I thank Members for allowing me to usher in this Bill in the Seanad. I listened with great interest to the Order of the Business and the robust defence offered by the Leader of the House, Senator Cassidy, in respect of the number of Bills introduced in the Seanad. About a fortnight ago we had a most wonderful debate on public transport which I very much enjoyed. This is a very good forum in which to introduce legislation and this Bill in particular which I am very pleased to introduce.
In matters such as e-commerce, the Internet and information technology, the pace of change is huge. This is bewildering and perplexing. One can hear about a company today and by tomor row it could have joined with a new company and developed a new product or software. There is constant evolution.
Undoubtedly, a company which does not use e-mail and other new technology in this technological age will be left behind. Some people in small and medium businesses are wary when they think about the expense and entering uncharted waters. One tells them that they must move with new technology because there is no such thing as the Scarlet O'Hara syndrome, that they can think about it tomorrow. There is no tomorrow for them. In their case tomorrow will be yesterday and they will be gone. I know most Members of the House are convinced on this matter but it is worth repeating.
There were three huge Internet gatherings in Dublin yesterday. Several hundred people attended one such gathering in the Royal Hospital, Kilmainham in the morning to hear how growing businesses could get finance for the Internet. In the afternoon there was an Enterprise Ireland conference on how funds could be made available to small and medium businesses and, in particular, for Internet and related technologies and last night people attended the COMS 2000 exhibition in the RDS. Despite what is happening, strange as it may seem, and in spite of the "hype", there is still a reluctance on the part of many smaller firms to move into this area. At a later stage, I hope to talk a little on Global Crossing and what is happening in that regard.
We must ensure that a social divide does not emerge. While this is a Bill to do with business and which is brief, brisk, supple and understandable with regard to the Internet and e-commerce, we must ensure a social divide will not develop between a new elite of those with technological skills, equipment and know how and those without it who find themselves outside a new Pale, so to speak.
The Electronic Commerce Bill, 2000, is landmark legislation. Everyone is aware of the huge impact the information revolution has on almost every aspect of our lives. We did not have an industrial revolution in the 1800s because we were too busy having a revolution over land or one of physical force. This is a revolution in which we should all participate. The convergence of computer, multimedia and telecommunications technologies has made the communication of information in all its forms quicker, cheaper and more powerful than ever before. I can think of a handful of inventions in the past which have had a profound effect and impact on the way we live our lives. Examples of those would be the steam engine, electricity, the telegraph and, as we will recall from our history books, the pioneers. Although I taught history, I cannot bring the dates to mind. Despite its short existence, the Internet is already seen as a technology of equal, if not greater, import to humankind.
It is hard to think of an aspect of our everyday lives which will not be affected by the Internet and the information revolution. As with most new technologies it is the business community which has been to the forefront. Most commentators are predicting that business-to-business e-commerce will surpass consumer orientated e–
commerce in its impact on our economy. The Internet's impact goes way beyond the commercial world. It has huge potential benefits for how we learn, how we are entertained, shop and communicate, both locally and globally. The Internet, like the telephone, will impact on all of our social and economic interactions.
These benefits will not necessarily be achieved automatically. A number of years ago the Government recognised the need to take a pioneering role by formulating a comprehensive set of policies to stimulate and promote the information society in Ireland. I pay tribute to the former Taoiseach, Deputy John Bruton, whose Government established the Information Society Commission towards the end of 1996. It is under its aegis that a lot of what we do operates. That was an important forward step.
This Bill is part of an integrated series of Government policies and initiatives aimed at strategically positioning Ireland to become the most e-commerce friendly country in Europe. The various elements of this policy are outlined in the Government's action plan for the information society, published by the Taoiseach in January 1999. There are various strands to the plan. These strands focus on key areas such as telecommunications infrastructure, encouraging electronic commerce, electronic government and other enabling measures. The action plan also recognises the importance of legislative and regulatory measures to facilitate the development of the information society. It commits the Government to legislate in order to facilitate electronic transactions.
When trying to legislate for the Internet we can learn a lot from the anarchist origins of the network. The phenomenal growth of the Internet can be attributed in large part to these origins – freedom, openness, absence of borders. The last thing the Internet needs at this early stage of its development is the heavy hand of Government regulation. As the Internet grows it begins to mirror society more – more commerce, legal cases and battles to control various sectors. The challenge for Government is to strike the right balance between the various forces of control, Government regulation, self-regulation by industry, the free market and technological progress. This Bill strikes the correct balance by acknowledging that what is needed at present is light regulation to oil the cogs of e-commerce and not throw a spanner in the works.
The Internet is a profoundly different way of doing business and has raised many questions about the interpretation and implementation of current legislation. Most of our laws were written purely with the paper world in mind. While the principles and objectives of our laws apply equally to the on-line and off-line world, the interpretation of these laws in the on-line world can cause confusion. This Bill represents a swift response by the Government to many of the most important issues raised by electronic commerce. It is a first step in adapting our Statute Book to take account of the realities of the Internet.
It would be impossible and undesirable to introduce an entirely new set of laws for e-commerce. There is no reason the huge body of legislation that currently governs traditional commerce should not apply equally to e-commerce. Company law, consumer law and privacy law already lay down principles for the governing of these areas, whether off-line or on-line. This Bill is intended simply to remove existing legal impediments and uncertainties regarding the development of e-commerce in Ireland. It will allow consumers and business alike to be free to use electronic communications to satisfy existing legal requirements which already apply to paper-based commerce. In this way the legislation is not intended to introduce an entirely new legal framework, but rather is intended to be enabling legislation.
A radically different approach to formulating legislation is required to address the issues raised by the Internet. One aspect of this new approach is closer consultation during the legislative process. Public policy relating to the Internet or anything else cannot be formulated behind closed doors. It cannot be isolationist. It has to be based on a shared effort of all concerned. Private sector innovation has a definite role to play.
It might be helpful to the House if I sketch briefly the background leading to the introduction of this Bill. We have consulted widely and publicly from the beginning. The original consultation paper published in August 1999 was drafted during a series of workshops and focus groups organised by my Department. Those groups included representatives from industry and other interest groups. The consultation process proved successful and submissions were received from many different businesses, organisations and individuals. Over 30 written submissions were received on the consultation paper and I take this opportunity to thank everyone who did so. An Internet discussion forum was also made available. This innovation was enthusiastically taken up by the on-line community and a lively debate ensued within the discussion forum. I see this as a model for future consultations in the legislative area.
The Bill is about positioning Ireland as a progressive, pioneering e-commerce regulatory environment. It is founded on two basic principles – functional equivalence of electronic media and technology neutrality. Functional equivalence means that communications using electronic means should not be treated any differently under the law than communications using traditional media. Technology neutrality is important because it would be inappropriate for legislation to endorse one technology solution over another and, given the extraordinary pace of technological developments in this area, it would be foolhardy to lay down detailed technical specifications which would more than likely be obsolete before the Bill is enacted. We must remember the Internet year is three months and getting shorter.
The Bill is also founded on the principle that Internet users should have free and open access to whatever level of security technologies with which they feel comfortable. By its nature the Internet is an open and therefore unsecure network. Technological solutions exist to allow commercial transactions to be carried out with confidence and to ensure that privacy is preserved. Most of these solutions are based on some form of cryptography and it is essential that Internet users have easy access to strong cryptography. This policy is enshrined and underpinned by this legislation.
In general the submissions were supportive of the on-line legislative proposals and they provided some good comments. In particular, the proposal to create a comprehensive e-commerce legal framework in one piece of legislation was widely welcomed. The media, particularly the newspapers which have specialist writers on e–
commerce, were part of the consultative process as they provided an important information tool. They frequently published information about the Bill and who had been consulted so that interested parties could read it.
This led to an interesting debate as comparisons were made between the UK and Ireland. I do not normally engage in such a debate but many specialist writers in the newspapers clearly stated that the Irish Bill is better than the UK Bill. I met the UK Minister, Patricia Hewitt, when she was here a month or six weeks ago. Her Bill was going into the House of Lords having been in the House of Commons. It started as simple legislation but it became bogged down and overwhelmed by what could or might happen. The result is that the Bill is cumbersome, costly and unadaptable. We hope this legislation will be the opposite. At a recent seminar in Brussels most commentators praised the Irish Bill as adopting the right approach to this issue.
Section 1 contains the Short Title and provides for the commencement of the Bill once enacted. Section 2 contains the definition of a number of terms subsequently used in the legislation. The definitions are designed to be comprehensive, technology neutral and, as far as is possible, future proof. I am not sure that anything can be future proof. How can one proof oneself against the future? Many of the definitions come directly from the electronic signature directive.
Sections 3 to 8 are fairly standard legislative provisions which do not have to be explained in much detail but I will refer to a few points. Section 6 deals with the prosecution of offences and provides that summary proceedings may be brought for an offence within 12 months of the discovery of evidence of the offence. Section 8 outlines the penalties for offences. It is important for engendering confidence and trust in e-commerce that the penalties provided are adequate to meet the crime. A number of submissions during the consultation process suggested that the maximum proposed fine of £80,000 should be increased substantially. In response to this view, the Bill provides for fines of up to £500,000 for indictable offences.
Part II of the Bill contains the key ground breaking provision providing for equivalence between the electronic and paper worlds. Section 9 lays down the fundamental principle on which the Bill is founded, namely, that information in electronic form shall not be denied legal effect, validity or enforceability solely on the grounds that it is in electronic form. Information incorporated by reference is also covered by this fundamental principle. This provision is important for e-commerce because Internet information is often incorporated by reference using links. This makes the information easier to read and allows relevant information to be easily accessed.
Section 10 outlines the areas of existing law to which the Bill will not apply. Laws governing the registration of immovable property, wills, trusts and enduring powers of attorney are excluded because it is felt that the technology and systems are not yet at a stage where such transactions can be executed electronically. The rules and laws governing how the courts work are also excluded for the time being. However, once it is appropriate to extend the legislation to these areas, section 10(2) gives the Minister the power to make regulations to that effect.
Section 11 clarifies that nothing in the Bill shall prejudice tax law. This is felt necessary to ensure that the provisions of the Bill do not inadvertently contradict tax law or create loopholes for tax avoidance. This provision does not in any way hinder the Revenue Commissioners from dealing with their customers electronically. On the contrary, the Finance Act, 1999, specifically provided for the electronic filing of tax returns and preparations for introducing this measure are well advanced. The Revenue Commissioners have been to the fore in developing systems in this regard for which I commend them. The regulations under the Companies Acts, which permit the electronic dealing in shares on the Stock Exchange, are also included in this section to prevent any unforeseen inconsistencies.
Section 12 sets out the basic standard that electronic writing must meet to be considered as meeting any requirements in law that information be in writing. With the Statute Book now available electronically on CD-ROM, it is easy to search for specific words. It may interest the House to know that there are 5,631 references to the word "writing" in statutes since 1922. The section lays down that electronic writing must be accessible for subsequent reference. Subsection (2) makes a distinction between public and private bodies. It is considered necessary to clarify that public bodies are free to lay down various requirements before they receive electronic writing.
The distinction between public and private bodies is also included in subsequent sections. The provision recognises that public bodies may have particular form and security requirements. They are allowed to introduce those requirements in an objective, transparent, proportionate and non-discriminatory manner. In no way are these provisions an opportunity for public bodies to lag behind. This Bill and the world of responding to customer needs create between them an imperative to introduce such systems sooner rather than later.
Section 13 is similar in format to the previous section and deals with the use of electronic signatures in place of written signatures under the law. The term "signature" appears 748 times in statutes since 1922. Electronic signatures perform the same role as written signatures by authenticating the origin of a document. They are a very important method of securing transactions on the Internet.
Section 14 allows for signatures to be witnessed electronically. In this case, however, advanced electronic signatures must be used. These offer a higher level of security which is considered necessary for documents that need to be witnessed. For certain important documents a seal is also required in addition to a signature to add a greater degree of authenticity to the document in question. Section 15 provides for an electronic method of meeting the requirement for a seal using electronic signatures.
Often there are requirements that information be retained or presented in its original form and disputes can often arise over the question of originality. Section 16 allows for the electronic documents to meet the requirement of originals, subject to certain requirements. There are also many legal requirements to retain documents. Section 17 allows for the retention and subsequent production of documents electronically.
Section 18 is one of the more important sections. It provides that a contract may be concluded using electronic communications and lays down the principle that a contract shall not be denied legal effect, validity or enforceability solely on the grounds that it is in electronic form. It also allows for the offer and acceptance of an offer to be carried out using electronic communications. Section 19 provides for basic presumptions regarding the determination of who sent an electronic communication. In essence for the purpose of a law, an electronic communication will be deemed to be that of the originator if it was sent by the originator.
Section 20 provides for the acknowledgement of receipt of electronic communications. Various levels of acknowledgements are available. The section proceeds on the assumption that acknowledgement procedures are to be used at the discretion of the originator. The section is not intended to deal with the legal consequences that flow from sending an acknowledgement of receipt apart from establishing the fact of receipt of the electronic communication. There is a clear distinction there. It is also important to be able to determine the time and place of dispatch and receipt of information for many existing rules of law. Section 21 provides a default rule for determining when and from where electronic communications are sent and when and where they are received.
One of the action points of the information society action plan is the early enactment of legislation dealing with electronic evidence in courts. Section 22 addresses this action point by providing for the admissibility of electronic information as evidence in legal proceedings. The assessment of the evidential weight of electronic communications is left to the courts. However, this section means that information cannot be denied admissibility as evidence in legal proceedings on the sole ground that it is in electronic form.
All these aspects are very far-reaching. While the Bill sets them out in straightforward terms they have huge implications. They will mark out a clear difference in how business can be done. We recognise that everybody may not be in a position, or may not want, to communicate electronically and that parallel paper and electronic systems will be maintained into the future. Section 23 clarifies this by providing that nothing in the Bill can be interpreted as requiring the use of electronic communications. It would be carrying the Big Brother concept very far if something like that was mandatory.
As already outlined with regard to section 8, which deals with penalties, it is important to have sufficient deterrents to ensure electronic signatures are not abused. Section 24 provides for a number of offences concerning the fraudulent use of electronic signatures, signature creation devices and electronic certificates. The offences are designed to address forgery of electronic signatures and the unauthorised use of them.
Section 25 lays down the investigative procedures for the offences created in the previous section. The purpose of this is to provide for lawful access to evidence only on the basis of a search warrant and where an offence or suspected offence under the Bill has occurred. The section also allows a court to issue a search warrant to require a person to disclose such evidence in intelligible form.
Section 26 is an important provision. It ensures that nothing in the Bill can be construed as requiring the disclosure or enabling the seizure of keys or codes used to keep information confidential. Such protection is essential for the security of e-commerce and received widespread industry support during the consultation process of which we spoke earlier.
Part III provides for matters relating to service providers who issue electronic signature certificates or provide other services relating to them. These service providers are known in the Bill as certification service providers.
Section 27 provides for accreditation and supervision of certification service providers. It states that these providers are free to set up business and offer their services without the need for any prior Government authorisation. It is important that this fledgling industry is not stifled by needless Government regulation. However, we are introducing a voluntary accreditation scheme which will be administered by the national accreditation board. The section also provides for a supervisory scheme of certification service providers, and these provisions are based on Article 3 of the electronic signatures directive.
Section 28 lays down the liability of certification service providers. Such a provider who issues a certificate as a qualified certificate to the public and who guarantees such a certificate shall be liable for any damage caused to any person who reasonably relies on such a certificate. Such certification service providers will have to assure the accuracy of all information in the qualified certificate as at the time of issue. They will also be liable for damages resulting from failure to register or publish revocation or suspension of the certificate unless they can establish that they have not acted negligently. The certification service provider may indicate in the qualified certificate limits on its liability provided these are clear and readily identifiable. This is traced back to the clear direction in the electronic signatures directive.
There is only one section in the last part of the Bill. Section 29 gives the Minister the power to place the registration of Irish Internet domain names on a statutory basis. The two-letter code assigned to Ireland for domain names is ‘ie'. I had a laugh at that because ‘ie' also stands for Iarnród Éireann. It is not clear at this stage whether such regulations will be needed. However, it is felt prudent to provide for the power at this stage. The ‘ie' domain name is a national resource which should be managed in the public interest and in the interests of the Internet community. The Schedule repeats the annexes to the electronic signatures directive for reference purposes.
This is a brief overview of what is contained in the Bill. With the speed of change, there will undoubtedly be a need for further e-commerce related legislation in years to come. It is a facilitatory measure and an important first step towards adapting our laws to the new realities of the information society. I thank the House for arranging to take this Bill. It was passed at Cabinet on Tuesday and I wanted it well aired before Easter. I listened to Senator Quinn asking where were the Bills the Government promised. I hope to publish two more next week, but it is a hope, so the Senator should not haul me in if I do not publish them in that time. We wanted to give the Bill a good airing and I can think of no better Chamber than the Seanad in which to do so.
I thank the officials in my Department who have put a great deal of work into the consulta tive process concerning this legislation. They have attended to the Bill in a very modern way and have been painstaking in their endeavours. They took great trouble in preparing, formulating and moving the Bill forward.
I commend the Bill to the House.