to placate their populations, then the E.U. will be forced to change, or may itself break apart into smaller blocks, or a far looser, less powerful, and less enticing confederation.  Unless it can show some positive headway in a very short time, England and Wales may also come to find that its currency – long seen as a stalwart and global reserve, becomes far less valuable, which will further erode its GDP, and business and bargaining status.

 

(III) OPPORTUNITIES – England and Wales, at least before the rhetoric and rancor between their leaders grows too harsh, can make concessions to Scotland and Northern Ireland to retain continued access to their markets for U.K.-based businesses, permit U.K. citizens to travel to and from these jurisdictions for work on very liberal terms, and in the case of Scotland, come to some lease arrangement for their Scottish submarine bases as well as some shared cost, revenue, and technical and staffing agreement for the North Sea oilfields.  Northern Ireland, for its part, can further exploit its existing competitive advantages and highly-educated workforce to attract those global and even local businesses based in England and Wales, perhaps even with free trade zones – with specific targeting of footloose financial institutions, manufacturers and automobile manufacturers who do not want to relocate too far, head offices with line and staff operations that might be anywhere, and well-heeled European and other expatriates who had thought to settle and plant their funds, in and around the capital of a U.K. firmly within the E.U.  The many castles, country estates, abbeys and priories of Northern Ireland may even be presented as opportunities to immigrate and invest some pre-agreed assessment with periodic upkeep, into the historic life and lore of the land, and live (and run and/or renovate) like Kings and Queens and Lords of the Land, because absentee landlords can still reap profits from tourist traffic in their absence.[79]  Conversely and by no means standing still, the U.K. can also offer tax, subsidy, and other concessions for branch plants and head offices to stay.  It remains to be seen whether one or more of these parties will be able to reach an agreement with the E.U. such that head offices based within their own territories, will have their goods and services more favourably treated (despite origin or situs) regarding E.U. market access, than those based in the odd-man or odd-men out amongst these three of England and Wales, Scotland, and Northern Ireland.  Success on this specific point for England and Wales would be a boon that allows global bank headquarters to stay in London.  Loss of E.U. membership would mean loss of “Passporting” rights within the EEA, which give financial institutions that are currently based in the U.K. (and therefore the EEA),[80] the right to access and serve the EEA market without having to first establish local branches in each of those 30 other EEA jurisdictions.[81]

 

(IV) THREATS – England and Wales may feel that moving slowly in terms of triggering the two-year timeline to conclude exit negotiations, is best for them and will gain them leverage against the E.U., and those parts of the U.K. that did not vote to leave.  However, with the rising disarray of the Labour Party and the lack of a solid leadership in the governing Conservative Party, there is a growing power vacuum.  Prime Minister Cameron is gravely wounded in prestige and credibility and has said, quite prematurely, in my own opinion, that he will resign.  This makes him a lame duck, so to speak, with low perceived authority.  Indeed, if he tries to take charge and move the country in a specific direction, he may become a lightning rod for the disgruntled – whether on one or both sides of the referendum, as emotions continue to run high.  The Conservative Party would be best served to call an election as soon as possible, as a new leader chosen from within the now-discredited party that both sides distrust, might otherwise not enjoy public support, or even legitimacy.  With continuing turmoil in the global markets, downgraded U.K. credit ratings,[82] and slowing investments due to this uncertainty, the residents of entire regions of the U.K. (stay and leave alike), that are put into further distress, may take matters into their own hands which would herald the start of scuffles, then riots, and ultimately local “nationalizations” of assets and properties with the expulsion of perceived outsiders – including those who voted on the wrong side, and other lawlessness.  If the U.K. military, which is based on locally formed and maintained Regiments, is called upon to restore order, then they may even mutiny in their own home areas and support the breakaway locals, with discipline rapidly breaking down across the land and the U.K. dissolving into armed and mutually hostile ethnic, economic, or interests-based enclaves.  Any subsequent move by the E.U., the North Atlantic Treaty Organization (NATO) as a whole, or others (including the United States), to morally or physically intervene would be seen by the locals as an attempt to support or force one side or another, and thus only serve to make matters much worse.

 

 

WHERE MIGHT THIS ALL GO?:

What then is the likely result of all of this, when will it all end, and where will the parties all be when the dust settles?  The answer, is “I don’t know” times three; but there are three possible scenarios that might still play-out, as listed and briefly described below from the worst case, to the best case.

 

 

OPTION CC – COARSE & CACOPHANOUS: The fact that the U.K. will break apart is, I think, inevitable.  There is no way to redo or cancel the results of the referendum without wide-scale revolt and a total loss of global credibility, and one nation cannot go in two directions – “remain” and “leave”, at the same time.  Even a national election with party platforms specifically for and against invoking Article 50, could lead to disaster, as it would be seen by “leave” voters as an under-handed attempt to disenfranchise them and void their referendum votes.  On the other hand, sliding chaos due to sustained indecision and a lack of leadership may ultimately lead to a result similar to that of the Balkans and the former Yugoslavia, with heavy loss of life as those who want to split must overcome the forceful efforts of those who clearly do not want them to leave.  In this scenario, there will be little to no immediate opportunity for sustained good economic relations between the (likely three, to start) main constituent parts of a former U.K.

 

 

OPTION BB – BALANCED & BILATERAL: A brief period of posturing and some violence may eventually settle into a more sedate split, akin to that of the former Soviet Union – albeit reached after a period of tensions and limited open conflict.  The responsible division of assets and liabilities will be negotiated, and each and all of the former constituent entities of the U.K. will steel themselves for rough times ahead as they try to make their way on their own terms, and with their own wits and resources.  This, of course, would require good faith on all sides, including: (i) the timely giving of consent by England and Wales for referenda in Scotland and Northern Ireland, or fuller and even complete devolution of legislative powers;[83] (ii) the removal from U.K. devolution statutes (if retained, and the U.K did not split-up) of references to E.U. laws – without which removals, both of these “remain” regions would still be bound by E.U. laws, regardless of whether or not they remained within the E.U.;[84] and (iii) the granting by Scotland and Northern Ireland, of their consent to England and Wales to amend devolution legislation in the first instance, when such amending legislation was tabled in London’s Houses of Parliament.[85]  Providing that the E.U. reciprocates[86] and itself remains as a cohesive entity, some or all of these parties may also enjoy continued and expansive access to that market, such as with Norway.[87]

 

However, the specific status and look of these new arrangements would depend on the level and degree of concessions that the E.U. was willing to give, and they were willing to make, and there are several models, including the Norwegian model, from which to choose.[88]  I will now present these, very briefly, as comparable and assessable on the 8 (“eight”) g-r-a-t-s-i-a-s factors of: General nomenclature; Rules and regulations; Agriculture; Treaties and trade; Surcharge; Immigration; Adherents; and Services.

 

 

Model I: Full membership.[89]

  • General nomenclature – European Union.
  • Rules and regulations – Many, creating a “Single Market” with all members voting.
  • Agriculture – Comprehensive regulation.
  • Treaties and trade – E.U. has negotiated 36 Free Trade Agreements with 53 non-E.U. countries.
  • Surcharge – Varied member contribution levels, with rebates.
  • Immigration – Free movement of citizens with equal access to labour markets and welfare systems.
  • Adherents – 28 members; all signatories to the European Economic Area (EEA) Treaty.
  • Services – Comprehensive regulation.

 

 

Model II: Norway.[90]

  • General nomenclature – Member of the European Economic Area (EEA), but not the E.U.
  • Rules and regulations – Accepts major E.U. rules (approx. 3/4 of all E.U. laws), but with no vote or veto.
  • Agriculture – Exempted from coverage, along with fisheries, justice, and home affairs.
  • Treaties and trade – EEA has negotiated 25 Free Trade Agreements with 36 non-EEA countries.
  • Surcharge – Significant contributor to the E.U. budget.
  • Immigration – Free movement of E.U. + EEA citizens, equal access to labour markets/welfare systems.
  • Adherents – (in the EEA: E.U. 28, Norway, Liechtenstein, and Iceland.)
  • Services – Included.

 

 

Model III: Switzerland.[91]

  • General nomenclature – Member of the European Free Trade Area (EFTA), but not the E.U.
  • Rules and regulations – 120+ bilateral agreements implement E.U. regulations necessary for trade.
  • Agriculture – Some tariffs remain on agricultural products.
  • Treaties and trade – Switzerland has 29 additional bilateral agreements with 41 other nations.
  • Surcharge – Contributor to the E.U. budget, but less so than Norway.
  • Immigration – Free movement of E.U.+ EEA+ EFTA citizens, equal labour market/welfare system access.
  • Adherents – (in the EFTA: E.U. 28, EEA 3, Switzerland).
  • Services – No general financial services access and limited professional services access to the E.U.

 

 

Model IV: Turkey.[92]

  • General nomenclature – Member of a Customs Union, with industrial goods free of tariffs and quotas.
  • Rules and regulations – Must enforce equivalent rules in those areas where it has market access.
  • Agriculture – Processed agricultural goods.
  • Treaties and trade – No E.U. vote or veto; must align third-country external tariffs with those of E.U.
  • Surcharge – Non-contributor to E.U. budget, but is a funding recipient as a membership candidate.
  • Immigration – Limited movement, labour, and welfare access rights for Turkish nationals.
  • Adherents – Monaco, Andorra, San Marino, Turkey.
  • Services – Excluded.

 

 

Model V: Canada (*pending/executory – not yet in force*).[93]

  • General nomenclature – E.U.-Canada Comprehensive Economic and Trade Agreement (CETA).
  • Rules and regulations – No tariffs on industrial goods; comply with E.U. safety, quality, and origin rules.
  • Agriculture – Tariffs to be eliminated in most areas, with quotas emplaced in others.
  • Treaties and trade – Preferential tariffs restricted to goods “substantially” made in Canada.
  • Surcharge – No contribution.
  • Immigration – Limited access.
  • Adherents – Canada.
  • Services – Limited access.

 

 

Model VI: Hong Kong/Singapore.[94]

  • General nomenclature – Unilateral Free Trade Policy.
  • Rules and regulations – No import tariffs and no export tariffs are imposed by these jurisdictions.
  • Agriculture – Varies.
  • Treaties and trade – Near absence of trade restricting practices, laws, and regulations.
  • Surcharge – No contribution.
  • Immigration – Varies.
  • Adherents – Hong Kong, Singapore.
  • Services – Varies.

 

 

Model VII: WTO Default Rules.[95]

  • General nomenclature – World Trade Organization (WTO).
  • Rules and regulations – reciprocal tariffs across a total of 5,000+ tariff lines.
  • Agriculture – Tariffs.
  • Treaties and trade – Arranged into high-level broad categories, and sub-categories of goods.
  • Surcharge – No contribution.
  • Immigration – Excluded.
  • Adherents – 160+ WTO-member nations, using default rules where no trade agreements exist.
  • Services – General Agreement on Trade in Services (GATS), with limited access.

 

 

Model IIX: Some, or None of the Above (*unknown unknown*).

  • General nomenclature – to be determined.
  • Rules and regulations – to be determined.
  • Agriculture – to be determined.
  • Treaties and trade – to be determined.
  • Surcharge – to be determined.
  • Immigration – to be determined.
  • Adherents – to be determined.
  • Services – to be determined.

 

 

OPTION AA – ALTERNATE AMALGAMATIONS: With no major incidents of violence, the three U.K. constituents may be able to both negotiate continued cordial political and business arrangements between themselves and with the E.U., and enter into a number of other alternate amalgamations.  For example, the Republic of Ireland and Northern Ireland may re-unify (with the latter already sending 37% of its exports to the former, and 60% to the E.U. as a whole),[96] finally match and merge their corporation tax rates,[97] and likely remain within the Eurozone[98] with full adoption of the Euro, as the currency to be used island-wide due to the gains E.U. membership has brought to them both;[99] Northern Ireland and Scotland may join to co-exploit their comparative advantages as earlier mentioned,[100] possibly with a new common “petro-currency”, and either in or out of the E.U.; or, one or both of Scotland and Northern Ireland may each remain solo but enter into a loose form of confederative relationship with England and Wales – using the Pound Sterling, the Euro, and likely also a third “national” currency.

 

 

WHAT IS MY OWN TOP CALL?:

And so?  Many are busy trying to predict the long-term consequences of the Brexit vote for other nations and regions of the world before these above initial waves are settled.  To me, this is like inviting 8 (“eight”) ballroom-trained octopuses[101] to give an impromptu underwater demonstration of the Brazilian Samba, Foxtrot, Jive, Mambo, Paso Doble, and Tango, and then trying to determine: (i) which ones will pair-up; (ii) which dance(s) each pair will choose; (iii) which is male and which is female with any certainty, and consequently which will lead and which will follow for each dance; and (iv) which tentacles each participant will use in their respective dance routines.  A lucky guess or two may well accrue, but seriously?!  There are too many moving parts and not enough grounding, settled precedent ……. the data is just too big!

 

Some people are now even hinting that the U.K. government will so delay the invocation of Article 50 and leaving the E.U. that it won’t even happen.  I think this view is ludicrous, at best, and I both favour and predict an ultimate result for the U.K. of one of the 3 options (of AA, BB, or CC) immediately above.

 

Of course, I could be totally wrong in one, or some, or all of my own many assumptions and predictions.

 

But then again, the analysis that leads to these conclusions is very clearly laid-out and set on some pretty sound ground; and so, I might not ……[102]

 

 

*************************************************************

 

 

Author:

Ekundayo George is a lawyer and sociologist.  He has also taken courses in organizational and micro-organizational behavior, and gained significant experience in regulatory compliance, litigation, and business law and counseling.  He is licensed to practise law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America.  See, for example: http://www.ogalaws.com.  A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors.  He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux. Trained in Legal Project Management (and having organized and managed several complex projects before practising law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams.  Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: healthcare; education and training; law and regulation; policy and plans; statistics, economics, and evaluations including feasibility studies; infrastructure; and information technology/information systems (IT/IS) – also sometimes termed information communications technologies (ICT).  See, for example: http://www.simprime-ca.com.

 

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

 

This article creates no lawyer-client relationship, and is not intended or deemed legal advice, business advice, the rendering of any professional service, or attorney advertising where restricted or barred.  The author and affiliated entities specifically disclaim and reject any and all loss claimed, no matter howsoever resulting as alleged, due to any action or inaction done in reliance on the contents herein.  Past results are no guarantee of future success, and specific legal advice should be sought for particular matters through counsel of your choosing, based on such factors as you deem appropriate.

 

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[1] See generally Wikipedia.  United Kingdom.  Visited June 24, 2016.  Web: <https://en.wikipedia.org/wiki/United_Kingdom>

[2] Malcolm Coles and Ashley Kirk.  EU referendum results and maps: Full breakdown and find out how your area voted.  Posted June 25, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/news/2016/06/23/leave-or-remain-eu-referendum-results-and-live-maps/>

[3]Rowena Mason, Anushka Asthana and Diana Gangan.  Nato and US defence chiefs issue security warnings over Brexit.  Posted May 10, 2016 on theguardian.com.  Web: <http://www.theguardian.com/politics/2016/may/10/nato-chief-brexit-warning-white-house-david-cameron>

[4] Malcolm Coles and Ashley Kirk.  EU referendum results and maps: Full breakdown and find out how your area voted.  Posted June 25, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/news/2016/06/23/leave-or-remain-eu-referendum-results-and-live-maps/>

[5] This can be accomplished through an amendment that was first titled as new Article 49 A through the 2007 Treaty of Lisbon, which amendment became Article 50 of the 1993 Maastricht Treaty, or “Treaty of the European Union” (TEU).  See TREATY OF LISBON.  AMENDING THE TREATY ON EUROPEAN UNION AND THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY (2007/C 306/01).  Posted in the Official Journal of the European Union and visited June 24, 2016.  Web: <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C:2007:306:FULL&from=EN>

 

The following new Article 49 A shall be inserted:

“Article 49 A

 

  1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

 

  1. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 188 N(3) of the Treaty on the Functioning of the European Union.  It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

 

  1. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

 

  1. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 205(3)(b) of the Treaty on the Functioning of the European Union.

 

  1. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.”

 

[6] Christopher Brennan.  U.K. Prime Minister David Cameron announces resignation after losing ‘Brexit’ vote.  Posted June 23, 2016 on nydailynews.com.  Web: <http://www.nydailynews.com/news/world/david-cameron-announces-resignation-losing-brexit-vote-article-1.2686084>

[7] (U.K.) Conservative Party Conference 2016, Birmingham, U.K. (Sunday, October 2, 2016 to Wednesday, October 5, 2016).  Web: <https://conservativepartyconference.com/index/>

[8] Steven Erlanger.  ‘Brexit’ Vote Roils Opposition Labour Party.  Posted June 26, 2016 on nytimes.com.  Web: <http://www.nytimes.com/2016/06/27/world/europe/hilary-benn-jeremy-corbyn.html?_r=0>

[9] Michael Sheetz.  The Pound Continues Down After Brexit Vote, Hits 30-Year Low.  Posted June 24, 2016 on thestreet.com.  Web: <https://www.thestreet.com/story/13619707/1/the-pound-continues-down-after-brexit-vote-hits-30-year-low.html>

[10] Newsmax.  Moody’s, S&P: UK Rating at Risk of Downgrade on Brexit.  Posted June 25, 2016 on newsmax.com.  Web: <http://www.newsmax.com/Finance/StreetTalk/brexit-moodys-sp-credit-rating/2016/06/25/id/735620/>

[11]  Philip Oltermann in Berlin, Jon Henley and Jennifer Rankin in Brussels, Angelique Chrisafis in Paris and Julian Borger.  EU governments pile pressure on UK to leave as soon as possible.  Posted June 25, 2016 on theguardian.com.  Web: <http://www.theguardian.com/politics/2016/jun/25/eu-emergency-talks-brexit-berlin>

[12] Reporting by Alastair Macdonald; Editing by Hugh Lawson.  EU names Belgian to coordinate Brexit negotiations.  Posted June 25, 2016 on uk.reuters.com.  Web: <http://uk.reuters.com/article/us-britain-eu-negotiator-idUKKCN0ZB0V9>

[13] James Tapper.  Petition to hold second EU referendum reaches 2m signatures.  Posted June 25, 2016 on theguardian.com.  Web: <http://www.theguardian.com/politics/2016/jun/24/petition-second-eu-referendum-crashes-house-of-commons-website>  Of note, the U.K. must actually “give its permission” for the holding of any referendum in Scotland or Northern Ireland, because jurisdiction over elections is a reserved power of the U.K. Parliament in Scotland (that might be devolved down to the Scots), and an excepted power in Northern Ireland, which was never really considered as amenable to devolution down to the government of Northern Ireland.  See e.g.  House of Lords.  The Agreement on a referendum on independence for Scotland – Constitution Committee Contents.  Posted 2012 on publications.parliament.uk and visited June 27, 2016.  Web: <http://www.publications.parliament.uk/pa/ld201213/ldselect/ldconst/62/6203.htm>

[14] Reuters.  Brexit: Scotland starts drive to stay in European Union after referendum.  Posted June 25, 2016 on abc.net.au.  Web: <http://www.abc.net.au/news/2016-06-25/scotland-starts-drive-to-stay-in-eu-independence-option-open/7543950> Amidst predictions of dire consequences including potential loss of access to the E.U. if it left, Scotland had voted 55:45 to remain within Britain in its own September 18, 2014 independence referendum, with a voter turnout of over 80%.  In this larger British referendum regarding EU membership specifically, both Scotland (voting 62.0:38.0 to stay), and Ireland (voting 55.7:44.3 to stay), are determined to find ways to remain within the E.U.  See generally Malcolm Coles and Ashley Kirk.  EU referendum results and maps: Full breakdown and find out how your area voted.  Posted June 25, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/news/2016/06/23/leave-or-remain-eu-referendum-results-and-live-maps/>; See also Scotland referendum: Scots reject independence from UK as Yes camp concedes defeat in historic vote.  Posted and last updated September 19, 2016 on abc.net.au.  Web: <http://www.abc.net.au/news/2014-09-19/scottish-referendum-no-camp-claims-victory-in-historic-vote/5756398> See also Tom Batchelor.  United Ireland?  Sinn Fein’s Martin McGuinness uses Brexit to call for vote on unification.  Posted June 26, 2016 on express.co.uk.  Web: <http://www.express.co.uk/news/uk/683490/EU-referendum-Martin-McGuinness-calls-border-poll-unification-Brexit-vote>

Of note, the institutions already exist to make this happen, being the North/South Inter-Parliamentary Association (for discussions and setting frameworks and timelines), and the North/South Ministerial Council (for putting those plans into action through “all island” policies and programs).  See generally Houses of the Oireachtas, North/South Inter-Parliamentary Association.   Visited June 26, 2016.  Web: <http://www.oireachtas.ie/parliament/tdssenators/northsouthinter-parliamentaryassociation/> See also, generally North/South Ministerial Council.  Visited June 26, 2016.  Web: <https://www.northsouthministerialcouncil.org/>

[15] World – Press Trust of India.  No Rush To Leave EU, Says Boris Johnson On Brexit.  Posted June 24, 2016 on ndtv.com.  Web: <http://www.ndtv.com/world-news/no-rush-to-leave-eu-says-boris-johnson-on-brexit-1423108> See contra Reuters.  From ‘loony’ to winner: Meet Nigel Farage, the man who engineered Britain’s exit from EU.  Posted June 24, 2016 on dnaindia.com.  Web: <http://www.dnaindia.com/world/report-from-loony-to-winner-meet-nigel-farage-the-man-who-engineered-britain-s-exit-from-eu-2227497>

 

“”People here don’t understand,” Farage said on Friday morning in Westminster, central London’s political district.  “They’re too wealthy, they don’t get what open-door, mass immigration as a result of EU membership has done to people’s wages, to people’s availability of getting doctors’ appointments, or their kids into local schools.  This was the issue ultimately that won this election.””

 

[16] Frances Perraudin and Katie Allen.  UK business leaders caution against hasty EU exit.  Posted June 25, 2016 on theguardian.com.  Web: <http://www.theguardian.com/politics/2016/jun/25/uk-business-leaders-caution-against-hasty-eu-exit>

[17] While one global bank had apparently earlier implied, pre-Brexit, that it “might have to” move staff out of London, another has strongly denied allegations that it has now, post-Brexit, “actually started to” move staff out of London.  See e.g.  Jill Treanor.  HSBC could switch 1,000 banking jobs to France after a Brexit vote.  Posted February 15, 2016 on theguardian.com.  Web: < https://www.theguardian.com/business/2016/feb/15/uk-better-in-reformed-europe-says-hsbc-chair>; Hazel Sheffield.  Morgan Stanley denies moving 2,000 London jobs to Dublin and Frankfurt.  Posted June 24, 2016 on independent.co.uk.  Web: <http://www.independent.co.uk/news/business/news/morgan-stanley-brexit-eu-referendum-jobs-dublin-frankfurt-a7100911.html>

[18] Katie Allen.  City of London could be cut off from Europe, says ECB official.  Posted June 25, 2016 on theguardian.com.  Web: <http://www.theguardian.com/politics/2016/jun/25/city-of-london-could-be-cut-off-from-europe-says-ecb-official>

[19] Katherine Sellgren, BBC News education reporter.  Students could be paying loans into their 50s – report.  Posted April 10, 2014 on bbc.com.  Web: <http://www.bbc.com/news/education-26954901>

[20] Ashley Cowburn.  Jo Cox death: Man who shot and stabbed Labour MP shouted Britain First, says eyewitness.  Posted June 16, 2016 on independent.co.uk.  Web: <http://www.independent.co.uk/news/uk/crime/jo-cox-shooting-man-who-shot-labour-mp-shouted-says-eyewitness-a7085656.html>

[21] See e.g. about.com.  Star Wars FAQ: Why Does Yoda Speak Backwards?  Visited June 24, 2016.  Web: <http://scifi.about.com/od/starwarsglossaryandfaq/a/SWAR_yoda-speak.htm>

[22] I strongly and unequivocally condemn all violence related to this referendum, and make no suggestion that I do or anyone else does, support or condone the actions of the individual arrested for the shooting of MP Jo Cox.

[23] Adam Withnall.  Britain has only 100 harvests left in its farm soil as scientists warn of growing ‘agricultural crisis’.  Posted October 20, 2014 on independent.co.uk.  Web: <http://www.independent.co.uk/news/uk/home-news/britain-facing-agricultural-crisis-as-scientists-warn-there-are-only-100-harvests-left-in-our-farm-9806353.html>

[24] Elizabeth Anderson and Rhiannon Bury.  Thousands of dairy farms face closure as debts reach crisis levels.  Posted February 21, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/business/2016/02/21/thousands-of-dairy-farms-face-closure-as-debts-reach-crisis-leve/>

[25]  Marion Dakers.  ‘Whatever we do, shops tell us to be cheaper’: the growing crisis in Britain’s farms.  Posted February 19, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/finance/newsbysector/industry/12164932/Whatever-we-do-shops-tell-us-to-be-cheaper-the-growing-crisis-in-Britains-farms.html> This article further  groups the 5 (“five”) key drivers that could worsen the farm crisis, as: changing tastes, a (farm) commodities collapse, industrialization, mounting debt, and E.U. subsidies (for the competing goals of land management, agricultural production, and green power generation).  See also Reuters.  Nothing to do with me: Putin says Russia didn’t influence Britain’s vote to leave EU.  Posted June 24, 2016 on dnaindia.com.  Web: <http://www.dnaindia.com/world/report-nothing-to-do-with-russia-putin-says-cameron-s-remarks-that-he-would-welcome-brexit-was-groundless-2227463>

[26] See generally Will Somerville, Dhananjayan Sriskandarajah, Maria Latorre.  United Kingdom: A Reluctant Country of Immigration.  Posted July 21, 2009 on migrationpolicy.org.  Web: <http://www.migrationpolicy.org/article/united-kingdom-reluctant-country-immigration/>

[27] Tom Rawle.  Immigration issue ‘needs to be put to the British public’.  Posted January 1, 2014 on express.co.uk.  Web: <http://www.express.co.uk/news/uk/451507/Immigration-issue-needs-to-be-put-to-the-British-public>

[28] See generally Cathryn Costello and Emily Hancox.  The UK, EU Citizenship and Free Movement of Persons, Migration Observatory policy primer.   Posted May 1, 2014 on migrationobservatory.ox.ac.uk.  Web: <http://www.migrationobservatory.ox.ac.uk/sites/files/migobs/UK_EU_Citizenship%20_Free_Movement.pdf>

[29] Supra note 27.

[30] Nick Robinson.  Immigration: A ‘very British’ issue.  Published March 4, 2014 on bbc.com.  <http://www.bbc.com/news/uk-politics-26442431>

[31] See Siemens.  Fact Sheet, Wind Power –United Kingdom, Status: March 2014.  Visited June 24, 2016.  Web: <http://www.siemens.com/press/pool/de/feature/2014/energy/2014-03-hull/fact-sheet-wind-power-uk-e.pdf>

[32] Scottish Times.  New report shows Scotland’s oil reserves worth ‘trillions’.  Posted September 3, 2014 on scottishtimes.com.  Web: <http://www.scottishtimes.com/scottish/economy-scottish/new-report-shows-scotlands-oil-reserves-worth-trillions/>

[33] Sourcewatch.  United Kingdom and Coal.  Visited June 24, 2016.  Web: <http://www.sourcewatch.org/index.php?title=United_Kingdom_and_coal>

[34] Id.

[35] Steve Hucklesby.  The threat to the steel industry and role of government policy.  Posted April 8, 2016 on jointpublicissues.org.uk.  Web: <http://www.jointpublicissues.org.uk/the-steel-industry-threat-and-role-of-government-policy/>

[36] IdSee also Anthony Reuben.  Could the government save UK steel?  Posted October 20, 2015 on bbc.com.  Web: <http://www.bbc.com/news/business-34392379>

[37] Harry Lambert.  A decade on the dole for the UK’s 27,000 steel workers would waste £1.2bn (Graphic: Steel is not one of the top ten British industries).  Posted April 12, 2016 on newstatesman.com.  Web: <http://www.newstatesman.com/politics/economy/2016/04/decade-dole-uk-s-27000-steel-workers-would-waste-12bn>

[38] Id. (Graphic:  Tata Jobs in England and Wales).  See also Malcolm Coles and Ashley Kirk.  EU referendum results and maps: Full breakdown and find out how your area voted.  Posted June 25, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/news/2016/06/23/leave-or-remain-eu-referendum-results-and-live-maps/>

[39] The Editorial Board.  The House Votes Unanimously to Strengthen Email Privacy.  Posted Aril 29, 2016 on nytimes.com.  Web: <http://www.nytimes.com/2016/04/30/opinion/the-house-votes-unanimously-to-strengthen-email-privacy.html?rref=collection%2Ftimestopic%2FSurveillance%20of%20Citizens%20by%20Government&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection&_r=0>

[40] Warwick Ashford.  Majority of Britons support government surveillance for national security.  Posted February 26, 2016 on computerweekly.com.  Web: <http://www.computerweekly.com/news/4500276373/Majority-of-Britons-support-government-surveillance-for-national-security>

[41] Id.

[42] Vaughne Miller, ed.  Exiting the EU: impact in key UK policy areas.  Number 07213, 12 February 2016.  Commons Briefing papers CBP-7213, at Section 20: Foreign and defence policies.  Visited June 25, 2016.  Web: <http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7213#fullreport>

[43] Id.

[44] Vaughne Miller, ed.  Exiting the EU: impact in key UK policy areas.  Number 07213, 12 February 2016.  Commons Briefing papers CBP-7213, at Section 2: Trade relations.  Visited June 25, 2016.  Web: <http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7213#fullreport>

[45] Id.

[46] Id.

[47] Id.

[48] Id.  This Commons Briefing Paper reaches the same conclusion.

[49] Sunday Express.  Heseltine in backlash over call for foreign students to be left out of immigration figures.  Posted August 26, 2014 on express.co.uk.  Web: <http://www.express.co.uk/news/uk/503278/Heseltine-immigration-backlash-over-students>

[50] Id.

[51] Griff Witte.  Immigration backlash at the heart of British push to leave the E.U.  Posted May 22, 2016 on washingtonpost.com.  Web: <https://www.washingtonpost.com/world/immigration-backlash-at-the-heart-of-british-push-to-leave-the-eu/2016/05/22/db54ad60-1c27-11e6-82c2-a7dcb313287d_story.html>

[52] Id. The Conservative MP, Stewart Jackson, represents Peterborough, a very multicultural and multiethnic city that can be reached by taking a 45- minute train ride to the north, from London.

[53] HM Treasury.  European Union Finances 2014: statement on the 2014 EU Budget and measures to counter fraud and financial mismanagement.  Cm 8974, December 2014 at page 15, chart 3.B and accompanying text.  Visited June 25, 2016.  Web: <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/388882/EU_finances_2014_final.pdf>

[54] See Council of the European Union – EU Budget.  Visited June 26, 2016.  Web: <http://www.consilium.europa.eu/en/policies/eu-annual-budget/>

[55]  Hilary Osborne and Josephine Moulds.  Cyprus bailout deal: at a glance.  Posted March 25, 2013 on theguardian.com.  Web: <https://www.theguardian.com/business/2013/mar/25/cyprus-bailout-deal-at-a-glance> Of note, the E.U. has since chosen to replicate this model throughout its jurisdiction, in a directive effective January 1, 2015, as the preferred model for resolving the insolvency of financial institutions.  See DIRECTIVE 2014/59/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 15 May 2014, establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council.  Posted in the Official Journal of the European Union and visited June 25, 2016.  Web: <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0059&from=EN>

[56] BBC.  Third Greece bailout: What are eurozone conditions?  Posted August 21, 2015 on bbc.com.  Web: <http://www.bbc.com/news/world-europe-33905686>

[57] RT.  Germans take over 14 Greek airports in privatization deal.  Posted December 15, 2015 on rt.com.  Web: <https://www.rt.com/business/325977-greece-airports-privatisation-bailout/>

[58] Matthew Dalton.  Greece’s Pension System Isn’t That Generous After All.  Posted February 27, 2015 on blogs.wsj.com.  Web: <http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-system-isnt-that-generous-after-all/>

[59] Will Martin.  Negative interest rates are a ‘seeping poison’ for the world’s most important financial institutions.  Posted June 20, 2016 on businessinsider.com.  <http://www.businessinsider.com/citi-research-note-on-negative-interest-rates-2016-6>

[60] Heather Long.  Negative interest rates are scaring people.  Posted June 16, 2016 on money.cnn.com.  Web: <<http://money.cnn.com/2016/06/16/news/economy/negative-interest-rates-europe/index.html>>

[61] Leslie Shaffer.  Negative interest rates by ECB, BOJ can’t boost growth, Allianz says.  Posted June 10, 2016 on cnbc.com.  Web: <http://www.cnbc.com/2016/06/10/negative-interest-rates-by-ecb-boj-cant-boost-growth-allianz-says.html>

[62] Supra note 59.

[63] The Economist.  The implications of Brexit for the Bank of England.  Posted June 24, 2016 on economist.com.  Web: <http://www.economist.com/news/britain/21701260-britain-faces-months-economic-uncertainty-implications-brexit-bank-england>

[64] NBC News.  Sea of Death: Many Migrants Drown Trying to Reach Italy.  Posted April 19, 2015 on nbcnews.com.  Web: <http://www.nbcnews.com/news/world/sea-death-many-migrants-drown-trying-reach-italy-n344381>

[65] Douglas Ernst.  ‘Allahu Akbar!’: Migrants storm through border fence.  Posted February 29, 2016 on wnd.com.  Web: <http://www.wnd.com/2016/02/allahu-akbar-migrants-storm-through-border-fence/#!>

[66] Soeren Kern.  Germany: Migrant Rape Crisis Worsens.  Posted March 5, 2016 on gatestoneinstitute.org.  Web: <http://www.gatestoneinstitute.org/7557/germany-rape-migrants-crisis>

[67] Jason Farrell, Senior Political Correspondent.  NHS ‘Scandal’ As UK Pays Millions To EU.  Posted March 2, 2016 on news.sky.com.  Web: <http://news.sky.com/story/1652305/nhs-scandal-as-uk-pays-millions-to-eu>

[68] Martin Fricker , Sam Webb.  Furious truckers threaten to RIOT as Calais motorway gridlock enters second sweltering day.  Posted July 1, 2015 on mirror.co.uk.  Web: <http://www.mirror.co.uk/news/uk-news/furious-truckers-threaten-riot-calais-5981547>

[69] Tony Todd.  French 2015 terror attacks a ‘dress rehearsal’ for 2016, experts say.  Posted and last updated January 12, 2016 on france24.com.  Web: <http://www.france24.com/en/20160111-france-november-13-paris-attacks-terrorism-charlie-hebdo-intelligence-security>

[70] Victoria Shannon.  Brussels Attacks: What We Know and Don’t Know.  Posted March 22, 2016 on nytimes.com.  Web: <http://www.nytimes.com/2016/03/23/world/europe/brussels-attacks-what-we-know-and-dont-know.html>

[71] James Hampshire, Shamit Saggar.  Migration, Integration, and Security in the UK Since July 7.  Posted March 1, 2006 on migrationpolicy.org.  Web: <http://www.migrationpolicy.org/article/migration-integration-and-security-uk-july-7/>  The added emphasis of brackets and italics, is my own.

[72] The Scottish Government.  A NATIONAL STATISTICS PUBLICATION FOR SCOTLAND.  SCOTLAND’S GLOBAL CONNECTIONS SURVEY 2013 – Estimating Exports from Scotland, 26th January 2015.  Visited June 26, 2016.  Web: <http://www.gov.scot/Resource/0046/00469028.pdf>; See also Scotland.  The official gateway to Scotland – Facts About Scotland.  Visited June 28, 2016.  Web: <http://www.scotland.org/about-scotland/facts-about-scotland>

[73] The Scottish Government.  A NATIONAL STATISTICS PUBLICATION FOR SCOTLAND.  SCOTLAND’S GLOBAL CONNECTIONS SURVEY 2013 – Estimating Exports from Scotland, 26th January 2015.  Visited June 26, 2016.  Web: <http://www.gov.scot/Resource/0046/00469028.pdf>

[74] Id.

[75] Invest NI.  Sectors and Opportunities.  Visited June 28, 2016.  Web: <http://www.investni.com/invest-in-northern-ireland/sectors-and-opportunities.html>; See also Invest NI.  Our Economy – Key facts and figures.  Visited June 28, 2016.  Web: <http://www.investni.com/invest-in-northern-ireland/our-economy/key-facts-and-figures.html>

[76] European Union.  Living in the EU.  Posted on Europa.eu.  Visited June 27, 2016 and last updated May 4, 2016.  Web: <http://europa.eu/about-eu/facts-figures/living/index_en.htm>

[77] Id.  (Graphic: Size and population – table view).  As listed in rising order of population, the 28 current E.U. member states, are: Malta, Luxembourg, Cyprus, Estonia, Latvia, Slovenia, Lithuania, Croatia, Ireland, Slovakia, Finland, Denmark, Bulgaria, Austria, Sweden, Hungary, Portugal, Czech Republic, Greece, Belgium, Netherlands, Romania, Poland, Spain, Italy, United Kingdom (with a population of 64,875,165 representing 12.76% of the E.U. total), France, and Germany.

[78] Frida Ghitis.  World’s new danger if other nations follow ‘Brexit’.  Posted and last updated June 24, 2016 on cnn.com.  Web: <http://www.cnn.com/2016/06/24/opinions/brexit-nexit-and-fate-of-eu-ghitis/index.html> There is already some emboldened agitation in France for a “Frexit”, and in the Netherlands for a “Nexit”.

[79] Wikipedia.  List of castles in Northern Ireland.  Visited June 29, 2016.  Web: <https://en.wikipedia.org/wiki/List_of_castles_in_Northern_IrelandSee also Invest NI.  Sectors and Opportunities – Tourism.  Visited June 28, 2016.  Web: <http://www.investni.com/invest-in-northern-ireland/sectors-and-opportunities/tourism.html> “Tourism is currently worth 4.9% of Northern Ireland’s GDP and sustains over 40,000 jobs.  The aim is to double tourism’s contribution to the economy by 2020.  This means generating an additional 10,000 new jobs and drawing in 4.5 million visitors into Northern Ireland every year.”  What better way to rapidly and efficiently get this done, with obvious spillover benefits in the construction and technology sectors, and sustained residual revenue streams for all parties concerned.

[80] See Infra, notes 88 to 95 and accompanying text.

[81] Id.

[82] Akin Oyedele.  The UK just got hit with 2 downgrades.  Posted June 27, 2016 on businesinsider.com.  Web: <http://www.businessinsider.com/sp-downgrades-uk-credit-rating-to-aa-from-aaa-2016-6>

[83] See e.g. Sionaidh Douglas-Scott.  Brexit, devolution and legislative consent: what if the devolution statutes were left unchanged after Brexit?  Posted June 15, 2016 on constitution-unit.com.  Web:  <https://constitution-unit.com/2016/06/15/brexit-devolution-and-legislative-consent-what-if-the-devolution-statutes-were-left-unchanged-after-brexit/See also supra, note 13 and accompanying text.

[84] Id.

[85] Id.

[86] Id. See also Scotland Politics.  Brexit: Spain and France oppose Scotland EU talks.  Posted June 29, 2016 on bbc.com.  Web: <http://www.bbc.com/news/uk-scotland-scotland-politics-36656980>  This cooperation appears to be lacking with the mainland E.U. members showing a united resistance to Scotland’s overtures to negotiate its own way, while the U.K. has yet to even start the process.  Keeping Scotland as a captive country like this, simmering on a backburner may yet cause blowback, as pent-up and rising discontent eventually boils-over.

[87] Szu Ping Chan, in Norway.  Brexit: what if the UK left the EU and could be more like Norway?  Posted June 27, 2016 on telegraph.co.uk.  Web: <http://www.telegraph.co.uk/business/2016/03/06/what-if-britain-left-the-eu-and-could-be-more-like-norway/>; But see contra Katy Barnato and Gemma Acton.  Norway’s PM not sure UK should copy its approach to EU.  Posted May 12, 2016 on cnbc.com.  Web: <http://www.cnbc.com/2016/05/12/norways-pm-not-sure-uk-should-copy-its-approach-to-eu.html> Norway has been able to negotiate its way into both the European Economic Area (EEA), as did Liechtenstein and Iceland, and the European Free Trade Association (EFTA), as did Switzerland.  Norway has good access to the Common Market, accepts E.U. rules and regulations including free movement, and contributes to the E.U. budget.  However, it is not a full E.U. member and has no vote or veto in creating or enforcing E.U. policies.  As Norway’s PM  and others point out, the lack of a voice and lack of access to the E.U. for services – including banking, which is a major component of the U.K. economy, might not make this model the first best offer of a negotiating, post-Brexit U.K.

[88] BBC News.  Five Models for post-Brexit UK Trade.  Posted June 27, 2016 on bbc.com.  Web: <http://www.bbc.com/news/uk-politics-eu-referendum-36639261>; HM Government.  Alternatives to membership: possible models for the United Kingdom outside the European Union – print version.  Posted March 2, 2016 on gov.uk.  Web: <https://www.gov.uk/government/publications/alternatives-to-membership-possible-models-for-the-united-kingdom-outside-the-european-union>

[89] Id.

[90] Id.

[91] Id.

[92] Id.

[93] Id.

[94] Id.

[95] Id.

[96] HM Government.  Alternatives to membership: possible models for the United Kingdom outside the European Union – print version, at p. 16, box 3.  Posted March 2, 2016 on gov.uk.  Web: <https://www.gov.uk/government/publications/alternatives-to-membership-possible-models-for-the-united-kingdom-outside-the-european-union>

[97] Sinead Moore.  Northern Ireland to cut corporate tax rate.  Posted November 25, 2015 on economia.icaew.com.  Web: <http://economia.icaew.com/news/november-2015/northern-ireland-to-cut-corporate-tax-rate>

[98] CNN Library.  Eurozone Fast Facts.  Posted and last updated January 28, 2016 on cnn.com.  Web: <http://www.cnn.com/2013/07/09/world/europe/eurozone-fast-facts/index.html> There are currently 19 (“nineteen”) countries in the Eurozone: Austria , Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, the Republic of Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia and Spain.

[99] Dan O’Brien.  Ireland’s economy has turned around, and support is firmly back behind the EU.  Posted June 17, 2016 on theguardian.com.  Web: <<https://www.theguardian.com/commentisfree/2016/jun/17/ireland-economy-eu>>  The Republic of Ireland has done very well through E.U. membership and remains highly unlikely to leave.

[100] BioPharmGuy.  Ireland – Biotech, Pharma & Life Science company career pages.  Visited June 27, 2016.  Web: <http://biopharmguy.com/links/country-ireland.php> This page contains a listing of biotech, pharmaceutical, and life sciences companies with major operations in the Republic of Ireland.  See also Quora.  Which major companies have their European headquarters in Ireland?  Visited June 27, 2016.  Web: <https://www.quora.com/Which-major-companies-have-their-European-headquarters-in-Ireland>  In highlighting these dedicated E.U. headquarters, we find Alphabet, Facebook, Paypal, Microsoft, eBay, Twitter, and Airbnb based in Dublin; we find Pfizer, EMC, VMWare, and Apple based in Cork; and we find Intel based in Kildare.

[101] National Geographic.  PHOTO IN THE NEWS: Wild Octopuses Have Complex Sex.  Posted April 3, 2008 on nationalgeographic.com.  Web: <http://news.nationalgeographic.com/news/2008/04/080403-AP-octopus-photo.html>

[102] Ekundayo George.  Analyzing the 2016 Brexit: The UK Exit Plan is Revealed, Promising a “Hybridized” End-result.  Posted January 20, 2017 on ogalaws.wordpress.com.  Web: <https://ogalaws.wordpress.com/2017/01/20/analyzing-the-2016-brexit-the-uk-exit-plan-is-revealed-promising-a-hybridized-end-result/>

1. INTRODUCTION –

The Law Societies of Alberta, Saskatchewan, and Manitoba, being the “Prairie Law Societies”, have initiated a dialogue – the “Innovating Regulation Consultation”,[1] to engage the local legal profession in a discussion of entity-based regulation, as opposed to the generally prevalent paradigm of practitioner-based regulation.[2]  With a multifactorial consideration of entity regulation, compliance-based entity regulation, and alternative business structures or ABS (which I have blogged on before),[3] the responses have, understandably, been both highly varied and voluminous.  Having recently attended a Town Hall meeting on the subject in Edmonton, I can summarize my own understanding of and thinking on, entity-based regulation, as follows; with advance and cumulative credit given for the inputs of all Town Hall meeting participants, the leadership of the prairie law societies, and authors featured on the website.[4]

 

2. PRACTICE OPTIONS –

The practice of law in the prairies varies widely.  This ranges in the traditional firm format from sole practitioners – including in very remote areas, through firms of 2-10 lawyers, then of 11-25 lawyers, and finally, larger entities of 26 and more licensed legal practitioners.  Too, there are corporate in-house counsel; government legal department lawyers; court duty counsel, children’s aid lawyers, and legal aid practitioners; as well as lawyers in other settings who may be regulated, such as those working within non-profit entities, or carrying licenses from multiple jurisdictions with rules that don’t always overlap.[5]

As such, one size will not fit all applications, and on this we can all agree.  Despite the significant and legitimate resistance to adding an additional layer of law society regulation and compliance, there is much that can be said for the anticipated benefits of drilling-down on problem areas, encouraging firm peers to “actually” be collegial and supportive of one another in terms of watching those problem areas, enhancing client satisfaction at a time when “apps” and other professions are making significant inroads into the legal market  with few to none of the burdens of entry and licensing, and the public – whether through fiscal constraints or generalized dissatisfaction, is increasingly constrained in access to justice.

 

3. ENTITY REGULATION OPTIONS –

Considering the discussions had and the materials presented, I can summarize three options for entity regulation of the legal profession: Tri-thematic option, 5 Key management principles option, and the “PACES” paradigm option.  I will now present and discuss these in some greater depth, as follows.

 

a. TRI-THEMATIC[6]:

This option has three principal themes, each with three of its own sub-elements for a total of nine compliance lines.

 

i. Professionalism:

-File management (file integrity, timeliness and limitations statutes, conflicts checks);

-Professional management (CPD, human resource practice, competence and civility);

-Professional insurance (naming conventions, advertising, SRO compliance and communications).

 

ii. Confidentiality:

-Client management (returning calls, retainer letters, non-engagement letters);

-Security (physical and cyber-security, combating burnout through work-life balance, and combating substance abuse);

-File retention, subordinates oversight, and safeguarding client property.

 

iii. Operations:

-Financial management, trust accounting, peer consulting and sustainability;

-Practice management (day-to-day management, certifications, access to justice);

-Business insurance, legal and regulatory compliance, and diversity.

 

b. 5 KEY MANAGEMENT PRINCIPLES[7]:

This option, as put forward by the prairie law societies, has 5 major principles, with several sub-elements that I have structured into a total of nineteen compliance lines.

 

i. Practice Management:

-Managing the practice;

-Managing practitioners;

-Managing a staff;

-Playing a role for the improvement of justice administration and access to justice, through:

I. Informing low income clients of alternate options and service providers;

II. Training staff to engage appropriately with self-represented litigants;

III. Considering taking-on matters for members of under-served populations.

 

ii. Client Management:

-Managing client communications;

-Managing client expectations;

-Managing conflicts of interest.

 

iii. File Management:

-Ensuring consistent procedures for opening of client files;

-Ensuring consistent procedures for closing client files;

-Managing the documentation in (and of) client files.

 

iv. Financial Management:

-Managing business planning and budgeting;

-Managing entity finances;

-Ensuring consistent billing practices;

-Ensuring appropriate and adequate insurance coverage;

-Managing business continuity, succession planning, and entity dissolution planning.

 

v. Professional Management:

-Managing currency and best practices in established firm practice areas;

-Managing capacity and competency building in selected new firm practice areas;

-Ensuring civil relations within the profession;

-Playing a role for the improvement of equity, diversity, and inclusion within the firm, through:

I. Training staff towards cultural competency in the delivery of legal services;

II. Working towards equal opportunity, diversity and inclusion in recruitment and hiring;

III. Working towards equal opportunity, diversity and inclusion in promotions;

IV. Ensuring the work environment accommodates equity diversity, inclusion, and disabilities.

 

iii. 5, P-A-C-E-S[8]:

This option has five major, free-form principles, with the intention that entities selecting this option will be able to create and add-in their own sub-elements as compliance lines that they find both suitable and attainable considering their own interests, ranges of practise, geographic scopes of operations, human and capital resources, and such other considerations that they deem applicable.

– “P”rofessional Standards and Competence;

– “A”ccounting and Stewardship;

– “C”lient Interactions and Marketing;

– “E”thics and Stakeholder Management;[9]

– “S”ecurity, Cybersecurity, and Compliance;

 

4. COMPLIANCE-BASED ENTITY REGULATION OPTIONS –

 

a. SOLE PRACTITIONERS:

Perhaps it would be best to leave the sole practitioners as directly-regulated individuals without any additional levels of law society regulation, for obvious reasons of time and resources.  But, then again, it might be a relatively simple thing to have sole practitioners annually check the boxes on a form and submit that form to the appropriate law society or law societies (SRO), in order to certify that: (i) they subscribe to a particular entity regulation option (likely the tri-thematic option for sole practitioners); (ii) they are aware of and undertake to regularly (throughout the one year reporting period) review the contents and requirements of that entity regulation option as promulgated by the SRO; (iii) they undertake to continue to develop and update their internal compliance procedures in accordance therewith; and (iv) they will endeavour to have, by a specified time (perhaps by the third form submission), a written compliance code and procedures in place for SRO inspection and stress test.[10]

 

b. SMALL and MEDIUM LAW FIRMS:

Similarly, firms of 2-10 practitioners and firms of 11-25 practitioners might be given the option to choose between the Tri-Thematic (having 9 distinct compliance lines) and the 5 Key Management Principles (having 19 distinct compliance lines), with a single champion or a firm committee for each of the 5 Key Management Principles.  In this case, the firm might be required to check the boxes on a form (twice yearly) and submit said form to the appropriate law society or law societies (SRO), to certify that: (i) it subscribes to a particular entity regulation option (as the firm shall select); (ii) it is aware of and undertakes to regularly (throughout the six month reporting period) review the contents and requirements of that regulation option as promulgated by the SRO and discuss them internally; (iii) it undertakes to continue to develop and update its internal compliance procedures in accordance therewith; and (iv) the firm will endeavour to have, by a specified time (perhaps by the fifth form submission), a written compliance code and procedures in place for SRO inspection and stress test.

 

c. LARGE LAW FIRMS:

Firms of 26+, on the other hand, might be mandated to apply the 5 Key Management Principles, or develop their own “5, P-A-C-E-S[11] content and distinct compliance lines – with a single champion or committee for each of these 5 primary letters, pursuant to what those firms perceive as the risks, their client bases and practice settings, and their size or geographic scope and operational reach, because firm policies, expectations, and culture tend to determine the conduct of legal practitioners therein.[12]  Each one of these large firms might therefore be required to check the boxes on a form (twice yearly) and submit that form to the appropriate law society or law societies (SRO), to certify that: (i) it subscribes to a particular entity regulation option (as the firm shall select, within limits); (ii) it is aware of and undertakes to regularly (throughout the six month reporting period) review the contents and requirements of that regulation option as promulgated by the SRO and discuss them internally; (iii) it undertakes to continue to develop and update its internal compliance procedures in accordance therewith; and (iv) the firm will endeavour to have, by a specified time (perhaps by the fifth form submission), a written compliance code and procedures in place for SRO inspection and stress test.

 

5. CONCLUSION –

Admittedly, the consultation is still in its very early stages, and so significant work remains to be done by both the regulators and the regulated.  This, however, constitutes my two cents, and my learned colleagues in prairie and other jurisdictions will, doubtless, add their own 98 to this our ongoing debate.

 

***********************************************************

 

 

Author:

Ekundayo George is a lawyer and sociologist.  He has also taken courses in organizational and micro-organizational behavior, and gained significant experience in regulatory compliance, litigation, and business law and counseling.  He is licensed to practise law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America.  See, for example: http://www.ogalaws.com.  A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors.  He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux.

Trained in Legal Project Management (and having organized and managed several complex projects before practising law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams.  Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: healthcare; education and training; law and regulation; policy and plans; statistics, economics, and evaluations including feasibility studies; infrastructure; and information technology/information systems (IT/IS) – also sometimes termed information communications technologies (ICT).  See, for example: http://www.simprime-ca.com.

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

This article creates no lawyer-client relationship, and is not intended or deemed legal advice, business advice, the rendering of any professional service, or attorney advertising where restricted or barred.  The author and affiliated entities specifically disclaim and reject any and all loss claimed, no matter howsoever resulting as alleged, due to any action or inaction done in reliance on the contents herein.  Past results are no guarantee of future success, and specific legal advice should be sought for particular matters through counsel of your choosing, based on such factors as you deem appropriate.

[1] Innovating Regulation – a collaboration of the Prairie Law Societies of Alberta, Manitoba, and Saskatchewan on consulting the legal profession regarding transitioning to entity and compliance-based regulation.  Visited May 8, 2016.  Online: http://www.lawsocietylistens.ca/

[2] Id.

[3] Ekundayo George.  U.K. Alternative Business Structures (ABS) – Caution is best for new law practice models.  Posted on ogalaws.wordpress.com, October 7, 2011.  Online:  https://ogalaws.wordpress.com/2011/10/07/u-k-alternative-business-structures-abs-caution-is-best-for-new-law-practice-models/

[4] Numerous or overly-detailed footnotes and citations would simply and unnecessarily re-hash the consultation website and the large volume of materials there offered for the reading of all interested parties, at their own leisure.

[5] Not all law societies, bar associations and the like move in the same direction or even at the same time, and so permitted actions in one jurisdiction may always subject one to query in another.  Hence, collaborative efforts on such as these on seeking consensus and buy-in amongst several SROs and their members on matters of key and common importance are always and equally welcome to those with multiple licenses, and the simply curious.

[6] These three themes are my own composition, as inspired by materials on the website and my own experiences.

[7] These five management principles are the creation of the Prairie law societies, and additional details regarding same are available on the consultation website.  I have, however, moved or slightly modified some of their sub-elements for fit and format.

[8] These five elements are my own composition, as inspired by materials on the website and my own experiences.

[9] Of note, this term “stakeholder engagement” is sufficiently broad to encompass shareholders in a law firm and the non-lawyer shareholders and/or directors in an ABS, and also sits on the same line as ethics to allow for a proper balancing of profit motives in an ABS, against the professional interests of an entity’s licensed practitioners.

[10] I suggest SRO inspection and stress tests in situ as opposed to submission in full format, due to the volume of materials, the diversity of practice settings, and the fact that some of the larger firms or more specialized practitioners might want to keep their plans confidential – especially if publicly owned as an ABS, when these may be akin to Trade Secrets; the improper disclosure of which might subject those unwitting officers and directors in the ABS to a securities derivative suit from shareholders when the share price is diminished or firm reputation hit.

[11] Again, this is my own formulation.

[12] These determinants of conduct and choice of regulatory option, however, are from the consultation website.

I recently watched the Canadian Senate – a much maligned institution of late – hard at work.   In session, was the Senate Standing Committee on Aboriginal Peoples (APPA), which was only just established in 1990 after several generations of Canada’s interaction with Aboriginal Peoples post-Confederation in 1867, and many centuries of explorer and settler interaction with the land’s first inhabitants before that time.

 

Meeting on Wednesday, February 17, 2016,[1] and chaired by Dr. Lillian Eva Dyck, a Senator from Saskatchewan and a member of the Gordon First Nation,[2] the committee was engaged in an “Examination of federal government’s constitutional and legal responsibilities to Aboriginal Peoples,”[3] in the second of its 2 meetings on the subject.[4] That Wednesday’s witness list was highly impressive,[5] with equally impressive presentations and revelations of policy, procedure, and lived experience in practice.

 

 

ISSUES

Amongst the major topics discussed were the United States Western Hemisphere Travel Initiative (WHTI)[6] and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).[7] As a lawyer with legal work experience in both Canada and the United States, neither one of these instruments was new to me. However, a third – the Jay Treaty – actually was.

 

WHTI (Western Hemisphere Travel Initiative):

Initiated in 2 stages, first for air travel (effective from January, 2007) and then for travel by land and sea (effective from June, 2009), WHTI grew directly from some of the key recommendations of the 9/11 Commission and was codified in the Intelligence Reform and Terrorism Prevention Act of 2004.[8] WHTI mandates that all travelers to and from the United States who are citizens of Canada, Mexico, Bermuda, and the United States itself, have and present secure passports or other acceptable documentation proving identity (such as NEXUS Cards, Enhanced Driver’s Licenses, and the “in-Canada” Secure Certificate of Indian Status – but with caveats[9]), for such travel originating in the western hemisphere.[10]

 

UNDRIP (United Nations Declaration on the Rights of Indigenous Peoples):

As adopted by the General Assembly of the United Nations at its 107th plenary meeting on September 13, 2007, the United Nations Declaration on the Rights of Indigenous People (UNDRIP),[11] is “a comprehensive statement addressing the rights of indigenous peoples[12] (…) which “emphasizes the rights of indigenous peoples to maintain and strengthen their own institutions, cultures and traditions and to pursue their development in keeping with their own needs and aspirations.[13] Of current key relevance are Article 30[14] (territorial quiet enjoyment amidst planned military activities in the Arctic) and Article 36[15] (rights to societal cohesion and cultural vibrancy in a changing and more “bordered” world).

 

Article 30

  1. Military activities shall not take place in the lands or territories of indigenous peoples, unless justified by a relevant public interest or otherwise freely agreed with or requested by the indigenous peoples concerned.

 

  1. States shall undertake effective consultations with the indigenous peoples concerned, through appropriate procedures and in particular through their representative institutions, prior to using their lands or territories for military activities.[16]

 

Article 36

  1. Indigenous peoples, in particular those divided by international borders, have the right to maintain and develop contacts, relations and cooperation, including activities for spiritual, cultural, political, economic and social purposes, with their own members as well as other peoples across borders.

 

  1. States, in consultation and cooperation with indigenous peoples, shall take effective measures to facilitate the exercise and ensure the implementation of this right.[17]

 

Although UNDRIP is not binding International law, such declarations by the United Nations “represent the dynamic development of international legal norms and reflect the commitment of states to move in certain directions, abiding by certain principles.”[18] Indeed, the 1982 Canadian Charter of Rights and Freedoms, which enshrines at Article 35[19] a guarantee of the rights of Canada’s Indigenous Peoples, appears a step in the right direction ….. but then, there is that Jay Treaty …..

 

JAY TREATY:

With a short title in the name of its American lead negotiator, Chief Justice John Jay, and signed on November 19, 1794, this “Treaty of Amity, Commerce, and Navigation, Between His Britannic Majesty and The United States of America”, maintained U.S. neutrality and consolidated the peace between these two sovereign states that had remained shaky since the latter achieved its independence from the former.[20] The main contention with this Treaty cited by several of the First Nations witnesses appearing before the Senate Standing Committee on Aboriginal Peoples was that the Treaty rights to free passage of the persons and goods of Aboriginal peoples to and from the United States as guaranteed in Article 3,[21] only applied one way (to Canadians traveling to the United States which deems Canada’s recognized First Nations and Native Americans to be “American Indians” for purposes of the Treaty), but not to Americans traveling to Canada; even though many are also citizens of First Nations with lands, members, and long histories of travel, trading, and cultural interests and practice in both Canada and the United States. The fact that Canada can claim succession in interest to the rights and obligations of Great Britain viz-a-viz the United States, but deny recognition and ratification of the Jay Treaty, remains a contradiction.[22]

 

 

THE CORE POINT as REPEATED SORE POINT

As shown, there is still a major disconnect between policymaking, law enforcement, and true consideration of the status, needs, and special circumstances of the Aboriginal Peoples (as first inhabitants) of the American Continents (South America, North America,[23] and the Arctic into today’s Russia, as well as their relatives and trading partners in yesterday’s Russia, which today is Alaska.[24]

 

The WHTI seeks passports, but in Canada many Band members have Status Cards issued by the Bands with disparate membership rules and regulations. Besides which, while seeking to honour the terms of the Jay Treaty, the United States has no power to accord rights thereunder to the Inuit or Métis, as they are not “Indians” within the meaning of the Indian Act,[25] and several members will undoubtedly fall short of the 50% (“fifty percent”) bloodlines rule required for their unimpeded entry into the United States as “American Indians” under Jay Treaty terms.[26]

 

The UNDRIP lays-out norms of acceptable behavior towards indigenous peoples. However, there is a long history of past and continued unacceptable treatment across the length and breadth of both North America and South America, and the pointing fingers of blame keep wagging, but with no resolution. However, Canada’s recently-inaugurated Liberal government has made a stated[27] and demonstrated[28] commitment to a re-vamped relationship with Canada’s Aboriginal Peoples –including promised implementation of the UNDRIP,[29] and this has been noticed and warmly welcomed by the First Nations in both actions,[30] and words.[31]

 

Clearly then, the only way to conclusively move forwards, capitalize on this new energy, and solve the long and repeated lack of full consideration and consultation in policy-making,[32] treaty interpretation,[33] and policy implementation,[34] is certainly to work together, but perhaps it is time to do so within the context of a significant paradigm shift as I will now describe.

 

 

ONE PROPOSAL

I would propose that the new(er) national governments of North America work much more closely and in a far more collaborative and mutually respectful way, with the older and transnational Aboriginal residents of the continent who are impacted by their decisions, and who preceded them in time and space. I would propose a single, continental body with unequal representation of the newer (9 national “government” members) and the older (12 “aboriginal” members).

 

I would also propose, as the government members: 2 from each of Canada, Russia, the United States, and Mexico; with an additional Canadian member from Indian Oil and Gas Canada (IOGC) to sit on RICT.[35]

 

Inspired by the Senate Committee meeting to perform some research on individual memberships and geographic scopes of several First Nations and Aboriginal Peoples so as to better balance the interests of communities of all sizes, I would also propose as the aboriginal members: 4 from Canada, 5 from the United States, and 3 from Mexico. From Canada, one might invite representation from the Cree, Inuit, Métis, and Mohawk. From the United States, one might invite representation from the Cherokee, Chipewa, Choctaw, Navajo, and Sioux. And from Mexico, one might invite representation from the Apache, Maya, and Nahuatl.

 

With a rotating 5-month chairmanship/chairwomanship amongst the Aboriginal members only,[36] there would be full rotation every 60 months, or 5 years. Term limits of 5 years might also be applied to the aboriginal members, and term limits of 3 years for the government members; giving a joint turnover only once every 15 years, so that the entity would often have veteran Commissioners, but always a veteran staff.

 

Preferably based in Canada[37] due to those stated and demonstrated commitments earlier noted,[38] this “First Americans’ Continental Circle (or “Commission”) for Engagement, Enablement, Systems and Sustainability (FACES)”, as proposed, would also have and operate through 7 subcommittees, with potential Aboriginal (“a”) and government (“g”) Commissioner member numbers as follows:

 

CLNT: Culture, Language, Necessities of Life, and Tourism (2a/2g);

RICT: Resources, Industry, Commerce and Trade (1a/1g),

RINC: Restitution, Issues Management, Negotiations, and Consultations (1a/1g);

SASA: Studies, Administration, Statistics and Appointments (1a/2g);

SECO: Services to the Community, Education, Communications, and Outreach (1a/2g);

TIRA: Travel, Identification, Registration, and Access (1a/2g); and

TRLS: Treaty Right, Law, and Status (2a/2g).

 

 

ASSURANCES

Each of the Aboriginal Peoples and First Nations represented on the Commission has its own governance structures and systems that will in no way be replaced, pre-empted, or subsumed within the Commission. The old (and existing) paradigm of First Nations self-governance is for a one-on-one relationship with the Crown. However, this means that issues that may be common to several First Nations are still handled on a case-by-case basis, and severe inconsistencies have resulted. This new paradigm would serve to ensure that there is consistency of result through uniformity of buy-in and coordination of efforts – both among and between all participating national governments, and among and between all participating Aboriginal Peoples (whether actually present, or represented in interest).

 

Of course, this is merely proposed as a forum where everyone can get to and stay on the same page, and where platforms, positions, and policies common to some or all of the Aboriginal Peoples of North America can be formulated, put forward, and implemented, respectively. Furthermore, having grown up in diplomatic circles, I know that it is not uncommon for small pairs, groups, or teams to step aside and informally discuss other pressing issues of mutual interest to them in this convenient forum, such as ensuring peaceful Arctic exploration, navigation, and resource exploitation, or superpower politics in other parts of the globe, the details of which may not seem immediately relevant to the other Commissioners, but the solutions for which may well do all some lasting good in ensuring world peace.

 

These are just some thoughts spurred by a very informative Senate Committee meeting.

 

*****************************************************************

Author:

Ekundayo George is a lawyer and sociologist. He has also taken courses in organizational and micro-organizational behavior, and gained significant experience in regulatory compliance, litigation, and business law and counseling. He is licensed to practice law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America. See, for example: http://www.ogalaws.com. A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors. He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux.

Trained in Legal Project Management (and having organized and managed several complex projects before practicing law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams. Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: Healthcare; Education & Training; Law & Regulation; Policy & Plans; Statistics, Economics, & Evaluations including feasibility studies; Infrastructure; and Information Technology/Information Systems (IT/IS) – also sometimes termed Information Communications Technologies (ICT). See, for example: http://www.simprime-ca.com.

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

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[1] Senate of Canada. Senate Committee on Aboriginal Peoples. Meeting schedule – Past Meetings. Visited March 4, 2016. Online:

<http://www.parl.gc.ca/sencommitteebusiness/Notice.aspx?parl=42&ses=1&comm_id=1001&Language=E&meeting_id=419810>

[2] Parliament of Canada. Members. Senator Biography. Lillian Eva Dyck. Visited March 4, 2016. Online: <http://www.parl.gc.ca/SenatorsBio/senator_biography.aspx?senator_id=2776&Language=E>

[3] Senate of Canada. Senate Committees. Senate Committee on Aboriginal Peoples meeting of Wednesday, February 17, 2016. Examination of federal government’s constitutional and legal responsibilities to Aboriginal Peoples. Visited March 4, 2016. Online: <http://www.parl.gc.ca/sencommitteebusiness/Notice.aspx?parl=42&ses=1&Language=E&comm_id=1001&meeting_id=419810>

[4] An additional meeting on this subject had just taken place on Tuesday, February 16, 2016, but with a different list of witnesses, being: Allan Clarke, Director General, Economic Research and Policy Development Branch, Lands and Economic Development (Indigenous and Northern Affairs Canada); Douglas Fairbairn, Legal Counsel (Department of Justice Canada); Claudia Ferland, Director General, Individual Affairs Branch, Resolution and Individual Affairs (Indigenous and Northern Affairs Canada); and Sheilagh Murphy, Assistant Deputy Minister, Lands and Economic Development (Indigenous and Northern Affairs Canada). See Senate of Canada. Senate Committees. Senate Committee on Aboriginal Peoples meeting of Tuesday, February 16, 2016. Examination of federal government’s constitutional and legal responsibilities to Aboriginal Peoples. Visited March 4, 2016. Online: <http://www.parl.gc.ca/sencommitteebusiness/Notice.aspx?parl=42&ses=1&Language=E&comm_id=1001&meeting_id=419796>

[5] Supra note 3. Listed as speakers, were: Grand Chief Abram Benedict (Mohawk Council of Akwesasne); Bill Erasmus, Regional Chief (Assembly of First Nations); Claudia Ferland, Director General, Individual Affairs Branch, Resolution and Individual Affairs (Indigenous and Northern Affairs Canada); Lisa Janes, Regional Director General, Northern Ontario Region (Canada Border Services Agency); David Millette, Director General, Negotiations – Central, Treaties and Aboriginal Government (Indigenous and Northern Affairs Canada); Rasennes Pembleton, Researcher, Aboriginal Rights and Research Office (Mohawk Council of Akwesasne); James W Ransom, Director of Tehotiienawakon (Mohawk Council of Akwesasne); and Joe Wild, Senior Assistant Deputy Minister, Treaties and Aboriginal Government (Indigenous and Northern Affairs Canada).

[6] United States Department of Homeland Security. Western Hemisphere Travel Initiative. Visited March 5, 2016. Online: <https://www.dhs.gov/western-hemisphere-travel-initiative>

[7] United Nations (UN). Declaration on the Rights of Indigenous Peoples. Visited March 5, 2016. Online: <http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf>

[8] United States Government Publishing Office (GPO). Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA), Pub. L. 108–458—Dec. 17, 2004. Visited March 5, 2016. Online: <https://www.gpo.gov/fdsys/search/pagedetails.action?browsePath=108%2FPUBLIC%2F[400+-+499]&granuleId=&packageId=PLAW-108publ458&fromBrowse=true>

[9] Indigenous and Northern Affairs Canada (INAC) – formerly Aboriginal Affairs and Northern Development Canada (AANDC). Border Crossing. [emphasis added]. Visited March 5, 2016. Online: <http://www.aadnc-aandc.gc.ca/eng/1100100032380/1100100032381>

 

“AANDC is currently only issuing the in-Canada Secure Certificate of Indian Status. Until further notice, all applications for the border-crossing Secure Certificate of Indian Status will be converted to the in-Canada Secure Certificate of Indian Status. Individuals receiving a Secure Certificate of Indian Status will receive a letter providing this information.”

 

“For crossing the border into the United States (U.S.) via land ports of entry (which can include ferry and lake crossings), AANDC has been advised that, in the near term, U.S. border officials will accept both the SCIS and older Certificates of Indian Status as valid identity documents.

 

“The Government of Canada cautions individuals that the duration for the acceptance of these documents for border crossing purposes into the United States is entirely at the discretion of the U.S. Government. A list of documents approved for entering the United States can be found at Western Hemisphere Travel Initiative. Please note that travellers entering the United States by air continue to be required to present a valid passport or, in certain circumstances, a NEXUS card.”

 

“Please contact Passport Canada for information on passports and the Canada Border Services Agency for information on NEXUS cards.”

[10] Supra note 6.

[11] United Nations (UN). Declaration on the Rights of Indigenous Peoples. Visited March 5, 2016. Online: <http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf>

[12] United Nations (UN). Frequently Asked Questions on the Rights of Indigenous Peoples. What is the Declaration on the Rights of Indigenous Peoples? Visited March 5, 2016. Online. <http://www.un.org/esa/socdev/unpfii/documents/FAQsindigenousdeclaration.pdf>

[13] Id.

[14] Supra note 11, at Article 30.

[15] Supra note 11, at Article 36.

[16] Supra, note 14.

[17] Supra, note 15.

[18] United Nations (UN). Frequently Asked Questions on the Rights of Indigenous Peoples. Is the Declaration Legally Binding? Visited March 5, 2016. Online. <http://www.un.org/esa/socdev/unpfii/documents/FAQsindigenousdeclaration.pdf>

[19] Constitution of Canada. The Constitution Act, 1982, enacted as Schedule B to the Canada Act 1982 (UK), 1982, c 11Canada Act 1982 (the “Canada Act”). Visited March 5, 2016. Online: <http://laws-lois.justice.gc.ca/eng/Const/index.html>

 

Constitution act, 1982 –

PART II – RIGHTS OF THE ABORIGINAL PEOPLES OF CANADA

 

Recognition of existing aboriginal and treaty rights

  1. (1) The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.

 

Definition of “aboriginal peoples of Canada”

(2) In this Act, “aboriginal peoples of Canada” includes the Indian, Inuit and Métis peoples of Canada.

 

Land claims agreements

(3) For greater certainty, in subsection (1) “treaty rights” includes rights that now exist by way of land claims agreements or may be so acquired.

 

Aboriginal and treaty rights are guaranteed equally to both sexes

(4) Notwithstanding any other provision of this Act, the aboriginal and treaty rights referred to in subsection (1) are guaranteed equally to male and female persons. (96)

 

Commitment to participation in constitutional conference

35.1 The government of Canada and the provincial governments are committed to the principle that, before any amendment is made to Class 24 of section 91 of the “Constitution Act, 1867”, to section 25 of this Act or to this Part,

(a) a constitutional conference that includes in its agenda an item relating to the proposed amendment, composed of the Prime Minister of Canada and the first ministers of the provinces, will be convened by the Prime Minister of Canada; and

(b) the Prime Minister of Canada will invite representatives of the aboriginal peoples of Canada to participate in the discussions on that item. (97)

[20] United States Department of State. Office of the Historian. Milestones 1784–1800. John Jay’s Treaty, 1794–95. Visited March 5, 2016. Online: <https://history.state.gov/milestones/1784-1800/jay-treaty>

[21] Yale Law School. Lillian Goldman Law Library. British-American Diplomacy. The Jay Treaty; November 19, 1794. [excerpt below with emphasis added]. Visited March 5, 2016. Online: <http://avalon.law.yale.edu/18th_century/jay.asp>

 

The Jay Treaty. Treaty of Amity, Commerce, and Navigation, signed at London November 19, 1794, with additional article Original in English. Submitted to the Senate June 8, Resolution of advice and consent, on condition, June 24, 1795. Ratified by the United States August 14, 1795. Ratified by Great Britain October 28, 1795. Ratifications exchanged at London October 28, 1795. Proclaimed February 29, 1796.

Treaty of Amity Commerce and Navigation, between His Britannick Majesty; and The United States of America, by Their President, with the advice and consent of Their Senate.

 

ARTICLE 3.

“It is agreed that it shall at all Times be free to His Majesty’s Subjects, and to the Citizens of the United States, and also to the Indians dwelling on either side of the said Boundary Line freely to pass and repass by Land, or Inland Navigation, into the respective Territories and Countries of the Two Parties on the Continent of America (the Country within the Limits of the Hudson’s Bay Company only excepted) and to navigate all the Lakes, Rivers, and waters thereof, and freely to carry on trade and commerce with each other. But it is understood, that this Article does not extend to the admission of Vessels of the United States into the Sea Ports, Harbours, Bays, or Creeks of His Majesty’s said Territories; nor into such parts of the Rivers in His Majesty’s said Territories as are between the mouth thereof, and the highest Port of Entry from the Sea, except in small vessels trading bona fide between Montreal and Quebec, under such regulations as shall be established to prevent the possibility of any Frauds in this respect. Nor to the admission of British vessels from the Sea into the Rivers of the United States, beyond the highest Ports of Entry for Foreign Vessels from the Sea. The River Mississippi, shall however, according to the Treaty of Peace be entirely open to both Parties; And it is further agreed, That all the ports and places on its Eastern side, to whichsoever of the parties belonging, may freely be resorted to, and used by both parties, in as ample a manner as any of the Atlantic Ports or Places of the United States, or any of the Ports or Places of His Majesty in Great Britain.

 

All Goods and Merchandize whose Importation into His Majesty’s said Territories in America, shall not be entirely prohibited, may freely, for the purposes of Commerce, be carried into the same in the manner aforesaid, by the Citizens of the United States, and such Goods and Merchandize shall be subject to no higher or other Duties than would be payable by His Majesty’s Subjects on the Importation of the same from Europe into the said Territories. And in like manner, all Goods and Merchandize whose Importation into the United States shall not be wholly prohibited, may freely, for the purposes of Commerce, be carried into the same, in the manner aforesaid, by His Majesty’s Subjects, and such Goods and Merchandize shall be subject to no higher or other Duties than would be payable by the Citizens of the United States on the Importation of the same in American Vessels into the Atlantic Ports of the said States. And all Goods not prohibited to be exported from the said Territories respectively, may in like manner be carried out of the same by the Two Parties respectively, paying Duty as aforesaid

 

No Duty of Entry shall ever be levied by either Party on Peltries brought by Land, or Inland Navigation into the said Territories respectively, nor shall the Indians passing or repassing with their own proper Goods and Effects of whatever nature, pay for the same any Impost or Duty whatever. But Goods in Bales, or other large Packages unusual among Indians shall not be considered as Goods belonging bona fide to Indians. No higher or other Tolls or Rates of Ferriage than what are, or shall be payable by Natives, shall be demanded on either side; And no Duties shall be payable on any Goods which shall merely be carried over any of the Portages, or carrying Places on either side, for the purpose of being immediately reimbarked, and carried to some other Place or Places. But as by this Stipulation it is only meant to secure to each Party a free passage across the Portages on both sides, it is agreed, that this Exemption from Duty shall extend only to such Goods as are carried in the usual and direct Road across the Portage, and are not attempted to be in any manner sold or exchanged during their passage across the same, and proper Regulations may be established to prevent the possibility of any Frauds in this respect.

 

As this Article is intended to render in a great Degree the local advantages of each Party common to both, and thereby to promote a disposition favourable to Friendship and good neighbourhood, It is agreed, that the respective Governments will mutually promote this amicable Intercourse, by causing speedy and impartial Justice to be done, and necessary protection to be extended, to all who may be concerned therein.”

 

[22] While some might say that the War of 1812 between Britain and the United States voided all treaties between them – including the Jay Treaty, it remains a fact that the Treaty of Ghent (1814) in the ninth of its 11 Articles “specifically” restored all of the rights and terms of the Jay Treaty as they applied to American Indians (provided that they cease and desist with all hostilities upon notification of the Treaty’s signing) but yet again, with no direct Indigenous consultation or seat at the negotiating table. See Yale Law School. Lillian Goldman Law Library. British-American Diplomacy. Treaty of Ghent; December 24, 1814. [excerpt below with emphasis added]. Visited March 5, 2016. Online: <http://avalon.law.yale.edu/19th_century/ghent.asp>

 

Treaty of Peace and Amity between His Britannic Majesty and the United States of America.

 

ARTICLE THE NINTH.

“The United States of America engage to put an end immediately after the Ratification of the present Treaty to hostilities with all the Tribes or Nations of Indians with whom they may be at war at the time of such Ratification, and forthwith to restore to such Tribes or Nations respectively all the possessions, rights, and privileges which they may have enjoyed or been entitled to in one thousand eight hundred and eleven previous to such hostilities. Provided always that such Tribes or Nations shall agree to desist from all hostilities against the United States of America, their Citizens, and Subjects upon the Ratification of the present Treaty being notified to such Tribes or Nations, and shall so desist accordingly. And His Britannic Majesty engages on his part to put an end immediately after the Ratification of the present Treaty to hostilities with all the Tribes or Nations of Indians with whom He may be at war at the time of such Ratification, and forthwith to restore to such Tribes or Nations respectively all the possessions, rights, and privileges, which they may have enjoyed or been entitled to in one thousand eight hundred and eleven previous to such hostilities. Provided always that such Tribes or Nations shall agree to desist from all hostilities against His Britannic Majesty and His Subjects upon the Ratification of the present Treaty being notified to such Tribes or Nations, and shall so desist accordingly.”

 

[23] I will limit my observations and conclusions to the North American continent and the Arctic.

[24] The degree of this interconnectedness was highlighted by Bill Erasmus, Regional Chief (Assembly of First Nations), as he noted that his own people, members of the Dene Nation were now, and had long been, present as residents, and/or actively trading in Alaska (while it was in Russia), North America, and Mexico. This is a staggering geographic reach. For a brief biography of Regional Chief Erasmus, please see: Assembly of First Nations (AFN). Chief Willy (Bill) Erasmus, B.A. Visited March 5, 2016. Online: <http://www.afn.ca/en/chief-willy-bill-erasmus-b.a>

[25] A hyperlink identifying those “Federally recognized Canadian Indian Bands” that can certify ancestry and Indian ancestry for purposes of U.S. implementation of the Jay Treaty can be found on the website of the United States Customs and Immigration Service (USCIS) under, Green Card for an American Indian Born in Canada. Visited March 5, 2016. Online: <https://www.uscis.gov/green-card/other-ways-get-green-card/green-card-american-indian-born-canada> . However, that link leads directly to a list of Canada’s officially recognized Indian Bands at Aboriginal Affairs and Northern Development Canada (AANDC) – as now renamed Indigenous and Northern Affairs Canada (INAC), under First Nation Profiles. Visited March 5, 2016. Online: <http://pse5-esd5.ainc-inac.gc.ca/fnp/Main/Search/SearchFN.aspx?lang=eng>

[26] 8 CFR §289.1   Definition.

 

The term American Indian born in Canada as used in section 289 of the Act includes only persons possessing 50 per centum or more of the blood of the American Indian race. It does not include a person who is the spouse or child of such an Indian or a person whose membership in an Indian tribe or family is created by adoption, unless such person possesses at least 50 per centum or more of such blood. [Emphasis added].

 

Code of Federal Regulations, Title 8 (Aliens and Nationality), Chapter I – DEPARTMENT OF HOMELAND SECURITY, Subchapter B – IMMIGRATION REGULATIONS. Visited March 4, 2016. Online:<http://www.ecfr.gov/cgi-bin/ECFR?page=browse>

[27] Susana Mas. CBC News. Trudeau lays out plan for new relationship with indigenous people. Posted December 8, 2015, on cbc.ca. Visited March 5, 2016. Online: <http://www.cbc.ca/news/politics/justin-trudeau-afn-indigenous-aboriginal-people-1.3354747>

[28] Id. Recalling the 5 promises of the Liberal election platform, the Prime Minister prioritized: (1) the launch a national public inquiry into missing and murdered indigenous women (as already started); (2) making significant investments in First Nations education; (3) lifting the two per cent cap on funding for First Nations programs; (4) implementing all 94 recommendations from the Truth and Reconciliation Commission; and (5) repealing all legislation unilaterally imposed on indigenous people by the previous government.

[29] Id. “The prime minister also vowed to implement all 94 of the recommendations from the Truth and Reconciliation report, starting with the UN declaration on the rights of Indigenous Peoples.”

[30] Canada NewsWire. Media Advisory – Rt. Hon. Prime Minister Justin Trudeau to Visit Tsuut’ina First Nation. Visited March 4, 2015. Online: <http://www.morningstar.com/news/canada-news-wire/CNW_20160226C2785/media-advisory-rt-hon-prime-minister-justin-trudeau-to-visit-tsuutina-first-nation.html> Honoured with the receipt of a headdress at the event along with the Prime Minister, was the Assembly of First Nations Chief, Perry Bellegarde.

[31] See e.g. Tiar Wilson. CBC News. Hopeful indigenous reaction to Justin Trudeau’s cabinet picks. Posted November 4, 2015, on cbc.ca. Visited March 5, 2016. Online: <http://www.cbc.ca/news/aboriginal/aboriginal-leaders-react-cabinet-choices-1.3303972> Assembly of First Nations Chief Perry Bellegarde was especially pleased with the recognition afforded to Canada’s Aboriginal Peoples in the appointment of two MPs from Canada’s First Nations to significant Cabinet positions – Jody Wilson-Raybould, regional chief of the B.C. Assembly of First Nations was named as Canada’s minister of Justice and Attorney General, and Hunter Tootoo of Nunavut was named as Canada’s minister of fisheries and the Canadian Coast Guard.

[32] One example of policymaking in Canada without proper consultation (if at all), is the entire Indian Residential Schools program, as now and conclusively agreed.

[33] The Jay treaty and its one-way impact is a clear, contemporary, and lasting example of a treaty that could have been very easily interpreted in a different and more inclusive way that was consistent with its framers’ intentions, a long time ago.

[34] Countless examples of disastrous policy implementation in the United States were seen in the mass and forced dislocations of several indigenous communities; as accompanied by other actions that some have called genocide.

[35] See text, below.

[36] This rotation might be by ascending commissioner age, descending commissioner age, alphabetic nation name, alphabetical commissioner name, or as the Aboriginal Commissioners (AC), themselves, may otherwise provide.

[37] There are a several additional reasons for Canada to provide a home base of operations for the Commission:

 

(I) FUNDING – Indian Tribes and Indian Bands have jurisdiction over their own members and can therefore (I think in most if not all cases, as subject to local laws and their ability to exercise powers tantamount to taxation), levy modest assessments against the “on-reserve” income of their citizens and generate sometimes significant “own source revenues”. See e.g. Daniel Schwartz. CBC News. How does native funding work? Posted February 6, 2013, on cbc.ca. Visited March 7, 2016. Online: <http://www.cbc.ca/news/canada/how-does-native-funding-work-1.1301120> Counting all of the Tribes and Bands across Canada, Mexico, and the United States, the significant funds so raised can be matched singly, doubly, (or even more, now that the 2% funding cap for First nations programs in Canada will soon be history), by those 3 national governments of North America that have the most direct stake in the Commission, its work, and its ultimate beneficiaries. Of course, these 3 parties would also pay the way for their own 9 members on the Commission.

 

(II) VALUE – With such a large number of Indian Tribes geographically based in the United States, including several with significant business and resource industry interests and revenues, the exchange rate of United States dollars to Canadian dollars will likely prove quite advantageous to them in money that invariably goes further in a friendly neighbouring country with a stable government and a well-educated, multicultural, and multilingual population.

 

(III) LEVERAGE – As host to the United Nations Secretariat, the International Finance Corporation (World Bank), and the International Monetary Fund (IMF), amongst others, the United States has seen significant and sustained multipliers in the local economies where these entities are based (New York and Washington, D.C.), and political leverage. Canada is already host to the International Civil Aviation Organization (ICAO) in Montreal. Establishing the proposed Commission in Alberta at this time, would provide a much needed economic boost to both that province and Western Canada, and immeasurably boost Canada’s standing, and diplomatic and political credentials in the international community due to first mover advantage. Such an initiative would also show that Canada was living up to Prime Minister Trudeau’s call for a new dawn in “sovereign to sovereign relationships” with Canada’s Aboriginal People – especially by extending that new dawn to all of the Aboriginal Peoples of North America.

 

[38] See supra, notes 27–31 and accompanying text.

ECJ

INTRODUCTION:

On October 6, 2015,[1] the Court of Justice of the European Union (ECJ) declared invalid a decision of the European Commission on July 26, 2000[2] that had, pursuant to the relevant EU data protection law,[3] granted and acknowledged safe harbour for certain United States entities when transferring the personal data of European Union citizens to, and processing and storing that data within the United States. The case had been referred to the ECJ for a preliminary ruling from the High Court of Ireland, with a subsequent non-binding Opinion from the ECJ Advocate General, Yves Bot,[4] that the ECJ eventually followed.

CASE HISTORY:

The case began when Maximilian Schrems, an Austrian Citizen (and law student at that time), spearheaded a group to file a complaint with the Irish Data Protection Commissioner (DPC)[5] against Facebook Ireland Ltd, which is the company’s European headquarters. When Billy Hawkes, the Irish DPC rejected the case,[6] Schrems and his group sought and were granted judicial review at the High Court of Ireland.[7] Citing pre-emption on the key issues by European law, Mr. Justice Hogan adjourned the case pending referral to the European Court of Justice (ECJ).[8] Those key issues were: (a) whether the Edward Snowden revelations of 2013[9] revealed such a wholesale (both actual and potential) lack of compliance with European law that the U.S. Safe Harbour provisions with regard to transferring the personal information of European Citizens were essentially invalid; and (b) whether EU member states were bound by controlling EU privacy laws regarding those safe harbours, or free to pursue their own investigations into allegations of privacy breach or other non-compliance as and when needed, and were then subsequently able to suspend data transfers if they violated EU laws and/or EU citizen rights. Advocate General Bot had opined in the affirmative on both of these points,[10] and the ECJ agreed.

IMPLICATIONS:

Being effective immediately and with no grace period (or period of suspended invalidity as would likely have been applicable in Canada,[11] were the matter heard under Canadian jurisdiction),[12] the ruling immediately put the businesses and business practices of thousands of entities in legal jeopardy for their reliance on an invalid law. Fortunately for all, the European Union’s 28 national data protection authorities, acting through their Article 29 Working Party, issued an October 16, 2015 statement[13] encouraging those entities impacted by the ruling to negotiate, establish, and implement their own interim measures to ensure compliance with the ruling, including, in a later Q&A compliance release of November 6, 2015, that they “consider putting in place any legal and technical solutions to mitigate any possible risks they face when transferring data”;[14] assuring European businesses and citizens that privacy and data protection remained key elements of European law, and that they would issue further guidance at a national level, but at a later date; and implying quite strongly, that coordinated enforcement actions might issue if an appropriate successor framework could not be negotiated with the United States by the end of January, 2016.[15] That specific “deadline” language, read:

“If by the end of January 2016, no appropriate solution is found with the US authorities and depending on the assessment of the transfer tools by the Working Party, EU data protection authorities are committed to take all necessary and appropriate actions, which may include coordinated enforcement actions.”[16]

Essentially, then, the Commissioners agreed to implement a suspended enforcement as they could not retroactively seek or secure any period of suspended invalidity from the ECJ, and nobody had asked for one to be considered on the possibility of such a decision resulting. It would have been interesting to read the ECJ views on Canadian and other such precedent …. Perhaps we’ll read that some other time!

For now, we watch as companies scramble to “not” comply with this newly invalid law;[17] we wait for both that national European guidance (whether or not uniform or coordinated);[18] and we follow – to the extent made public – negotiations between the United States and Europe up to January 31, 2016. There may already be light at the end of that negotiation tunnel, as two identical bills – H.R.1428[19] in the House of Representatives (now passed by the full House), and S.1600 in the United States Senate[20] may eventually grant the United States District Court for the District of Columbia (USDC, DC) exclusive jurisdiction to hear foreign citizens’ privacy breach complaints against federal (not state) government actors of the United States. But, only the President can sign any final version of either Bill, into law.

In addition, the matter – now transferred back to the Irish High Court for further deliberations, may still result in a finding that Facebook cannot provide adequate data privacy protections for European citizens. If again referred or appealed to the ECJ, and upheld, Facebook’s European operations might cease under subsequent enforcement actions in one or many European jurisdictions on such a ruling.

And so, one way or the other, we wait![21]

*****************************************************************

Author:

Ekundayo George is a lawyer and sociologist. He has also taken courses in organizational and micro-organizational behavior, and gained significant experiences in regulatory compliance, litigation, and business law and counseling. He is licensed to practice law in Ontario and Alberta, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America. See, for example: http://www.ogalaws.com. A writer, blogger, and avid reader, Mr. George has sector experience in Technology (Telecommunications, eCommerce, Outsourcing, Cloud), Financial Services, Healthcare, Entertainment, Real Estate and Zoning, International/cross-border trade, other services, and Environmental Law and Policy; working with equal ease and effectiveness in his transitions to and from the public and private sectors. He is a published author on the National Security aspects of Environmental Law, has represented clients in courts and before regulatory bodies in both Canada and the United States, and he enjoys complex systems analysis in legal, technological, and societal milieux.

Trained in Legal Project Management (and having organized and managed several complex projects before practicing law), Mr. George is also an experienced negotiator, facilitator, team leader, and strategic consultant – sourcing, managing, and delivering on complex engagements with multiple stakeholders and multidisciplinary teams. Team consulting competencies include program investigation, sub-contracted procurement of personnel and materials, and such diverse project deliverables as business process re-engineering, devising and delivering tailored training, and other targeted engagements through tapping a highly-credentialed resource pool of contract professionals with several hundred years of combined expertise, in: Healthcare; Education & Training; Law & Regulation; Policy & Plans; Statistics, Economics, & Evaluations including feasibility studies; Infrastructure; and Information Technology/Information Systems (IT/IS) – also sometimes termed Information Communications Technologies (ICT). See, for example: http://www.simprime-ca.com.

Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”) including employees, agents, directors, officers, successors & assigns, in whole or in part for their content, accuracy, or availability.

This article creates no lawyer-client relationship, and is not intended or deemed legal advice, business advice, the rendering of any professional service, or attorney advertising where restricted or barred. The author and affiliated entities specifically disclaim and reject any and all loss claimed, no matter howsoever resulting as alleged, due to any action or inaction done in reliance on the contents herein. Past results are no guarantee of future success, and specific legal advice should be sought for particular matters through counsel of your choosing, based on such factors as you deem appropriate.

[1] Schrems (Judgment) [2015] EUECJ C-362/14 (06 October 2015), [2015] EUECJ C-362/14, [2015] WLR(D) 403, EU:C:2015:650, ECLI:EU:C:2015:650. Online: http://www.bailii.org/eu/cases/EUECJ/2015/C36214.html

[2] Commission Decision 2000/520/EC of 26 July 2000 pursuant to Directive 95/46/EC of the European Parliament and of the Council on the adequacy of the protection provided by the safe harbour privacy principles and related frequently asked questions issued by the US Department of Commerce (OJ 2000 L 215, p. 7)

[3] Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ 1995 L 281, p. 31).

[4] Case C-362/14 Maximillian Schrems v. Data Protection Commissioner [2015] EUECJ C-362/14, Opinion of AG Bot (23 September 2015). Online: http://www.uni-muenster.de/Jura.itm/hoeren/itm/wp-content/uploads/C0362_2014-EN-Opinion.pdf

[5] RTE News. Data Protection Commissioner says no action will be taken against Apple and Facebook. Published on rte.ie, July 26, 2013. Online: http://www.rte.ie/news/2013/0726/464770-data-protection/

[6] Id.

[7] Schrems v. Data Protection Commissioner [2014] IEHC 310 (18 June 2014). Online:http://www.bailii.org/ie/cases/IEHC/2014/H310.html

[8] Ruadhán Mac Cormaic. High Court refers Facebook privacy case to Europe. Published on irishtimes.com, June 19, 2014. Online: http://www.irishtimes.com/business/technology/high-court-refers-facebook-privacy-case-to-europe-1.1836657

[9] Barton Gellman. Edward Snowden, after months of NSA revelations, says his mission’s accomplished. Published on washingtonpost.com, December 23, 2013. Online: >http://www.washingtonpost.com/world/national-security/edward-snowden-after-months-of-nsa-revelations-says-his-missions-accomplished/2013/12/23/49fc36de-6c1c-11e3-a523-fe73f0ff6b8d_story.html

[10] Supra note 4.

[11] Schachter v. Canada, [1992] 2 S.C.R. 679 at 715-16, 1992 CanLII 74 (SCC) per Lamer, CJ. Online: http://scc-csc.lexum.com/scc-csc/scc-csc/en/item/903/index.do

A court may strike down legislation or a legislative provision but suspend the effect of that declaration until Parliament or the provincial legislature has had an opportunity to fill the void. This approach is clearly appropriate where the striking down of a provision poses a potential danger to the public (…) or otherwise threatens the rule of law (…). It may also be appropriate in cases of underinclusiveness as opposed to overbreadth. For example, in this case some of the interveners argued that in cases where a denial of equal benefit of the law is alleged, the legislation in question is not usually problematic in and of itself. It is its underinclusiveness that is problematic so striking down the law immediately would deprive deserving persons of benefits without providing them to the applicant. At the same time, if there is no obligation on the government to provide the benefits in the first place, it may be inappropriate to go ahead and extend them. The logical remedy is to strike down but suspend the declaration of invalidity to allow the government to determine whether to cancel or extend the benefits. (Citations omitted).

[12] As I wrote in an earlier blog post, Canadians are very much aware of the challenges of international data governance and transnational privacy protection. See e.g. Ekundayo George. In who’se pocket is your data packet? – International Data Governance. Published on ogalaws.wordpress.com, February 6, 2013. Online:

https://ogalaws.wordpress.com/2013/02/06/in-whose-pocket-is-your-data-packet-international-data-governance/

[13] Article 29 Working Party (Art. 29 WP). Statement on the implementation of the judgement of the Court of Justice of the European Union of 6 October 2015 in the Maximilian Schrems v Data Protection Commissioner case (C-362-14). Brussels, October 16, 2015. Online: http://ec.europa.eu/justice/data-protection/article-29/press-material/press-release/art29_press_material/2015/20151016_wp29_statement_on_schrems_judgement.pdf

[14] European Commission – Fact Sheet. Q&A: Guidance on transatlantic data transfers following the Schrems ruling.

MEMO/15/6014. Brussels, November 6, 2015. Online: http://europa.eu/rapid/press-release_MEMO-15-6014_en.htm

[15] Supra, note 13.

[16] Id.

[17] See e.g. supra, note 14.

[18] Technology executives and politicians alike have even warned that if these concerns over, and an increasingly vocal resistance to, targeted and/or bulk collection of personal data through government surveillance continue to “trend”, we may very soon see a real splintering of the internet into several disparate and walled-off variants. See e.g. Stephen Lawson, IDG News Service. Jitters over US surveillance could break the Internet, tech leaders warn. Published on itworld.com, October 8, 2014. Online: http://www.itworld.com/article/2825590/security/jitters-over-us-surveillance-could-break-the-internet–tech-leaders-warn.html

[19] First introduced in the United States House of Representatives (the “House”) on March 18, 2015 by Representative F. James Sensenbrenner, a Wisconsin Republican, the HR.1428 Bill is officially known as The Judicial Redress Act of 2015, and has a stated purpose “[t]o extend Privacy Act remedies to citizens of certified states, and for other purposes”. Online: https://www.congress.gov/bill/114th-congress/house-bill/1428/all-info

[20] First introduced in the United States Senate (the “Senate”) on June 17, 2015 by Senator Christopher S. Murphy, a Connecticut Democrat, the S.1600 Bill has now been referred (as H.R.1428) to the Senate Judiciary Committee, but it is yet to be considered and voted upon by the full Senate. Online: https://www.congress.gov/bill/114th-congress/senate-bill/1600/all-info

[21] *Reserved (pending further news).

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