📰 ‘Finalise body for Cauvery water sharing’
T.N. insists that the Supreme Court appointan authority
•The Tamil Nadu government insisted on Tuesday that the Supreme Court itself should finally appoint an authority and frame a scheme for sharing and management of Cauvery river waters among Tamil Nadu, Karnataka, Kerala and Puducherry, and not leave the responsibility to the Centre.
•Arguing before a Special Bench of Chief Justice of India Dipak Misra, Justices Amitava Roy and A.M. Khanwilkar, Tamil Nadu, represented by senior advocate Shekhar Naphade, said it has for the past 25 years had a frictional relationship with Karnataka over Cauvery, and had often to make the journey to the Supreme Court for release of water.
•The day-long hearing saw the court chide the Centre for not implementing the final award of the Cauvery Tribunal in 2007.
Centre questioned
•The court questioned the reluctance shown by the Centre to set up of the Cauvery Management Board and frame a scheme for implementation of the tribunal award despite it having been notified in 2013.
•“It was your responsibility to frame a scheme,” the court asked the Centre, appearing through Solicitor General Ranjit Kumar.
•Mr. Kumar said the Centre did set up the Cauvery River Water Authority and Supervisory Committee following the Supreme Court's direction. It had, in fact, been waiting for some clarifications on the tribunal award. Mr. Kumar submitted that the Centre had decided to wait till the Supreme Court took a final call on the tribunal award.
•But Chief Justice Misra responded that the Centre should not have let a vacuum prevail after the tribunal's award.
•Senior advocate Fali Nariman, for Karnataka, submitted that the Board or Authority should be headed by a former Supreme Court judge. While Mr. Kumar submitted that the tribunal award was not clear about water release during times of distress, Mr. Nariman differed to say there was no clarity in the award in times of surplus.
•Mr. Naphade objected to any fiddling with the monthly release of water as this would impact the State’s essential seasonal crops. Karnataka interjected to submit that there should not be any restriction on how it uses its share.
📰 India calls for a representative UN
Backs Donald Trump’s efforts to reform the world body, says it should keep pace with change
•India has extended support to efforts of U.S. President Donald Trump to reform the UN, saying it should include the expansion of the number of permanent and non-permanent members of the world body to keep pace with the changed times.
•During a discussion on UN reform on Monday, Mr. Trump insisted that he had always seen the “great potential” of the organisation, but warned that “bureaucracy” was stopping it from realising its potential.
•Once a harsh critic of the U.N., he called for reforms — a view India had been expressing for a long time.
•“We have said the world body should be reformed to keep pace with the changed times, including the expansion of its permanent or non-permanent members,” External Affairs Ministry spokesperson Raveesh Kumar said at a press conference here. “We have consistently maintained the same line,” he said.
•Mr. Kumar was referring to the high-level meeting on UN reforms chaired by Mr. Trump. External Affairs Minister Sushma Swaraj also attended the meeting. White House Press Secretary Sarah Sanders told presspersons that Mr. Trump supported the reform agenda of UN Secretary-General Antonio Guterres, and was pleased to join nearly 130 countries to support a big, bold reform to eliminate inefficiency.
•In his address, Mr. Guterres said, “We are reforming our peace and security architecture — to ensure we are stronger in prevention, more agile in mediation, and more effective and cost-effective in peacekeeping operations.
‘Fair globalisation’
•“We are reforming our development system to become much more field-focused, well-coordinated and accountable to better assist countries through the 2030 Agenda for Sustainable Development — our contribution to a fair globalisation.”
•“We need to bring decision-making closer to the people we serve; trust and empower managers; reform cumbersome and costly budgetary procedures; and eliminate duplicative structures,” he added.
📰 ‘New policy may help revive interest in coal bed methane’
‘OALP, HELP will increase investment in coal-rich India’
•India has the third-largest reserves of coal in the world. Therefore, the expectation is that there is also a high potential for coal bed methane (CBM), said Prashant Modi, CEO of Great Eastern Energy Corporation.
•The problem so far has been a lack of investor interest, which should now recover due to the new Open Acreage Licensing Policy (OALP) introduced by the government, he said in an interview.
•“Generally, the new policy of OALP and HELP (Hydrocarbon Exploration and Licensing Policy) should help,” Mr Modi said. “They have removed the cost recovery structure, which was a big headache. Revenue sharing is much cleaner and simpler. The other major issue that they cleared partially was of pricing and marketing freedom.” “Going forward, if it is market priced, people will invest,” Mr Modi added. “The legacy issues are over. The older fields are anyway depleting. November 15 is the first deadline for the expressions of interest, so let’s see. By end December, they will announce who will get what.”
‘No bidding’
•Mr. Modi said that there has not been a bidding round in CBM since 2010. “The DSF (discovered small fields) bids happened, but I don’t think any of them have progressed up to now,” he added. “From the information I have, many of them are already in the market for sale.”
•“There is a lot of coal in India — it has the third largest reserves in the world. So there is scope for CBM. And if the policy is right, then people will take the risk. There is enough CBM resource according to the government. The issue was that investment was not coming in.”
📰 U.S. defence firms want grip on technology in Make-in-India plan
•U.S. defence firms offering to set up production lines in India to win deals worth billions of dollars want stronger assurances they won’t have to part with proprietary technology, according to a business lobby group’s letter to India’s defence minister.
•These companies are also saying they shouldn’t be held liable for defects in products manufactured in collaboration with local partners under Prime Minister Narendra Modi’s Make-in-India’s drive to build a military industrial base.
•Lockheed Martin and Boeing are both bidding to supply combat jets to India’s military, which is running short of hundreds of aircraft as it retires Soviet-era MiG planes, and its own three-decade long effort to produce a domestic jet is hobbled by delays.
•Lockheed has offered to shift its F-16 production line to India from Fort Worth, Texas, and make it the sole factory worldwide if India orders at least 100 single-engine fighters.
•The U.S. firm has picked Tata Advanced Systems as its local partner under the defence ministry’s new Strategic Partnership model under which foreign original equipment manufacturers (OEMs) can hold up to a 49% stake in a joint venture with an Indian private firm which will hold the majority of shares.
•The US-India Business Council (USIBC) wrote to India’s defence minister last month seeking a guarantee that U.S. firms would retain control over sensitive technology - even as joint venture junior partners.
•“Control of proprietary technologies is a major consideration for all companies exploring public and private defence partnerships,” the business lobby, which represents 400 firms, said in the Aug. 3 letter, reviewed by Reuters and previously unreported.
•“To allow foreign OEMs to provide the most advanced technologies, the partnership arrangement between an Indian owned ‘strategic partner’ company and a foreign OEM needs to provide an opportunity for the foreign OEM to retain control over its proprietary technology,” it said, noting this wasn’t explicit in the policy document.
Technology transfer
•Technology transfer is at the heart of Mr. Modi’s drive to build a domestic industrial base and cut a reliance on imports that has made India the world’s biggest arms importer in recent years.
•Without full tech transfer in previous arms deals, India’s mainly state-run defence factories have largely been left to assemble knock-down kits even for tanks and aircraft produced under license from the foreign maker.
•Mr. Modi’s advisers have vowed to change that, insisting on transfer of technology so that critical military equipment are designed and manufactured in India.
•Benjamin Schwartz, USIBC’s director for defense and aerospace, said the new Indian policy offered a roadmap for establishing partnerships between U.S. and Indian companies, but it raised some questions for the firms.
•He said he was not in a position to name those companies concerned by the Indian policy, but there was a “general desire to see increased clarity” on several aspects, including the control of proprietary technologies.
•The USIBC also opposed a clause in the new rules that held foreign firms jointly responsible for the quality of the platforms provided to the military, saying legal liability is a significant factor in business decisions.
•“We recommend the MoD (Ministry of Defence) affirm that foreign OEMs will not be liable for defects outside their company’s control,” the USIBC said.
•Lockheed did not respond to a request for comment. Boeing, which is bidding for a separate contract to sell its F/A-18 Super Hornets for India’s aircraft carrier fleet, declined to comment on the USIBC letter. But the company’s India president, Pratyush Kumar, told a conference this month there were concerns about Indian private firms’ lack of experience in the aerospace sector.
•Only state-run Hindustan Aeronautics Ltd. had made planes under license, while some private players were starting from scratch, having never built even an aircraft component. Mr. Kumar said he could not find a single example worldwide of a private enterprise with limited experience building out a plane under transfer of technology.
•“Look at Turkey, look at Japan, look at Brazil — look at multiple countries. In all cases there is a fine balancing act of co-opting the capabilities of both public and private enterprise,” Mr. Kumar said at a conference organised by the Centre for Air Power Studies.
•India’s defence ministry offered no response to the concerns expressed by the lobbying group on the strategic partnership model, which will also apply to building submarines and helicopters as part of a $150 billion modernisation drive.
•But an official, referring to sensitive technology, said the Centre has made clear that foreign firms can be allowed to raise their stake beyond 49% if the technology they bring is state-of-the art.
📰 Targeting refugees
The Centre has revealed a disturbing intentto push the Rohingya back to a conflict zone
•The Union government’s position that it considers Rohingya refugees from Myanmar’s Rakhine state as a potential security threat is a disturbing attempt to paint the persecuted community in a poor light so that it could justify their deportation in future. While some degree of caution is necessary in dealing with any unusual flow of refugees from a conflict-hit region, the imputation of collective motivation to the Rohingya refugees in the country, estimated to number about 40,000, is heartless. The Centre’s affidavit in the Supreme Court contains self-serving arguments: that providing for refugees from out of the country’s limited resources would have an adverse impact on its citizens, as they would be deprived of their legitimate share in employment, housing, educational and medical facilities; that there is growing stridency in Rohingya militancy; and that Buddhist citizens face threat of violence from the refugees. Whether or not these assertions are based on facts, they disregard the wider context. Myanmar refuses to accept most Rohingya as its citizens, rendering them stateless, and hundreds of thousands have fled to Bangladesh in just the past few weeks. The intention to deport them by itself constitutes an unusual abandonment of humanitarian principles, as India has an exemplary record in taking care of refugees from many countries since Independence. India is not a signatory to the UN Convention on Refugees, 1951, but it has so far adhered to its normative standards. It has played host to refugees of all hues, and stood by the principle of non-refoulement, under which refugees cannot be forced to return to conditions of danger.
•Non-refoulement has now evolved into a peremptory norm that every country is expected to follow. The existing law on the subject as well as some judicial decisions do support the norm that deportation of illegal immigrants is a matter of executive policy. It is also true that the fundamental rights relating to movement and settlement within the country are available only to citizens, but it cannot be forgotten that the right to life and liberty under Article 21 is not confined to citizens, but anyone who has to face the rigours of law on Indian soil. As the Centre asserts, it does have a procedure to pass deportation orders, one that it believes is fair and reasonable. But when an entire class of people is identified for deportation and accused of plotting against the host country, it is unlikely that fairness can be assured in every case. India may have strategic and diplomatic reasons for backing the Myanmar position with regard to terrorism in the Rakhine region. However, that does not necessarily mean that it should cite vague fears about militants infiltrating the country under the guise of refugees, who happen to be Muslim, to deny safe haven to a largely stateless community.
📰 India needs to push for a new deal
It must reopen the discussion on balancing the global intellectual property system with development
•Global trade and intellectual property are at a crossroads. In a time when multilateral consensus is languishing on a large number of issues, the Trump administration is considering pulling the U.S. out of most free trade agreements on the ground that it needs a more favourable environment for its companies and its people. Much will be written about the carnage as far as jobs, wages and national sovereignty that the current American onslaught on trade deals brings to the fore. Here, I focus on a critical issue — how trade deals are becoming the new Trojan horse to ensure stronger patent protection and continued profits to global companies.
Problem with trade deals
•A bit about the historical trajectory of events. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) embodied an international regulatory regime for the first time, in 1995. Although it represented a major compromise for most developing countries, it was only the starting point for many other nations, which have since then promoted excessive protection of private investor interests through bilateral trade agreements, often at the expense of wider public interests. Corporate libertarians, riding high on increased market power, continue to lobby their governments for absolute protection of intellectual property (IP) rights of corporations.
•For the U.S. in particular, which has never made any qualms about the importance of its domestic corporate interests, trade agreements are a prime vehicle to supplant its strong domestic standards of IP protection in partner countries, in a bid to ensure the same level of privileges for its companies abroad. Over the past 20 years, the American strategy has been a neat one: to pursue bilateral agreements with individual countries one by one to ensure stronger IP protection across markets, by sidestepping the multilateral regime.
Gaming the system
•In an inter-connected and highly globalised world, what goes around comes around quite fast and often with drastic consequences for all. In this case, the crux of the matter lies in how these stronger rules are changing the global corporate landscape. For years now, while patent protection is getting stronger in all sectors in a large number of countries, the conditions for its grant are becoming greatly relaxed. Not only do such lax patenting requirements allow companies to claim patents more broadly — or consecutively, with little show of original effort as in the case of evergreening — but also patents can be claimed on all possible inventions (and discoveries) that are of relevance to the present, and even to the future. A large number of countries have already foregone many degrees of policy freedom by signing up to ‘TRIPS-Plus’ standards of protection. This, in conjunction with other trade measures, is disintegrating existing markets and rigging established rules of the game. A superstar firm today is not necessarily one with the greatest technological breakthroughs or the largest research and development labs, but surely is one that has a large IP portfolio, engages in extensive litigation on patent issues, and thrives on licensing revenues. Noting the gravity of the situation, The Economist in 2016 produced two short opinion pieces on how corporate profits and returns on capital are at near record levels in the U.S. and what might be wrong with it. It argued that established companies are “becoming more entrenched” in existing markets worldwide, and made the case that high profits may be a sign of a sickness rather than growth and called for reining in IP rights.
•At the global level, these sectors are stratified, with profits neatly split up between large corporations and new kinds of non-innovator firms that simply amass patents speculatively in upcoming, promising technologies for spurious returns. The non-innovator companies are the patriciates of the system: when they hit the technology jackpot, they control the market and have the power to shift wealth and control competition. An example that beautifully captures the situation is Qualcomm Inc., an American company that is the legal patent holder of thousands of patents that are considered critical to build mobile phones with wireless technologies, accounting for a total profit of $5.7 billion through intellectual property licences in 2016 alone.
Stemming the tide
•For India, the fate of its pharmaceutical and software sectors swings in the balance, and guaranteeing fair and unfettered competition will be critical to ensure that we do not lose more ground to global companies abroad and at home. The United Nations Conference on Trade and Development (UNCTAD)’s recent Trade and Development Report calls for stronger measures to protect domestic sectors against the undue domination of large companies, particularly in high-profit sectors such as pharmaceuticals, media and information and communications technology (ICT), where foreign companies still account for most of the transfer of profits across borders. Warning against trade deals that seek to protect the status quo, the report identifies patents as an instrument of unfair market power across markets. The report uses data for U.S. multinational companies (MNCs) and their foreign affiliates in India to show that patent reforms have led to significant increases in the rates of return to affiliates of American companies by enabling monopoly profits when compared to publicly listed and locally headquartered companies, which are increasingly being left behind. In the pharmaceutical sector, for example, the analysis that ranges 20 years (from 1996) shows that profits of domestic companies are in sharp decline since the late 2000s while those for the American MNC affiliates operating in the Indian market are rising steeply. A similar trend is visible in the ICTs sector as well.
•It is important to take these findings in the broader perspective of what India’s growth drivers will be in the years to come. Our high-technology sectors are already taking a beating because they operate in a volatile global environment. Supporting IP standards that simply follow a ‘winner takes all’ ideology without emphasis on technological advancement and competitive markets will be a regrettable mistake. What India needs right now is a clear and tough stance on intellectual property both in domestic policy and at the multilateral level. At home, support for innovation has to be accompanied with instruments that guard against the misuse of market power, coercive bargaining and aggressive merger and acquisition strategies if local firms should survive and flourish.
•Heated negotiations in the run-up to the upcoming WTO Ministerial Conference in Argentina already show that these issues will be central: there are ongoing attempts by big business to push for new rules in areas such as e-commerce to slice up profit-making opportunities of the future. Other proposals being made will largely limit the ability of governments to constrain corporate behaviour in the public interest even if they succeed partially. In such an international context, we need to stop soft-peddling on these issues in the pretence that we aspire to be a major IP player in the same vein as the U.S. What we need is a return to old-fashioned pragmatism that clearly shows the West that India recognises the fallacy of the current IP system and leads the way to broker a global new deal. This new deal should not only call for a return to business in the WTO by tackling the forgotten issues of the Doha Round but also firmly reopen the discussion on balancing the global IP system with development. That way, even if we don’t win in Argentina, we will have made an ambitious start in redefining the global trade and IP agenda.
