Capital and Foreign Investment

'Financial History, Historical Analysis, and the New History of Finance Capital' by Barry Eichengreen in (2019) 1(1) Capitalism  20-58 comments

The traditional way of starting an essay on the history of capitalism is by not defining the term. The practice is regrettable, since it elides multiple definitions of which two most obviously stand out. For Karl Marx, the essence of capitalism was the separation of labor from the means of production, the concentration of the latter in the hands of the capitalist class, and the development of a political superstructure to secure property rights. For Milton Friedman, who positioned himself as the Marxist's mid-twentieth-century bete noire, capitalism was synonymous with markets and their association with private property and voluntary exchange. The Marxian portrait lends itself to a characterization of the economic system as unequal, exploitative, and unstable, whether due to a falling rate of profit or, in its twenty-first-century variant, an everincreasing concentration of wealth and power in the hands of the 1 percent. Friedman and his followers, on the other hand, see unregulated market exchange as expressing freedom of choice, as a vehicle of opportunity and self-improvement, and as a mechanism for competing away inefficiencies. 

Both conceptualizations are of ideal types. Both are ahistorical since they treat capitalism as a disembodied system detached from time and place. For Marx, the dynamics of the system arise out of a struggle between classes that occurs independently of the particulars of the setting. For Friedman, the magic of capitalism is its extraordinary facility at aggregating the decisions of self-interested individuals - homos economicus - into a social optimum in any context in which an unregulated market exists. 

This analysis of ideal types, whether undertaken by neoclassical economists or class theorists, appeals to neither the "new economic historians" who reside in economics departments nor to "new historians of capitalism" whose disciplinary home is history. Both are dissatisfied with the disembodied nature of such analyses. Both are concerned to understand how the response of individuals to the economic problems that they confront is shaped by a particular historical setting. Economic historians respond to this dissatisfaction by assembling large data sets that can expose the particularities and historically contingent nature of economic behavior. They use these data points of historical information on, inter alia, individual consumers, investors, and entrepreneurs, together with statistical techniques, to document actual economic behavior, dispensing with the economist's assumption of convenience, utility maximization. They use historical data to contextualize economic behavior and demonstrate how it is shaped by the specific context. 

Historians of capitalism substitute narrative for statistical methods in an effort to make their portrayal of historical action more vivid and context-specific. They invoke global history to demonstrate how national cases are embedded in a larger social and economic setting and a broader set of power relations. They embed their analyses of economic processes in the twenty-first-century historian's framework, emphasizing race, gender, and ethnicity in order to show how the dynamics of the economic order are contingent on its social underpinnings. 

Thus, economic historians and historians of capitalism see economic structure and organization as contingent. Both see it as contextually and historically specific. Both challenge the economist's conception of an ideal, rarified market. Both seek to denaturalize the economic order. In their common emphasis on how economic relations are shaped by historical context, the two schools are natural allies. 

That's the positive take, anyway. The negative take is that economic historians, concentrated in economics departments, have been corrupted by that discipline's obsession with statistical technique, causing them to focus on ever-narrower questions to which such technique can be neatly applied to the exclusion of aspects of economic behavior that are not easily measured and quantified. They narrow their audience to that small subset of historical scholars with advanced training in mathematics. Historians of capitalism, lacking that training, disregard their colleagues' statistical analyses and, all too often, the findings of a half-century of scholarship in economic history. Lacking a statistical mindset, they use evidence selectively, in a manner consistent with their grand narrative. In this view, the two sides are engaged in a dialogue of the deaf, where no communication, much less synthesis, takes place. 

Evidently, then, questions about the state of the field serve as something of a Rorschach test. Being optimistic by temperament, I will make the positive case in this essay-that dialogue and maybe even synthesis are possible. Even if dialogue and synthesis are not yet evident, the preconditions for their existence are present. Among economic historians resident in economics departments, an appreciation of the importance of large processes, of the global reach of markets and capitalism, and of the ever-present question of race never went away. Despite their reliance on statistics, economists concerned with historical issues never in fact abandoned the use of narrative.  Contrary to the belief that "the half has never been told," new economic historians never lost sight of the importance of slavery for American economic development nor of the importance of giving voice to the enslaved. Economic historians no longer feel obliged to dismiss traditional historical findings, the revolutionary fervor of the 1960s and 70s generation having given way to an awareness that iconoclasm is not everything. Nor must they defend themselves against unsympathetic colleagues, economists having been reminded of the limitations of their abstract theories and of the existence of historical precedents by the global financial crisis and therefore having grown increasingly sympathetic to the historical enterprise. 

Another basis for dialogue is that-notwithstanding the emphasis in history curricula on race, gender, ethnicity, and psychology-the old staples of business history, labor history, and financial history never actually went away. That said, the rebirth of the history of capitalism in history departments allows the history of material processes to share the stage with "literary-inflected analyses of identity formation and collective memory." Initiatives like the Cornell University boot camp for historians of capitalism seeking to acquire facility in quantitative methods and economic theory enable more scholars in history departments to access and utilize research by economic historians. 

Having emphasized the importance of time, place, and context, I will elaborate these arguments by drawing on a specific historical literature, that on the development of financial markets in the United States. This is an appropriate case for several reasons, aside from the fact that it utilizes my expertise. There is the association of capitalism with finance capitalism in the Marxist-Leninist canon and, equally, the tendency for neoclassical economists to take finance as epitomizing the efficiency of market outcomes.  There is the disproportionate attention that early practitioners of the new economic history paid to tests of financial market efficiency, but also the prominence that historians of capitalism accord to financial markets and relations. And there is the impetus that the financial crisis of 2007-2008 and its echoes of crises past gave to both the history of capitalism and economic history.

The Productivity Commission's research paper on Foreign Investment states

Over the past two centuries, foreign funding has supported Australia’s economic development by permitting more capital investment than domestic savings would have otherwise allowed 

Foreign investment brings ‘spillover’ impacts too, both positive (access to new technologies, better management practices, increased competition) and negative (potentially less competition, social and environmental costs). 

Foreign investment also stirs strong community reservations, although Australians are generally supportive of globalisation and free trade. To balance the economic benefits of foreign investment against the risks, and to maintain community confidence that foreign investment is in the national interest, Australia regulates foreign investment through a range of mechanisms. 

Since 1974, foreign acquisitions with a value above certain thresholds are screened and require a decision of the Treasurer that they are not contrary to the ‘national interest’. Recent changes have lowered these thresholds to zero for sensitive national security businesses. Australia has a broadly open policy towards foreign investment, but is more restrictive than many other advanced economies, by some measures To the extent that foreign investment proposals are blocked or discouraged, this results in lower Australian household incomes — Commission modelling estimates that these economic costs would be material, though not large. 

Foreign investment policy has become more prominent over recent years. Greater attention is being given to the difficulty of taxing multinationals and the national security risks associated with sensitive sectors or critical infrastructure assets — as, for the first time, one of our largest sources of investment is not a democracy or a military ally. 

Policy change in response has been piecemeal. Monetary thresholds for screening vary by source country, sector and type of investor, while the use of approval conditions is increasing. 

The role of the Foreign Investment Review Board has become more akin to a regulator than a gatekeeper, yet its powers and institutional arrangements have changed little. 

Overall, the design and vesting of responsibility with the Treasurer for administering the ‘national interest’ test works well. It gives flexibility to quickly adapt to new concerns, weighing up not just the costs, but also the benefits from foreign investment. The ‘negative’ nature of the test (deciding whether proposals are contrary to the national interest) also limits the risk of rejecting projects that are in the national interest. These features should be retained. 

Other aspects of the foreign investment policy framework could be improved. 

The national interest test lacks clarity around how it is interpreted from case to case. Tighter policy guidance and excluding risks from the test that can be mitigated through national regulations (such as competition) would lower compliance costs and lift investor certainty. Attaching conditions to foreign investment approvals provides only a limited means to mitigate risks. National laws and regulations, together with purpose-built and adequately-resourced regulators (such as the Australian Competition and Consumer Commission, or the Critical Infrastructure Centre), where available, should be preferred. 

Publication of reasons for decisions to block proposals, greater certainty around timelines, and aligning applications fees with the actual cost of administering the screening regime would increase transparency, enhance predictability and lower the costs of the screening regime.

Bioethics

'Balancing Patient and Societal Interests in Decisions About Potentially Life-Sustaining Treatment: An Australian Policy Analysis' by Eliana Close, Ben P. White & Lindy Willmott in (2020) 17 Journal of Bioethical Inquiry 407–421 comments 

 This paper investigates the content of Australian policies that address withholding or withdrawing life-sustaining treatment to analyse the guidance they provide to doctors about the allocation of resources. All publicly available non-institutional policies on withholding and withdrawing life-sustaining treatment were identified, including codes of conduct and government and professional organization guidelines. The policies that referred to resource allocation were isolated and analysed using qualitative thematic analysis. Eight Australian policies addressed both withholding and withdrawing life-sustaining treatment and resource allocation. Four resource-related themes were identified: (1) doctors’ ethical duties to consider resource allocation; (2) balancing ethical obligations to patient and society; (3) fair process and transparent resource allocation; and (4) legal guidance on distributive justice as a rationale to limit life-sustaining treatment. Of the policies that addressed resource allocation, this review found broad agreement about the existence of doctors’ duties to consider the stewardship of scarce resources in decision-making. However, there was disparity in the guidance about how to reconcile competing duties to patient and society. There is a need to better address the difficult and confronting issue of the role of scarce resources in decisions about life-sustaining treatment.

The authors argue 

In response to recent high-profile disputes, clinicians and ethicists have argued that limited medical resources are relevant to decisions to withhold or withdraw life-sustaining treatment (Truog 2017; Wilkinson and Savulescu 2019), a view shared by some members of the public (Brick et al. 2019). Although most doctor-initiated decisions to limit life-sustaining treatment are based on the rationale that ongoing active treatment is “futile” or “non-beneficial” (and therefore not in the patient’s best interests), distributive justice affords a distinct ethical justification for non-treatment, particularly in publicly funded healthcare systems (Truog 2017; Wilkinson and Savulescu 2019). Interventions at the end of life that provide little or no benefit consume scarce healthcare resources, which could be used more efficiently by others (Huynh et al. 2014; Carter et al. 2017). Even so, how to incorporate resource considerations into current decision-making paradigms is debated, and the degree of doctors’ involvement in allocation decisions is controversial (Truog et al. 2006; Scheunemann and White 2011). Contrary to arguments that resources should be taken into account, some argue that doctors are exclusively patient advocates and it is unethical to limit treatment at the bedside that may provide a benefit, however small (Levinsky 1984; Wyller 2014; Close et al. 2019b). While medical policies are a regulatory mechanism that can navigate this debate and set out the extent of doctors’ duties to consider resources in their decisions, little is known about the content of policies that address withholding or withdrawing life-sustaining treatment in Australia. This article therefore sets out to investigate the question: what professional guidance is given to doctors about the role of scarce resources when making decisions about withholding or withdrawing life-sustaining treatment? 

Despite increasing discourse about the importance of resource management, reliance on resource allocation as a basis for withholding or withdrawing life-sustaining treatment can be difficult in practice, for several reasons. First, the prospect that resource allocation is relevant to end-of-life decision-making remains taboo, raising the spectre of “death panels” and unjustified age and disability discrimination (Truog et al. 2006; Scheunemann and White 2011; Cohen 2012). This taboo may partly explain why interests-based and resource-based rationales for limiting life-sustaining treatment are not sufficiently distinguished in practice (Rubin and Truog 2017). Indeed, some doctors perceive that the concept of futility masks both conscious and unconscious rationing (Close et al. 2019b), the “withholding … of a medically beneficial service because of that service’s cost to someone other than the patient” (Ubel and Goold 1997, 75). Given that health resources are limited, rationing is necessary and justifiable, provided it is accomplished transparently using fair processes (Daniels 2000; Scheunemann and White 2011). However, evidence that doctors ration at the bedside (Hurst et al. 2006; Ward et al. 2008), sometimes under the guise of futility (Close et al. 2019b), suggests the requisite transparency is lacking. This negatively impacts the profession as well as patients and families, and some doctors report feeling conflicted by the “gatekeeper” to treatment role that can be thrust upon them, absent explicit resource-allocation policies to support their decisions (Close et al. 2019b). 

A second source of difficulty is that the legal basis for using resource constraints to justify withholding or withdrawing life-sustaining treatment is largely untested. Since legal disputes over life-sustaining treatment are typically brought under the court’s parens patriae jurisdiction, which is focused on an individual patient’s best interests, resource issues are usually not argued by the parties nor do they form part of the court’s deliberations. In several cases, Australian courts have commented that resources are not relevant to best interests (Willmott et al. 2014). Nevertheless, the courts traditionally support rationing decisions, provided they are made transparently and founded on fair administrative policies or processes (Close et al. 2018). The challenge in this area is that often these explicit policies do not exist. 

A third source of difficulty is what constitutes “patient best interests” or “rationing” can be matters of perspective. Conflicts over life-sustaining treatment typically arise when the degree of benefit to the patient is marginal or uncertain; doctors have a clinical rationale for saying the treatment is unwarranted. From the viewpoint of the person seeking treatment, who perceives some benefit or chance of a benefit, denying such treatment could not be justified on a “best interests” basis so could be regarded as rationing. However, from the doctor’s viewpoint, denying the treatment amounts to a decision to forgo “inappropriate” or “futile” treatment on “clinical grounds” rather than one based on rationing. Therefore, parallel resource considerations could be construed as responsible stewardship. When a genuine clinical rationale exists to recommend treatment withdrawal, doctors may not turn their minds to parallel resource-based rationales or may be reluctant to invoke them as these could be perceived as a form of pressure on families to “free up the bed.” In the absence of a clear decision-making paradigm or policies that support taking resource factors into account, the typical path is either to “cave-in” to surrogates and accede to a request for treatment that the doctor believes is inappropriate (Pope 2016) or continue to negotiate treatment withdrawal under the guise that this is solely a clinical decision and the patient’s interests are the only ones at stake. 

Commentators have urged that resource-based rationales for non-treatment should be clearly distinguished and disclosed to promote more transparent decision-making processes and enhance trust in the medical system (Truog et al. 2006; Young et al. 2012). Medical policies can help doctors distinguish between distributive justice and patient interests and promote fair and transparent processes to guide decision-making (Rubin and Truog 2017; Bosslet et al. 2015). Policies are an important regulatory mechanism because they have both legal and ethical weight; depending on their provenance they can be persuasive or even determinative in court (McDonald 2017). However, to our knowledge very little literature (Martin 2013; Levinson et al. 2014) has examined Australian policies on withholding and withdrawing life-sustaining treatment for adult patients. Therefore, the purpose of this paper is to analyse Australian policies on withholding and withdrawing life-sustaining treatment to determine the extent of guidance they provide about distributive justice. We set out to investigate the extent to which publicly available policies address scarce resources as a factor in decision-making, distinct from a patient’s interests, what they say about the doctor’s role in making resource-based decisions, and whether they promote a transparent and fair approach when allocating resources at the bedside.

Consumer perceptions of GDPR

'Data Protection or Data Frustration? Individual Perceptions and Attitudes Towards the GDPR' by Joanna Strycharz, Jef Ausloos and Natali Helberger in (2020) 6(3) European Data Protection Law Review 407-421 comments 

 Strengthening individual rights, enhancing control over one’s data and raising awareness were among the main aims the European Commission set for the General Data Protection Regulation (GDPR). In order to assess whether these aims have been met, research into individual perceptions, awareness, and understanding of the Regulation is necessary. This study thus examines individual reactions to the GDPR in order to provide insights into user agency in relation to the Regulation. More specifically, it discusses empirical data (survey with N = 1288) on individual knowledge of, reactions to, and rights exercised under the GDPR in the Netherlands. The results show high awareness of the GDPR and knowledge of individual rights. At the same time, the Dutch show substantial reactance to the Regulation and doubt the effectiveness of their individual rights. These findings point to several issues obstructing the GDPR’s effectiveness, and constitute useful signposts for policy-makers and enforcement agencies to prioritise their strategies in achieving the original aims of the Regulation.

Digital Currencies

The ASPI Policy Brief on The flipside of China’s central bank digital currency states 

Globally, there’s increasing interest in the development of central bank digital currencies, driven by a wide range of policy motivations. A survey published by the Bank for International Settlements in January 2020 found that, out of 66 central banks, 80% were engaged in the research, experimentation or development of a central bank digital currency. 

The PRC is a significant actor in this space, not least because it’s years ahead of the world in research into the development of its central bank digital currency known as ‘digital currency / electronic payment’ or simply ‘DC/EP’ (see Figure 1). China’s market-Leninist approach to innovation, personal data and industry policy makes it possible to conceive that over a billion Chinese consumers could be transacting in DC/EP before a central bank digital currency becomes mainstream in any other country. 

At the technocratic level, DC/EP is designed to ensure visibility and traceability of transactions and establish greater control over China’s financial system and capital accounts while displacing anonymising cryptocurrency alternatives that can’t be readily controlled. Recent reporting has also indicated that the People’s Bank of China (PBoC) aims for DC/EP to erode the dominance of Alipay and WeChat Pay in the digital payments space, levelling the playing field between the technology duopoly and commercial banks. 

At the leadership level, DC/EP is being driven by the financial ‘risk management’ and ‘supervision’ imperatives of Chinese Communist Party (CCP) General Secretary Xi Jinping. DC/EP will offer no true anonymity, as the PBoC will have both complete visibility over the use of the currency, and the ability to confirm or deny any transaction. There are also no express limits on the information-access powers of the party-state’s political security or law enforcement agencies, such as the Central Commission for Discipline Inspection (CCDI), which has a keen interest in the technology. While DC/EP could enable more effective financial supervision and risk management that any government might seek to embed in a central bank digital currency, the PRC’s authoritarian system embeds political objectives within economic governance and otherwise reasonable objectives. Terms such as ‘anti-terrorist financing’, for instance, take on a different definition in the PRC that is directed at the CCP’s political opponents. 

DC/EP is being developed and implemented domestically first, but could allow China to shape global standards for emerging financial technologies. It also creates opportunities for the PRC to bypass the US-led financial system, which it perceives as a threat to its security interests, potentially disrupting existing systems of global financial governance. Through DC/EP, Beijing could over time move away from the SWIFT system and bypass international sanctions. 

The purpose of this policy brief is to improve baseline understanding of DC/EP’s structural mechanics and place the project in its political and bureaucratic context. The aim is to catalyse and contribute to an informed conversation about what the rollout of DC/EP may mean for China and for the world. 

This policy brief is organised as follows: Section 1 is a general overview of digital currencies; Section 2 focuses on the policy drivers behind DC/EP; Section 3 examines DC/EP’s architecture based on patents in order to assess the surveillance capabilities it would embed; Section 4 describes the institutional ecosystem behind DC/EP; Section 5 looks at how DC/EP would affect domestic digital payment systems Alipay and WeChat pay; and Section 6 looks at the implications DC/EP could have for global financial governance.

ASPI's recommendations are -

DC/EP’s rollout is likely to have notable ramifications for governments, investors and companies, including China’s own tech champions. More analysis is needed before prescriptive policy solutions can be developed for the political and financial oversight challenges DC/EP could create. At the same time, it’s important to act in anticipation of key shifts in global financial regulation and advances in financial technology, so that governments don’t end up trying to reverse course when it’s too late to deal with the systemic risks DC/EP could create. We suggest the following:

1 If DC/EP achieves global take-up, the political features it embeds won’t be possible to effectively mitigate or regulate. Therefore, governments must be prepared to mitigate the political risks by investing in research into and the development of credible alternatives to DC/EP for all key highly traded currencies. 

2 Decision-makers in liberal democracies must develop a clear strategy for detecting flaws in and improving the existing system for global financial governance and work to improve international coordination among each other to achieve those strategic outcomes. 

3 Liberal democracies should establish domestic laws on data privacy and protection. They should regulate the ways that any entity can collect and use individuals’ data, improve oversight and improve due diligence aimed at mitigating data security risks.

Flag

The Select Committee on the Aboriginal Flag offers two recommendations: 

 1  The committee recommends that the Commonwealth government does not compulsorily acquire the copyright for the Aboriginal flag under section 51(xxxi) of the Australian Constitution. 

2  The committee recommends that, in the negotiations underway with Mr Harold Thomas and the current licensees, the Commonwealth government aims to achieve a model for the future use of the Aboriginal flag by members of the community that is independent from government, that involves and consults with Aboriginal people, and that ensures that the body selected bears responsibility for: maintaining the integrity of the Aboriginal flag; upholding the dignity of the Aboriginal flag; and making decisions about the Aboriginal flag's use.  Subject to the rights of Mr Thomas, a parliamentary committee may be of assistance in framing the structure of a body that could have custodial oversight of the Australian Aboriginal Flag. 

The Committee comments

Throughout the inquiry, the committee heard views regarding the future of the Aboriginal flag including compulsory acquisition, a negotiated outcome, models for custodianship of the flag, the possibility of a new fair dealing exception and whether it may be time for a new Aboriginal flag. 

The possibility of compulsory acquisition of the copyright and/or the existing copyright licences drew strong, largely adverse views from numerous submitters and witnesses. Many suggested that the preferred outcome was one in which Mr Thomas voluntarily allowed the Commonwealth government to acquire the copyright and/or existing licences through a process of negotiation. No clear consensus was formed around the way forward in the event that a negotiated outcome could not be achieved. Should government acquisition occur, evidence indicated broad support for ongoing recognition (a moral right) and compensation on just terms for Mr Thomas. 

In relation to the future administration of the Aboriginal flag, some called for an ongoing role for government (such as ownership and administration of the flag through a statutory agency) while others felt that ongoing government control of the Aboriginal flag was inappropriate. The committee received a number of different suggestions for potential models of administration and a preference for Aboriginal custodianship of the flag, either through an Aboriginal community controlled organisation, or an elected or representative body. 

Suggestions around how freely the Aboriginal flag should be able to be used also varied. Many submitters and witnesses advocated for use free-of-charge for all Australian people and organisations, while others warned of possible exploitation and suggested some kind of scaled fee system for commercial use of the flag. Despite differing views, evidence consistently supported use at no or low cost for Aboriginal people and organisations that seek to use the flag to advance the interests of Aboriginal people. Compulsory acquisition 

Section 51(xxxi) of the Australian Constitution provides that the Commonwealth government can compulsorily acquire property on just terms:

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: ... (xxxi) the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws. 

Compulsory acquisition of the copyright subsisting in the Aboriginal flag and, or the existing copyright licences was discussed at length during this inquiry. Numerous witnesses and written submissions put forth views regarding the legal ability of, and moral basis for, the Commonwealth government pursuing this option. 

If the Commonwealth government acquired the copyright subsisting in the Aboriginal flag, the Commonwealth, as opposed to Mr Thomas, would own the flag's copyright. A number of submitters acknowledged that the Commonwealth would then be subject to the operation of subsection 196(4) of the Copyright Act 1968 (Cth) (Copyright Act) should it take such an approach, which provides that: [a] licence granted in respect of a copyright by the owner of the copyright binds every successor in title to the interest in the copyright of the grantor of the licence to the same extent as the licence was binding on the grantor. 

As the successor of the copyright, the Commonwealth government would be bound by the licence agreements made by Mr Thomas with WAM Clothing, Wooster Holdings (Gifts Mate) and Carroll & Richardson Flagworld (Flagworld). If the Commonwealth was to control the use and reproduction of the Aboriginal flag design as a flag or banner and/or on clothing and other merchandise, it would also need to acquire those existing licences in addition to the flag copyright. 

Another option is for the Commonwealth government to acquire the three existing licences (with WAM Clothing, Wooster Holdings and Flagworld) for the Aboriginal flag, as opposed to the copyright subsisting in the flag. Under this arrangement, Mr Thomas would continue to be the owner of the copyright. 

Ms Stephanie Parkin, Chair of the Indigenous Art Code, provided evidence to the committee regarding this approach, outlining that changes to the licensing agreements may impose obligations or burdens on Mr Thomas, but would otherwise not infringe upon on his rights as the copyright owner:

My understanding is that, in that situation, Mr Thomas would still remain the copyright owner of the flag and that the acquisition would occur further on down the track, in terms of those exclusive licensees. In terms of impinging or infringing upon his rights, I think that would also depend on what that licence agreement looks like that Mr Thomas has between him and those exclusive licensees and what, if any, type of obligation he would have to adhere to if the licences were compulsorily acquired. Obviously I recognise that we don't know the terms of the licensing agreement, but if there were any changes to those exclusive licenses then there could be burdens or obligations that the copyright owner—for example, Mr Thomas—would have to comply with. 

A number of submitters and witnesses voiced their preference for an outcome in which Mr Thomas retains ownership of the flag copyright, preferably through a negotiated agreement about the use and fees for use of the Aboriginal flag. 

Support for compulsory acquisition 

Some submitters and witnesses expressed support for compulsory acquisition. For example, FAL Lawyers (which represents Spark Health Australia, Clothing the Gap and Free the Flag) argued in support of compulsory acquisition on the basis that acquiring the copyright is no different to circumstances in which government acquires real property where it is in the public interest to do so:

All levels of Australia government routinely engage in the compulsory acquisition of land. Specific legislation is enacted at state and federal level to regulate these acts…Compulsory acquisition is by its nature against the wishes of the owner, and there are many reasons a land owner may be reluctant to hand over his or her rights…Despite these owner misgivings, governments routinely engage in compulsory acquisition…We ask why compulsorily acquiring someone's home to widen a road is commonplace and acceptable at all levels of government, but compulsorily acquiring copyright in a flag design (or a licence thereto) for the benefit of an entire race of Australians is entirely unacceptable. 

FAL Lawyers further argued that Mr Thomas, as demonstrated through the existing licences, is prepared to divest control of and monetise his copyright:

Mr Thomas has granted an exclusive licence to a third party to produce flags. This means Mr Thomas cannot himself produce a flag without authorisation from his licensee. Mr Thomas can, as a result of the licences he has already granted in consideration for financial gain, infringe his own copyright. However, any idea that the Government should respect the desire of Mr Thomas to retain control of any use of the Flag is misplaced. Mr Thomas has demonstrated he is well-prepared to divest such control entirely (to the exclusion of himself), for appropriate monetary compensation. 

Ms Nova Peris OAM expressed a strong preference for compulsory acquisition, at the same time suggesting that just terms should not be afforded to current licence holders:

To resolve this issue, I believe that the Aboriginal Flag ought to be considered and given the same rights as the Australian Flag and the freedom of the Torres Strait Islander Flag. I believe that the Aboriginal flag should be federally compulsory acquired under Section 51(xxxi) of the Constitution of Australia as a matter of national emergency, by ''urgent acquisition''. I do not believe that the current licence agreements should be paid out by the taxpayer. 

When asked whether compulsory acquisition should be considered if the Commonwealth government is unable to resolve the current dispute about the use of the Aboriginal flag, Spark Health Australia stated: 

I feel like the flag is a significant national symbol and that it's worth acquiring. In that process, it's not nice but the government acquires things of national significance all the time. In that process Harold will still be fairly compensated and so will the licensees, and, again, he'll maintain his moral rights.   

Concerns regarding compulsory acquisition 

While acknowledging the legal basis for compulsory acquisition, many submitters and witnesses objected to it.  Key among their concerns was that compulsory acquisition of the Aboriginal flag copyright would mirror past experiences of dispossession and appropriation experienced by Aboriginal people. 

Professor Marcia Langton AO argued that:

I do not believe that the compulsory acquisition of the licences and/or copyright of the Aboriginal flag is appropriate. First of all, there are constitutional issues and, moreover, it is my very strong view that the cultural property and the intellectual property of Mr Harold Thomas should not be compulsorily taken away from him. I say this for a number of reasons. One is that he is an Aboriginal person, and doing so would create a very bad precedent in terms of breaching the Constitution and any appearance of an act based on racial discrimination. Two, he is a member of the stolen generations, and for the government to cause him harm a second time would be unconscionable. His ownership of the rights in the Aboriginal flag has been affirmed by the Federal Court. The only way forward is for him to voluntarily relinquish all of his rights to the Australian government, and I understand, from reading newspapers, that Minister Ken Wyatt is engaged in negotiations with him to acquire the rights in the flag and to overcome all the problems with the licences that have been issued by acquiring all rights. 

Associate Professor Jani McCutcheon was similarly concerned about the implications of compulsory acquisition, and described the challenge of quantifying just terms: 

This would be an extraordinary step, without any precedent that I am aware of, and there is no guarantee that the 'just terms' achievable under constitutional law principles would constitute truly fair terms. It would also painfully replicate the kind of involuntary dispossession Aboriginal people have endured for more than two centuries. 

Reflecting on compulsory acquisition, Mr Will Carter, an Aboriginal community member, artist and small-business owner, stated:

If I really sit here and think about that, I kind of lean more towards that being almost another form of oppression. It dismisses our sovereignty, noting that we don't have constitutional recognition. So if there's a constitutional avenue for the flag to be acquired compulsorily, then those are my thoughts around that. 

Other Aboriginal artists and art organisations were concerned about the precedent compulsory acquisition of the Aboriginal flag would establish with respect to artists' copyright in their works, in circumstances where there have been calls for greater protection of their intellectual property and copyright rights. 

Ms Claire Coleman argued that 'compulsory acquisition of the flag copyright by government is to be avoided at all cost' because it 'endangers copyright laws and agency for artists particularly Aboriginal artists and credibly increase the risk of a proliferation of fake art'. 

The Bar Association of Queensland shared this view, adding that compulsory acquisition may adversely impact work that has already been done to protect the intellectual property of Aboriginal artists:

It would be problematic to compulsorily acquire the licences or copyright as this may have drastic consequences to the intellectual property rights of other Aboriginal artists. If this was to occur, it may reverse the important work done by Indigenous Art Code and Senate Committee findings set out in the Report on the impact of inauthentic art and craft in the style of First Nations peoples. 

McCulloch & McCulloch Australian Art Books Pty Ltd emphasised the potential impact of compulsory acquisition on the broader arts community, suggesting that it 'would completely destroy the basic tenets of copyright for artists, writers, musicians, playwrights, film makers and any other creators' which is of 'extreme concern' to the Aboriginal arts community in particular.   

A negotiated outcome 

While compulsory acquisition was raised as a possible outcome, evidence to the inquiry indicated that a negotiated outcome with the copyright holder is clearly the preferred way forward.  A negotiated outcome could ultimately result in the Commonwealth government acquiring the flag copyright, the existing licences, or another arrangement, but the committee heard that Mr Thomas's consent would be pivotal. 

Submitters and witnesses recommended basic principles for a negotiated outcome. Dr Fady Aoun suggested:

Of the multiple options canvassed before the Select Committee championing more liberalised access to the Aboriginal flag, the most sensible and appropriate approach may well be to negotiate sustainable and mutually beneficial outcomes with Mr Thomas and the exclusive licensees. 

The Shepparton Regional Reconciliation Group (SRRG) expressed a preference for negotiations with Mr Thomas, rather than licence holders: SRRG believes there should be negotiated outcomes, which recognise Mr Harold Thomas's rights as the author of the flag, but free up the flag for general use, especially by Aboriginal communities and organisations. Negotiations directly with Mr Thomas may be preferable to those with licence holders. 

Acknowledging the competing interests in relation to the Aboriginal flag, the Australian Copyright Council further articulated that Mr Thomas should have a voice regarding how the flag is used into the future:

Well, the negotiated outcome, given the existing contractual landscape, is really limited by what the contracts say and how the licensees are prepared to give over the rights that they have. The ideal situation, given the fact that there is such a community interest in it and a balancing of these unique factors, is that Mr Thomas retains copyright ownership and that continued royalties flow to him and that he gets a say in the landscape in which the flag continues to be used. 

Custodianship of the flag 

The concept of custodianship was raised by a range of submitters and witnesses, largely in the context of who might be responsible for administering the flag and approving its use into the future. 

The Aboriginal Advisory Council of Western Australia and the Indigenous Wellbeing Centre outlined why an outcome where there is a custodian of the flag is preferable to one where the flag is owned: 

[S]o much is owned by the government. It seems that our heritage is owned, our country is owned and our people are owned because of all the different acts that are imposed upon us. If government are going to do that, they'd have to be very clear about how they're going to inform our community that it is actually for our betterment—it's protecting the flag but it's not real ownership. That's a sticky one.  In our community people are custodians of knowledge. We do a lot of cultural healing work. We don't own that knowledge. We have to explain that to government all the time—'You can't take that IP, because it doesn't belong to us; it belongs to the community.' Custodianship is probably the approach that needs to be taken rather than ownership. 

The Indigenous Wellbeing Centre added:

[W]e would like to see the custodianship held, not ownership; that Harold will continue to own it; and that it will be custodianship for the Aboriginal nation, and people who are running not-for-profit organisations, which are Aboriginal community controlled, should be able to use it freely, with the intention of actually bringing the community together and improving the health and wellbeing of our communities…So we're not looking for a blanket thing. It's more that we need to think about custodianship rather than ownership. Aboriginal people live in two worlds—one in the West, where these contracts, laws, and copyright stuff under the act are—and then, from a cultural perspective, their freedom in how they express themselves is being hindered now because of this copyright issue…set off some sort of custodianship where it is used and define exactly who can use it and how they can use it. That will clear up a lot of the issues.   

Custodianship models 

Various models for custodianship of the Aboriginal flag were raised during the course of the inquiry, for example custodianship via a newly established independent government body, an Aboriginal community controlled organisation or an existing national Aboriginal entity such as the National NAIDOC Committee. The extent of the role for the Commonwealth government varied between models: while some saw a key role for the Commonwealth government as 'owner' of the flag, others raised concerns and suggested that the Commonwealth government's role should be negligible. 

Professor Langton emphasised the importance of Commonwealth government ownership of the flag, but suggested administration be vested in an independent body:

…it's very important that the flag is owned by the government of Australia but that there are checks and balances in legislation that sets out very clearly the ownership and the use of the flag and how the use of the flag in special circumstances would be determined by an independent body. But most uses of the flag should be freely available to every Aboriginal person, club, corporation and association without any financial impost so that the flag can be used freely. It would only be in extraordinary circumstances, particularly in relation to commercial uses of the flag, that the independent body I am recommending would have a mandate to consider that matter. 

In contrast, Australians for Native Title and Reconciliation (ANTaR) reiterated concerns with the notion of Commonwealth government 'ownership', and considered that even if the Commonwealth government was to acquire rights to the Aboriginal flag, Aboriginal people should be responsible for how it is used:

…I can certainly see the perception and probably the reality of a government acquiring the copyright off the Aboriginal artist and holding it in government hands, when it's really about a broader Aboriginal ownership and that's what, ultimately, needs to be the outcome in its free and proper use…If the government were to acquire the copyright, it should still be free for Aboriginal people to determine how it's used and enacted. It should be a government decision beyond holding it 'on behalf of', if that makes sense. 

While no clear consensus emerged regarding the copyright ownership of Aboriginal flag, submitters and witnesses expressed that an independent body, controlled by Aboriginal people should be a custodian. An independent body 

Some witnesses recommended that an existing body could take on the responsibilities of being custodian of the Aboriginal flag. For example, the National NAIDOC Committee suggested it could have a role, given the committee's longevity:

As suggested in our paper, we believe that the National NAIDOC Committee could play a part in that. We're one of the only committees that have lasted, since the 1970s, through the various changes and machinations of the Indigenous affairs portfolio…We believe and we've suggested to the agency that NAIDOC could play a part in some part of a solution or be part of the dialogue with Mr Thomas to make sure that that licence, if it's a non-commercial licence, is with an Aboriginal or Indigenous entity. 

Others suggested that an Aboriginal community controlled organisation would be well placed to be the custodian of the flag. Tandanya National Aboriginal Cultural Institute suggested to the committee that Mr Thomas had at one stage, entered into discussions with the organisation regarding custodianship of the flag:

Our understanding is that he was going to offer copyright to Tandanya to look after the flag. This was many years ago. Obviously there has been a lot of changeover within Tandanya in the last two to three years...I'm trying to get the information from this organisation as to what sorts of conversations were had, if at all. But that is my belief, that he had some sort of thought about bringing the copyright to Tandanya, and as the national institute. 

The Victorian Aboriginal Health Service (VAHS) echoed this view, adding that perceived or actual government control would be likely to cause issues within the community: One thing I think our community wouldn't accept would be if government owned the rights to the flag. I think it would need to be some kind of community-controlled organisation or perhaps a trust or something like that. I don't think they would accept it being government owned and controlled. That's probably going to cause more issues than not. 

Dr Matthew Rimmer speculated that an approach such as that taken by the Torres Strait Islander Regional Council (see chapter 1) could be a potential model for community control:

In my submission, I go through an array of different options, some within the frame of copyright law and some outside it. Already there has been a lot of discussion of the merits and problems in relation to acquisition of copyright by the government. I think the community ownership model being put forward in relation to the Torres Strait Islander flag has been quite useful and successful. 

Aboriginal Peak Organisations Northern Territory emphasised the significance of being custodian of the Aboriginal flag and on that basis argued for the establishment of a national authority, rather than a local Aboriginal controlled organisation having responsibility for the flag:

I think it needs to be national because of the symbolism of the flag and what it means to Aboriginal people in Australia as a whole. So I don't think it's appropriate that a local Aboriginal-controlled organisation has the—it's a big thing. It would be a big thing to hold the workings of the flag within an organisation. I think it needs to be a national agency, with Aboriginal control and governance. 

Professor Langton suggested that:

…the flag should be in the ownership of a Commonwealth body that acts as a trust and which would have an Aboriginal board—a small board, say three people—to give approvals for its use. It also should be covered by Commonwealth legislation setting out very clearly the way in which the flag is used. The flag is already, of course, an official Australian flag, but, unlike the Torres Strait Islander flag, it's not owned by an Aboriginal body. The only way to overcome that problem, as far as I can see, is to put it into some kind of trust arrangement with legislation, but firmly under the control of an Aboriginal board of directors of a trust kind of arrangement.  

Associate Professor McCutcheon held a similar view, suggesting that: the copyright in the Aboriginal Flag is assigned or partly or exclusively licensed for an agreed fee to a suitable trustee such as the National Indigenous Australians Agency and clear guidelines are established in relation to its use. 

Associate Professor McCutcheon offered further input regarding how such a trustee could operate:

This would also require compensation to the licensees if they were required to cede their contractual rights. The guidelines should be agreed following input from all representative stakeholders and could stipulate when permission to reproduce and communicate the flag is required and what licence fees may be applicable depending on those factors, and when permission is not required and no license fee would be payable. The scheme could structure ongoing payments to Mr Thomas or an outright assignment of his copyright. Certain obligations should also be placed on the Trustee to act as a fiduciary in relation to the flag, ensuring that it is used respectfully and in accordance with the agreed guidelines and the scheme should specify who can take action if they consider the trustee is derelict in its duties. 

Dr Terri Janke has previously recommended the establishment of a National Indigenous Cultural Authority comprised of various Aboriginal organisations to be 'the peak advisory body on indigenous cultural and intellectual property rights'.  Such a body could, among other things, 'develop policies and protocols with various industries' and 'authorise uses of Indigenous cultural material through a permission system which seeks prior consent from relevant Indigenous groups'.  Dr Janke suggested that a trust or cultural authority could carry out a similar function in respect of the Aboriginal flag, particularly to ensure that its usage is in connection to Aboriginal people for the advancement of their rights:

The role of a trust or a national Indigenous cultural authority is like a guardian for its integrity. It could be like saying that you still need to consult and think about how you use that flag. It's not going to be put on everything. It's got to have some connection to Aboriginal people or some connection to the way it was originally intended, as advancing Indigenous rights. So to put it on a beer bottle might be against that spirit, but if you're a football team or a kids netball team wanting to put it on your guernsey, for when you're running on the field, that might be something that would fall within a suitable use. I think the guardians, a trust, could look after and make sure that the process is appropriate, that there is that connection, and have consultation with people for its suitable use. We don't want to see it derogatorily treated. I think we must be mindful also of the right of attribution, the connection to the creator of the flag. 

The Central Land Council recommended the establishment of an Aboriginal Flag Commission or Council as a subsidiary of a National Indigenous Cultural Agency as envisaged by Dr Janke:

We would invite the Committee to recommend that the Commonwealth Government assumes control of the Aboriginal Flag under a newly established entity. This could be designated as an Aboriginal Flag Commission, or Council, and may be a subsidiary organisation within a National Indigenous Cultural Authority (NICA). 

A voice to parliament 

Several submitters and witnesses stated that an Indigenous voice to parliament could play a role in the context of the Aboriginal flag. A voice to parliament could involve amending the Constitution to establish an Aboriginal and Torres Strait Islander group of people to provide advice to parliament about Indigenous issues. 

One submitter noted that a dedicated voice to parliament may have identified the issue earlier and made the resolution process easier,  while others suggested that such a body would be best placed to administer the flag. Ms Claire Coleman stated that she did not believe 'that any organisation currently is set up to administer the flag copyright in the situation we're in right now', and that a new body would need to be established unless 'there were actually the constitutional arrangements suggested in the Uluru statement, which would give us an administrative body which could in fact administer the flag'.  Mr Ngunggai Warren Mundine AM shared this view, stating that while there are a number of existing peak bodies that could administer the flag, eventually voice to parliament would be the preferred option. 

Future licensing structure 

If the current licence agreements are negotiated or wrested away from the current licensees, submitters and witnesses suggested how a future licensing scheme for use of the Aboriginal flag could be structured. A tiered licensing system was raised by a number of submitters and witnesses, with different fees and conditions applying to commercial and non-commercial use. For example, Dr Dimitrios Eliades suggested:

This body of indigenous representatives duly elected by their indigenous communities to be the exclusive licensee may grant sublicenses with a tiered approach to licences. For example, non-commercial First Nation people’s use; commercial First Nation people's use; non-commercial non-First Nation peoples use and commercial use by non-First Nation peoples…That body will be best suited to determine the merit of applications and whether they warrant a nominal license fee, giving them the opportunity to use the copyright in the Aboriginal Flag within the terms of the licence and in accordance with its recognition in the Proclamation that the Aboriginal Flag is the flag of the Aboriginal peoples of Australia and a flag of significance to the Australian nation generally. 

The National NAIDOC Committee also advocated for different fees for different uses, distinguishing, in particular, between use by community organisations and multinational companies: 

It depends on what licence the federal government is able to secure. So, at the moment, we're saying a non-commercial licence. That would still allow Mr Thomas and licensees to have their commercial rights to that material. If they grant both licenses, then that would be a different sort of structure. But, yes, I think there would have to be a sliding scale of fees, focused on community organisations and how much they want to use the flag or on multinational companies that want to use the flag. 

The National NAIDOC Committee determined that the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) might provide a useful framework to 'filter' organisations into a scaled system:

What's the legislation that encompasses the majority of Aboriginal or Torres Strait Islander organisations or corporations? At the moment it's the CATSI Act, which has about 3,300 organisations. You might also be able to include not-for-profit organisations and charities that are listed under the commission's register. You could extend that to Indigenous businesses, if the businesses were part of a commercial licence, and registration with Supply Nation. I think the object of using the CATSI Act is that it would filter down to as many organisations, corporations and community based companies as possible. If you think that there are 3,300 organisations, they might cover hundreds of thousands of Aboriginal and Torres Strait Islander people within their core functions, so something like that would allow them to use it for non-commercial purposes.

AIME Mentoring supported differential fees, adding that the fee for use of the Aboriginal flag could also depend on whether the flag was being used to advance the interests Aboriginal people:

One was that there's a licence available for free for organisations registered through the CATSI Act and potentially for Indigenous organisations at large or people who can prove that they benefit the work of Aboriginal people. Potentially it might extend to all First Nations people in that process…I don't mind that there's a little bit of a pendulum swing to mainstream organisations; I think it's an opportunity to challenge some of the mainstream organisations if they do use the Aboriginal flag or want to use the Aboriginal flag. It says, 'Okay, what are you going to be doing with this?' I don't think the fashion groups being able to put an Aboriginal flag on a pair of swimmers, for example, or something else that they then go and make profits from necessarily advances the progress of Aboriginal people. I think that's a grey zone where it's worth thinking about the design frame around it. 

A new ‘fair dealing’ exception 

Introducing a new fair dealing or fair use exception under the Copyright Act was raised by a number of submitters and witnesses as an option to balance the interests of those wishing to use the Aboriginal flag, with Mr Thomas's rights as the copyright owner.  Paragraph 1.16 outlines a number of exceptions to copyright that are presently legislated for 'fair dealings'; none of these currently apply to use of the Aboriginal flag in a general sense. 

The Australian Lawyers' Alliance argued that a fair dealing exception warrants serious consideration, as the Aboriginal flag has become a ‘widely accepted symbol of unity for Aboriginal people’ and ‘represents an essential medium by which Aboriginal people assert their identity’.   

In a joint submission, Dr Dilan Thampapillai, Mr Andrew Ray and Ms Georgia Reid outlined the difference between 'fair dealing' and 'fair use' (some submitters and witnesses without copyright expertise did not distinguish between the two concepts), stating:

We note that a number of commentators have recommended a ‘fair use’ option. However, there is a significant difference between fair dealing, which is an established exception under Australia’s Copyright Act, and fair use, which does not presently exist within the Act. If Australia were to enact a fair use exception, particularly for the specific purpose of the Aboriginal Flag, it would give rise to an extraordinarily complex question of interpreting and applying domestic Australian copyright law. As this would likely frustrate the purposes of the Committee’s inquiry, we make no further comment on the issue of fair use other than to advise the Committee against adopting that terminology. 

Associate Professor McCutcheon explained how an exception could be legislated to allow 'free use' of the flag for certain purposes:

It would be possible for Parliament to legislate an additional fair dealing exception designed to facilitate the 'free use' of the Aboriginal Flag. The wording of the exception would have to be carefully considered, but something like a fair dealing for the purpose of ‘cultural expression’ could be introduced. 

Others were hopeful that an exception could facilitate use for Aboriginal people seeking to use the flag for non-commercial use.  For example, Ms Jacqui Katona stated:

It shouldn't be controversial to negotiate fair use, for a nominal fee or no fee, for a range of uses of the Aboriginal flag by Aboriginal people for Aboriginal people. These shouldn't be issues that are causing controversy…I think it's pretty well agreed that we don't want to see any copyright protection diminished for any copyright holder, given the difficulty there is in maintaining protections, generally, for Aboriginal art and Aboriginal artists. Harold being central to any process, going forward, is something that everybody is agreed upon. But the nature of fair use by Aboriginal people—that is, non-commercial use—I think, is really at the heart of the problem. Commercial use can be problematic where organisations are engaged in profit making, yet they're not prepared to financially acknowledge the holder rights. That's a problem with very basic Australian law not just the moral issue that it carries for Aboriginal people. 

Another option could be 'fair dealing for a prescribed purpose authorised by regulation', which would be a more prescriptive scheme for permissible uses, but with flexibility to ensure appropriate protection and compensation for Mr Thomas:

An alternative to a cultural expression fair dealing exception might be a more limited new fair dealing exception for a prescribed purpose authorised by regulation. This could allow a bespoke scheme to be crafted and then prescribed by regulation…The scheme could more particularly specify permissible uses and any compensation that needs to be paid (perhaps managed through the Copyright Agency)…Again, this fair dealing exception could have more general application than just the Aboriginal Flag and would allow the government to regulate fair dealing purposes more quickly than legislating other bespoke fair dealing exceptions as required. The potential disadvantage is the reduced Parliamentary oversight and public debate surrounding potentially important changes to the copyright balance effected by regulation.  

As with many options raised with the committee, such an exception would have a corresponding impact on Mr Thomas's rights as the copyright owner. Associate Professor McCutcheon remarked:

The potential problem with this approach is that ‘freeing’ the flag as a fair dealing comes at a corresponding cost to Mr Thomas and his licensees, because uses which currently require permission and are financially compensated would no longer require permission if they met the conditions of the exception. This would represent a financial loss for Mr Thomas and his licensees. 

Associate Professor McCutcheon did forewarn, however, that uncertainty around whether the fair dealing exception applies in any particular circumstance may ultimately defeat the purpose of such a solution:

What do we mean by ‘cultural expression’? When will a dealing be ‘fair’? In particular, there may be questions about whose purpose qualifies. For example, would the exception cover a third party manufacturer applying the Aboriginal Flag to coffee mugs for a clear commercial purpose if the downstream purpose is to facilitate their customers’ cultural expression? How should the exception reconcile uses which have a profit objective but which are dedicated to Aboriginal causes? It may take a few court decisions to clarify the contours of this new fair dealing, especially whether businesses can use the defence. In the meantime, uncertainty about the exception will likely lead to risk aversion and a poor uptake of the exception, defeating its purpose.  A new flag 

While many submitters and witnesses opined that an outcome should be reached through negotiations with Mr Thomas, others suggested that the Aboriginal flag is 'dying' and that the time has come for a new Aboriginal flag to be created. 

According to Mr Michael Connolly:

…the flag is slowly dying. I've had people that have come to my business, my shop, my emails. They are sick and tired of non-Indigenous people running our country, running our businesses and running our flag. They have said to me over the last 18 months, "We don't even want the flag". 

Ms Gail Beck, Chair of the Aboriginal Advisory Council of Western Australia, described the anger and distress felt by some Aboriginal people about the current situation with the Aboriginal flag. Ms Beck told the committee:

…there are quite a large number of people who have decided to turn the flag upside down and are seeking to create a new one which the people will forever own. Also with us creating a new flag they see then that WAM will get nothing. They're very angry basically. 

Mr Michael Graham, Chief Executive Officer for the VAHS, explained how this distress and anger has created division, with some Aboriginal people arguing for the creation of a new flag:

What's happening is some people are getting so angry they're just saying, 'Stuff it, we'll just create a new one.' Others are saying, 'My family have been fighting under this flag as a united people since it first came to the embassy, because then it became more nationally recognised. So you've got two groups of people. I haven't heard a lot saying, 'Create a new one,' but it is out there. When I say that, it's probably more the social media stuff that you see, because, as you know, in Melbourne we're locked in our houses, basically. We don't get the chance to get out so we use the media, social media outlets, more than anything. There are people saying, 'No, it's been tainted.' There are people saying, 'No, my family fought hard for this.' 

The Indigenous Wellbeing Centre highlighted that the prospect of a new flag is particularly painful for some Aboriginal Elders:

A lot of the younger ones, in particular, been saying, 'We should have a competition to design a new flag.' I suppose what a lot of the elders are saying, 'Well, that's not actually really a resolution; that's really accepting defeat and allowing this to happen to us.' 

Witnesses told the committee how Aboriginal people identify with the history of the Aboriginal flag, and explained that the suggestion to design a new flag is borne out of anguish:

…for the first time since the early 1970s, that Aboriginal people are electing to not use the flag, starting conversations about designing a new flag. This is unprecedented in my lifetime. It speaks to the fact that Aboriginal people identify with the history of this symbol – as a mix of pride and resistance and our shared history. But they are now in destress and seeking a new way forward. It would be a great shame for a new flag to be required based on a failure to resolve this complex issue. 

Mr Mick Gooda told the committee that he had already 'abandoned the flag' and explained that the Gangalu people in Central Queensland had started developing their own flag:

I understand and support Mr Thomas's right to benefit from his intellectual knowledge and his contribution. But I've taken a different view. I've decided that, while he has a right to do that, I've got a right not to buy and contribute to some white bloke who is going to benefit from our flag. I've sort of abandoned the flag now. I belong to the Gangalu people in Central Queensland, and we're starting to develop our own flag. I understand what [Mr Warren Mundine] was saying—it's iconic, it's a symbol of where we are—but I just take a personal view that I'm paying a ransom, paying people for that right. What I've done is work out the balance between the right for Mr Thomas to benefit from that against my right to make a choice, and that's the choice I've made. 

Professor Langton saw a new flag as the only way forward in the event that ongoing negotiations between the Commonwealth government and Mr Thomas are unsuccessful:

I do hope those negotiations are successful. If they are not, then the only alternative we have is to have a competition for a new flag. I think that would be a tragic outcome. I think it's enormously important to preserve the flag designed by Mr Harold Thomas as the Aboriginal flag. 

AIME Mentoring was more optimistic about the prospect of a new Aboriginal flag, and described the current situation as an opportunity to create something new:

There's constantly renewal as we grow into the shoes of what we're inheriting and we start to be able to vote and think about what that looks like. So I think there's opportunity for creativity. Our suggestion is that there could be a national flag designing campaign which could have some freedom and flavour to it and which could see people designing a new Australian flag as well and continuing to explore: What does the Australian story look like? Does the Australian flag tell our story as First Nations people with strength? I would say that there is potentially scope for evolution. I hope that we might see some of that evolution in the way that our national symbols are portrayed in the next 30 years.

Pharma Pricing

'An International Review of Health Technology Assessment Approaches to Prescription Drugs and Their Ethical Principles' by Leah Z. Rand and Aaron S. Kesselheim in (2020) Journal of Law, Medicine and Ethics comments 

 In many countries, health technology assessment (HTA) organizations determine the economic value of new drugs and make recommendations regarding appropriate pricing and coverage in national health systems. In the US, recent policy proposals aimed at reducing drug costs would link drug prices to six countries: Australia, Canada, France, Germany, Japan, and the UK. We reviewed these countries’ methods of HTA and guidance on price and coverage recommendations, analyzing methods and guidance documents for differences in (1) the methodologies HTA organizations use to conduct their evaluations and (2) considerations they use when making recommendations. We found important differences in the methods, interpretations of HTA findings, and condition-specific carve-outs that HTA organizations use to conduct evaluations and make recommendations. These variations have ethical implications because they influence the recommendations of HTA organizations, which affect access to the drug through national insurance and price negotiations with manufacturers. The differences in HTA approaches result from the distinct political, social, and cultural contexts of each organization and its value judgments. New cost-containment policies in the US should consider the ethical implications of the HTA reviews that they are considering relying on to negotiate drug prices and what values should be included in US pricing policy.

Tech

'The Global Semiconductor Value Chain: A Technology Primer for Policy Makers' (Stiftung Neue Verantwortung Policy Brief) by Jan-Peter Kleinhans and Nurzat Baisakova comments 

 Semiconductors such as memory chips or processors are a foundational technology and the backbone of modern society. Not only are they a prerequisite for any endeavors into emerging technologies, such as artificial intelligence, quantum computing, autonomous vehicles and many more. But every industry relies on access to those chips. As a result, semiconductors are at the heart of the intensifying US-China technology rivalry. China is highly dependent on US-origin semiconductor technologies and the US government uses its export control regime to curb the technological advancements of certain Chinese companies. These export control measures work especially well in the semiconductor value chain because of strong interdependencies due to high divisions of labor. 

The semiconductor value chain is defined by a few key countries – United States, Taiwan, South Korea, Japan, Europe and, increasingly, China. None of these regions have the entire production stack in their own territories since companies often specialize on particular process steps (design, fabrication, assembly) or technologies (memory chips, processors, analog semiconductors, etc.) in pursuit of economic efficiency. Ultimately, no region has achieved “strategic autonomy”, “technological sovereignty” or “self-sufficiency” in semiconductors. In fact, the semiconductor value chain is characterized by deep interdependencies, high divisions of labor and close collaboration throughout the entire production process: US fabless companies rely on Taiwanese foundries to manufacture their chips. The foundries themselves rely on equipment, chemicals and silicon wafers from Japan, Europe and the US. The semiconductor value chain is thus highly innovative and efficient but not resilient against external shocks. 

Such a complex and interdependent value chain creates three challenges for policy makers: First, how to ensure and secure access to foreign technology providers through trade and foreign policy? Since any of the above-mentioned countries could severely disrupt the value chain through export control measures, foreign and trade policy plays a key role to ensure continued access to foreign technology providers. Second, how to build leverage by strengthening domestic companies through strategic industrial policy? Since no region will be able to have the entire production stack within their own territory, governments should support their domestic semiconductor industry to maintain key positions within the value chain. Third, how to foster and support a more resilient value chain? In certain parts, such as contract chip manufacturing, the value chain is highly concentrated and needs to be diversified to lower geographical and geopolitical risks. 

This paper provides a first analytical basis for policy makers. It gives an overview of the global semiconductor value chain, its interdependencies, market concentrations and choke points.

Genome

'How White nationalists mobilize genetics: From genetic ancestry and human biodiversity to counterscience and metapolitics' by  Aaron Panofsky Kushan Dasgupta Nicole Iturriaga in (2020) American Journal of Physical Anthropology comments 

Our aim in this study was to understand how genetics ideas are appropriated and mobilized online toward the political projects of White nationalism and the alt right. Studying three different online venues, we investigated how genetics is used to support racial realism, hereditarianism, and racial hierarchy. We analyzed how these ideas are connected to political and metapolitical projects. In addition, we examined the strategies used to build authority for these interpretations. 

We analyze three online venues in which genetics has been mobilized to advance racial realism and hereditarian explanations of racial differences. These were (a) the use of genetic ancestry tests in online nationalist discussions, (b) blogs and other venues in which the human biodiversity ideas are articulated, (c) activities surrounding the OpenPsych collection of online journals. Ethnographic and interpretive methods were applied to investigate scientific and political meanings of efforts to mobilize genetic ideas. 

We found that White nationalists use genetic ancestry tests to align White identity with ideas of racial purity and diversity, educating each other about genetics, and debating the boundaries of Whiteness. “Human biodiversity” has been mobilized as a movement to catalog and create hereditarian ideas about racial differences and to distribute them as “red pills” to transform online discourse. The OpenPsych journals have allowed amateur hereditarian psychologists to publish papers, coordinate activity, and legitimate their project at the academic margins. 

These various appropriations of genetics aim to further racial realism and hereditarian explanations of racial social and behavioral differences. Beyond these substantive aims, on a “metapolitical” level, they serve to reframe concepts and standards for political and scientific discussion of race, challenge structures of academic legitimacy and expertise, and build a cadre of ideological foot soldiers armed with an argumentative toolkit. As professional anthropologists and geneticists aim to accurately communicate their science and its implications for understanding human differences to the public, they must contend with these substantive claims and metapolitical contexts.