On June 13, the legislature added regulations governing free economic pilot zones to the roster for the extraordinary legislative session.
The same day, National Development Council Minister Kuan Chung-ming (管中閔) said that the opposition’s objections to the proposed pilot zones were entirely politically motivated, which we in the Greater Tainan government find profoundly regrettable. The central government’s consistent failure to listen to expert advice in the reviewing of such legislation is not in any way in the country’s best interests.
On May 28, we brought up 10 major queries about the draft bill during the joint legislative review, four of which I repeat here, for the public to deliberate.
First, of the 73 articles in the draft, a full 33 — almost half the total number — authorize executive government agencies to create additional legislation, and specify how this is to happen.
How are local governments supposed to respond to such an insubstantial and incomplete piece of legislation? How, indeed, are companies and the general public supposed to have any confidence in the draft? Kuan assures us that the articles in question merely deal with technical issues and details, while council Deputy Minister Chen Chien-liang (陳建良) has said that the clauses in question concern the enforcement of bylaws that can be implemented after they are announced in the legislature.
As for the authorization of other government agencies to add crucial, core elements of the regulations, legislators are trying to persuade us that this complies with the principle of legal certainty, while really they are just delegating their legislative responsibilities. This not only violates national sovereignty, it is also not the way things are done in a country run according to the democratic rule of law, and in fact runs counter to the principle of legal certainty.
According to a Council of Grand Justices interpretation, legislating on technical issues and details does not even require legal authorization, so what was the point in wasting all that time and effort including all those clauses on the whys and wherefores of how the legal authorization was to proceed?
Second, Article 73 of the draft clearly states that the regulations are to remain valid for 10 years. The question then is, what happens once those 10 years have expired? What are the companies in the pilot zones to do when all of the privileges, tax breaks and other benefits cease to exist? What is the sense of having local governments set up pilot zones with a shelf life of 10 years? Chen’s response to this — why are we discussing what happens when the pilot zones cease to exist when they have not even started yet? — is not a responsible answer. All it does is pass the buck to whoever is in government 10 years down the line.
The third issue is the concerns over the government’s announcement that seven ports — six sea ports and one airport — are also to be free economic zones, which means that there will be two sets of legislation and two supervisory government bodies in the same area: the Ministry of Transportation and Communications being responsible for the ports, the Ministry of Economic Affairs for the pilot zones. In the competition and cooperation between these two different types of zone, there are sure to be conflicts and confusion as to who is responsible for what, with one blaming the other when things go wrong.
These same concerns will also apply to all the current agricultural, industrial and science parks, as well as the goods-for-export processing zones, if they are allowed to be designated as free economic pilot zones, too. Implementing all of this will be an administrative nightmare.
Finally, the “shop in front, factory in the rear” virtual zones described in the draft will mean there is precious little distinction between how firms for which the more lax special regulations apply and those for which the normal regulations apply, almost to the extent that one company could be said to be operating within both systems.
Not only does this run counter to the regulatory principle of clearly differentiated treatment, it is also substantially different to how things are being done in overseas success stories like Singapore, or even the Shanghai free-trade zone. It is entirely predictable that this will only lead to confusion and, ultimately, failure.
The free economic pilot zone proposal is an import facet of Taiwan’s industrial policy promoting further liberalization and internationalization. The fact that the Greater Tainan government applied for designation as a free trade port and as a free economic pilot zone does not mean that we necessarily have to accept everything in the government’s draft regulations without question, or that we cannot express our concerns about any stipulations in the draft that make no sense.
Government policy is implemented through legislation, and so it is imperative that we engage in rational debate about how this legislation is formulated, to ensure that we end up with legislation that can truly be beneficial to Taiwan’s economic prospects. Whatever happens, we must not let the process descend into a game of politics in the run-up to elections, for if we do, it will be ordinary Taiwanese who suffer.
William Lai is the mayor of Greater Tainan.
Translated by Paul Cooper
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