Categories
Articles

Industry, Innovation, and Infrastructure. The struggle to realize the principle of sound efficiency in support of the right to a clean, healthy, and sustainable environment without noise pollution

The United Nations has as one of its Industry, Innovation, and Infrastructure segment development goals building resilient infrastructure to promote inclusive and sustainable industrialization fostered by innovation. There are also other goals: health and well-being (goal 3), ensuring healthy lives and promoting well-being for all of all ages in all cities), sustainable cities and communities (Goal 11: Make cities and human settlements inclusive, safe, resilient, and sustainable), responsible consumption and production (Goal 12 – Ensure sustainable consumption and production patterns), partnerships for the goals (Goal 17 – Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development). 

The UN passed Resolution No. 76/2022, recognizing the right to a clean, sustainable, and healthy environment. And the OECD has studies to promote responsible business conduct, something to be applied by the equipment and infrastructure industries and condominiums, among others.[1]

Based on this normative context, we will try to present some insights into the control of noise pollution arising from the manufacture of noisy machines to achieve the right to smart, healthy, and sustainable cities. And to institutionalize the principle of acoustic efficiency for noise control of machinery, equipment, works, services, and infrastructure.  We urgently need to maximize the acoustic efficiency of the machines and minimize noise to protect public health and welfare. According to the World Health Organization, noise above 50 decibels is harmful to health. Noise affects cognition, and physiology, impacting the nervous, cardiovascular, endocrine, sleep, and digestive systems, among others.  Noise is an anomaly, a mechanical pathology, a symbol of the acoustic inefficiency of machines! 

Some considerations on this matter:

 First, the gardening equipment and construction industries, condominiums, mass transit systems, helicopters, household appliances, the automobile industry, drones, and others must conform to the right to a clean, healthy, and sustainable environment.  Thus, we need eco-efficient and acoustically eco-sustainable business models.

Second, industrial innovation should focus on replacing acoustically inefficient mechanical technologies with acoustically eco-efficient and environmentally sustainable ones. In this regard, adherence to the principle of acoustic efficiency is urgently needed, with investments in environmental sustainability for the eco-efficiency of the machines. Laws encouraging acoustic environmental sustainability should support the change in the industrial pattern, replacing inefficient technologies with more efficient ones from an acoustic perspective. Municipalities can and should encourage technological innovations to promote acoustic efficiency and environmental sustainability. This can be done through its purchasing power by encouraging public tenders and buying eco-friendly products, services, and equipment.

Third, urban infrastructure in cities must be eco-efficient and committed to acoustic environmental sustainability. Urban infrastructure (streets, avenues, sidewalks, condominiums) must adopt clean, healthy, and sustainable technologies. In this regard, there is public infrastructure and private infrastructure (condominiums), both of which must be aligned with the best practices of acoustic environmental management.  Environmental law enforcement agencies must prevent and repress noise with measures for monitoring urban noise.

Fourth, there should urgently be an educational campaign directed at residential condominiums to raise awareness of how machine noise can damage people’s health and well-being. Laws should encourage self-regulatory practices by condominiums for noise containment and acoustic environmental governance and compliance measures. 

Fifth, consumers and end users of industry and infrastructure should be informed about the institutional and industry policies adopted by governments and companies for acoustic environmental sustainability. There should be maximum transparency from manufacturers and retailers about the acoustic efficiency of the machines. This is why policies for adhering to acoustic efficiency equipment seals are fundamental.

Sixth, the construction industry should adopt acoustically efficient machines, abandoning inefficient machines, for the sake of the health and well-being of its employees and for the sake of the health and well-being of other citizens.

Seventh, the machine industry must invest in efficient machines. Therefore, there is a legal and ethical duty to conduct research and develop equipment that is committed to acoustic environmental sustainability.  The industry should guide itself by the acoustic quality standard of its equipment. 

Eighth, we need to update the laws and the institutional training of competent government agencies to raise awareness of acoustic environmental sustainability. 

Ninth, society demands better business conduct committed to acoustic environmental sustainability, with governance practices and acoustic environmental compliance so that the principle of acoustic efficiency in equipment, works, and services can be achieved.  In short: The right to a clean, sustainable, and healthy environment is premised on acoustic environmental sustainability. We urgently need innovation by the industry, condominiums, machine suppliers, and service providers to ensure commitment to acoustic efficiency, replacing polluting machines with eco-efficient and eco-sustainable technologies. 

Ericson Scorsim. Lawyer and Public Law Consultant Ph.D. in Law from the University of São Paulo (USP). Author of the book Propostas Regulatórias: Anti-Ruídos Urbanos (Regulatory Proposals: Anti-Urban Noise), Amazon, 2022.


[1] OECD, OECD Studies on Responsible Business Conduct Policy, 2022.

Categories
Articles

Geopolitical Game Related to Semiconductors Between the United States and China: The Taiwanese TSMC Company Controversy

Taiwan is one of the epicenters of the geopolitical game between the United States and China. These two countries are vying for global leadership. Taiwan is home to TSMC, one of the largest semiconductor manufacturers in the world.  Taiwan is a territory of China with autonomy and democracy.  This is why China proclaims one country, two systems.

Semiconductors are essential equipment in smartphones, cars, televisions, refrigerators, and more. Also, semiconductors serve the defense industry, used in missiles, tanks, aircraft, and command and control systems. Qualcomm and NVidia are semiconductor suppliers to the US defense industry.  

TSMC has the following market shares: North America (65%), Europe, the Middle East and Africa (6%), China (10%), and the Asia Pacific (14%). It is one of the most valuable companies in the world. It is one of Apple’s leading chip suppliers. TSMC has stopped supplying chips to the Chinese company Huawei due to pressure from the USA. The US government wanted a North American company to acquire control of TSMC. On the other hand, the Chinese government is also interested in having a Chinese company take over TSMC.

Any disruption to TSMC’s operation could threaten the United States national security, as the electronics industry depends on the Taiwanese company’s chips. The disruption of TSMC’s operations also threatens China’s national security. China has control of the rare materials used to manufacture semiconductors.  As a result, TSMC finds itself in the crossfire between the two countries. The company is also formed with the support of North American, European, and Asian companies.  In an interview with journalist Fareed Zakaria on his program GPS on CNN USA, Marc Liu, Chairman of TSMC, said that if China invades Taiwan, the plant will not be operational because its operation is interdependent with companies in the United States, Europe, and other countries. 

The United States has announced a U$50 billion incentives bill for setting up semiconductor factories in the United States, as well as for semiconductor research and development and technology workforce training. Interestingly, the US government has consistently criticized the Chinese government’s subsidy policy for its industry. However, now it is using the same tactics. TSMC plans to invest in semiconductor manufacturing in the state of Arizona.

Brazil can seize opportunities in this rearrangement of the global semiconductor supply chain. To do so, Brazil must build up its institutional capacity in industrial, science, and technology policy.

 ** All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Public Law Consultant Ph.D. in Law from the University of São Paulo (USP). Author of the book 5G Communications Geopolitical Game: United States, China, and the Impact on Brazil, self-published, 2020.

Categories
Articles

Resolution 76 of 2022 Defines the Human Right to a Clean, Healthy, and Sustainable Environment. The right to clean, healthy, and sustainable cities without noise pollution

The United Nations General Assembly passed Resolution 76 on July 26, 2022, declaring the right to a clean, healthy, and sustainable environment. Among the justifications presented are the risks of the impact of climate change and the unsustainable management of natural resources that interfere with the enjoyment of a clean, healthy, and sustainable environment by all human beings.

Environmental damage is felt by individuals and communities around the world, with a more substantial impact on vulnerable groups such as women, girls, indigenous peoples, children, and the elderly. The Resolution recognizes the importance of gender equality and the demand to address climate change and prevent environmental degradation. It also highlights the need for empowerment, leadership, and meaningful participation of women and girls as managers, leaders, and advocates of natural resources in the protection of the environment.

Environmental degradation, climate change, loss of biodiversity, desertification, and unsustainable development constitute some of the most significant pressures and severe threats for effectively enjoying all human rights by present and future generations. The Resolution also recognizes that the exercise of human rights, including the rights to seek, receive and impart information, to participate effectively in the conduct of government is vital to the protection of a clean, healthy, and sustainable environment; UN Member States reaffirm their commitment to respect, protect and promote human rights to avoid environmental degradation. Additional measures should be taken to face the environmental challenges and ensure the effectiveness of human rights for all. UN member states, international organizations, and businesses must adopt environmental policies to ensure the right to a clean, healthy, and sustainable environment.

This normative context of the UN Resolution clearly configures the right to clean, healthy, and sustainable cities without noise pollution. Noise pollution is one of the factors of environmental harm, also jeopardizing the fundamental rights to quality of life, health, work, rest, and others.  Urban noise causes an unclean, unhealthy, and unsustainable environment. Therefore, city leaders must commit to eliminating, mitigating, and isolating noise pollution to protect the right to a clean, healthy, and sustainable environment!

Also, companies, service providers, suppliers of mechanical equipment, and other organizations must be committed to a clean, healthy, and sustainable noise-free environment.

**All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Public Law Consultant Ph.D. in Law from the University of São Paulo (USP). Author of the book Propostas Regulatórias: Anti-Ruídos Urbanos (Regulatory Proposals), Amazon, 2022

Crédito de Imagem: ONU – Unsplash/Manuel Venturini

Categories
Articles

Cloud Computing: The Geopolitical and Geoeconomic Context

The United States and China Dispute Global Technological Leadership. Technological competitiveness is measured by each country’s computing capacity, represented by cloud computing infrastructures and semiconductor manufacturing. These computing infrastructures are essential for modeling global cyberspace. The cyber power of a country currently represents one of the factors of national power.[1]Thus, each country with cyber power seeks to project its power to other countries, something that represents its soft power.

The United States has passed the so-called Cloud Act, a law that allows US authorities access to data stored on servers of companies located abroad but subject to US jurisdiction. Brazilian authorities have not yet perceived the geopolitical and economic risks arising from the US Cloud Act. Despite the name, international data traffic is predominantly done through undersea cable networks in the oceans. Computational capability is collecting, storing, processing, and transferring data. In the geopolitical and economic realms, the country with greater control over its data and digital infrastructure has greater political and economic control over its economy and even influence over other countries.

 Cloud computing produces billions of dollars in business, helping streamline businesses, financial capital, and logistics. Therefore, digital infrastructure capability can improve the business environment globally. The so-called Cloud Computation is a complex system integrated by a network of computers, software, data centers, and undersea cable networks, among other elements. There is now infrastructure as a service, software as a service, and platform as a service, among others. It is necessary to differentiate cloud computing services provided to governments from those offered to enterprises. There are also distinctions between private, public, and hybrid clouds.

In cloud computing for governments, especially in defense and national intelligence, there are usually stricter requirements for cybersecurity due to sensitive data on the networks. This geopolitical and economic dispute extends to international technical cyber security standards. In the layers of cybersecurity, you need to analyze data security, application security, data hosting security, and network security. Thus, one must assess the company’s reliability and check whether it follows international cybersecurity standards when selecting a cloud computing provider and whether it offers an infrastructure with resilience to cyber-attacks. As for standards, abusive policies in setting technical cybersecurity standards that exclude international competition must be avoided.

There are many business applications with cloud computing: industry, smart cities (smart operations centers for urban management), power grid management, public lighting grid management, digital government in the cloud, water supply system management, smart environmental protection, smart refrigeration systems, transport and logistics, audiovisual media (film production and broadcasting), smart ports, mining, oil and gas, and others. For example, several filmmakers and actors located in different countries will be able to make films and animations jointly. Recently, a technology company offered the experience of forming a virtual orchestra with the participation of musicians in several different countries. In the ports area, cloud computing applications make it possible to reduce costs by formatting routes and schedules for loading and unloading containers as well as ships.

There is a project in the financial sector to build the future generation of financial infrastructure called the “Bank of Things.” It is a partnership between Huawei and SPD Bank. The focus is on leveraging the internet of things for the financial sector, especially in credit risk analysis. There are BoT (bank of things) opportunities for the so-called fintechs. The goal is to create applications based on 5G technology and the Internet of Things to develop twins of things (duplicate objects). The goal is to monetize the assets, starting with connectivity. Thus, one takes advantage of digital payment systems and data resulting therefrom.[2] For example, car and driver data will be used for insurance risk analysis in smart cars. As for smart homes, residents’ data will be used for consumer potential, credit analysis, and commercial advertising. The entire digital economy depends on cloud computing systems, which is essential for digital transformation. 5G technology in mobile telecommunications networks and the Internet of Things will lead to an exponential demand for cloud computing services. Artificial intelligence and big data tools will contribute significantly to hyper-scale data processing (videos, text, images, etc.). Mathematical models are applied to cloud computing systems with the capacity to process billions of pieces of data in real-time.

In this context, scientific research for the development of new medications that used to take years will now have results in months. There will be more data traffic, hence the need for reinforced cybersecurity. The United States relies on Big Techs in cloud computing such as Amazon, Microsoft, Google, Oracle, IBM, SalesForce, Dropbox, and others. These companies offer cloud computing services in Brazil for private companies and governments. Courts of Justice in Brazil have been hiring foreign companies for cloud computing services, and[3] Brazilian business groups have procured cloud computing services from foreign companies.

The Central Bank of Brazil has a resolution authorizing procuring cloud computing services with data storage abroad.[4] China has Alibaba, Tencent, and Huawei. The European Union has no global competitor in cloud computing. Hence, its public policy encourages the development of cloud computing infrastructure by European companies. The European Union has programs to strengthen its cyber sovereignty, focusing on developing cloud computing infrastructures. The geopolitical dispute is extended to the power to access data on servers located abroad, which makes it possible to extend the extraterritorial application of US jurisdiction. 

In that line, the United States has passed the Cloud Act (Clarifying Lawful Overseas Use of Data), which is a law that allows US authorities to access data stored by service providers on servers located in other countries. The United States Congress has a bill on data access, transparency, and accountability called the “Setting an American Framework to Ensure Data Access, Transparency and Accountability Act” or the “Safe Data Act.” Regulation of the subject is incipient. The European Union is the most advanced on the subject, having passed the Cybersecurity Act and the proposal for data governance regulation. The European Union Agency for Cybersecurity (ENISA), for example, has cloud security recommendations for healthcare service providers.[5] It has another recommendation for cloud computing security and resiliency for governments.[6] There is a recommendation for cybersecurity standards for hospitals. In the United States, Executive Order no. 13984 from January 2021 deals with malicious cyber-attacks against cloud computing infrastructures. According to that act, the National Security Agency must assess the cybersecurity risks in providing cloud technologies and infrastructure to the government. After that, the Trade Department began requiring cloud computing infrastructure service providers to verify the foreign identity of service providers, as well as certification and compliance rules.

The United States has passed specific regulations for the procurement of cloud computing services by the government and federal agencies. China has passed the Data Security Law that ensures protections for critical information infrastructure (information services, energy, transportation, water conservation, finance, utilities, e-government), requirements for international data transfer, data export control rules, compliance for data providers, trading platforms, data consumers, and rules for data center location in Chinese territory. It should be noted that, although there are common rules for cybersecurity, depending on the industry’s uniqueness, there is a demand for more specific rules. Thus, there are peculiarities in the financial, energy, nuclear, defense, and health sectors, among others. As for cyber risks, there are some risk-sharing practices between the cloud computing and service provider and the customer. In cloud computing contracts, there should be maximum transparency about cyber risks and information about the clauses for updating cyber security services on devices, networks, and equipment.

Insurance contracts must have clear and precise clauses about contractual coverage regarding cyber risks. In addition, companies must develop geopolitical and geoeconomic risk matrices. In the near future, there may be discussions about competition in the cloud computing market, especially about economic concentration.[7] Data confidentiality, availability, and integrity are essential in cloud computing. There is also the concern with the environmental sustainability of data centers as they are large energy consumers. In this respect, cloud computing services should follow the principle of energy efficiency. In Brazil, there is no proper cybersecurity regulation in cloud computing services. Brazil lacks a general law for cybersecurity. Currently, the topic is only addressed as self-regulation by private companies. In short, cloud computing infrastructures and services will shape the digital economy. The country that best invests in cloud computing infrastructure will have greater international competitiveness and computing power. Brazil has an interesting geostrategic profile to attract investments in cloud computing and become a global and regional player in this sector.  

**All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Consultant in Regulatory Communications Law. Ph.D. in Law from the University of São Paulo (USP). Author of the book Jogo geopolítico entre Estados Unidos e China no 5G: impacto no Brasil.” (The Geopolitical Game between the United States and China regarding 5G: Impact on Brazil), Amazon, 2020 e 2021. Author of the book Geopolítica das Comunicações, 2nd edition, revised and updated, Amazon, 2022.


[1]As in Cyber capabilities and National Power: a net assessment. The International Institute for Strategic Studies – IISS.

[2] Huawei and SPDBANK, Bank of Things White paper. Next-Generation financial infrastructure, 2020.

[3] This is the case, for example, with the São Paulo Court of Justice, which has procured Microsoft’s cloud computing services.

[4]  Central Bank of Brazil, Ordinance n. 3,909, dated August 16, 2018, provides on the cybersecurity policy and on requirements for procuring data processing and storage and cloud computing services to be observed by payment institutions authorized to operate by BACEN.

[5]See: European Union Agency for Cybersecurity. Cloud Security for healthcare services, January, 2021.

[6]See: European Network and information security agency. Security & Resilience in governmental clouds, making an informed decision, January, 2011.

[7] Geer, Dan, Jardine, Erics and Leverett, Eireann. On Market Concentration and Cybersecurity Risk, Journal of Cyber Policy, 2020, vol. 5, n. 1, 9-29, Routledge – Taylor & Francis Group.

Crédito de Imagem: FIA

Categories
Articles

Tech Diplomacy. Capacity building of Countries’ Foreign Policy in the Field of Cyber and Technology

Technologies have taken a central role in several countries. For this reason, some countries are innovating their foreign policy concerning new technologies. Some steps are being taken to adapt diplomacy to technological issues.

The first step is appointing ambassadors with expertise in technologies and digital or cyber issues.

Second is creating a specialized technology affairs team or office for foreign policy management.

Third, designing a foreign policy strategy focused on technologies. In the context of the new geopolitical era, some insights are necessary: the anticipation of situational awareness to stay ahead of technological changes and their impact on international dynamics, the coordination of political positions to reduce complexity in domestic and foreign policy, a clear strategic vision with the definition of priorities, values, and interests. 

In the face of the speed of technological change, there are challenges to matching this speed of technological evolution with leadership, legislation aligned to the decision-making process, and leadership in maximizing technological opportunities. Cyber diplomacy requires collaboration between governments and the private sector. Microsoft, for example, has established a permanent office at the United Nations. The intensity of the dispute for political, economic, and technological leadership among countries has created new areas of geopolitical conflict. Impactful topics such as the rare materials and semiconductor global supply chain are part of this competition. Another topic on the international agenda is the norms and standards of new technologies.

The global internet architecture is the subject of dispute between countries. Therefore, the integration of new technology issues in foreign policy requires some capabilities: maintaining situational awareness about the state of technological change and its impact on international dynamics; coordinating positions effectively in domestic policy and foreign policy for better alignment between technology policy to reduce complexity; having a clear strategy to direct technology policy; and establishing priorities, values, and interests. Some countries have already incorporated measures to integrate new technologies into their foreign policy: diplomats, teams, and strategies. Tech diplomats have the following areas of responsibility: domestic policy advice to ensure that thinking, policy, and regulation conform to major international trends and priorities; domestic and international policy coordination and alignment in multilateral, minilateral, and bilateral forums; policy and strategy creation, leading or contributing domestically and internationally. Some examples of countries with tech ambassadors (ambassadors with expertise in technology) are Denmark, China, the UK, the US, France, Germany, Austria, and Australia. Denmark has a tech ambassador for engagement with tech companies with offices in Copenhagen, San Francisco, and Beijing. The UK has appointed a general consul with business experience to represent British interests in San Francisco, home to major technology companies. China has a network of over one hundred and forty (140) specialized diplomats to identify and support the acquisition of emerging technology companies. The United States has established the Office of the Coordinator for Cyber Issues, with a global network of over one hundred and fifty (150) cyber policy officers.

For example, the US government created the US Bureau of Cyberspace and Digital Policy, which has an ambassador for critical emerging technologies. In this context, it is recommended that technology companies have a geopolitical policy with transparency and clear and precise rules on how to act in crises, with experts in geopolitical and security conflicts, international law, and human rights. It is also recommended that companies have a geopolitical crisis committee. Another recommendation is the international participation of technology companies in geopolitical decision centers such as the United Nations. Another suggestion is establishing a committee for setting self-regulatory practices.[1] France has a digital team of over thirty (30) people to deal with the Minister for Europe and Foreign Affairs, the National Agency for Information Security, and the Ministry of Economy and Finance. Germany has an International Cyber Policy Coordination Staff with seven permanent members. India’s Ministry of External Affairs has a foreign policy dedicated to technologies; however, it has not adopted other measures such as appointing an ambassador dedicated to the topic and/or designing the foreign policy strategy in the technological domain. 

The UNIDIR Cyber Policy Portal presents the scenario of the countries’ cyber defense public policies.[2] Brazil can take advantage of these lessons. Diplomacy capacity-building in the cyber domain and new technologies is essential in the geopolitical, geoeconomic, geocultural, and geodefense context. The global competitiveness scenario requires Brazil to adopt a new foreign policy committed to technological and cybernetic issues. New technologies have a significant influence on governments, markets, and society. There are several issues on the international agenda that Brazil needs to be engaged in and present its position on internet architecture, cyber security, intellectual property, data protection, digital connectivity, internet accessibility, technical standards for equipment, internet of things, artificial intelligence, 5G, 6G protection of critical national infrastructures, intelligence and disinformation operations on networks, espionage, among other relevant topics. This is why Brazil must have cyber and cultural diplomacy at its service.

Itamaraty has much to contribute to advancing diplomatic services in the face of new technologies. Several international organizations must address technological issues: United Nations, International Telecommunications Organization, ICANN, International Electrotechnical Commission, and ISO, among others. Brazil’s participation in international organizations to debate technological and technical issues is essential for its technological, economic, social, and cultural development.

All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Consultant in Regulatory Communications Law. Ph.D. in Law from the University of São Paulo (USP). Author of the book 5G Communications Geopolitical Game: United States, China, and the Impact on Brazil, Amazon, 2020. Author of the book Geopolitics of Communications, Amazon, 2021.


[1] Disrupters and defenders. What the Ukraine War has taught us about the power of global tech companies. Tony Blair Institute.

[2] Erzse, Akos and Garson, Melanie. A Leader’s guide to building a tech forward foreing policy. Tony Blair Institute for Global Change, march 25, 2022.

Crédito de Imagem: Blog iPleadrs

Categories
Articles

Arbitration between Huawei and Sweden Over the Exclusion of 5G Investments

In January 2022, Huawei filed a request for international arbitration against the government of Sweden before the World Bank’s Arbitration Chamber – the International Centre for Settlement of Investment Disputes (ICSID) for the protection of its 5G technology investments in the Swedish market, valued at more than 520 million euros. Here is a summary to better understand the case: Sweden’s communications regulatory agency (Swedish Post and Telecom Agency) has banned the supply of 5G network technology by the company Huawei.

The decision was adopted on the occasion of the 3,400-3,720 Mhz frequency band auction. The Agency decided that Huawei equipment used in telecommunications networks’ core functions must be removed by January 1, 2025. In light of this, Huawei filed an appeal with the Swedish Administrative Court, but it was unsuccessful. It should be noted that this Swedish decision was influenced by the lawfare practices adopted by the US government against Huawei.

In 2022, Huawei took the case to the World Bank’s Arbitration Chamber –  International Centre for Settlement of Investment Disputes (ICSID). In its request for international arbitration, Huawei alleged the reasons discussed below: Huawei has contributed to Sweden’s economy for 20 years. The Swedish authorities have adopted discriminatory treatment of Huawei’s investments made in Sweden through its subsidiary Huawei Sweden. The decision to exclude Huawei from the Swedish market implies damages of an additional 520 million euros or 5.2 billion in Swedish currency.

The Swedish decision violates the international obligations arising from the investment agreement between Sweden and China (mutual protection agreement between Sweden and China). Huawei claims it has implemented all the required cybersecurity rules, achieving more than 270 global certifications. According to Huawei, Sweden’s decision to exclude Huawei from supplying 5G technology represents a drastic and unexpected change in the Swedish authorities’ position.

Swedish legislation (the Electronic Communications Act of 2003) grants the Telecommunications Agency the power to regulate telecommunications services. In 2020, this law was modified so that the telecommunications agency must consider the risks to the security of telecommunications networks in the licensing procedure. Thus, the telecommunications agency must consult security authorities and the armed forces when granting individual licenses that may pose national security risks. In this case, the telecommunications regulatory agency must consult the relevant authorities.

According to Huawei, the telecommunications regulatory agency acted contrary to legal requirements. On the other hand, the telecommunications agency is against the rule that determined the possibility of imposing different security conditions when granting individual licenses. The Agency’s final decision found that Huawei’s products pose security risks to Sweden. However, the Agency did not specify any threat by Huawei to Sweden’s national security.

With the exclusion of Huawei, Ericsson, the main competitor, now has a monopoly in the supply of 5G products and services. Despite this, Ericsson’s CEO stated that Sweden has deviated from the European Union’s guidelines regarding the security of 5G networks, which considers balancing legitimate national security concerns and free competition. And yet, the aforementioned Ericcson CEO stated his criticism of the European 5G networks’ cybersecurity legislation. Huawei claims in its petition that it relied on the right to protect its investment under the international agreement between Sweden and China.

Huawei tried to settle the dispute with Sweden through negotiations, unsuccessfully. Sweden has breached the international agreement with China. National security reasons are not present in the international investment agreement between Sweden and China. In the twenty years of Huawei’s operations in Sweden, there has never been a security incident. Sweden has violated its obligations under Article 2 (1) of the international agreement that guarantees fair and equitable treatment of Chinese investors in Sweden. Sweden has violated the parameter related to fair and equitable treatment because the telecommunications agency’s decision is: 1) arbitrary and discriminatory; 2) disproportionate; (3) is not transparent; (4) is contrary to the legitimate expectations of Huawei as an investor in Sweden; and (5) was made without guaranteeing Huawei’s right to the due process of law.

Under the China/Sweden agreement, no contracting state shall expropriate, nationalize, or take any other measures in respect of an investment made in its territory by an investor from another contracting state, except based on public interest, provided that there is due legal process and compensation. Thus, Sweden adopted measures that had the effect of expropriating Huawei’s investments without compensation. Therefore, one of Huawei’s requests is that the Swedish government compensate for the investment loss totaling approximately 520 million euros – 5.2 billion in Swedish currency.

Under the principle of full reparation, the loss of reputation due to the breach of the international treaty between Sweden and China must be considered. Huawei’s final requests in the arbitration proceedings are: for the Arbitration Panel to declare that Sweden has breached its obligations under the Sweden-China investment agreement; order Sweden to compensate Huawei for all damages and losses suffered as a result of Sweden’s breach of the Sweden-China investment agreement, to be quantified by Huawei in due course; order Sweden to pay all costs of arbitration, including Huawei’s legal costs and expenses; order Sweden to pay interest on the amounts mentioned above from the time of Sweden’s breach of the Sweden-China international agreement; and grant Huawei any other relief as the Panel deems appropriate.

Huawei reserves the right to raise other issues relating to the matters in dispute described in the request for arbitration or related to the parties, to amend and/or supplement the petition, and to seek interim measures before the Arbitration Panel. In short: the focus of the international arbitration request is to protect Huawei’s investment in the Swedish market for the supply of 5G telecommunications network equipment. It is an issue that affects international trade and the international investment protection regime.

As can be seen from this precedent, geopolitical and geo-economic reasons impact international trade and ultimately negate freedom of trade and freedom of investment. The lawfare practiced by the United States against the Chinese company influenced the Swedish government to adopt the ban on Huawei. Therefore, companies must consider geopolitical and geo-economic factors in their risk analysis and investment plans.

Ericson Scorsim is a lawyer and consultant in Communications Regulatory Law, with a focus on telecommunications and media infrastructures, with a Ph.D. in Law from USP (University of São Paulo), and author of the books  Jogo geopolítico das comunicações 5G – Estados Unidos, China e impacto sobre o Brasil” (The Geopolitical Game of 5G Communications – United States, China, and Impact on Brazil), Amazon 2020, and “Geopolítica das Comunicações” (Communications Geopolitics), Amazon 2021.

Categories
Articles

5G and the Metaverse

Much has been said in the media and social networks about the metaverse. There is no integrated reality yet; currently, there is only the future promise of building a digital ecosystem. It is a term spread by the company Meta, Facebook’s new name.

The company has forecast that the metaverse will advance within five (5) to ten (10) years.

Now, what exactly is the metaverse?

Experts understand that the metaverse is an ecosystem of digital infrastructure with the capacity to deliver various applications: augmented reality, virtual reality, extended reality, and hybrid reality, among others.[1]  In other words, it is an integral and advanced multidimensional digital interactivity system. 3D applications will be the basis of the metaverse. For example, the multimedia system in cars can display the travel routes with digital graphical data. Some other topics are intertwined with the metaverse: digital identities, digital objects, digital currencies, artificial intelligence, and interoperability of systems, among others.

There are expectations regarding creating a parallel reality, the reality of the physical and organic world, to create “doubles,” that is, the creation of avatars, a digital persona, something common in the games industry. Also, the metaverse will enable the advancement of the so-called Internet of Bodies (IoB) and the sensory/tactile internet. As an illustration, the experience with surgeries with robotics applications is an example of tactile internet. Some see the potential of non-local distance communication to empower “the sixth sense” in the future. It would be an expanded dimension of cognition through the assistance of computer technology, something that quantum physics can explain. Computer vision and hearing, and 3D will be vital in this mission of integral cognition. There is the possibility of building virtual cities to simulate the urban management of a city. The metaverse will disrupt various business models; however, it will also allow for the design of new business models. The metaverse has potential for industries such as financial, advertising, healthcare (e.g., telemedicine), education (e.g., online learning), entertainment, automotive, gaming, smart cities, tourism, and others. There are examples of creating and marketing “digital filters” (a kind of augmented reality) as a new market. According to data from the company Meta, there are more than 700 (seven hundred) million digital filters. The company Nissan has 5G-based projects together with the telecommunications company Verizon in the United States to use applications of the metaverse in vehicle technology. This technology enables interaction between the driver, the car, and the internal, external, and virtual environment. There are projections of avatars representing, for example, pedestrians crossing city streets.

There is also a system connecting the car to the cloud computing system. From the data in the cloud, it is possible to have full “sensing” of the environment through which the vehicle circulates (omni-sensing cloud), a kind of situational awareness. This data visualization allows for the verification of traffic congestion, accidents, and accident risk prevention. It is a kind of cognitive assistance for the driver by visualizing scenarios.[2]  There is plenty of disruptive potential for the labor market, merging in-person work with virtual work. For example, videoconferencing will be better with the metaverse. Virtual reality glasses are one of the devices used for this digital immersion experience. Spatial audio applications, usually used in games, will be common in the metaverse.[3] At the base of the metaverse are the blockchain system and NFT (non-fungible tokens).

These two technologies serve as the digital representation of assets, goods, or physical objects. This is why they contribute to the trading of digital goods. Now, the metaverse ecosystem will depend on fifth generation (5G) communications networks and sixth-generation networks. These 5G and 6G networks will be the backbone of the metaverse’s operation. Therefore, investments in advanced digital connectivity are needed to reap the metaverse’s full potential. It is clear that there are opportunities in the metaverse, but there are also risks and challenges.

The first challenge is the common definition of the metaverse and the interoperability standards between systems and protocols. In summary, the economic agents in the market will dispute the definition of the metaverse’s technical standards.[4] T

he second challenge is the construction of a regulatory environment that promotes technological innovations but, at the same time, guarantees the fundamental rights to privacy, intimacy, data protection, and security, among others.

The third challenge is monetizing the metaverse applications. There are sensitive topics such as the protection of children and adolescents in this virtual environment and vulnerable audiences. Scientific studies have pointed to the increase in mental health problems due to the immoderate use of technologies. There are still challenges in “educating” the market (economic agents) as to the perception of the impact of the metaverse. Who knows if we will have a metaverse for the political realm in the future, for improving democratic institutions, quality of public services, a better quality of political agents, and political education and culture in Brazil! Digital connectivity in 5G is the foundation of communications network infrastructure for metaverse deployment.

** All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson M. Scorsim. Lawyer and Consultant in Regulatory Communications Law. Doctor in Law from USP. Author of the book Geopolitical game between United States and China on 5G technology: impact in Brazil, Amazon.


[1] Future Today Institute. Tech Trends Report, 2022.

[2] Invisible-to-visible visualizes real and virtual world information through augmented reality to create the ultimate connected-car experience for drivers and passengers. Nissan Motor Corporation.

[3] Murphy, David and Neff, Flaitri Neff. Spatial Sound for computer games and virtual reality.

[4] Yan, Yu and Korbert, Charlotte. Shaping the technology roadmap of virtual reality (VR) and augmented reality (AR). Challenges and standardization needs. IEEE Digital Senses, 26/5/2017.

Crédito de Imagem: Agenzia YES

Categories
Articles

5G Technology and the Standard Essential Patents. The Regulatory Policy of the US Department of Justice

The US Department of Justice is studying a new regulatory policy for Standard Essential Patents.[1] The issue has implications for fifth generation (5G) communications network technology.

This analysis is made in the context of the United States’ quest to maintain its technological leadership and ability to produce technological innovations and its competitiveness worldwide. It should be noted that there is a US law on global leadership and competitiveness, including parts to ensure the Open-Ran (Radio Access Network) system in 5G network technology, the requirement of interoperability between equipment, products, and services of 5G equipment suppliers. It should be noted that the issue of standard essential patents has come to the fore with 5G technology. Paradoxically, the United States is not a leader in 5G technology; there is no US company leading in this sector globally. In contrast, China is a global leader. Huawei is a leading 5G technology supplier and a 5G standard essential patents leader. That is why there is a trade war between the United States and China on the topic of 5G. Huawei has been hit by this trade war, as it has been excluded from the US market. The United States is failing to beat the competition in 5G technology.

In light of this, the US government decided to ban Huawei, citing national security as the reason for preventing a competitor from remaining in the US market. According to the official text from the Justice Department, the US government is committed to a competitive bidding system and intellectual property. The intention here is to verify whether the sanctions applicable to infringement cases of standard essential patents are subject to the licensing commitment procedure, which demands good-faith negotiation. Usually, the licensing of patents must be non-discriminatory, fair, and reasonable. According to the text, the good-faith negotiation system promotes technological innovation, better choices for consumers, and enhanced industrial competitiveness.

The patent protection system promotes innovation and economic growth by encouraging inventors to apply their knowledge, take risks, and invest in research and development. However, there are risks with patent owners’ strategies to gain improper benefits in licensing negotiations, which can cause multiple harms, including increased costs for royalty payments and delayed introduction of new products and services.

The owner can exclude other competitors from making new inventions. The voluntary consensus on standard essential patent adopted by Standards Developing Organizations plays a vital role in the economy. Interoperability standards in product design allow for products manufactured by many different firms, including small and medium-sized entities, to function together and create innovative technologies that benefit consumers. However, applying interoperability standards to technologies covered by intellectual property rights is a complex issue. Many Standards Developing Organizations adopt intellectual property rights protection policies that allow for patent licensing in connection with standardized technologies and encourage participation in the development process by both patent holders and implementers. These policies may require participants to accept to make available licenses to their technology licenses according to non-discriminatory and reasonable practices.

According to the official text, promoting interoperability across a wide range of products makes it possible to create cheaper products for consumers. Promoting efficient patent licensing contributes to reducing litigation risks and costs, enabling good-faith negotiation between intellectual property owners and licensees.

Efficient intellectual property negotiations on essential standards will improve standardization efforts, supporting competitiveness and innovation. Negotiation is encouraged through the use of alternative dispute resolution mechanisms.

In short: geopolitical and geo-economic issues may create risks for standard essential patents owners regarding 5G and their respective business models. There are sticking points between the interests of the patent owners and the companies interested in licensing the patented products. Market solutions are being promoted to address the problem of licensing and essential patents. But, as noted, the US government has adopted regulatory practices to encourage an open-Ran and non-discriminatory negotiation system on reasonable terms. Usually, the patent owner has made billion-dollar investments in research and development to produce technological innovations. Logically, they are interested in the greater protection of their intellectual property rights.

On the other hand, other companies are interested in accessing the technology by licensing that patent. Therefore, the best strategic option is self-regulation by the market. However, governments should exceptionally intervene to ensure that conflicting economic interests are weighed in licensing standard essential patents in 5G network technology.

All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson M. Scorsim. Lawyer and Consultant in Regulatory Communications Law. Ph.D. in Law from the University of São Paulo (USP). Author of the book Geopolitical game between United States and China on 5G technology: impact in Brazil Author of the book Geopolitics of Communications, Amazon.


[1] United States. Patent and Trademark Office (USPTO). Draft policy statement of licensing negotiations and remedies for standards-essential patents subject to voluntary F/Rand Commitments, December 6, 2021.

Crédito de Imagem: FIA – Fundação Instituto de Administração

Categories
Articles

New Chinese Anti-Foreign Sanctions Law enacted within the scenario of trade wars

China approved a law designed to limit foreign sanctions, called the Anti-Foreign Sanctions Law. It is their response to the trade war begun by the United States. China has been the target of restrictions in foreign trade, especially through measures taken by other countries in relation to Chinese exports and imports. The U.S. government has a list of restrictions on Chinese companies in a variety of industries; there is control over technology exports, especially regarding access to microchips, which are vital components in a variety of industries: automobiles, telecommunications, computers, and others.

The goal of the U.S. chip export control policy is to maintain the current status quo of Chinese dependency on these basic inputs. Without chip export control, China would gain substantial market share in several markets, increasing its advantage in international competitiveness.[1] Under Chinese law, if any country violates international law and the basic principles of international law, restrains or suppresses Chinese interests, justifying their actions by a variety of pretexts and their own laws, and adopts discriminatory and restrictive measures against Chinese citizens or organizations or interferes in Chinese internal matters, the Chinese government will have the right to take the corresponding countermeasures. The targets of China’s countermeasures can be people or organizations. Among these measures are: the refusal to grant and/or invalidation of visas in passports, banning entry into China and deportation; sale, seizure or freeze of personal property, real estate and/or other types of property in China, prohibitions or restrictions on organizations or people inside Chinese territory in regard to certain transactions, cooperation, and/or other activities, and other additional measures.

These rules seek to restrict the unjustified application of legislation in an extraterritorial manner (blocking rules). The Chinese Ministry of Trade is authorized by the law to impose orders to not comply with foreign extraterritorial sanctions. Furthermore, the Ministry of Trade will prepare the export control list (Unreliable List).  Based on this Chinese legislation, there are evidently geopolitical and geoeconomic risks for countries that export to China. If a country unilaterally levies any sanction that causes harm to China’s interests, it may face retaliation against its exports. As can be seen, this law is a form of self-defense by China against unilateral sanctions imposed by other governments. It is China flexing its geopolitical and geoeconomic power against hostile actions by other countries.

Therefore, it is important for global companies with activities on different continents to analyze the geopolitical and geoeconomic risk presented by this new Chinese law, including evaluation of the risks brought by new public policies in countries that are hostile to China. As a result, there are practical situations that merit attention. Initially, the Brazilian government gave indications that it was aligned with the position of the United States. The U.S. government even put pressure on the Brazilian government to exclude the Chinese company Huawei’s 5G technology. The 5G bid notice for the commercial network of mobile communications does not seem to contain any restrictions against participation by this Chinese company. However, there is a mention of a possible restriction against participation by the Chinese government in supplying technology for the Brazilian federal government’s own communication network.

Now, it is important that the Brazilian government and companies evaluate the geopolitical and geoeconomic risks in their relations with China, especially in light of the new Chinese Anti-Foreign Sanctions Law. Brazil is one of China’s main commercial partners, with exports of soy, ore, petroleum, and other commodities. Therefore, if there is any type of hostile act against China, there is a risk that sanctions will be levied by the Chinese government, with retaliation against Brazilian exports. Geopolitical and geoeconomic risk analysis needs to be done in order to correctly assess the intentions, interests, actions, and threats by governments, as well as to determine their extent. After all, any and all models of global business are subject to geopolitical and geoeconomic influence, even more so within the context of the dispute for technological leadership between the United States and China.

 *All rights reserved, may not be copied or used without citation of the source.

Ericson Scorsim. Attorney and Consultor in Regulatory Communications Law. PhD in Law from USP. Author of the Book: Jogo Geopolítico das Comunicações 5G: Estados Unidos, China e o Impacto no Brasil, Amazon, 2020


[1] See: Khan, Saif and Flynn, Carrick. Maintaining China’s dependence on democracies for advanced computer chips. Global China. Assessing China’s Growing Role in the World. Edited by Tarun Chhabra, Rush Doshi, Ryan Hass, Emillei Kimball, Washington, Brooking Institution Press, 2021, p. 193-208.

Categories
Articles

Opportunities for Brazil in BRICS in Technologies and Digital Connectivity

Brazil is part of the BRICS group: Brazil, Russia, India, China, and South Africa. There are opportunities in this geostrategic partnership.

At the 2021 meeting, some interesting points were set.[1] In the field of the digital economy, there are recommendations for strengthening the digital infrastructure to favor cooperation and the promotion of new technologies that facilitate access to digital products and services.

Another recommendation is to digitalize the health sector through exchange programs in digital medical technologies among BRICS countries. In addition, it is recommended to strengthen the adoption of the smart factory with the exchange of best practices. Moreover, best practice exchange programs are encouraged, with sharing of experiences and collaboration on digital skills.

There are incentives to promote the development of digital trade platforms, with integration for small and medium-sized enterprises’ participation in exploring new markets. There are guidelines for the promotion of infrastructure financing and the exchange of best practices between countries. There are incentives for monetization of assets for investment in infrastructure construction and product and technology exchange among BRICS member countries to favor exports. There is the goal of improving logistics and transport and, respectively, connectivity with a focus on developing digital frameworks and interface for international logistics.

There is the intention of cooperation in the management of cities and urban infrastructure in the post-covid scenario. Another goal is developing green infrastructure and promoting sustainability best practices to attract investments in sustainable infrastructure. The creation of common platforms and a BRICS network is encouraged to facilitate the exchange of best practices and experiences in precision technology for sustainable agriculture and intelligent management of climate change. Another goal is to facilitate the exchange of information regarding digital platforms for farms and precision agriculture.

There is also the objective to explore regional corridors for Agritech innovations. The creation of an agroforestry forum is also sought. The objective is to create favorable conditions for the expansion of agricultural trade among the BRICS countries. There are considerations on strengthening supply chain resilience. Another goal is the promotion of the digital economy and tools to support trade between countries. There are programs for strengthening micro, small, and medium enterprises to strengthen development. Another topic is the establishment of mutual recognition agreements in authorized economic operator programs.

In the context of the digital economy, the sharing of experiences, best practices, and collaboration is sought for artificial intelligence in governance efficiency. There is the goal of strengthening digital infrastructure and cooperation for the promotion of new technologies and access to digital products and services, especially in 4G, 5G, artificial intelligence, robotics, internet of things, 3D printing, augmented reality, nanotechnology, biotechnology, quantum computing, among others. There is an intention to promote digitalization in the health and medical sector and exchange programs to develop digital technologies applied to health (local and global) among the BRICS countries. There is a demand for best practices exchanges in the smart factory segment, with systems connected by sensors. There are programs for the exchange of digital skills, with training in infrastructure and connectivity.

Another objective is to promote the development of local digital trade platforms and facilitate the integration of micro, small, and medium enterprises to explore new markets. Another theme in financial services is cooperation in financial technology (FINTECH) among BRICS countries. The sharing of experiences with digital technology is desired for the adoption of security and compliance parameters. Another aspect is the promotion of intellectual property financing through harmonization and adoption of evaluation methodology. As for medical equipment, there are incentives to create an environment for strengthening trade between the BRICS countries. There are several opportunities for Brazil. First, the expansion of its digital infrastructure in telecommunications networks and, respectively, the expansion of connectivity on a large scale, with the contribution of BRICS technology providers. Second, the expansion of Brazilian foreign trade through global digital platforms. Third, cooperation on cybersecurity issues, taking advantage of Russia’s and China’s experience. Fourth, the exchange of best practices on precision farming issues. Fifth, the robotization of factories, especially with Chinese technology. Sixth, the renewal of medical-hospital equipment through the import of technologies from BRICS countries. Seventh, the strengthening of the defense capacity of submarine cable networks, taking advantage of Russia’s and China’s expertise. Eight, there is the export of subsea oil and natural gas exploration technology from Brazil to BRICS countries.

Finally, there are opportunities in the scope of remote sensing services, a specialized niche strategic for agriculture, maritime transport, and air navigation, among other segments.

*All rights reserved. This article must not be reproduced or used without mentioning the source.

Ericson Scorsim. Lawyer and Consultant in Regulatory Communications Law. Ph.D. in Law from the University of São Paulo (USP). Author of the book “Jogo geopolítico das comunicações 5G – Estados Unidos, China e impacto sobre o Brasil” (The Geopolitical Game of 5G Communications – United States, China, and Impact on Brazil).


[1] BRICS. Business Council. Brics Business Council Annual Report. Intra-BRICS Cooperation for continuity consolidation and consensus. India, 2021.