Project Title

Workshop on Implementing the APEC Online Dispute Resolution (ODR) Collaborative Framework 

Project Year

2020   

Project Number

EC 02 2020A 

Project Session

Session 1   

Project Type

Standard 

Project Status

Project in Implementation   
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Project No.

EC 02 2020A 

Project Title

Workshop on Implementing the APEC Online Dispute Resolution (ODR) Collaborative Framework 

Project Status

Project in Implementation 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: Renewed APEC Agenda on Structural Reform (RAASR) 

Project Year

2020 

Project Session

Session 1 

APEC Funding

150,000 

Co-funding Amount

32,000 

Total Project Value

182,000 

Sponsoring Forum

Economic Committee (EC) 

Topics

Structural Reform 

Committee

Economic Committee (EC) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Japan 

Co-Sponsoring Economies

Chile; China; Hong Kong, China; Indonesia; Papua New Guinea; Russia; Chinese Taipei; United States; Viet Nam 

Expected Start Date

01/08/2020 

Expected Completion Date

31/05/2021 

Project Proponent Name 1

Hiroki Habuka 

Job Title 1

Information Economy Division, Commerce and Information 

Organization 1

Ministry of Economy, Trade and Industry 

Postal Address 1

Not Applicable 

Telephone 1

(81-3) 35010397 

Fax 1

Not Applicable 

Email 1

habuka-hiroki@meti.go.jp 

Project Proponent Name 2

Yoshihisa Hayakawa 

Job Title 2

Professor 

Organization 2

Rikkyo University 

Postal Address 2

Not Applicable 

Telephone 2

(81) 9078030058 

Fax 2

Not Applicable 

Email 2

haya@rikkyo.ac.jp                      

Declaration

Hiroki Habuka and Yoshihisa Hayakawa 

Project Summary

The workshop provides the means to implement the APEC Collaborative Framework for Online Dispute Resolution (ODR) of Cross-Border B2B Disputes (the “Framework”) and the ODR Model Procedural Rules (“Procedural Rules”), which were endorsed by the EC at Puerto Varas, Chile in August 2019. The Workshop will: 1) provide economies an opportunity to learn about and consider “opting in” to the Framework; 2) encourage ODR providers, including regional arbitration and mediation centers, to partner with the EC by agreeing to follow the Framework and Procedural Rules (and get listed on the APEC EC webpage); 3) encourage businesses (including MSMEs) to consider settling their disputes by using ODR and the listed ODR providers; 4) seek support from the academic community, including in the oversight of ODR providers as provided in the Framework; and 5) discuss administrative issues arising from implementation of the Framework. The workshop will also assist APEC member economies in building the capacity to use ODR for dispute resolution in both the private and public sectors including courts. The Workshop is the logical next step building on the work of earlier APEC workshops and EC policy dialogues on ODR. The results of the Workshop will be reviewed at EC1 (or EC 2) in 2021.

Relevance

Relevance – Region: Micro-, small-, and medium-sized enterprises (MSMEs) in APEC account for 97% of businesses and employ over half of the workforce. Yet they account for only 35% or less of direct exports.[1] Expansion into international markets is crucial for MSMEs’ continued growth and APEC economies’ well-being. As the EC and the Strengthening the Economic and Legal Infrastructure FotC (SELI) have recognized, MSMEs face significant hurdles to access justice in cross border transactions. A recent APEC Business Advisory Council (ABAC) survey of small businesses found lack of dispute resolution to be the major reason why small businesses abandon cross-border trade. It is a "major" or "severe" problem for 58% of respondents. In emerging economies, that number rose to 74%.[2] Studies show that the vast majority of disputes concern payment. Small businesses are particularly vulnerable to late payments because their cash flow and credit lines are limited.

The Economic Committee endorsed the Framework and the Procedural Rules “on a pilot basis, which will be subject to review by EC at the end of a five year period” at EC 2 in August 2019. The Framework is designed to promote confidence among businesses by providing quick electronic resolution and enforcement of disputes across borders, languages, and different legal jurisdictions.  It is intended to provide MSMEs an opportunity to compete and flourish in the global supply chain. It also promotes inclusivity, good regional business relationships and entrepreneurship by women.[3]

At EC 1 in Putrajaya, Malaysia in February 2020, economies strongly supported organizing a workshop to further discuss ODR and administrative details as outlined in the SELI work plan for implementation of the Framework.[4]  Five member economies -- China, Hong Kong, China, Japan, Singapore and the US – have already opted-in to the Framework with several more actively considering joining.[5] This workshop will bring all economies and stakeholders together to coordinate and smooth the path for implementation of the Framework and is urgently needed. At EC 1 2020, economies also supported a follow-up policy dialogue on ODR after this workshop to consider and approve any recommendations.

The unprecedented shutdown of courts across APEC in response to the coronavirus and restrictions on travel and personal interactions have worsened access to justice issues. While APEC ODR was designed to help small businesses navigate the global stage, it is also invaluable for resolving disputes when face-to-face meetings or physical hearings are neither encouraged nor allowed.[6] The Workshop will consider how courts in APEC economies can shift to ODR to provide access to justice during pandemics. 

Relevance – Eligibility and Fund Priorities: The proposal is linked directly to the 2020 APEC Funding Criteria (promoting regional economic integration) because it contributes to the implementation of structural reforms under RAASR, including strengthening the economic and legal infrastructure (SELI), improving Ease of Doing Business (EoDB) (enforcing contracts), and integrating MSMEs into the global economy. In this regard, China, Indonesia, Chinese Taipei and Viet Nam identified EoDB enforcing contracts as a priority area of improvement in their IAPs.  Chile, Japan, the Philippines, Russia, and Thailand also stressed the importance of improving ease of doing business.  ODR is an important component for EoDB enforcing contracts in cross-border disputes.

This Workshop directly addresses the structural reform priority areas of “more open, well-functioning, transparent and competitive markets” and “deeper participation in those markets by all segments of society including MSMEs, women.…” As pointed out in the 2019 APEC Economic Policy Report: “Many MSMEs are reluctant to engage in international trade out of fear of the high costs of litigation in case of a dispute. Current arbitration systems are also too costly and time-consuming, hence inappropriate for small value disputes. [The ODR Collaborative Framework] is an example of harnessing digital tools to help MSMEs access global opportunities, thereby promoting inclusion.”[7] Moreover, ODR provides women-led MSMEs with greater access to justice and markets.[8]

This Workshop is also line with the 2018 High-Level Structural Reform Officials’ Meeting objective of implementing the Framework as a key structural reform priority.

Relevance – Capacity Building: APEC Doing Business 2020 indicators shows that it takes on average 440 days to resolve a simple contract dispute involving an MSME in a domestic APEC court at a cost of 37 percent of the value of the claim.[9] The problems are worse in cross-border disputes because courts are too tied to geography, jurisdiction and in person enforcement. Even if special courts were created, or systems were made more efficient, the costs of local counsel and travel plus issues of culture and language can be prohibitive for MSMEs transacting online with foreign companies. Under one recent survey, 97 percent of the respondents reported that in person arbitration was the preferred method of resolving disputes in cross-border trade. But, cost and lack of speed were cited as the biggest drawback to international arbitration.[10]  In fact traditional arbitration is often too expensive and slow for MSMEs.  In an earlier survey, nearly three-fourths of respondents favored simplified procedures for claims under $500,000.[11]   As the UN General Assembly has recognized, ODR “can assist the parties in resolving disputes in a simple, fast, flexible, and secure manner, without the need for physical presence at a meeting or hearing.”[12]  In every context in which ODR has been implemented, it has consistently proven to reduce both the time and cost for resolving disputes. 

By facilitating implementation of ODR in APEC, this Workshop will help build capacity for viable dispute resolution for MSMEs when no workable legal recourse presently exists. 

Surveys have shown that small enterprises tend to work without clear contracts and dispute resolution clauses, which makes them vulnerable in case of disputes.[13]  As discussed in SELI and the EC, use of ODR will promote a culture of contract-based relationships. In turn, it will help make transactions more efficient, drive down risk and make MSMEs more competitive by lowering cost. A contract-based system utilizing ODR is expected to result in tangible economic advantages for everyone in the supply chain. The Workshop will consider how to promote a culture of contract and get businesses involved in the Framework.

The Workshop will also address how courts in APEC economies can effectively utilize ODR in response to the COVID-19 pandemic.  Some economies in APEC have already moved courts to ODR. The Workshop will address questions such as how to build ODR that is effective in courts and what disclosure and ground rules need to be established before setting up an ODR process in courts.



[1] APEC, Small and Medium Enterprises, available at https://www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-Technical-Cooperation/Working-Groups/Small-and-Medium-Enterprises.  

[2] ABAC & University of Southern California, Realizing the Untapped Potential of MSMEs in APEC, at 6, 40 (2018), available at http://info.marshall.usc.edu/academic/gpp/abac/SiteAssets/ABAC%202018%20Final%20Report.pdf (APEC interviews with 560 business executives and trade association leaders plus 430 survey responses).

[3] The endorsed text is available at http://mddb.apec.org/Documents/2019/SOM/CSOM/19_csom_012anxb.pdf.

See APEC Secretariat, How APEC Helps Small Businesses Go Global, 29 August 2019, available at https://www.apec.org/Press/Features/2019/0830_EC.

[4] Report by the Chair of the Economic Committee on EC 1 2020. 

[5] Dr. James Ding, Structural Reform, Going Digital, and COVID-19, 7 May 2020, available at https://www.apec.org/Press/Blogs/2020/0506_COVID.

[6] Id.

[7] 2019 APEC Economic Policy Report, Structural Reform and the Digital Economy, December 2019, at 92, available at https://www.apec.org/Publications/2019/11/2019-APEC-Economic-Policy-Report. 

[8] See ABAC & University of Southern California, Realizing the Untapped Potential of MSMEs in APEC, supra at 85 (“ODR provides a less gender biased and faster method of resolving disputes, enabling [women] to avoid direct conflict and get back to business.”).

[9] World Bank, Doing Business 2020, Regional Profile, Asia-Pacific Economic Cooperation (APEC) at 54-55 https://www.doingbusiness.org/content/dam/doingBusiness/media/Profiles/Regional/DB2020/APEC.pdf.

[10]  Queen Mary University of London and White & Case, 2018 International Arbitration Survey at 2, https://www.whitecase.com/sites/whitecase/files/files/download/publications/qmul-international-arbitration-survey-2018-19.pdf.

[11] Queen Mary University of London and White & Case, 2015 International Arbitration Survey, at 26, https://www.whitecase.com/publications/insight/2015-international-arbitration-survey-improvements-and-innovations.

[12] GA Resolution 71/138, UNCITRAL Technical Notes on Online Dispute Resolution, December 13, 2016.

[13] Ecorys, Study on the Use of Alternative Dispute Resolution for Business to Business Disputes in the European Union, (2012) at 111.

Objectives

The central objective as outlined in the Concept Note is to assist in the implementation of the Framework including by:

(1) providing member economies with an opportunity to learn about the Framework and get prepared to opt-in;

(2) offering ODR providers, including regional arbitration and mediation centers, an opportunity to partner with the APEC EC by agreeing to follow the Framework and Procedural Rules (so that they may be listed on the APEC EC webpage);

(3) working with participating member economies and ABAC to promote the Framework and encourage member economy businesses (including MSMEs) to consider settling their disputes by ODR and/by using the listed ODR providers;

(4) develop an Administrative Implementation Work Plan including leveraging private sector and academic community support for assisting SELI in the implementation of the Framework and oversight of ODR providers; and

(5) building the capacity of APEC member economies including through private lawyers to use ODR for dispute resolution in both private and public fora (including courts).

Alignment

Alignment - APEC:  The Workshop follows the APEC Structural Reform Ministerial Joint Statement (2015), highlighting that: "the development of international legal instruments and their adoption will create a more conducive climate for cross-border trade and investment, thus facilitating economic growth.  Use of these instruments provides greater legal certainty in cross-border transactions, harmonization of finance and dispute resolution systems, closer economic and legal integration among cooperating economies, and the simplification of procedures involved in international transactions."  In addition, the project will follow the 2014 APEC Joint Ministerial Statement directive “to build awareness of private international law instruments to facilitate cross-border trade and investment, enhance ease of doing business, and foster effective enforcement of contracts and efficient settlement of business disputes” and respond to the call by Ministers to promote a wider use of such instruments to contribute to APEC’s regional integration, connectivity and structural reform agenda. In September 2019, the APEC SME Ministers supported “the development, on a pilot basis, of the APEC Collaborative Framework for Online Dispute Resolution of Cross-Border Business-to-Business Disputes, which will provide a cost-effective and efficient platform to resolve low-value cross-border disputes.”[1] 

Alignment – Forum: The Workshop will provide the means to implement the Framework which was endorsed by the EC in August of 2019 and the SELI ODR Work Plan which was endorsed by the EC in March of 2017.



[1] Available at https://www.apec.org/Meeting-Papers/Sectoral-Ministerial-Meetings/Small-and-Medium-Enterprise/2019_sme, para. 14.

TILF/ASF Justification

Not Applicable.

Beneficiaries and Outputs

Outputs: The project will implement a two-day workshop which will be held in January 2021 in Tokyo, Japan. The workshop will seek to implement the Framework. 

1. Draft Administrative Implementation Work Plan for the Framework (“Administrative Implementation Work Plan”)

a. Select and contract consultant to create a draft Administrative Implementation Work Plan (August-September 2020) – includes ToR, APEC Secretariat approvals and issuing of $19,500 contract.

b. POs review the draft Administrative Implementation Work Plan to be presented at the Workshop. 

2.  2-day Workshop January 2021, Tokyo, Japan)

a.  80 participants (including 22 travel-eligible, plus 10 speakers and contractor):

i.  POs will invite relevant policymakers and government officials responsible for the design and implementation of ODR reforms in member economies. Relevant agencies will include Ministries of Justice, Economy, and Economic Planning.

ii.  POs will invite experts from other APEC fora (e.g., ABAC, SMEWG, ECSG, GOS, TELWG).

iii. POs will invite experts from the private sector and academia as well as private online dispute resolution providers and regional arbitration and mediation centers interested in partnering with APEC on an ODR pilot program.

iv. POs will also invite key experts from relevant international institutions such as UNCITRAL.

b.  Workshop Plan:

i.  Address administrative details and issues arising from the implementation of the Framework through draft Administrative Implementation Work Plan for subsequent review by SELI and the EC.

ii.   Give ODR providers, including regional arbitration and mediation centers, an opportunity to partner with the APEC EC by agreeing to follow the Framework and Procedural Rules (and get listed on the APEC EC webpage).

iii.   Provide capacity building advice for economies considering opting-in to the Framework as well as for economies’ use of ODR for domestic dispute resolution including in the courts.

iv.  Present ODR platforms that have been implemented at a regional level (including through private sector ODR providers) and by economies (including through the courts).

v.  Advise participating economies on how to promote the Framework and encourage businesses (including MSMEs) to consider settling their disputes by ODR using the listed ODR providers. POs will solicit ABAC’s and academic institutions’ assistance. The Work Plan will recommend future events such as workshops in participating economies to promote the Framework.

vi.  Consider how to encourage further harmonization of the relevant laws for an ODR legal framework using existing international instruments (consistent with the Framework and SELI work plan).  At the request of participating economies, the POs may ask the contractor to review member economy implementation of private international law instruments relevant to ODR. 

3.   Summary Report of Workshop (10-15 pages) will be presented to SELI and the EC on 1 April 2021.

a.  Summary of discussions and presentations, participant recommendations and conclusions and draft Administrative Implementation Work Plan.  The report may also include a discussion of the use of artificial intelligence in ODR, use of ODR for business to consumer (B2B) disputes (currently the Framework is limited to B2B disputes) as well as use of ODR in the private and public sectors (for example, courts).

b.  Circulation for endorsement in February 2021 (within 30 days of Workshop date).

Outcomes: 

1.  The Workshop will provide economies knowledge of the benefits of ODR and the Framework and encourage more of them to “opt in” to the Framework.

2.  ODR providers including regional arbitration and mediation centers partner with the APEC EC by agreeing to follow the Framework and Procedural Rules and provide their own platforms. 

a.  Under the Framework, the EC seeks to partner with platform host/ODR providers willing to provide their own platform (rather than having APEC build and manage a new standalone platform).  NOTE: As the UNCITRAL ODR Technical Notes recognize, in order to offer ODR as a turnkey solution, a common technological platform must be established.[1] The platform provides the framework that allows the parties to resolve the dispute electronically.  All communications in ODR proceedings should take place via the ODR platform.

3.  Academic institutions attending the workshop will agree to support SELI in implementing the Framework including through oversight of ODR providers as provided in the Framework and the Administrative Implementation Work Plan. 

4.  Member economies will use the knowledge gained at the Workshop to encourage their businesses (including MSMEs) to agree to settle their disputes by ODR and/by using the listed ODR providers as provided in the Framework. 

5.  Member economies will use the knowledge gained about ODR to implement ODR in their public sector (including courts).

a. Use of ODR in APEC member economy courts greatly decreases the time and cost of litigation.

b. Use of ODR during the pandemic provides access to justice as many courts have closed.    

Beneficiaries: Immediate beneficiaries of this project will be the member economies and key industry stakeholders/partners.  Member economies are welcomed to nominate relevant government officials responsible for the design and implementation of dispute resolution systems including ODR.  POs would seek recommendations on the participation of key private sector stakeholders/partners such as regional arbitration centers and businesses from economies, SELI and ABAC.  The selection criteria would be as inclusive as possible. 

Long-term beneficiaries will be the MSMEs in APEC economies who will be able to increase their economic participation and reduce business risks through use of ODR. 

a.   Use of ODR by MSMEs engaged in cross-border disputes could save APEC MSMEs billions of dollars. Studies show that in one region, over one-fourth of MSMEs were involved in B2B disputes over a three-year period, with the average value of the dispute being $50,000. Additionally, as many as 35% of these disputes remain unresolved with the cost of unresolved disputes estimated to be 2.8% of their turnover.[2] 

b.   Reducing the number of unresolved disputes through implementation of ODR would also increase the liquidity and sustainability of MSMEs.  Studies show that the vast majority of small business B2B disputes are about payments.[3]  MSMEs are particularly vulnerable to late payments as their cash flow and credit lines are far more restricted than those of larger companies with 55 percent of small businesses facing liquidity problems.[4]  As the World Bank has found, speedy disputes resolution is “essential for small enterprises, which may lack the resources to stay in business while awaiting the outcome of a long court dispute.”[5]   If the outstanding payment is small, it is too expensive to go to court or use in person arbitration. 

Implementation of ODR also has the potential to help improve customer relationships and therefore client retention for small businesses.  A significant cost that MSMEs face as a result of unresolved disputes is loss of market through damaged client relationships.  This is especially important for micro and small businesses because they have fewer clients.


[1] UNCITRAL ODR Technical Notes, para 26 (2016).

[2] Ecorys, Study on the use of Alternative Dispute Resolution for Business to Business disputes in the European Union, supra at 6, 123, 125; DG Enterprise and Industry, Business Disputes Keep Businesses from Doing Business, at 4.

[3] Study on the use of Alternative Dispute Resolution for Business to Business disputes, supra, at 124; Business Disputes Keep Businesses from Doing Business, supra, at 5. (Finding in EU that “71% of the disputes of small enterprises and 44% of medium-sized enterprises are concerned with payments.”).

[4] Ecorys, Study on the Use of Alternative Dispute Resolution for Business to Business Disputes in the European Union, supra, at 12. 

[5] World Bank, Doing Business 2017, Regional Profile, Asia-Pacific Economic Cooperation (APEC) at 215.

Dissemination

The workshop materials including agendas and presentations will be distributed to the participants electronically and will be made available through the APEC website (Meeting Document Database). The POs will also publish a detailed summary report of the workshop including participant recommendations and conclusions and the Administrative Implementation Work Plan for review by the EC. The recommendations may include plans for future workshops in participating economies to promote the Framework to MSMEs and build on the SELI plan for administrative implementation of the Framework.  The Workshop report, including recommendations and conclusions, will be presented at EC 1 in 2021 for consideration and approval by SELI and the EC. 

The target audience for the detailed summary report of the workshop includes member economies, SELI, and the Economic Committee.  This report of the workshop is intended to be an official APEC publication. 

There is no intention to sell outputs arising from this project.

Gender

POs will work to ensure that both female and male speakers and participants have equal opportunities to attend and actively participate in the workshop. POs will try to identify and invite relevant speakers, both men and women, as far in advance as possible and will send invitations to economies with enough time for them to consider the most suitable participants. In the invitation, POs will encourage economies to consider gender balance in their nominations and will pay attention to the nominations received from economies. POs will include gender information in the sign-in sheets as well as in the evaluations of the workshop to measure the percentage of women participants. Considering previous workshops on similar topics, PO’s would try to achieve at least 35% women participants and speaker/experts. 

In terms of the overall project objectives, ODR has an important role in providing increased access to justice and markets for women led MSMEs.  See note 8 supra and accompanying text.  The project may include a session in the workshop addressing the issues particularly relevant to women.  POs may also include a question in the post-event survey to measure how well gender issues were addressed.

Work Plan

The project will implement a two-day workshop that will seek to build on and implement the APEC ODR Collaborative Framework, consistent with the SELI ODR Work Plan.  The workshop will take place in Tokyo, Japan in January 2021.  Key steps include:              

Timeline

Key task

Deliverables

August 2020

POs will work to develop the draft agenda for the workshop, identify relevant experts and speakers, and send speakers invitations

Final agenda for the workshop; Complete list of experts and speakers; Invitations to speakers

August-October 2020

POs will select and contract with consultant; review administrative implementation plan produced by consultant

TOR and Consultant contract; draft administrative implementation plan.

September 2020

Circulate the invitation and nomination forms for the workshop to APEC economies through the Economic Committee; circulate the draft administration implementation plan to APEC economies through SELI

Invitation; nominations forms; and information note for participants

September 2020

Book venue make accommodation and administrative arrangements. The workshop could be shifted to July 2021 or a virtual format with 4 months’ advance notice 

Details of Venue and Accommodations

October 2020

(one per calendar year)

Submit APEC Project Monitoring Report: Provide Secretariat with update on status of Project

APEC Project Monitoring Report

January

2021  

Implement a two-day workshop in Tokyo Japan

Implementation of the workshop

March 2021

Provide Secretariat with update on status of Project

 Monitoring Report

April 2021

Drafting of report, Submission to Secretariat for review, Finalization and Endorsement by SELI and the Economic Committee Plenary 

Summary Report of Workshop including Administrative Implementation Work Plan

May 2021 

Prepare and send a draft APEC Project Completion Report to the APEC Secretariat for review.  After review by the APEC Secretariat, it will be sent to the EC for comments and endorsement.

APEC Project Completion Report

May 2022  (12 months after Project completion)

Participation in the Long-Term Evaluation of APEC Projects conducted by APEC Secretariat

Evaluation Forms

Risks

The timing of the event may be affected by COVID-19.  To address this concern, the POs have moved back the proposed time of the workshop to January 2021.  If necessary, the event could be further postponed to July 2021 or take place in a virtual format. 

In the case of the workshop itself, the risks relate to getting good quality speakers as well as relevant participants from all member economies, regional arbitration and mediation centers and ABAC. POs plan to manage this risk by carefully designing the agenda of the workshop and identifying relevant experts well in advance. In addition, POs will circulate the invitation to economies as early as possible and provide information of the desired profile of participants to guide economies in the nomination process. Another risk for the workshop is with regards to possible delays in the development and collection of workshop materials and inputs, including presentations from speakers. For this issue, POs will work closely with speakers to ensure timely submission of their presentations so that the necessary information and analysis is available by the time of the event. 

Another risk involving the implementation of the Framework concerns the willingness of regional arbitration and mediation centers to partner with APEC in developing and funding the ODR platform(s).  So far, none of the current ODR provider initiatives has provided a solution for MSMEs in cross-border commercial transactions.  There seem to be a number of reasons: (1) the number of businesses offering ODR has been limited in light of the expenses associated with building a secure ODR platform; (2) the mechanisms have been limited given that lower-value disputes involving MSMEs may not be thought to generate enough revenue to be viable; and (3) the ODR mechanisms are often restricted to the particular business or region in which they are implemented. To mitigate this risk, POs will work with member economies to cast as wide a net as possible and to explain the market potential for interested regional arbitration and mediation centers.  Several ODR providers have already expressed a willingness to partner with APEC on the ODR Collaborative Framework. 

The Workshop will also address the risk that a sufficient number of economy businesses (including MSMEs) may not decide to resolve their cross-border B2B disputes by ODR using the listed ODR providers. As noted above, surveys have shown that small enterprises tend to work without clear contracts and dispute resolution clauses, which makes them vulnerable in case of disputes.  POs intend to invite ABAC, academic institutions, ODR providers, and the private sector to develop a plan for capacity building of MSMEs that would encourage business/MSME to use contracts and dispute resolution clauses with ODR. 

Yet another risk is finding a sufficient number of online mediators and arbitrators who would be willing to resolve cases for a fee commensurate with the amount in dispute (which will generally be substantially lower in the case of MSMEs).  Studies show that currently arbitrators charge up to $1200 per hour for in-person arbitration.  APEC member economies would likely need to assist regional arbitration and mediation centers in locating arbitrators willing to work for a lower amount (e.g. recent graduates from law schools). To mitigate this risk, POs will reach out to academic institutions for possible assistance. APEC might also provide training to potential mediators and arbitrators. 

Finally, any recommendations developed at the Workshop for implementation of the Framework would be subject to agreement and approval by SELI and the Economic Committee at EC 1 in 2021.  To mitigate this risk, POs will prepare as detailed a report a possible and enlist the support of the contractor. The report will carry the weight of recommendations from stakeholders and world-renowned experts.

Monitoring and Evaluation

POs will regularly monitor the progress of the activities under this project and ensure milestones described in the timelines above are achieved. POs will provide an annual Monitoring Report and informal updates to the program director on a regular basis. 

POs will develop participant evaluation forms to collect participants’ feedback for this workshop at the start and end of the workshop. The evaluations will allow participants to assess the quality of the workshop on the substantive program, as well as on the organization and logistics. The evaluations will also try to gauge the level of knowledge gained by participants on key issues or topics covered during the workshop. Data disaggregated by gender will be collated to ensure that impacts on women are measured and monitored – this will include the number of participants as well as the number of technical experts engaged as speakers and experts. This information will be reported through the APEC process – via APEC Monitoring and Completion reports. 

The POs will use as indicator of gender participation, the percentage of participants who are women. The target for this indicator in this project will be 35%. 

After the Workshop, the POs will prepare a detailed report of the Workshop that will include Workshop recommendations and conclusions. The POs will work with the contractor and academic institutions to develop the administrative arrangements required to implement the Framework.  POs will work with SELI to provide a full list of ODR providers willing to partner with APEC on the Framework.  POs will also work with SELI, ABAC, and the private sector to coordinate future industry stakeholder use of the Framework. The Workshop recommendations will be considered for approval at EC 1 2021 by SELI and the Economic Committee. 

POs will use the following indicators to assess whether the project has met the project’s outputs:

1.  Number of participating economies (15);

2.  Number of participants (80) and number of participants from travel eligible economies (22);

3.  Number of speakers/moderators (12);

4.  Proportion of female participants and speakers (30%);

5.  Participant satisfaction regarding quality of workshop—substance, organization and logistics—as expressed in evaluation questionnaires (90% satisfactory);

6.  Results of ex-ante and ex-post survey of participant knowledge to assess knowledge gained on workshop key topics (targeted level of increase 30%); and

7.   Presentation to EC of a detailed summary report of the workshop with conclusions and recommendations (including an Administrative Implementation Work Plan for the Framework).

Linkages

In addition to the direct linkage to the EC RAASR, EoDB and structural reform, the EC ODR initiative/SELI ODR Work Plan calls for cross-APEC collaboration with e.g. ABAC, ECSG, SMEWG, GOS, TELWG.  POs will invite representatives from these fora and share information with them about the workshop and its outcome. Experts from relevant international organizations, such as UNCITRAL will also be invited to discuss best practices and experiences.  Further, the 24th Meeting of APEC Ministers Responsible for Trade Statement 2018 specifically notes the relevance of the EC ODR initiative to strengthening MSMEs’ Competitiveness and Internationalization in the Digital Age.[1]  The APEC SME Ministerial Statement 2019 further expressed support for the development of the APEC ODR Collaborative Framework, which they noted will provide a cost-effective and efficient platform to resolve low-value cross-border disputes (para. 14).

As explained supra (objectives, outputs, and outcomes) the Workshop seeks to address administrative details and issues arising from the implementation of the Framework thereby building on the earlier work done in the Economic Committee including EC 05 2018A (November 2018) which produced the initial draft of the ODR Collaborative Framework and Procedural Rules and the subsequent approval of the Framework and Procedural Rules by the EC in August 2019.  The Workshop will:  give ODR providers, including regional arbitration and mediation centers, an opportunity to partner with the APEC EC by agreeing to follow the Framework and Procedural Rules (and get listed on the APEC EC webpage); provide capacity building advice for economies considering opting-in to the Framework as well as for economies’ use of ODR for domestic dispute resolution including in the courts; advise participating economies on how to promote the Framework and encourage businesses (including MSMEs) to consider settling their disputes by ODR using the listed ODR providers; and consider how to encourage further harmonization of the relevant laws for an ODR legal framework using existing international instruments.  As discussed supra (project relevance), at EC 1 February 2020, economies strongly supported organizing a workshop to further discuss ODR and administrative details for implementation of the Framework.



[1]  Available at https://www.apec.org/Meeting-Papers/Sectoral-Ministerial-Meetings/Trade/2018_trade, para 42).

Sustainability

This project is part of the APEC initiative on the APEC ODR Collaborative Framework for Cross-Border B2B Disputes that was endorsed by the EC at EC2 in August of 2019.  The Workshop seeks to implement the Framework and support member economies by: providing an opportunity to learn about the Framework and opt-in; addressing administrative details concerning implementing the Framework including SELI collaboration with academic institutions in the Framework oversight and review; encouraging ODR providers including regional arbitration and mediation centers to partner with the APEC EC by agreeing to follow the Framework and  Procedural Rules; encouraging member economy businesses (including MSMEs) to consider settling their disputes by ODR using the listed ODR providers; leveraging private sector and academic community support; and building the capacity of APEC member economies including private lawyers to use ODR for dispute resolution in both private and public fora. 

POs will work with the contractor to develop the draft Administrative Implementation Work Plan for addressing administrative details and capacity building for MSMEs, consistent with the SELI workplan for implementation of the Framework.  The work plan may include a proposal for future workshops that would encourage business/MSME to use contracts and dispute resolution clauses with ODR.  POs will present the report of the workshop including the Work Plan to SELI and the EC. It is anticipated that the Economic Committee will host a policy dialogue to consider the results of the workshop.  One key element in assessing progress of the Framework implementation is the data that partnering ODR providers share, including the number of disputes resolved, the stage at which the disputes are resolved and whether the parties were satisfied with the process.  Academic institutions will help assemble the data and prepare an Annual Report on the Framework for SELI and the EC.  SELI and the EC will therefore be in a position to assess progress and determine next steps.

Project Overseers

Hiroki Habuka (Mr).   Hiroki Habuka is a senior attorney licensed in Japan and New York State, working for the Ministry of Economy, Trade and Industry, Japan (METI) as a Deputy Director of the Digital Economy Division. He is responsible for establishing a new regulatory framework for digital technologies, including ODR, AI, privacy protection, and data security. He is the Japanese representative to the APEC EC and has been a speaker at many APEC events involving the ODR Collaborative Framework.  He was a Project Overseer for the second APEC Workshop on Developing a Collaborative Framework for ODR in Osaka, Japan in May of 2019. Previously, he worked at the World Trade Organization, Japanese law firm Mori Hamada & Matsumoto, the Financial Services Agency, Japan, and McDermott Will & Emery in Paris. He received a master’s degree in International Economic Law, Business and Policy from Stanford Law School (LL.M., Fulbright Fellow), a Juris Doctor degree from University of Tokyo Law School, and a Bachelor of Arts degree from University of Tokyo, faculty of law.                                                     

Yoshihisa Hayakawa (Mr.) is a professor of law at Rikkyo University, Tokyo; a partner at Uryu & Itoga law firm, Tokyo; an international arbitrator; and the Japanese representative for several private international law negotiations including the UNCITRAL ODR Technical Notes. He is the Convener of SELI in the APEC EC.  He has served as a speaker at all of the EC policy dialogues and workshops on developing the APEC ODR Collaborative Framework since 2017.   He was a Project Overseer for the second APEC Workshop on Developing a Collaborative Framework for ODR in Osaka, Japan in May of 2019. He is the President of Japan National Committee of UIA, a member of the Commission on Arbitration and ADR of the ICC and a member of Users Council of Singapore International Arbitration Center.  He also teaches and conducts research at Columbia University, Cornell University, QM College University of London and the Australian National University.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

Not Applicable.

Waivers

Not Applicable.

Are there any supporting document attached?

No 
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Created at 23/08/2020 18:38  by Lucy Phua 
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