The Members of Indonesian Coalition for Economic Justice:
Indonesia for Global Justice (IGJ), Indonesia AIDS Coalition (IAC), Serikat Petani Indonesia (SPI), Solidaritas Perempuan (SP), Transnational Institute, Kesatuan Perjuangan Rakyat (KPR), Ekologi Maritim Indonesia (EKOMARIN), KIARA, Kaoem Telapak, Sahita Institute (HINTS), FIAN Indonesia
The Impacts Data Colonization in Digital Trade Chapter to the people
- Developing countries in the Global South, especially Indonesia, are still lagging behind in data protection and digital infrastructure. This situation creates a big opportunity for the Big Tech companies that seek profit from data extraction. Data extraction and control become tools for dominating information, knowledge, markets, and hegemony. This impact is not only economic but also extends to the life of society and the broad needs of the country. In the end, it perpetuates the Global South countries only as markets and supporters of the dominance of large technology companies that lead to global inequality.
- Trade agreements treat data as a commodity that is crucial and affects people’s lives. Data protection is left to each developing country and it creates risks from the weakness of regulations. The digital trade chapter in Indonesia-EU CEPA (Comprehensive Economic Partnership Agreement) provides broad and unlimited opportunities for cross-border data flows and gives big techs enjoy more freedom and protection. This freedom is reinforced by restrictions on the requirement to store data locally, process data locally, and protect the software (source code/algorithm) they use.
- The Indonesia-EU CEPA has several problematic clauses that give broad impacts to the people of Indonesia such as market liberalization through digital means, the threat to the freedom of cross-border data flows, data storage without legal protection, the secrecy of data processing through source code, and tax-free electronic transmissions. Below are four (4) impacts of digital trade provisions:
- First, the threats of cross-border data free flow. The flexibility of data flows also presents a massive opportunity for large-scale data extraction, which is extremely beneficial for Big Tech in shaping their business strategies and dominating economic activities through the digital economies of developing countries. Important and strategic data of nations and countries, which affect the livelihoods of many people, are controlled by a group of companies, leading to the colonization of data. The control of strategic data by Big Tech companies will only lead to development driven exclusively by corporate profits. Corporate hegemony will become even sharper, and the potential for economic failure in developing countries will become a continuous threat that exacerbates global inequalities.
- Second, Data storage without legal protection. The debate over data localization emerged from the lack of guarantees regarding data protection and access within the jurisdiction of a specific country. Many developing countries, which are technologically lagging behind, rely on digital and internet facilities located outside their jurisdiction without adequate data protection and access. Another important issue is the implementation of national laws or regulations that face challenges because the location of servers, where data is stored, falls outside the legal jurisdiction of the users. Consequently, if there is a violation or crime, the enforcement and legal sanctions are becoming challenging. The similar condition applies to the enforcement of national regulations or policies such as taxation and other provisions.
- Third, Secrecy in data processing through source code. The control over the source code used in digital services is an effort to protect the interests of society and the country, not merely limited to individual privacy protection. There should be rules or provisions that guarantee the prevention of data bias that violates human rights and theft of data, which ultimately harms society or the country. Source code has been protected under trade rules in the chapter on intellectual property rights and trade secrets. It should be removed to ensure the security of society. The lack of access and control over source code allows many things to be hidden, including violations and criminal activities, such as tax evasion, unfair competition, illegal data mining, espionage, and more.
- Fourth, Electronic transmission without tax collection. Electronic transmission and electronic transactions without tax collection will harm developing countries. Taxes on electronic transactions cannot be imposed due to the moratorium on electronic transmission in the WTO, which exempts tax collections. Some advanced countries are taking the initiative to make it permanent. This policy adopted in free trade agreements becomes a pressure point for developing countries. Neoliberal policies that reduce state revenues solely through taxes have resulted in low and weak sources of funds for development in developing countries. Furthermore, the loss of commercial electronic tax collections cannot be overlooked. Meanwhile, the majority of economic activities are shifting or already being conducted through digital means. The lack of tax collection from the digital transmission or digital transactions is leading to the drain of foreign exchange reserves from developing countries.
We need Global Data Governance and Not Trade Agreements
- The clauses of the Indonesia-EU CEPA indicate that the burden of data protection rules is placed on individual countries. There is no provision that guarantees protection for individuals and nations regarding the collection, processing and transmission of their data. Generally, developing and underdeveloped countries also lag behind in providing protection, in terms of anticipating the gap or lag between regulations and the capabilities of digital facilities. Moreover, considering the rapid development and highly adaptive nature of digital technology, both the Indonesian Personal Data Protection (PDP) law and the General Data Protection Regulation (GDPR) in the European Union are still inadequate in providing protection.
- The future will be shaped by rapid and comprehensive learning processes based on the collection of as much data as possible. Unrestricted, uncontrolled, and unselective data extraction only benefits large business groups or Big Tech. The development of Artificial Intelligence (AI), which increasingly determines business development and human behaviour is not just an economic issue but also a humanitarian one.
- Indonesia issued the Personal Data Protection (PDP) law. However, the law alone is not sufficient to provide adequate protection for the people because the focus of the law on personal data protection is not sufficient to protect other data that significantly impacts the lives of many. For example, aggregate data that has been anonymized in its collection and processing would be difficult to include in the PDP regulations. Personal data protection has not freed Indonesia from the threat of data colonialism.
- What is needed now is a rule that can limit the domination and monopoly of big tech companies over data. We need global data governance that provides protection for developing countries against the domination of big tech over economic control. And this cannot be regulated in a free trade agreement. In fact, this agreement is used by Big Techs to protect their interests with strong influence lobbies in the trade negotiating arena. The UNCTAD 2021 report has also emphasized that data movement governance arrangements in international agreements are not the right place because data cannot be equated with trade in goods and services.
- Therefore, the development of an international legal framework regarding global data governance must be discussed and agreed upon in an international institution that is more legitimate and binding on the state, and based on the principles of human rights protection and far from contesting data monopoly by big tech companies.
Point of Recommendations:
- Remove the digital and data privacy chapter from the Indonesia-EU CEPA as the instrument is not a suitable instrument to regulate data governance;
- Revoke the moratorium on electronic transmission in the WTO which exempts tax collections.
- An international legal framework regarding global data governance must be discussed in an appropriate and legitimate international institution based on the principles of protecting human rights.
- Public law on the right of data should be pushed to the governments and not only limited to individual data, but also to broader public data that has been controlled by the big tech companies.
- Developing an alternative digital infrastructure that is owned and controlled by the people is essential to show the sovereignty of data and using it in a collective way.
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For Further communication, please contact:
Olisias Gultom, Director of Sahita Institute: olisias@gmail.com
Rachmi Hertanti, Transnational Institute: r.hertanti@tni.org
