I read about yesterday’s conference on Benefit Corporation legislation.
That did generate some press. We’ll be on the record, and I’ll send you a transcript to edit for 10 days, and you can take out any part of it.
I assume I can edit freely.
That’s right, edit freely, like completely freely.
(laughter)
Completely rewrite history. It sounds like we’re in communist Russia or something.
That’s exactly right, but you can’t touch my part. It has to still make sense somehow. [laughs]
I probably should not edit your part.
Never mind, we’re good.
[laughs] How’s going for you?
I think we have a good gathering from all over the world. [laughs] It happened that we have a Italian lawyer here, and he study benefit corporation law.
That’s great.
He has been based in Milan and Taipei, so he can share his experience...
That’s awesome.
Now we have both European and US experience to share, so we got more knowledgeable. [laughs]
That’s awesome. There was two versions of benefit corporation law here...
...domestically, around different sort of responsibilities, accountability criteria, and things like that. There was some internal debate that actually surfaced. I think Chu Ping raised some differences between the two versions. I was very curious how’s your take on all this.
We do not yet know how the differences between the two versions are going to be resolved, do we?
The New Power Party’s version, I think they require...Professor Fang will come. He can explain that part. Basically, I think it’s a misunderstanding. New Power Party means they want if people didn’t get the benefit report disclosed, then there will be some...
Penalties?
...penalties, or something like that. Ping thought that the government will check the inside content to see whether it’s followed the rule or not. Ping is against that part. I think it’s a misunderstanding because later we explained, "Hey, New Power Party means they want people to disclose it, not have to have a government to check the content."
Even if it’s 10 blank A4 pages, that’s going to be OK for government? Because we’re not going to look into content...
Basically, government should not look into it.
If it’s 10 pages of comic sans, drawings or whatever...
That is problem, right?
[laughs] That’s the problem of that company?
If it’s entirely blank pages, that probably doesn’t work. It needs to be...
(laughter)
It need to have a lorem ipsum.
Right, like cartoons.
(laughter)
Cartoons would work.
Cartoons might work. You can actually do a report in cartoon fashion and say some substantive things.
For the record, I’m totally for cartoons.
(laughter)
I think it’s a good discussion.
It was a very good discussion. I don’t have a good feeling for how the politics is going to work out. That’s the real question. Of course, we are very interested in seeing it move along fairly quickly.
Of course.
We’ve got some real sense of urgency. We think that it would be good for Taiwan if Taiwan can be the first Pacific Rim country to do this, too.
Is it possible at all to implement this at a regulation level, before it gets to the Parliament?
I do not know enough about Taiwanese law.
It is continental law system, same as Germany.
A year ago, Ecuador proposed to do that. Ecuador actually wrote regulations that would be adopted by the superintendent of corporations in Ecuador. The lawyers that looked at it in Ecuador that we were working with said that they thought that that would be enforceable and would be an option.
They actually proposed regulations. They formally published regulations in Ecuador, and then the government changed. Now they’ve introduced legislation, so they’re not going to do regulations. If you could do regulation right away...
With 60 days of discussion, of course, but yeah.
Then the only question would be would it be recognized as enforceable and be something that would be binding that the companies could rely on if they used it?
That’s right. A few differences: Regulation cannot introduce, in a continental law system, new penalties that is not mandated by the law.
On the other hand, we did put in quite a few provisions in the Company Act for the disclosure of the company’s incorporation documents, like the charter, as well as the right of minority shareholders to propose things that are for the public benefit if that is somehow recognized by the company in the first place.
It all hinges on the disclosure of the intent. If we do publish a regulation that says, "Oh, by the way, if an organization’s charter include a specific reference to a kind of templated language, then it is subject to this, this, this effects," I think that would be enforceable.
That’s a very interesting idea. No one’s raised that issue in Taiwan before this morning. I think it would be preferable if we could get the legislation done.
Of course.
If we can’t, that’s an interesting alternative. Make a note. [laughs]
We should at least talk to Professor Fang.
Another possibility is the local policy level. Each city, each municipality can also make regulations or policies by its own. Of course, the drawback is that it may be fragmented, like every major city will introduce a different...
Slightly different.
...benefit corporation structure for the registered organizations.
I think it would be preferable, if we went this way, to try to do it at the national level. When you set up a corporation in Taiwan, do you do that through the central government? Do you file your papers...?
No, you file it through the local government.
Oh, OK.
You need to have a register address, like a physical address, in a municipality, city or county. The city or municipality government takes the application.
They actually file the documents?
Of course, the central registration database is in the Ministry of Economic Affairs. This actually is somewhat complicated now because you can also start a company online. When you file it online, then it’s actually directly to the MoEA, so it’s like...
It’s already centralized?
It’s different tracks, but the same database.
If a member of the public wants to get a copy of the documents for a corporation, they go to the Central Ministry or do they go to...
Depending on whether they’re a stakeholder. If they’re a stakeholder, they can legally go to either the MoEA or the local office and ask for a copy. If they’re not a stakeholder, they actually depend on the owner using a digital certificate to upload those documents to the MoEA website.
The public does not have access to all of the records of a corporation...
That’s right.
...without consent? That’s interesting. That’s different than the United States.
I understand that. By law, the company is required to publish quite a few things online, but the articles of incorporation is not part of it; that’s opt-in.
However, anyone can get a physical copy of that from the Ministry of Economic Affairs.
It’s interesting. Every country has their own system. [laughs]
That’s right.
I’m learning more and more about the...
We have a central database, right?
We have a central database.
We can check the company name.
You can do that in the central database, but you cannot get the copy of the document.
The founding documents is not available online by default.
Right.
No, it’s by voluntary disclosure.
I’m intrigued by the notion of regulations. We should investigate that.
Who would write those regulations? The ministry?
The Ministry of Economic Affairs, certainly.
They’re busy at the moment writing a report to Congress already on this.
That’s right, exactly. I’m kind of in charge of overseeing that effort.
(laughter)
Kind of?
You are?
Yeah, I am.
Apologies.
(laughter)
Of course, the Minister of Economic Affairs have to stamp that, but I’m in close collaboration with the staff, the three people who was there at the dinner yesterday, [laughs] trying to make it happen.
Oh, yeah. You have dinner last night.
That’s right.
(laughter)
You could actually write the regulations.
Regulation is within our purview, but legislation needs the MPs.
We definitely have to talk to Richard about this.
[laughs] He will come.
The legislation is entirely in the Parliament. Even if we present a draft bill, it will most likely get scheduled for the next year. It can’t be fast-tracked through the legislation this year.
How it will be called, 條例 or what’s the...?
As long as it’s enforceable, there’s no difference really. As we see recently, our draft bill for marriage equality to the legislation was a separate act because the referendum says that it cannot change the existing civil code.
We sent a new act for marriage equality that basically says, for a marriage relationship between same-sex individuals, see civil code, see civil code, see civil code for the rights and obligations. That’s the "Enforcement Act of Judicial Yuan Interpretation No. 748", nicknamed the hyperlink act...
(laughter)
We’re going digital right, so that’s your...
Exactly.
You’re at the center of everything digital.
It’s a technicality. Outside of the Company Act, we can still basically write anything that we would have written in the Company Act. It makes no difference. That’s, I think, what Dr. Chen Mei-ling point out yesterday.
We could always do regulation, and then...
Upgrade it?
...it could be replaced by legislation at some point.
Is it lasting? If the authority changed, that kind of government...
Regulation.
...regulation can be...
The same goes for laws. The real point is whether the public service is on our side. If the public service, in general, is on our side, then regulations tends to be very stable. Minister-level people can’t really change a regulation at will if the public service say, "Oh, our operation depends on it."
In the United States, what we would do is, if we replaced the regulation with legislation, we would grandfather companies that used the regulations. We would say that everyone that...
That registered.
...acted under the regulation is now deemed to be under the legislation.
Exactly.
It carries over seamlessly.
Exactly. It’s very tactical, but I think at least that proposal would generate some momentum within this year. Everybody knows very few brand-new legislation is going to pass this year. It will have to re-propose again the next year, because it’s a different set of MPs.
You have an election?
January, so a different set of MPs will...
Will come in.
...will come in on January.
Very interesting.
Regulation can follow the principles...
The regulation can basically, I think, be exactly what’s been proposed in the legislation.
Exactly the same thing. You just can’t introduce new...
New penalties.
...new penalties.
That’s OK.
[laughs] Interesting.
This is excellent. Thank you!
(laughter)
Glad to be of some help.
We appreciate your service.
[laughs] That’s exactly right. That’s why I’m a public servant, right? [laughs]
Audrey, you think this is the right way to go, right?
What I mean is that if, across parties, there’s some consensus about the key legislative parts, then, of course, legislation is preferable. At the moment, from the discussion yesterday, at least what I heard of it, there’s still party politics going on.
Yes, that’s right.
In that political circumstance, the administration will be reluctant to choose among parties.
Usually, what we do is that we run a consultative process like we did with the vTaiwan project. We show with hard numbers that, according to a rolling survey, 100 percent of people agree that if you call yourself a benefit corporation or a social entrepreneur under the Company Act structure, you should voluntarily disclose your founding documents.
100 percent of people agree, so we say, "There is rough consensus on many things, but this is a consensus, period," so we introduced that in the Company Act draft bill. The administration basically plays it safe by only proposing in the draft bill what we already know...
...that there will be cross-partisan support.
Hi Professor Fang!
We have this tremendous new idea.
Mm-hmm.
(laughter)
The minister has come up with it, though. We’re going to shift gears. You’re going to take a completely different approach.
We’re just brainstorming here.
(laughter)
Help me understand the politics briefly. My understanding is that there are three parties, essentially.
With their own versions.
There’s two parties clearly with their own versions, but the majority party does not have legislation that’s been introduced.
There is a version, but it’s an act that pertains to the social enterprises in general, without saying anything about the structure. It may be a co-op, it may be a company, or a charity. What it looks at is an earned income percentage.
If you fit the threshold of allocating the revenues and resources to a certain percentage, then you’re eligible to ecosystem-supporting benefits from the government.
It doesn’t have to be a company. It could be a co-op, a charity, or whatever. It’s called the Social Enterprise Development Act, proposed by MP Karen Yu.
The majority party does not have benefit corporation legislation, but the two other parties...
They’re totally compatible though.
I understand. What I’m trying to understand is, if we were to go the new way of regulations where those would presumably come from the majority party and would actually...
We’re a system where the administration is a separate power. The premier appoints us, the ministers. The president appoints the premier, and the president is directly elected. It is not a parliamentary system. The career public service must remain neutral when it comes to party politics, as required by law.
If we were to do the regulations, then it would not be as if now the third party that has not yet introduced benefit corporations would be introducing it? It would be the administration?
It would be the administration.
What we’re talking about is the possibility of moving fairly quickly to adopt regulations and get them in place this year, still with the goal of having legislation, eventually, which would replace and bring in...
Like the hyperlink act.
I was telling people that the same approach was initially started in Ecuador. They actually drafted regulations, but then the politics in Ecuador changed, and so they’ve now switched over to legislation and abandoned the regulations. Certainly, it would be something that would work...
...that we could do very quickly and get Taiwan into the community right away.
I think they’re compatible, the regulation, and we also can have the legislation at the same time. It’s compatible, totally.
It’s totally compatible.
I think it’s good to see the move-on.
...we cannot stay here. [laughs]
We can also say that the regulation is subject to a review. Usually, we can say 試行要點, a experimental regulation that says, "A year or two years after the introduction of this regulation, we’re going to do a review to see whether it needs changing or it needs upgrading to a legislation." That itself can be written into the regulation.
What do you think?
I think that...
We surprised you, right?
(laughter)
It’s not what I was expecting.
(laughter)
I guess you expected this to be a courtesy visit? [laughs]
I like it. I think it’s a...
I think it’s very good. Sometimes, people just afraid the change. If they can see what actually in practice, they will feel comfortable. I think it will be better for everyone to trust the system.
That’s right. It gives everyone a firsthand experience.
It’s good transition, too.
That’s right.
It’s like to transform to another stage.
We’re agreed that you’re going to work with the minister, and very quickly...
(laughter)
Happy?
I think it’s good. I think that as long as we can give this kind of company a legal status, even by the regulation, I think it works well, too. It also needs the three basic elements...
The basic characteristics would still be the same.
The only difference is that we cannot introduce new penalties, but that’s it.
That’s all right, too. We can leave those to be reported on after a year of experience.
That’s right.
I totally support.
Awesome. Thank you. [laughs]
Dinner last night was very productive.
Exactly.
(laughter)
Who is in charge of this? [laughs]
I had a dinner last night with Betty and also with Betty’s new boss, the new head of the MSME agency of the Ministry of Economic Affairs. The new agency leader is very important because the MoEA SMEA itself is undergoing a change.
I think next year or so, they will change to be the "SME and Startup" agency. Policies concerning newly founded companies...
Will be through that?
...will be through the agency. The registration is handled by the commerce agency, and the MSME agency basically is just in charge of cultivating and incubating work. The word start-up is diffused in various different ministries.
Once there’s a organizational change, it will be consolidated into the new SME&S agency. Anything that pertains to starting a new company will move to this agency, which is why they’re now in charge of drafting a response to the legislation for the Benefit Corporation and Social Enterprise acts.
I was talking with the new agency leader about the conference that you held. It’s very good momentum. It gives us something to talk about. [laughs]
It’s great.
It’s perfect. All right?
I’m happy. [laughs]
We can celebrate next year.
(laughter)
We’ll get it done this year.
We have to beat Jason because Jason still thinks we can do June with legislation. We’ll have to do it before Jason.
[laughs]
Karen and Jason are both very helpful in communicating the ideas of social innovation to the wider community.
Good. I think we’re done.
Awesome.
Let’s adjourn with good progress.
Let’s get moving. [laughs]
Thank you so much.
Thank you.
What’s the information about the numbers of the benefits corporation in the united states? Benefit corporation increase, right?
Yes, it’s almost 10,000 at this point in the United...
Last year, it was just over 6,000.
Do you see a lot of other laws citing benefit corporation as a requirement, like referencing?
The short answer is no.
It kind of stand of its own?
It stands on its own. We have not promoted any kind of tax relief. There are proposals to require that, for certain programs, the parties that are bidding on the program be benefit corporations. We’ve not put any effort into that.
It’s certainly not at a legislation level?
Nowhere in legislation.
That’s great because the other difference, in addition to penalty, is that law do not usually cite a specific regulation. If it stand on its own, then there’s no difference between a law or regulation anyway.
Good. That will not be a problem, at least in the United States’ experience.
That’s awesome. Yay.
Right?
I keep looking at you because you need to get to work.
(laughter)
I am always working.
(laughter)
You need to call the minister this afternoon and say, "Here’s my draft."
(laughter)
We kind of did that, actually. [laughs]
...so many versions already. [laughs]
The draft is finished? That’s great.
That’s exactly right.
Let’s publish the regulation.
A regulation needs, of course, 60 days of public debate. If we say it’s provisional or if it’s a pilot, then I think there will be less contention. It will not be seen as taking things away from the future MPs.
No, because they could still sponsor the legislation, take credit for...
Exactly.
Let’s adjourn before we change our minds.
Maybe we can have a global benefit corporation legislators and government meeting in Taipei.
Yes, absolutely.
Of course.
Invite all the congressman, the legislators, to come here, or not.
Right.
Thank you.
Thank you so much. This is great.