MYKOLAS ROMERIS UNIVERSITY

DOCTORAL CANDIDATES‘ ASSOCIATION

Social Transformations in Contemporary Society

Proceedings of an International Scientific Conference for Young Researchers

2019 (7) Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

Conference is organized by:

Conference partners:

Editorial board of the issue: Chairperson: Prof. dr. Agota Giedrė Raišienė, Academic Association of Management and Administration, and Mykolas Romeris University, Lithuania

Members: Dr. Michele Albano, CISTER (Research Centre in Real-Time Computing Systems) Research Unit, School of Engineering (ISEP) of the Polytechnic Institute of Porto (IPP), Portugal Assoc. prof. dr. Mantas Bileišis, AVADA, Mykolas Romeris University, Lithuania Prof. dr. Virginijus Bitė, Mykolas Romeris University, Lithuania Prof. dr. Vasco Boatto, University of Padova, Italy Dr. Norbert Bozsik, Károly Róbert College, Hungary Dr. Lynn Clark, The University of Manchester, United Kingdom Prof. dr. Gediminas Černiauskas, Mykolas Romeris University, Lithuania Dr. Miglė Eleonora Černikovaitė, Mykolas Romeris University, Lithuania Prof. dr. Gintaras Černius, Mykolas Romeris University, Lithuania Dr. Daiva Daukantaite, Lund University, Sweden Assoc. prof. dr. Aistė Dromantaitė, AVADA, Mykolas Romeris University, Lithuania Assoc. prof. dr. Teresa Fayos, University of Valencia, Spain Prof. dr. Antonio Fici, University of Molise, Italy Assoc. prof. dr. Stanislav Filip, School of Economics and Management in Public Administration, Slovakia Assist. prof. dr. Diego Foti, University of Messina, Italy Dr. Marc Oliva i Franganillo, University of Barcelona, Spain Prof. dr. Ineta Geipele, Riga Technical University, Latvia Assist. prof. dr. Patrizia Ghisellini, University of Bologna, Italy

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Dr. Amar Hussain, Prosecution Department Government of Sindh, Pakistan Prof. dr. Sohail Inayatullah, Tamkang University, Taiwan; University of the Sunshine Coast, Australia Prof. hab. dr. Robertas Jucevičius, Kaunas University of Technology, Lithuania Dr. Ilona Kajokienė, Žemyna clinic, Mykolas Romeris Univeristy, Lithuania Dr. Marius Laurinaitis, Mykolas Romeris Univeristy, Lithuania Prof. dr. Alfonsas Laurinavičius, Mykolas Romeris University, Lithuania Prof. dr. Ilídio Tomás Lopes, University of Lisbon, Portugal Prof. dr. Ingrida Mačernytė Panomariovienė, Mykolas Romeris University, Lithuania Prof. dr. Mel Marquis, European University Institute, Italy; Central University of Finance and Economics, China Dr. Frėdėric Marty, Research group on law, economics, and management, University of Nice Sophia Antipolis, France Assoc. prof. dr. Teri McCarthy, Lithuanian University of Educational Sciences, Lithuania Prof. dr. Odeta Merfeldaitė, Mykolas Romeris University, Lithuania Prof. dr. Jacqueline Nolan-Haley, Fordham University, United States of America Dr. Natalija Norvilė, Mykolas Romeris University, Lithuania Dr. Jaromír Novák, University of Economics in Bratislava, Slovakia Dr. Avelino Oliveira, Centre for Public Administration & Public Policies, Portugal Assoc. prof. dr. Bulent Ozel, Istanbul Bilgi University, Turkey Dr. Irene Pellizzone, University of Milan, Italy Assoc. prof. dr. Paulo Alexandre da Silva Pereira, Mykolas Romeris University, Lithuania Assoc. prof. dr. Cristian Pettinari, University of Milan, Italy Dr. Andrius Puksas, Mykolas Romeris University, Institute of Lithuanian Scientific Society, Lithuania Assoc. prof. dr. Rizal Rahman, National University of Malaysia, Malaysia Prof. dr. Albert Sanchez-Graells, University of Bristol Law School, United Kingdom Prof. dr. Hannu Schadewitz, Turku School of Ecoomics, University of Turku, Finland Prof. dr. Aelita Skaržauskienė, Mykolas Romeris University, Lithuania Dr. Katarina Stachova, School of Economics and Management in Public Administration, Slovakia Dr. Silvia Svecova, School of Economics and Management in Public Administration, Slovakia Dr. Rūta Tamošiūnaitė, Academic Association of Management and Administration, and Mykolas Romeris University, Lithuania Assoc. prof. dr. Agnė Tvaronavičienė, Mykolas Romeris University, Lithuania Assoc. prof. dr. Aurelija Ulbinaitė, Vilnius University, Lithuania Assoc. prof. dr. Akin Savas Yildirim, Istanbul Bilgi University, Turkey Assist. prof. dr. Carsten Weerth, Main Customs Office Bremen and FOM University of Applied Sciences for Management and Economics, Germany Dr. Andrew Wells-Dang, Oxfam in Vietnam, Vietnam

Organizational Committee of an International Scientific Conference for Young Researchers ‘‘Social Transformations in Contemporary Society 2019’ Chairperson – Dalia Karlaitė, Mykolas Romeris University, Lithuania Co-Chair – Mykolas Simas Poškus, Mykolas Romeris University, Lithuania Members: Inga Bertašienė, Mykolas Romeris University, Lithuania Svajūnė Ungurytė-Ragauskienė, Mykolas Romeris University, Lithuania Audronė Urmanavičienė, Mykolas Romeris University, Lithuania

3 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) Table of Content

MASS PERSONALIZATION VS. MASS CUSTOMIZATION: FINDING VARIANCE IN SEMANTICAL MEANING AND PRACTICAL IMPLEMENTATION BETWEEN SECTORS ...... 6

PRINCIPAL - AGENT AGREEMENT AND UNEMPLOYED THIRD COUNTRY NATIONALS: THE ROLE OF PUBLIC AND PRIVATE EMPLOYMENT SERVICE AGENCIES IN COUNTRACTING-OUT EMPLOYMENT CASE MANAGEMENT TO ENABLE YOUNG THIRD COUNTRY IMMIGRANTS EMPLOYMENT-RELATED TRANSITION FROM WELFARE TO WORK IN CZECH REPUBLIC ...... 16

"DIFFERENT SPEED" OR UNIFIED EU? ANSWER FROM THE POINT OF VIEW OF INSTITUTIONALISM THEORY ...... 26

SOCIAL TRANSFORMATION OF PAKISTAN UNDER KASHMIR DISPUTE .... 36

CULTURE, ADVERTISING AND THE PLAY WITH ‘RELIGION’ ...... 46

VIDEO SURVEILLANCE AND THE GDPR ...... 55

THE SIGNIFICANT ROLE OF LEGAL REGULATIONS AND STANDARDISATION IN THE DEVELOPMENT OF TELEMEDICINE IN THE EU ...... 66

EVALUATION OF CYBER INSURANCE AS A RISK MANAGEMENT TOOL PROVIDING CYBER-SECURITY ...... 84

CROSSING METACOGNITIVE AWARENESS IN UNIVERSITY STUDIES: AN EMPHASIS ON BELIEFS ...... 94

CHINA'S ONE BELT ONE ROAD INITIATIVE AND THE EU’S FDI SCREENING REGIME: SCOPE, EU’S ATTITUDE AND IMPACT...... 105

CIRCULAR ECONOMY – ONE OF THE MOST IMPORTANT CHALLENGES FOR THE EUROPEAN UNION ...... 118

THE LEGAL RESPONSIBILITY FOR THE VIOLATION OF E-WASTE MANAGEMENT IN CONTEMPORARY SOCIETY ...... 131

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SOCIAL RESILIENCE ASSESSMENT FRAMEWORK IN THE CONTEXT OF ORGANIZATIONS OPERATING IN RURAL AREAS: CONCEPTUAL REVIEW142

JURISDICTION IN THE SUCCESSION MATTERS UNDER THE REGULATION (EU) NO 650/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 4 JULY 2012 IN THE FACE OF POLISH INTERNATIONAL CIVIL PROCEDURE ...... 150

NATIONALISM IN THE CONTEXT OF POLITICS OF CHANGE IN SPAIN .... 162

DAMAGE CLAIMS FOR IMPROPER PRISON CONDITIONS: THE JURISPRUDENCE OF THE SUPREME ADMINISTRATIVE COURT OF LITHUANIA FROM THE PERSPECTIVE OF THE CONVENTION FOR THE PROTECTION OF HUMAN RIGHTS AND FUNDAMENTAL FREEDOMS...... 171

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MASS PERSONALIZATION VS. MASS CUSTOMIZATION: FINDING VARIANCE IN SEMANTICAL MEANING AND PRACTICAL IMPLEMENTATION BETWEEN SECTORS

Gedas Baranauskas

Mykolas Romeris University, Lithuania [email protected]

Abstract

During last 3 decades, Mass Personalization and Mass Customization as research domains have been advancedly overlooked and currently are overcoming theoretical boundaries. Ongoing digital transformation, rapidly increasing orientation to customer centric approach, demand-driven supply and value creation via online environment, platforms or tools undoubtedly influence content and development of these two paradigms too (Rungtusanatham and Salvador, 2008; Gandhi et al., 2013; Hu, 2013; KMPG, 2016; Tiihonen and Felfernig, 2017). On the other hand, a number of academic research as well as organization practices still show variances in the semantical meaning of those mentioned concepts, implementation logic and limited interaction with digitalization and value co- creation. Therefore, the research type of scoping review is based on literature analysis. It is followed throughout this article for a quality evaluation of a current standpoint and practical tendencies in the field of understanding Mass Personalization and Mass Customization, as well as defining possibilities in adapting approaches of value co-creation and technology-based attitude. Purpose – article aims to conceptualize an existing semantical gap between concepts of Mass Personalization and Mass Customization by analyzing recent scientific literature and trends in their practical implementation. Design / methodology / approach – in this research the author followed a mixed type of quantitative and qualitative methodologies. The first one is related to the method of scoping review, which is used to collect and categorize data of semantical meaning in Mass Personalization and Mass Customization concepts. The qualitative one follows methods of general and comparative scientific literature review and conceptualization of new insights later. Therefore, the design of research is described as a systematic literature review and information systemization. Finding – results of the present evaluation of the research subject suggest that mismatches in semantical understanding of analyzed concepts as well as their adoption are very common. In addition, it is noticed that approaches of value co-creation and technology-based attitude and their combination are evaluated separately or partly from the research subject. Research limitations / implications – the present article has limitations both in theoretical and practical fields. From the perspective of scientific research, it is noticed that in different periods, the focus has been switched exclusively on process standardization or Mass Customization, without conducting a multi-dimensional research. In addition, there are also limited research carried out in the field of finding content differences between Mass Personalization and Mass Customization concepts as well as their possible combination for different sectors, with a focus on non-manufacturing organizations, digitalization and data analytics. Practical implications – results of the research may be applied in practice in different sectors and different type of organizations: a) as a multi-dimensional framework and basis for conducting an internal evaluation of ongoing process status as well as a content of service in relation to Mass Customization or Mass personalization; b) as a theoretical background to set up a direction and

6 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) content of changes to reach a more customized or personalized service and create an overall more customer-centric approach in an organization; c) as a summary of key points for a better understanding on main differences, requirements, trends of each concept and their practical adoption. Originality / Value – theoretical analysis created following holistic and multidimensional standpoints not only confirms existing differences between semantical meanings but also reveals possible areas of misunderstanding when applied in practical implementation. In parallel, at this point, a combined approach of value co-creation and technology-based attitude produces valuable insights for future research and might serve as a basis for ongoing process evaluation in practice. Keywords: Mass Customization, Mass Personalization, Digitalization, Co-creation Research type: literature review.

Introduction

In recent decades, terms, concepts and practical cases of mass service customization or personalization as well as a technology-based attitude to organizational management processes and systems have been combined and used widely both in development of private and public sectors (Jitpaiboon et al., 2013; Deloitte, 2015; Chatzopoulos, 2017; OECD, 2018). Actually, it has become a multidisciplinary management concept with a focus on applying combined methods and wide-spreading effect to different type of organizations and sectors. To be more specific, it became a dominant element within the content of management at organizations of different levels: a) as a strategic orientation to gain a competitive advantage and a higher level of process excellence in a long term run; b) as a key performance index to evaluate a level of customer satisfaction and value co-creation in a mid term run; c) as a standard to follow in daily management of process, system and employees at operational level (Welborn, 2009; Moon and Lee, 2015; Schlager, 2018). In addition, influence of external factors is also worth mentioning: new ways of correlation among sectors, a raise of global and dynamic tendencies of services and product line automation and digitalization, rapid social changes in the society take a notoriously significant place here (Jitpaiboon et al., 2013; OECD, 2018). All these factors naturally demand a continuous scientific research to discover new ways of aligning best practices and solving both new and old type of problems in the field.

Scientific research of Mass Personalization and Mass Customization: main statistical data, content and trends

In the field of business management, the last decade, especially last 5 years, stand for remarkable changes both on scientific research level and organization practices. Fast Information and Communication Technologies (ICT) development, a rise of Big Data and Big Data Analytics (BDA) as well as new combinations of methods in process management lead to distinctive attitude and evolution of concepts of Mass Personalization and Mass Customization (Risdiyono, 2016; Tiihonen and Felfernig, 2017). It is possible to outline a strong reflection of these concepts revealed in the scientific research field, and this can be illustrated by indicators of research frequency, main research areas, researcher origin (country), etc. (see in Table no. 1).

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Table 1. Main data of scientific research on Mass Personalization and Mass Customization in 2015-2019 Topic Frequency Area Origin Mass 204 (total): 1) Engineering (68) 1) USA (44) Personalization 2019 – 8 2) Computer Science (61) 2) People’s Republic of China 2018 – 50 3) Business Economics (42) (PRC) (25) 2017 – 68 4) Communication (30) 3) Germany (16) 2016 – 39 5) Science Technology other 4) Italy (15) 2015 – 39 topic (27) 5) England (12) Mass 1127 (total): 1) Engineering (763) 1) People’s Republic of China Customization 2019 – 54 2) Business Economics (516) (PRC) (221) 2018 – 259 3) Computer Science (485) 2) USA (212) 2017 – 284 4) Operations Research 3) Republic of China (ROC) 2016 – 271 Management Science (189) (147) 2015 – 258 5) Mathematics (189) 4) Germany (119) 5) England (87) Source: Composed by the researcher and based on resources in the Web of Science (WoS) search tool (accessed 2019-05-02)

In reference to the table above, summarized results of the search in Web of Science (WoS) database are exposed under the following conditions: a) Search was implemented in 4 databases in the WoS platform: Web of Science Core Collection, KCI-Korean Journal Database (KJD), Russian Science Citation Index (RSCI), SciELO Citation index. Moreover, none restrictions by languages and document types were made; b) In evaluation categories “Area” and “Origin” results are provided in classification by relevance. Only first 5 data rows are provided under both categories “Area” and “Origin” as they take the biggest part of all findings proportionally, and these subjects are considered as most analyzable in the context of Mass Personalization and Mass Customization respectively. For instance, Engineering appears to be the most analyzable area in terms of Mass Personalization as it covers 33 % of the scope, and Science Technology other topic covers 13 % of the scope. Therefore, this dispersion of research domains ranges between 33 % - 13 % in relation to all identified research domains, in case of Mass Personalization. While in case of Mass Customization, this range deploys from 68 % to 17 % with Engineering and Mathematics respectively. In the category „Origin“, 58 % of all researches in Mass Personalization topic and 70 % of all researches in Mass Customization topic are represented. Coming back to data in table above, main insights of scientific research content and trends during last 5 years period are clarified as follows. First, it is noticed that the amount of research in Mass Customization overrides the amount of research of Mass Personalization by five times. Evaluating average numbers, first topic (during the period 2015 - 2018 as full year period) has 268 researches while second topic – approximately 49 researches per year. Comparing to the overall period (1990 - 2019), the difference between topics reach a proportion of 1 : 10 (418 : 3 586 researches). The main feature in the statistics should be outlined – 2017 is the peak period for both topics. In general, the selected period of 2015 – 2019 is also the most intensive: 49 % of all Mass Personalization and 31 % of all Mass Customization domains related scientific research are completed during the last 5 year period. Furthermore, 3 repetitive domains in two topics are identified: Engineering, Computer Science, and Business Economics. This point confirms the assumption that these topics currently are living through a transition into business management field. In addition, main differences are noted: Mass Personalization is strongly related to a specific research area of

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Communication and Health Care Sciences Service (under domain Science Technology other topic) while Mass Customization is related to a more general research area Operations Management and Mathematics. At this point, an additional content-based overview confirmed assumption that Mass Personalization is used more in Public Sector organizations and their related activities: 40 % (17) of studies in the period 1990 - 2019 in the domain of Health Care Sciences Service belongs to a subdomain of Public Environmental Occupational Health. In order to evaluate the development of content and new trends in areas in different periods, 3 periods of data were compared: from the start date of data collection in the WoS database to 2019; last 10 years (2009 - 2019) and last 3 years (2016 - 2019). In the case of Mass Personalization research areas, there are two periods where individual topics are investigated: a) first and second periods – Computer Science, Engineering, Business Economics Communication, and Health Care Sciences Service; b) in the third period same four mentioned areas are analyzed, additionally with an increased attention towards Science Technology (other topics) and Behavioral Sciences. In the case of Mass Customization, main research areas in all periods are Computer Science, Engineering, Business Economics, Mathematics, and Operations Research Management Science. Therefore, it can be stated that Mass Personalization represents customer oriented organizations better, those which focus to customer data, behavioral analysis and results application, communication flow management, while Mass Customization is more related to product driven and oriented organizations and product, process or systems improvements at operational management level. New form of synergy between analyzed objects, which were recently identified in practice and academic researches should also be mentioned – a combination of concepts, which have evolved to the business model of Mass Customization and Personalization (MCP) (Risdiyono et al., 2016).

Variance in semantical meaning and practical implementation

As mentioned before, the period of recent 5 years features an increased attention to technology and combined (integrated) methods. This type of management has become dominant in organizations decision-making processes and an essential part of competitive advantage. Mentioned factors also have influenced current customer centric concepts of Mass Customization and Mass Personalization, Product-Service Systems (PSS) or value co-creation as well as their development to new individualization models: e-customization, Mass Customization and Personalization (MCP), Access-Based Product-Service Systems (AB-PSS), etc. (Park and Yoo, 2013; Risdiyono et al., 2016; Fels et al., 2017; Dreyer et al. 2019; Tunn et. al., 2019). It should be mentioned that user-driven product or service customization and digitalization, indicators of customer satisfaction and loyalty were strongly affected by recent trends of automation, data management and overall fourth industrial revolution (industry 4.0) (Forbes and Schaefer, 2017; Rødseth et al., 2017; Wang et al., 2017; Zhang et al. 2019). This phenomenon lead to the transformation of traditional production-inventory and business models (mass production and B2C (business-to-customer) model) to new models, which fully meet personalized needs of a customer as well as employees (mass customization and C2B (customer-to-business)) (Gross et al., 2018; Zhang et al. 2019). Although it is clear what crucial role in modern organization management these customer centric concepts of Mass Customization and Mass Personalization play, they still face numerous mismatches in semantical interpretations and later practical usage. Accordingly, main semantical meaning similarities and differences are provided in the table no. 2 (below).

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Table 2. Variances in semantical meaning of Mass Customization and Mass Personalization Mass Customization Mass Personalization A customized service/product and A personalized experience based on co- acquisition of competitive advantage creation, analysis of user behavior and Definition through the combinations of organizational changes technological and management methods and their adaptation Data-driven foundation; limited Data-driven foundation; strong customers impact and interaction with customers impact and interaction with Key elements organization; harmonization between organization; demand-driven co- diversity, costs and quality; demand- creation driven supply chain Usage of combined methods; tailored Provide a greater access to information; product or service; orientation to streamlining processes; tailored Aim competitive advantage experience and target audience; orientation to customer needs and smart service Source: Composed by the researcher and based on resources: Deloitte LLP, 2015; ; KMPG, 2016; Fels et al., 2017; Tiihonen and Felfernig, 2017; Dreyer et al. 2019

In addition to above provided data, it is important to note a suggestion of Delloite LLP (2015) regarding a 4 stage model of products and service individualization, which illustrates differences in the process logic. In this model, personalization is the first stage after standardization and the first of three individualization stages, while customization is a second or intermediary stage between personalized and bespoke products and services. Bespoke service here should be treated as a full customer engagement (by co-design and co-creation type of activities) in the individualization procedure with a clear purpose to create a unique result (Deloitte LLP, 2015). Coming back to semantical meaning variances, main similarities of concepts are identified: both have a data-driven foundation and use them for a tailored product/service or system creation and experience for the target audience by keeping costs level nearly to a mass production level. In other words, in both cases harmonization is kept with diversity, costs and quality (Skačkauskienė and Davidavičius, 2015; Dreyer et al., 2019; Tunn et al., 2019). Another common feature is a constant interaction and two-way communication with customers as well as employees. In this way relevant information input and evaluation during individualization procedure as well as building customer satisfaction and loyalty in the future are ensured (Fels et al., 2017; Schlager et al., 2018). At this point it is important to mention that communication is one of the main misleading features in semantical interpretation and practical implementation. Data analyses of scientific studies on the Mass Personalization topic show a close relation to the Communication domain. Scientific research of this concept also reveal an impact made by communication on co-design and co- creation approaches: it is based on a proper management of customer data input in the design phase as well as provision of a solid output, in form of timely and tailored information for users (Hu, 2013; Tiihonen and Felfernig, 2017; Gross et al., 2018). In comparison, the concept of Mass Customization has clear communication and interaction management limitations: a) First, it is a basic internal production paradigm, which uses a configuration of processes or systems based on knowledge and new combined management methods, typically used in Mass Production concept. In most of cases, they are created via in house development

10 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) and have clear predeterminations by designers, which unnecessarily satisfy specific requirements of costumers (Tiihonen and Felfernig, 2017; Wang et al., 2017). b) Second, transition from a standard service or product model (Mass Production concept) to a customization driven by user experience has not been widely discussed (in business management field) in terms of mass confusion taking a role as a side effect, as this solution requires personal assistance with communication of relevant information, constant support and feedback (Huffman and Kahn, 1998; Tiihonen and Felfernig, 2017). c) Third, another type of approach to Mass Personalization, Mass Customization and Communication domains can be identified in organizations practice. According to Deloitte (2015), in the phase of personalization, organizations analyze existing customer purchase or profile (user model) data and later modify products or service according to results from a recommended system (Tiihonen and Felfernig, 2017). Thus, no active communication or other type of customer engagement is needed here. It should be noted that due to existing assumption of that a two-way communication and customer interaction management is costly and time consuming organizations prefer to implement this concept as a key tool in sales and marketing strategies (Gandhi et al., 2013; Deloitte LLP, 2015). Accordingly, in practice it is illustrated by implementing a different degree of personalized marketing. For instance, campaign personalization, geographical personalization, related content personalization, etc. Besides, modified C2B business model - C2B2M-MP (customer to business to manufactory based on mass personalization) is used (Deloitte LLP, 2015; Zhang et al. 2019). In the customization phase organizations face complex challenges to define a cost effective number of features and options for customizations as well as they properly deal with costumers engagement, experience and communication management. At this point, previously mentioned combinations of technological and management methods are adopted. In addition, Deloitte (2015) research and analysis also show 2 possible categories of customization: a) Active participation in process. This type is typically related to a customer willingness to be actively involved into the whole customization procedure and noticed in category of a more expensive service or luxury products, for example, fashion accessories, clothing, jewelry, furniture, or holidays. It also might be called as an intermediary stage between Mass Customization and Bespoke service; b) Limited participation in process, which is related to a standard customization concept based on passive users’ actions and their preferred low level of involvement. In this case, products or services are massively produced and customized by using data which organizations already operate or receive, while for costumer limited options for customization are offered. In practice, in this customization category, an account customization feature illustrate data collection and management when service or product content can be personalized after creating account and sharing personal data with organization (Deloitte LLP, 2015). Overall, Mass Customization in practice is defined under a general business model of C2B2M-MC (Customer to business to manufactory based on mass customization) and 5 specific operations models: Customers’ personalized requirements (CPR) based on customization model; Product design (PD) based on customization model; Product manufacturing (PM) based on customization model; Supply chain (SC) based on customization model and Users’ service (US) based on customization model (Zhang et al., 2019). Real examples of passive customization can be found in food and beverage market segments as well as in the field of entertainment relating books, music, etc. Comparing practical implementation tendencies between sectors, first of all, common historical circumstances raised in 1990s should be mentioned. They feature innovative social and technical infrastructures as well as development of information and communication technologies (ITC) and their adaptation to organizations practice (Pieterson et al., 2007). Moreover, tendencies of the last decade in the private sector possess an application of mixed

11 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) features, however, customization appears to become dominant. In opposition, strong preferences to Mass Personalization concept are recognized in the pubic sector (Needham, 2011; Dvoriak and Savickaitė, 2018). In addition, it should to be mentioned that the selection of Mass Personalization is based not only on the role of the Communication domain in the public administration context, but on two side needs too. To be more specific, public organizations aim to adapt good practices in digital and tailored customer experience management so as to improve service quality and a cost ratio (Homburg and Dijkshoorn, 2013). On the other side, looking from the customer perspective, a clear need for this type of service model as well as an increasingly raising expectation to receive a high level of interaction possibilities, service content transparency and digital environment simplicity from government is identified. A personalized e-government service delivery in public health, safety, communication and tax administration fields is defined as a good practical example where this concept implication helps to manage such public sector service management issues as reducing information overload and asymmetry, improving waiting time, decentralizing service provider network by delivering an equitable access to public goods without any specific time and location limitations (Homburg and Dijkshoorn, 2013; Christensen and Pilling, 2014; Kant, 2014, Schwarz, 2016). Examples of personalized e-government service are found in cases of Canada, Netherlands, England (Homburg and Dijkshoorn, 2013; Dvoriak and Savickaitė, 2018). At this point, relevant insights from Deloitte LLP research are outlined as bringing an importance where it is stated that there are general obstacles in environment which are affecting customized product orientated private sector organizations, but also influence customer engagement and preferences in the public service area. Rapidly evolving technologies, economic uncertainty defined by low growth and margin compression numbers, customers demographic shifts are identified as impacting organizations by a significant scope (Deloitte LLP, 2016).

Conclusions

In summarizing semantical meaning and practical implementation of analyzed concepts, main points are clarified: a) In scientific research, Mass Personalization is evaluated as a pre- stage of Mass Customization, while in practice it is understood as a stage coming after or combined with Mass Customization; the main mismatch area is a role of Communication domain; b) When increasing digitalization and development of Information and Communication Technologies (ICT), new forms of customers engagement in product or service individualization procedure is revealed as well as a set of new requirements for value co-creation and co-design activities and systems are outlined. Therefore, organizations should focus to an application of combined, technology and management synergy based methods, qualitative and quantitative process measurement indicators; c) Practical implementation between sectors features differences and tendencies – private sector organizations are tended to adapt combined Mass Customization and Personalization (MCP) concept or base their strategy on process oriented customization methods while the public sector prefers Mass Personalization concept more (Gandhi et al., 2013; Fels et al., 2017; Risdiyono et al., 2016).

Discussions

The scoping review and systematic literature review have confirmed following positions and assumptions in the field of semantical interpretation and practical interpretation of Mass Personalization and Mass Customization:

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a) Mass Personalization paradigm has a strong content relation to the Communication domain. It is based on management of customer engagement, experience and satisfaction; also it features in building customer loyalty as well as ensuring a streamlined information flow and access to smart service. Due to mentioned elements of content, Mass Personalization is more acceptable to adapt to Public Service as this is confirmed by numerous researches under the Public Heath Care subdomain of the analyzed period. But at this point an open question has been left unanswered on how properly in time and location aspects and in which framework personalization technologies should be switched from the product oriented Mass Customization based C2B2M-MC business model to the customer orientated C2B2M-MP (customer to business to manufactory based on mass personalization) model? b) Mass Customization paradigm is defined as an operational technology oriented to product manufacturing. This approach is mostly influenced by historical reasons and overall practical implementation tendencies: a misleading correlation to the Mass Production paradigm and application via advanced manufacturing operations technology. It is illustrated by dominant scientific research origin countries USA, Germany, United Kingdom, and this correlates with statistics of product configurators offered by companies based on country of origin: leading countries are Germany, USA, Austria, United Kingdom and Switzerland (Risdiyono, 2016). In practice, it is also evaluated as a multidimensional, intermediary procedure stage between Mass Personalization and Bespoke service. In this case, both practical and theoretical type of questions for future research arise: how organizations should transit from personal marketing to personal experience and find a right proportion between a level of involvement and customization? How to incorporate a value co-creation approach and tools into already customized systems, services or products? c) As recommended guidelines for practical analysis in both sectors organizations can be adapted and combined: 1) At operational level, for AS-IS type, multidimensional status identification – Customization index (Welborn, 2009), classification of 5 customization models (Zhang et al., 2019) and a matrix of workers competencies and skills evaluation (Gross et al., 2018). 2) At strategic level, to define TO-BE situation and future actions direction – 3-level matrix of goals (of the manufacturing paradigms) (Hu, 2013), evolution and characteristics of C2B model diagram (Zhang et al., 2019) and an extension to Mass Customization and Personalization (MCP) concept. It is important to notice – comparative analysis and research about combination of these methods and their application possibilities in organizations of different types and sectors are missing.

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15 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

PRINCIPAL - AGENT AGREEMENT AND UNEMPLOYED THIRD COUNTRY NATIONALS: THE ROLE OF PUBLIC AND PRIVATE EMPLOYMENT SERVICE AGENCIES IN COUNTRACTING-OUT EMPLOYMENT CASE MANAGEMENT TO ENABLE YOUNG THIRD COUNTRY IMMIGRANTS EMPLOYMENT-RELATED TRANSITION FROM WELFARE TO WORK IN CZECH REPUBLIC

Eddy Bruno Esien

Charles University in Prague, Czech Republic [email protected]

Abstract

Purpose – This purpose of this paper is to explores contracting-out of employment case management service implementation and the role of public and private employment service agencies under principal-agency agreement in Czech Republic to enable young third country immigrant employment-related transition from unemployment to all types of employment Design/methodology/approach – The qualitative case study was to understand the role of Local Public Employment Service (PES) and Private Employment Service agencies in contracting-out for employment case management service delivery to enable young third country immigrant employment-related transition from welfare to work. Drawing on official employment-related legislative documents and scholastic text, data were collected. Data were analyse using document and thematic qualitative content analysis techniques. Finding –The findings show information, monitoring to guide ethical value and accountability, and bonding to target agency`s conduct. This outcomes points to crucial authoritative model in contracting-out of employment case management implementation to manage taxpayer`s money in time where countries are still facing financial crisis with gross domestic product deficit. Research limitations/implications – The single case-oriented approach focused only to Czech Republic with insufficiently generalization to explain the phenomenon in countries not included in the study leading to low external validity. In addition, this study focuses mainly on young third country immigrant employment-related transition from welfare to work in Czech Republic. Thus, irregular and undocumented third country immigrants are not part of this study. Analysing research findings with the lens of contracting-out model, assumes that human beings actions are rational bounded with self-interest and opportunism. Using principal-agent theory in contracting-out case management study allows the investigation to specify tasks as well as how controlling and monitoring over private agencies and bonding mechanism serve as prerequisite for principal`s (PES) authoritative managerial duty to enable young third country immigrant`s from welfare to work. Practical implications – The outcome of this study is relevant because it widens the understanding of corporate partnership between officials (principal) and employment agencies (agent) to improve young third country immigrant’s transition into work. Also, the researcher hopes this research contribution would stimulate further study in active policy measure implementation and governance. In addition, this research outcome offers other observation and approach of the researcher about the implementation governance of activation policy measures to enable young third country immigrant’s employment-related transition. Hence, the most important contribution is not the achievement, but to contribute for further study in third country national`s research.

16 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

Originality/Value – This research is considering the distinctiveness of third country national’s heterogeneous group’s sub-category as a focused group to enrich the real community and foster social cohesion. There is still little rigorous empirical evidence to justify the contracting out of employment case management services service delivery to enable third country national’s employment related transition from welfare to work in CEE countries, including Czech Republic with needs to fill this knowledge gap. This study enriches this line of qualitative research and concentrates in particular on the sub group of young third country immigrants among the heterogeneous groups of third country nationals Keywords: Contracting-out case management, Czech Republic, Employment service, Welfare-to- work, Young third country nationals Research type: research paper.

Introduction

Contracting-out of employment case management from public to private employment service agencies to deliver advice to hard-core job seekers is not completely new governance. Contracting out takes places in quasi-markets replacing state monopoly of service delivery, assuming private agencies are better off to enable disadvantaged people`s needs. Yet, private enterprises may have too strong incentives to cut cost that can impair service implementation quality (European Commission 2012; Gesine 2016; Bartlett et al 1993). Moreover, local government units are face challenges with information asymmetry and costly administrative process to monitors agency`s performance (Gilbert 2004: 120) and manage taxpayers money resulting to conflict of interest fulfilling their relational tasks (Gilbert 2004) in the contractual agreement. Although, there are existing contracting-out of employment service research in many countries, rigorous empirical evidence is still scarce in CEE countries (Gesine 2016), including Czech Republic to understand the role of public and private employment agencies contracting out for employment case management specifically to enable young third country nationals employment-relate transition from welfare to all type of work. As a matter of fact, this study provides an more insight to enrich contracting out of employment case management research in Czech Republic. Thus, analyzing the principal-agent relation is keys to understanding this dynamic. The purpose of this paper is to fill in the gap and explores contracting-out of employment case management service implementation and the role of public and private employment service agencies under principal-agent agreement in Czech Republic to enable young third country immigrant employment-related transition from unemployment to all types of employment. In addition, this research enriches contracting-out of case management service delivery to enable unemployed young third country immigrants among hard core- welfare recipients employment-related transition from welfare to work in Czech Republic. Unemployed young third country immigrants are defined as non-EU nationals or foreigners who voluntarily and legally move to one of the European Union member`s State with visa and residence permits. In particular, they are hard-to-place clients that face several barriers to enter work and needs employment case management to adjust contemporary competitive (de)regulated employment systems. The research questions is: How is the role of Public employment service and private employment Service agency in contracting-out of employment case management service implementation under principal-agent agreement to enable young third country immigrant employment-related transition from welfare to work in Czech Republic, and what is the consequent to young third country immigrant. Drawing on official employment documents and scholastic texts, the qualitative case study data are collected for analysis with the methods of document and thematic content

17 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) analysis techniques. The paper begins with section two discussing principal and agent arrangement in contracting-out of employment case management model. Section three will discuss the methodology and methods of the study. In section four, the researcher will present the findings on the role of public and private employment agencies in contracting-out case management service implementation enabling young third country immigrant’s employment- related transition from welfare to work in Czech Republic. Finally, this paper will end with some general remarks

Principal-agent agreement in contracting-out case management

Principal-agency agreement is a relational authoritative model in contractual governance where according to institutional economics, agent of implementation (here employment agencies) is supposed to pursue the interest of the principal (here a bureaucratic apparatus or individual officials) (Potůček et al 2016). Analysing of the principal-Agency model over the past years is essential to understand the causes and consequences of interests’ disagreements (Zinyama 2014). In particular, it assumes human beings actions as rational bounded with self-interest and opportunism (Eisenhardt, 1989). The principal – agent arrangement emphasizes on information asymmetry problems in contracting out of service implementation (Barney and Ouchi, 1986). As a matter of fact, principal-agency agreement shows the risk attitudes of principals and agents (Eisenhardt, 1989) in contracting-out of employment case management services delivery implementation. However, there are information resulting to conflict of interest that is often manage with bonding to target agency`s activities, and monitoring of their tasks. In contracting-out, agency relationships occur when the principal (Public Employment Service) in the relational agreement delegates authority to agents (private employment services) and the principal`s interest is often affected by the choices of agency’s who own the resources such as time, information and skills (Potůček et al 2016: 147). This relational authoritative model of corporative governance is useful to develop flexible forms of services delivering specifically targeted to local labour market needs (European Commission 2012). Yet, the decisions differ in Austria, Finland and the Czech Republic due to their dissimilar institutional setup in Employment Acts. Moreover, different problem arises when there is conflict of interest between the principal and agent. In Barney and Hesterly (2005) view, conflict of interest arises in principal-agent specific tasks fulfilment. Similarly, Potůček et al (2016: 147) argues that conflict of interest is imperative because it is not the principal but the agent who has resources such as time, information and skills. Therefore, the principal cannot fully check the agent`s compliance with his/her orders and interest (Potůček et al 2016). Thus, making principal unable to monitor agent`s actions and incapable to controls agent`s activities because of insufficient information. And agent`s deviation from the pursuit of the principal`s interest, instead pursing his value orientation and /or maximizing his own benefit and appropriating the utilities of some of the goods and services that the principal made him responsible (Mlcoch 1996, Dowding 2011, seen in Potůček et al 2016: 147). In addition, there are also issues of adverse selection and moral hazard. (Keil 2014) that shows agent`s opportunistic behaviour in service delivery that works against the principal managerial performance (Zinyama 2014). On one hand, Adverse Selection occurs before the start of the relational contractual interaction (ex ante) between the principal and agent. In Keil (2014) view, the principal cannot fully judge (a) the agent`s quality indicated by productivity, soft skills, and education, for instance, that are hidden characteristic, (b) the plans of the agent if and how to maximise her own profit through consuming “perks”, shirking, gather valuable knowledge, such as,

18 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) hidden intentions. The outcome shows agent`s opportunistic behaviour is service delivery that works against the principal managerial performance (Zinyama, 2014). Similarly, Keil (2014) argues that it leads to quality uncertainty because principal takes the risk to pay a price higher than the agent`s real market value. In this case, a price cap indicates the risk that the “high-value” agents don`t apply (Keil 2014). For example, adverse selection can lead to partial market failure, since the principals offer the average price that is too low for the high- quality applicants. In this case, only low-quality firms offer their service, even if the minimum price the high quality agents want is lower than the principal’s maximum willingness to pay (Keil 2014). On the other hand, moral hazard is ex post consisting of hidden action (Keil 2014). In addition, moral risk also appears if the principal can fully monitor the actions, but has limited ability to judge them properly (Keil 2014).The underlying problem is the information asymmetry that is helpful of the agent about the quantity and quality of input and of the output (hidden information) (Keil 2014). This gives agents an opportunity to use the discretionary freedom and to maximize his profit function, for instance, through ‘fringe benefits’, reduced effort, and unnecessarily high budgets that leads to inefficiencies since the decrease in the principal’s payoffs is higher than the increase of the agent’s (Keil, 2014). But, the principal can reduce it with monitoring. Therefore, to protect principal`s interests, principals monitors agency`s actions to decrease information asymmetry (Keil 2014) caused by moral hazards. The principal needs to control the effort invested by the agent. Monitoring activities could be resolved by reports, accounting, explanation and direct observation (Zinyama 2014). Even though, monitoring do not give the full story of agent`s decision because of the continuous flux between factual and value premises and facts and values interdependency in the implementation process. Alternatively, fines can be defined for cases where the principal recognizes opportunistic behaviour (Keil 2014). Often, this is not applicable due to difficulties in defining such behaviour in the reality. In addition, principal can cut private enterprises possibilities of misconduct through the principal`s bonding arrangement that penalised agents violating principal`s interest or reward them for achieving principals goal (Zinyama 2014) in contracting-out of case management to enable young third country immigrants employment-related transitions. This bonding mechanism are delegation of restrictive and contractual agreements or rules in a cooperative manner that limit the agent’s choices (Zinyama 2012). For instance, a coding guidelines, process definitions or management rules to guide the relational contractual arrangement between the principal and agent. But this also bears transaction costs, since compliance with these claims needs control and monitoring. Having explored the principal-agent agreement, it is certain that specifying the task and monitoring over private agencies respective activities as well as bonding mechanism are prerequisites for the principal – agency relational contractual arrangement in the arena of contracting-out employment case management service delivery from public to private sector. Therefore, contracting-out employment case management implementation to enable young third country immigrant’s employment-related transition from welfare to work is interconnected between the principal and agency relational contractual agreement to improve disadvantaged people’s social cohesion (Wilensky and Turner 1987). Yet, despite scholastic research, there has not been enough rigorous empirical evidence to prove the role of public and private employment service agency in contracting-out case management specifically to assist young third country immigrant`s welfare to work in CEE countries, including the Czech Republic. As such, the purpose of this paper is to fill this gap by investigating contracting-out of employment case management service implementation and

19 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) the role of public and private employment service agencies under the principal-agent agreement to enable young third country immigrant employment-related transition from welfare to all types of work in Czech Republic. The next chapter is about the methodology and methods to investigate this phenomenon and derive findings to answer the research question.

Methodology and Materials

This qualitative case study research rely on a constructivist philosophical position, about how the complexities of socio-cultural world are experienced, interpreted, and understood in a particular context and time (Bloomberg 2007). The finding is a triangulation of official employment policy documents and an overview of scholarly literature to offer a corroboration and/or supportive evidence (Mayring 2012) from Czech Republic. The official documents are Czech Employment Act (that’s ACT dated 13th May 2004 on Employment in Czech Republic) and employment policy reports about Public Employment Service. The criteria for selecting these documents are multiple purposely sample (Patton, 1990; Yin, 2003). The researcher searches the official employment documents and reports from online through search engines such as Google and gatekeepers in Czechia between the month of February and March. The documents were specifically in Czech and English language. In the cases of Czech language, the researcher use Google to translate the text or ask his Czech`s colleagues to assist in translation The researcher used document analysis and thematic content analysis technique (Mayring, 1983) to code and analyses the data using themes derived from principal-agent theory-led deductive categories. In the first round of coding process, the researcher develops following suitable categories to enable interpretation: (I) Regulation – room for relation: This show the information agents know or principal have for employment service contracts. How are information process regulated and obtained and how agents offer this information; (II) Control - Monitoring pattern: This code offers officials monitoring administrative process to regulate agencies activities and keep record of their performance; (III). Guidance – Bonding: This code offers the process where principal govern agency`s conduct to enable young third country immigrant employment related transition. The researcher also shows links to the bonding mechanism such as punishment towards misbehaviour that are relevant to guide the process from corruption and hold agency accountability for transparency. For example, arrangements that penalised agents violating principal`s interest or reward them for achieving principal`s goals. Furthermore, the researcher conducted other rounds of coding based on the extracted text from the document. In this case, the researcher follows a content structure which lies at the centre of this study text interpretation (Lamnek, 2010; Atteslander, 2010). Thus, after several rounds of codes deduction, a thick description for the interpretation is built with the theoretical preposition (Hennink et al. 2011: 236) of principal-agent arrangement to understand the role of public and private employment services in contracting out of employment case management implementation to enable young third country immigrant transition from welfare to all types of work.

Findings

The data of this study shows three vital role of public and private employment service agency in contracting out of case management implementation. The first is the role of information to specify tasks. The second ensure monitoring to account for accountability and transparency. Finally, an essential aspect is bonding to target and conditioned agency`s action

20 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) against misconduct. Hence, in the following sub section, the author of this paper will illustrate and elaborate the three results of this paper:

Information and relational contractual cooperation to specify task

Contracting-out case management implementation is observed from the perspective of authority delegation serving as a tool to manage decision through corporate governance control and contractual relationship (Fama and Jensen 1983). In Czech Republic, the Labour Office may cooperate with non-state employment agencies in the delivery of targeted programmes such as case management other economic providers based on a contractual relationship where they agree partly on the contribution made for targeted programme provisions. “In the implementation of targeted programmes, the Labour Office may cooperate with other entities or may ensure the provision of such programmes through other legal entities or natural persons based on a contractual relationship (Czech Republic, ACT of 13 May 2004 on employment, Subsection 4, 435/2004 Col) As part of the agreement, other economic providers based on a contractual relationship partly agree on the contribution made for targeted programme provisions. Part of an agreement to provide a targeted programme is an agreement on the contribution to be made to the legal or natural person for the provision of the targeted programme” (Czech Republic, ACT of 13 May 2004 on employment, Subsection 4, 435/2004 Coll.) Through this agreement, the Regional Branches of the Labour Office and Employment Agencies cooperate to carry out intermediation activities. The Labour office assigns the work, supervises, advice, and offer information services in the field of employment opportunities: “The Regional Branches of the Labour Office and Employment Agencies cooperate in performing intermediation activities, employment of natural persons who assigns the work and supervises it (the “User”), and an advisory and information services in the field of employment opportunities” (Czech Republic ACT of 13 May 2004 on employment, 435/2004 Coll.). Moreover, the government may issue a decree to established type of work which employment agency may hire out temporary worker to work for the user Section 64 “The Government may issue a decree to establish types of work for which the employment agency may not hire out temporary workers to work for the user” Private employment agencies are obligated to communicate and offer the Regional Branch of the Labour offices with information and records about their activities in service delivery: “A natural person to whom the Regional Branch of the Labour Office provides services under this Act is obliged to provide the Regional Branch of the Labour Office with information...Employment agencies are obliged to keep records” (Czech Republic, ACT of 13 May 2004 on employment, Section 21, Subsection (1), 435/2004 Coll.) In addition, the Regional Branch of the Labour Office may include job seekers in the shared employment intermediation on the basis of individual activation plan and employee`s written consent: “The Regional Branch of the Labour Office may include job seekers in the shared employment intermediation on the basis of an individual action plan (Section 33(2)) and with the employee’s prior written consent. When selecting job seekers, account is taken in particular of the labour market situation” (Czech Republic, ACT of 13 May 2004 on employment, Section 119a, 435/2004 Coll.)

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Labour office and employment agencies shall cooperate in their specific task resolving situation in the labour market. Employment services may perform the brokerage activities on basis of an agreement with the labour office “Regional branches of the Labour Office and employment agencies shall cooperate in brokerage activities under paragraph 1 a) a c) resolving the situation in the labour market. The Employment agencies may perform the brokerage activities under paragraph 1 a) a c) also on the basis of an agreement with the Labour Office (Section 119a)” (Czech Republic, ACT of 13 May 2004 on employment, Section 119a, 435/2004 Coll.) In another word, information and cooperation are tools that officials and non-state entities are using in their relational contractual cooperation to specify tasks and duties. Since specification of tasks is disputable as principal cannot fully check human beings actions that is rational bounded with self-interest and opportunism (Eisenhardt, 1989) to maximise their own profit, public service sector are adjusting with monitoring to control private employment agents activities, which is the subject of the next subsection

Monitoring to account for accountability and transparency

Public employment officials (Principals) should monitor employment agents (agency) actions, decisions and performance (Eisenhardt, 1985) through administrative tasks and incentives to induce agents work in the best of their interests. The labour office grants and withdraws permits from legal entities to broker employment and keep up records of employment agencies as well as inspect the activities laid down in the agreement “Grants and withdraws permits from natural persons or legal entities to broker employment and maintains records of employment agencies”. “Performs inspection activities to the extent laid down in this Act and the Act on the free movement of services” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll.) The Labour Office prepare materials to draw up a concept and programs for the development of employment policy to discuss important issues on the labour market about actions that influence state employment policy and systematically monitors and evaluates the situation “Prepares materials to draw up a concept and programs for the development of state employment policy to address important issues on the labour market and opinions concerning the actions that influence the state employment policy, systematically monitors and evaluates the situation on the labour market and takes action to influence labour demand and supply” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll.) In addition, the Labour Office monitors and examines private agencies delivering service activities to check suspect of misconduct by penal code regulation: “The Labour Office is entitled to examine their capacity to provide intermediation activities if there is reason to suspect that there is a serious threat to protected interests or unauthorized provision of intermediation activities. The Office performs reviews in accordance with special legal regulations.” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll) The labor office also keeps the record of permitted employment agencies as a way to control their address and list of workplaces to understand agency conduct, activities, and history of suspension behaviors: “Records of employment agencies that have been granted permit for employment intermediation are kept by the Labour Office. The records contain the information under Section 62, the address of the employment agency, a list of its workplaces and an indication of whether the employment agency – a legal person has been subject to the suspension of activity consisting

22 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) in employment intermediation pursuant to a special Act92)” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll.)

Bonding to target and conditioned agency`s action

The labour office keeps record of employment agencies with permission to offer employment service: “Records of employment agencies that have been granted permit for employment intermediation are kept by the Labour Office” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll.) The records contain the information about the address of the employment agency, list of their work places and signs whether they have been subject to suspension of employment service implementation activities: “The records contain the information under Section 62, the address of the employment agency, a list of its workplaces and an indication of whether the employment agency – a legal person has been subject to the suspension of activity consisting in employment intermediation pursuant to a special Act92)” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll.) Private employment organizations are supposed to meet the specify condition for the permit of employment intermediation otherwise the will face punishment: “If the legal or natural person ceases to meet the conditions specified for the permit of employment intermediation, the legal person is punished with prohibition of the activity consisting in employment intermediation” (Czech Republic, ACT of 13 May 2004 on employment, 435/2004 Coll.). As a matter of fact bonding served as a mechanism to enable the principal take control of agencies actions and keep record about their past and current conduct for better assessment. In this arrangement, employment agency are obliged to meet the obligation and task otherwise the faced penalties and suspension To sum up, Czech Republic PES is undergoing reforms in it public employment sector through contracting of welfare service to enable welfare to work process. Equally, this decentralisation model is transforming from the state to the market where private entities cooperate with the public officials to deliver welfare service through information, monitoring and bonding that is legally binding and regularly controlled through a performance-based management system.

Discussion and conclusion

In this paper, the researcher analyse the role of public and private employment service agency in contracting out of case management to enable young third country immigrant employment-related transition from welfare to work in Czech Republic. The institutional reform decentralising the role of public to private employment service delivery is the consequences that end the monopoly of PES in the delivery of specific public goods and show outsourcing as broader state efforts to decentralised power and promote inclusion as well as manage huge sum of Taxpayer`s money. Information in contracting-out case management relational contractual tool officials and non-state entities are using to specify tasks and duties. Since specification of tasks is disputable as principal cannot fully check human beings actions that is rational bounded with self-interest and opportunism (Eisenhardt, 1989) to maximise their own profit, public service sector are adjusting with monitoring. Monitoring of private employment agents actions and

23 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) decisions offer guidance and control to resolve agency problem in contracting-out for case management (Zinyama 2014). Acting as mechanism to negotiate agent`s behaviour and performance (Eisenhardt, 1985; Mahoney, 1992; Zinyama 2014) in service delivery. Such observation regulates private employment agencies conduct in service delivery. Therefore, with bonding agency face punishment due to violation of principal`s interest or reward for achieving principals goals (Zinyama 2014). This approach also help to cut agency`s information asymmetry and ownership in contracting-out of case management as officials and private employment service agencies will eventually stabilizes confidence through bonding of common interest (European Commission 2012; OECD 2010; European Commission 2012). To conclude, information, monitoring of agency activities, and bonding regulation to target agency`s misconduct are valuable tool of employment case management implementation to enable young third country immigrant employment related transition from welfare to work and ease vulnerable people subjective wellbeing in Czech`s contemporary superdiversity society. However, if this is not taking into consideration, corruption will take place that is not only harmful to hard-core unemployed citizens participation in welfare sub regimes (such as employment system), but the society, welfare state, economy, and Czech`s social cohesion process.

References

Avila, Z. (2015). “Public employment services in multi-agency policy interventions for local development: The case of the Mexican aerospace industry”, in K. Caraher and C. Snell (eds): Government policy and management: A reader (York: University of York). Bartlett, W., & Le Grand, J. (1993). “The theory of quasi-markets” In: J. Le Grand and W. Bartlett (eds.) Quasi-Markets and Social Policy. Basingstoke: Macmillan Press, pp. 13–34 Bruttel, O. (2004). Contracting-out the Public Employment Service and the consequence for hard-to-place jobseekers: Experiences from Australia, the Netherlands and the UK, Paper for the Second Annual ESPAnet Conference University of Oxford Czech Republic (2004). ACT of 13 May 2004 on employment, 435/2004 Coll. Retrieved from https://portal.mpsv.cz/sz/obecne/prav_predpisy/akt_zneni/act_no._435_2004_coll._1.1.2018.pdf Accessed 10.10.03 Domberger, S., & Jensen, P. (1997). “Contracting out by the public sector: Theory, evidence, prospects” Oxford Review of Economic Policy, 13:67-78 Eisenhardt, K.M. (1985). Control: Organisational and economic approaches. Management Science, 31(1): 134-149. Dowding, K. (2011). “Rational Choice Theory”, in SAGE Handbook of Governance, M. Bevir (eds.) London: SAGE Publication, 36-50 European, C. (2012). Forms of contractual arrangements between employment services, Small Scale Study 2012 Gesine, S. (2016). Public or private job placement services—Are private ones more effective? IZA World of Labor, Institute for the Study of Labor (IZA), Bonn, Iss. 285 Retrieved from http://dx.doi.org/10.15185/izawol.285 Kalužná, D. (2008). “Main Features of the Public Employment Service in the Czech Republic” OECD Social, Employment and Migration Working Papers, No. 74, OECD Publishing, Paris. Retrieved from http://dx.doi.org/10.1787/230150403603 Kei, P. (2014). Principal agent theory and its application to analyze outsourcing of software Development, DOI: 10.1145/1082983.1083094 Levin, J. & Tadelis, S. (2008). Contracting for Government Services: Theory and Evidence from U.S. Cities Mahoney, J.T. (1992). The choice of organisational form: Vertical financial ownership versus other methods of vertical integration. Strategic Management Journal, 13(5): 559-584. Michelsen, C. (n.y): “Contracting out by the Public Sector: Theory, Evidence, Prospects. A referee`s report Mlcoch, L. (1996). Institucionalni ekonomie (Institutional Economics, in Czech). Praha: Karolinum

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Organisation for Economic Co-operation and Development (2005). Public Employment Services: Managing Performance, Employment Outlook Organisation for Economic Co-operation and Development (2010). Contracting out government functions and services in post-conflict and fragile situations, Handbook Potůček, M. & Rudolfova, B. (2016). Public Policy: A Comprehensive Introduction, Karolinum, Prague Powers, T. (2017). Partnerships and contractors in the delivery of employment services and ALMPs: a literature review. Employment Policy Department, International Labour Organization, EMPLOYMENT Working Paper No. 226 Scoppetta, A. (2013). Successful partnerships in delivering public employment services, Brussels, European Commission Soudek, J. (2013). Public procurement of homogeneous goods: Czech Republic case study. Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies, Rigorous thesis. Retrieved from https://dspace.cuni.cz/bitstream/handle/20.500.11956/56586/RPTX_2012_2_11230_0_409876_0_139914.pdf? sequence=1 Steve, D. (2008). Contracting out employment services to the third and private sectors: A critique. Zinyama, T. (2014). Contracting Out: What Works, What Doesn’t And Why? International Journal of Public Policy and Administration Research, 2014, 1(2): 64-79.

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25 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

"DIFFERENT SPEED" OR UNIFIED EU? ANSWER FROM THE POINT OF VIEW OF INSTITUTIONALISM THEORY

Svajūnė Ungurytė-Ragauskienė

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose. The ongoing processes of European integration are confronted with the challenge of "different speed" EU. Union is often divided into "eurozone" - central and peripheral countries or old and new Europe. However, it is forgotten and ignored that "speeds" mean differences. Such heterogeneity can lead to a pessimistic EU scenario where European countries move at different speeds and do not always pursue the same goal. On the one hand, there is a presumption that the EU Member States must continue to seek solidarity through the development of a common administrative model and, on the other hand, the growth of sovereign powers. The question arises as to whether reforms carried out by EU Member States contribute to the overall integration of Member States in the field of institutionalism. Design/methodology/approach. Thus, it is through the functioning of institutes that economic phenomena and processes are analyzed with the help of institutionalism theory. Based on this theory, institutions define the rules of public gaming or human-made constraints that shape their interactions. In general, the representatives of the theory of institutionalism pay much attention to the analysis of the economic behavior and political motives of individuals. A multi-faceted approach has made institutionalist interpretations one of the most important tools for theoretical perspectives and organizational research. Institutionalism is the conventional theoretical wisdom of EU studies. Finding. EU integration has attracted particular attention since its origins as a result of the political and economic union of the Member States. Recognizing the administrative convergence of EU Member States as one of the key factors for achieving common goals and criteria, the challenges of a rapidly expanding organization have been overcome by several means over several decades. However, in the recent decade of the EU, with the global economic crisis, the Brexit talks, the Hungarian and Polish Eurosceptic political forces, the difficult-to-manage migration problem have hit Europe hard and have led many to thinking about the future of a united Europe. Research limitations/implications. Institutionalist interpretations helps to explain separate and different phenomena of European integration. However, institutionalism cannot explain long-term transformation of EU integration processes. What is more, viewpoint article is short article which focus on some of the key challenges, issues or developments in natural products research. This article is "opinion" style article, which gives the author’s perspective on a particular issue, backed up by the literature. Practical implications. Idea of EU as single federal state showed that there are too much of differences in the same union. EU integration may be initiated by agreements among governments, international institutions, once established, take on a political life of their own, and the rule-making authority delegated to them by states collectively binds and bounds governments by locking in patterns of collective behavior and ratcheting supranationality. Institutionalism approaches (sociological, historical, rational choice and discursive) help to explain different phenomena that have been occurring in the experience of EU integration. Originality/Value. There is a lack of research in scientific literature that examines and evaluates the importance of increasing administrative complexity and public administration

26 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) fragmentation processes in EU Member States. It is clear that such diversity only complicates intergovernmental cooperation between countries, but there is a lack of scientific insight into what aspects of sovereign change in public service contribute to the strengthening of the EU and which weaken it. The assessment of change in public governance is also determined by the aspect of belonging to "central" and "peripheral" EU countries. The main argument of the critics of the "different speed" European model concerns the inequality of the states of such a union, the non-member countries of the EU will have much less chance of defining the details of their rules, and the pace and conditions of European unification will almost entirely be controlled by nuclear states. In this case EU would become even more fragmented in the future. Keywords: European Union, European integration, Institutionalism, Unified EU, Different speed EU Research type: viewpoint.

Introduction

The ongoing processes of European integration are confronted with the challenge of "different" or "two speed" EU countries. There is a general belief that "heavyweight" politics can try to tackle the problems that the EU has faced, and that is why it is often divided into "eurozone" - central and peripheral countries or old and new Europe. However, it is forgotten and ignored that "speeds" mean differences. Such heterogeneity can lead to a pessimistic EU scenario where European countries move at different speeds and do not always pursue the same goal (The Economist, 2017). It is clear that in such a "different speed" Europe, it is difficult to create and maintain the same ambitions of Member States. On the one hand, there is a presumption that the EU Member States must continue to seek solidarity, on the other - the growth of sovereign powers. The main argument of the critics of the "different speed" European model concerns the inequality of the states, the non-EU countries will have much less chance of identifying the details of their rules and the pace and conditions of European unification will almost entirely be controlled by central states. In this case EU would become even more fragmented in the future. Institutionalism theory, which is often used to deal with the various phenomena of European integration gives precisely these interpretive lenses. From the perspective of institutionalism, the EU does not need to be seen as a federal system or an intergovernmental system. According to the theorists of this perspective, EU integration is a supranational governance and focuses on the institutionalization of individual policy areas, such as trade, tourism, communication services at European level (Švarplys and Matulionis, 2009). According to this theory, not central or peripheral states are important but interest groups whose activities cross national borders and benefit from the EU system. The fundamental premise of the scientific paradigm prevailing in this comparative research is that policies and their outcomes are determined by institutions perceived as rules created by policy makers and their systems that structure the behavior, identity and interrelation of the same actors. In this case, political institutions are often a mediator between politically significant socio-economic or cultural structures and the decisions of specific actors. What is important that the different directions of the new institutionalism not only emphasize the importance of the institutions, but also point to some causal mechanisms of how these institutions are created or maintained. The article analyzes the insights of one of the most prominent foreign scientists with regard to (i) sociological institutionalism which focus not on norms and rules, but on social actors and cognitive and cultural systems within the organization itself (DiMaggio and Powell, 1983; 1998), (ii) historical institutionalism, which seeks to determine the forms of institutions and their origins, as they have a profound

27 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) effect on the behavior of individuals, forming certain procedures and ways of doing things (Thelen, 1999), (iii) rational choice theorists, which focuses on the political decision-making process and the ways in which political structures shape decisions and ensure stability (Shepsle, 2008) and the fourth (iv) discursive institutionalism, which explains ideas that focus on action, the power of persuasion in political debate, democratic legitimacy, the revaluation of political interests and value, and the dynamic change of history and culture (Schmid, 2010).

4 neo-institutionalist approaches

Based on this theory, institutions define rules of public gaming or human-created constraints that shape their interactions (North, 1990). In general, the representatives of the theory of institutionalism pay great attention to the analysis of the economic behavior and political motives of individuals. It is proposed to look at the individual not as a separate subject but as part of the social system (Lane, 2006). Attention is also paid to the property of individuals, corporations and the state (Ereminaitė, 2014). A multi-faceted approach has made institutionalism one of the most important tools for theoretical perspectives and organizational research (Cornelissen et al., 2018). Thus, the theory of institutional economics can reasonably be regarded as a fundamental theory of social science, whose representatives offered not only detailed quantitative studies of social phenomena, but also important qualitative analyses. Although institutionalism has been dominated by economic theory for a long time, it has been criticized by many other scientists. According to critics, the heterogeneity of the theory of institutionalism provides a basis for questioning the existence of its science school. Neo- institutionalism in scientific literature is also criticized as the old school. According to R. W. Scott (2008), most early works of institutionalism were limited because of the lack of attention given to organizations: some theorists analyzed broader institutional structures - structure and political systems, linguistic and legal systems, but few considered organizations to be institutionalized or pointed out ways in which larger institutions form the assemblies of organizations. The scientific literature suggests that classical and new institutionalism are not two completely different theories, so there is no need to distinguish them and deal with them as two separate concepts. Neo-institutionalism marks the continuity of early theory as well as some progress and change (Scott, 2008). Moreover, the first representatives of neo- institutionalism expressed the basic concepts of this theory, but their work lacks the interpretation or definition of the concept of "institution", although it can be predicted to be taken for granted by rationalized myths (Greenwood et al., 2008). So it can be said that the new school of institutionalism is not very far from the ideas of classical institutionalism, but it complements it and allows for deeper analysis. Classical institutionalism seemed to be a hopeful theory, but also is lacked a deeper and more detailed field of individual behavioral research. Over the last three decades, neo- institutionalization has become the main stream of organizational theory research that can distinguish between cultural, political and cognitive processes that underpin social practices within the institution's concept (Greenwood et al., 2008). When the theory of neo- institutionalism emerged, microeconomic analysis was extended to those economic spheres where it was not used before (Lakis and Namiotko, 2012). It is true that it is difficult to define one specific concept of neo-institutionalism. Scientists say there are both new institutionalism as well as branches of social sciences themselves (DiMaggio and Powell, 1998). What is more, new institutionalism aims to be called at least a few scientific disciplines: rational choice, organizational theories (or sociological), historical and discursive institutionalism without a

28 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) common theoretical model (see Table 1). Each of them recognizes the importance of institutions in the European integration process, but explains differently how and why the authorities are affected. Representatives of sociological or otherwise organizational institutionalism are P. J. Di Maggio and W. W. Powell. The goal of institutionalism in this direction is to separate itself from the formal aspects and to find out how institutions work in reality. Unlike the economic or political approach to institutions, the focus of sociological institutionalism is on the fact that institutions emerge from the activities of individuals, but not necessarily the result of their conscious construction (DiMaggio and Powell, 1998). According to scientists, in the theory of sociological institutionalism, it is assumed that, according to the internal socialization process, the institutions' employees keep the rules constant. True, in the context of changing circumstances, the institutions' internal rules are also changing. Thus, the representatives of sociological institutionalism focus not on norms and rules, but on social actors and cognitive and cultural systems within the organization itself. Sociological institutionalism is an important issue. If the structure and agency create each other, then why the norms remain relatively stable over time and why organizational forms in modern society are surprisingly similar (Bileišis, 2012).

Table 1. 4 Neo-institutionalist approaches: sociological, historical, rational and discursive Approaches Authors sociological Historical and P. J. Di Maggio sociological ir W. W. Powell historical institutionalism is K. Thelen There is an It is believed that based on the same opinion that the when discursive sociological idea that institutionalism of institutionalism the categories of rational choice encounters three thinking are preceded involves elders, it tends to by thinking and that sociological and use their results those categories are historical views. as basic social or cultural information. constructs. rational choice K. A. Shepsle discursive V. A. Schmidt Source: adapted by Thomson and Hosli, 2006; Schmidt, 2010

Late eighties when institutionalists turn to political, economic and social sciences, the explanation of institutions was based on the logic of historical institutionalism. One of the most prominent representatives and pioneers of this theory is K. Thelen. Historical institutionalism seeks to determine the forms of institutions and their origins, as they have a profound effect on the behavior of individuals, forming certain procedures and ways of doing things. It is emphasized that political systems are not neutral spaces in which external interests compete, but rather complex forms that generate independent interests and favorable circumstances (Thelen, 1999). Historical and sociological institutionalism is based on the same sociological idea (see Table 1) that the categories of thinking are preceded by thinking and that those categories are social or cultural constructs. However, historical institutionalism prefers political development and power and interest issues. Rational choice theorists (Shepsle, 2008) focuses on the political decision-making process and the ways in which political structures shape decisions and ensure stability. There

29 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) is an opinion that the institutionalism of rational choice involves sociological and historical views (Thomson and Hosli, 2006) (see Table 1). The theory of rational choice can be defined as an analysis of the choices made by rational actors in interdependence (Shlepsle, 2008). According to A. Shepsle (2008), political power research is usually limited to institutional power. The inability to explain some of the current phenomena has led to another approach of neo-institutionalism and the academic field of institutionalism is expanded. Faced with various ideas and discourses that do not correspond to the traditional assumptions of institutionalism, the phenomena began to be interpreted as the fourth new - discursive institutionalism. V. Schmid, a representative of discursive institutionalism, explains idea that focus on action, the power of persuasion in political debate, democratic legitimacy, the revaluation of political interests and value, and the dynamic change of history and culture (Schmidt, 2010). Only this approach has the opportunity to explain preferences, strategies and normative orientations of actors. According to A. Schmidt (2010), when discursive institutionalism encounters three elders, he tends to use their results as basic information (see Table 1). Early institutionalism relied on the assumption that institutions determine organizational structures and that is why institutional isomorphism occurs. However, subsequent studies have shown that in real situations, institutional change can occur from the bottom up, and the institutions themselves, as a system of rules, develop not without the efforts of organizations operating within the institutional framework. We can use the term of the organizational field to explain such mutual institution building. Early representatives of institutionalism focused on case studies of organizations in order to highlight their impact on the institutional environment. The organizational field is defined as the population of organizations operating in a common cultural or social subsystem (Scott, 2008). Organizational field studies allow us to define how institutions are perceived by all the actors in the field, not just one organization. This creates preconditions for predicting reactions to the actions of the investigated organization (Bileišis, 2012), for e.g. EU integration processes.

ES integration through new institutionalist perspective

New institutionalism is often used to explore the various phenomena of European integration (see Table 2). The fundamental premise of the scientific paradigm prevailing in this comparative policy research is that EU policies and their outcomes are determined by institutions perceived as rules created by policy makers and their systems that structure the behavior, identity and interrelation of the same actors (Gudzinskas and Maliukevičiūtė, 2014). In this case, political institutions are often a mediator between politically significant socio- economic or cultural structures and the decisions of specific actors. Different approaches of the new institutionalism not only emphasize the importance of the institutions, but also point to some causal mechanisms of how these institutions are created or maintained. Institutional factors also play an important role, because various forms of ad-hoc cooperation between EU member states outside the established institutionalized system are driven by a convergence of preferences and attempts to maximize national interests (Bauer and Remacle, 2018).

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Table 2. Institutionalism as European integration theory Key concept Main problem Methodological assumptions Institutionalism  The impact How is the policy at • European institutions form an of the European European level autonomous policy together institutions on the institutionalized? with interest groups and institutions of the national states Member States and • The ability of institutions to on the European expand their powers and set political system; their own policy course  The importance of transnational exchanges for institutionalizing policies at European level Source: adapted by A. Švarplys ir A. V. Matulionis, 2009

According to sociological institutionalism, socialization is the most important tool of EU influence. This Europeanisation mechanism includes the EU's ambition to convey accepted patterns of social behavior. Socialization measures are in place to increase public acceptance of EU membership and the validation of membership conditions (Inokaitytė, 2013). Promoting mutual communication, increasing the volume of EU-related information, supporting regional cooperation, etc. Unlike compliance with EU external incentive policies, compliance with EU conditions based on socialization measures is more effective in the long term. Based on sociological institutionalism, the EU political behavior of national actors is determined by a system of collective beliefs that include standards of behavior and values acceptable to society. These normative templates define the political goals and the measures needed to implement them. Instead of trying to maximize subjective interests, political actors fill social expectations. Unlike the rational choice of institutionalism, sociological institutionalism treats European integration as a process of disseminating new identities and consolidating them in candidate countries. The EU norms and rules that a candidate moves to the national system must be close to the existing institutional practices and norms of political behavior (Inokaitytė, 2013). Member States take over the European norms that it regards as legitimate and close to the national system. Identification with the EU, not only at the level of the political elite but also at the level of society, is one of the most important conditions of European integration, which is distinguished by sociological institutionalism. It also explains the often occurring phenomenon of "institutional isomorphism", when certain rules are taken over by imitation and not by their necessity and functionality (Gudzinskas and Maliukevičiūtė). According to the sociological institutionalism, over time, organizations within the "institutional field" are similar in structure and action, and various institutional constraints force organizations to adapt to the environment. Unfortunately, in the long run, organizations are starting to implement the same reforms, not waiting for efficiency, but in order to imitate organizations (simulation factors), they are translated into higher institutions (coercive factors), taking into account organizations with similar experience (normative factors). This idea is very close to historical view of institutionalism. According to historical institutionalists, the rules can remain unchanged (or little change) even if they appear to be ineffective and do not perform the functions assigned to it

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(Gudzinskas and Maliukevičiūtė). It is based on the so-called "road addiction" argument, emphasizing the importance of past events or decisions in structuring later ones.

Table 3. European integration through 4 institutionalism approaches Idea of Approaches Main assumptions future EU sociological  Rules can be created, modified, and maintained according Unified to what the characters consider to be normative or socially "right". Europe  It also explains the often occurring phenomenon of "institutional isomorphism" when certain rules are taken over by imitation rather than by their necessity and functionality. historical  Rules may remain unchanged (or little change) even if they Unified appear to be ineffective and do not perform the functions assigned Europe to it.  It is based on the so-called "road addiction" argument, emphasizing the importance of past events or decisions in structuring later ones. rational  Institutions can be used as a tool of political power. Different  Affected actors create or support certain institutions to speed increase or maintain their positions in a particular political area. Europe  Institutions must not (usually and not) provide the optimum benefit to all players in a political game. discursive  Power, interests, institutional positions, or cultural ? attitudes are not important factors in institutional development.  Ideas and their proper presentation can play an independent role in influencing power relationships, institutional positions, cultural patterns, and at the same time cause a change of rules or otherwise defined institutions. Source: adapted by Inokaitytė, 2013; Gudzinskas and Maliukevičiūtė, 2014

Institutionalism of rational choice emphasizes the importance of EU external incentives in the process of European integration. It is believed that the efforts of the political elites are based on the strategy of maximizing the benefits (Inokaitytė, 2013). EU applies a leverage- based conditionality policy to promote change. In exchange for political, economic and legal reforms, the EU offers rewards for financial support, EU market participation or the ultimate goal of membership in the organization. In this case, the EU does not change the fundamental priorities of policy actors, but affects their strategies and methods of operation. According to the rational choice, the EU institutions can be used as a tool of political power. Influential actors create or support certain institutions to increase or maintain their positions in a particular political space. According to this interpretation, the institutions must not (usually and not) provide the optimal benefit to all participants of the political game (Gudzinskas and Maliukevičiūtė, 2014). The fourth institutionalist approach analyzing European integration processes is discursive institutionalism. It is such an umbrella category that unites institutionalists of various perspectives (rational choice, historians and sociologists) who try to assess the independent meaning of ideas for the change of EU institutions (Gudzinskas and Maliukevičiūtė, 2014). It is argued that ideas and their proper presentation can play an independent role in influencing EU power relations, institutional positions, cultural patterns and at the same time cause a change of rules or otherwise defined institutions (see Table no 3).

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Different approaches to institutionalism distinguish between the different mechanisms and conditions of European integration. All these views have different views on the ongoing processes of European integration. The implementation of European integration reforms is not always based on rational actors' calculations. In this context, the theory of sociological and historical institutionalism emphasizes normative compliance between the EU and the candidate country. The focus is on the role of ideas, widespread discourses and attitudes in the process of European integration. Meanwhile, in terms of rational choice, it would be more useful for Europe to move at different speeds. The discursive approach, which covers all of the above, does not provide a categorical view of the future of Europe, but gives an approach that can be easily attributed to the different circumstances that have arisen.

EU integration - towards unified or "different speed" Union?

The integration of the EU since its origins has received particular attention as a result of the political and economic unification of the member states. Recognizing the administrative convergence of EU Member States as one of the key factors for achieving common goals and criteria (Cioclea, 2010), the challenges of a rapidly expanding organization have been overcome by several means over several decades. However, in the recent decade of the EU, with the global economic crisis, Brexit talks, the Hungarian and Polish Eurosceptic political forces, the difficult-to-manage migration problem have hit Europe hard and have led many to thinking about the future of a united Europe. At the end of last year, the Austrian Presidency of the Council raised the importance of the principle of subsidiarity. From an Austrian point of view, the EU should focus on key issues that require a joint decision by all Member States, while addressing less important issues locally. This means that the issue of "slower moving" countries is not a priority in the EU. The Romanian Presidency, which started its presidency at the beginning of this year, continues the work begun by Austria. The priorities of the Romanian Presidency are based on its slogan: cohesion, common European values, understood as unity, equal treatment and convergence. The Presidency program focuses on four key priorities: a Europe of convergence, a safer Europe, Europe as a strong global actor and a Europe of shared values. Thus, the EU promotes administrative convergence. From sociological and historical views, a policy that leads to "different speed" EU does not unite but creates a wedge between countries. Such differentiation eliminates the desire for equality through greater integration. A "two speed" Europe will create two separate EU. The fact that a group of six countries that once gave birth to the EU will be the center of the EU in the future is not entirely logical. On the basis of the institutional approaches, EU would fall apart at different speeds and lose its core objectives. From the rational choice view, the idea of "speed" gives the EU member states more freedom to form country alliances to create a policy that is more beneficial to a particular group of states. This would be particularly difficult when it is impossible to reach a unanimous consensus at EU level. This is important for countries if the EU continues to expand into the Balkans and become a Union of more than 30 countries. It is believed that unanimity in such a broad union would be extremely difficult. A "two speed" Europe is a better alternative than a Europe that is dead or immobile. From the discursive point of view the idea of a multi-speed Europe over the Union with many groups of countries united to face different challenges. It is believed that other countries may seek to establish unions to adopt similar laws on asylum or to promote cooperation in the field of justice and home affairs. It might be that Member States will be grouped according to the relevance of the issue to their country. Implementation of a "different speed" EU might

33 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) create various new procedures or limitations, e.g. admission to the Union for countries seeking to become members of the EU or trying to exit from EU.

Conclusions

EU integration has attracted particular attention since its origins as a result of the political and economic union of the Member States. Recognizing the administrative convergence of EU Member States as one of the key factors for achieving common goals and criteria, the challenges of a rapidly expanding organization have been overcome by several means over several decades. However, in the recent decade of the EU, with the global economic crisis, the Brexit talks, the Hungarian and Polish Eurosceptic political forces, the difficult-to-manage migration problem have hit Europe hard and have led many to thinking about the future of a united Europe. Idea of EU as single federal state showed that there are too much of differences in the same union. EU integration may be initiated by agreements among governments, international institutions, once established, take on a political life of their own, and the rule-making authority delegated to them by states collectively binds and bounds governments by locking in patterns of collective behavior and ratcheting supranationality. Institutionalism helps to explain different phenomena that have been occurring in the experience of EU integration. The sociological, historical, rational choice and discursive theoretical perspectives of institutionalism identify the different outcomes of change in European integration processes. It is important to note that compliance based on normative and rational calculations is difficult to distinguish. As a result, these approaches often work together and often complement or include each other. However, it can be said that sociological and historical, complementary approaches emphasize the idea of a unified Europe and rational choice institutionalism - a union of "different speed". In fact, Europe has several speeds today. As example Eurozone or Schengen areas. There may be various blocs (for e.g. bloc of defense issues with Sweden, Poland, Germany, Denmark, and Netherlands) which could work closer. The idea of "different speed" EU would also allow these blocs to improve the sharing of information between agencies of Member States. But the main question is if "different speed" Europe is a solution to today's EU problems. This should primarily be considered by EU policy makers.

References

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SOCIAL TRANSFORMATION OF PAKISTAN UNDER KASHMIR DISPUTE

Sohaib Mukhtar

National University of Malaysia, Malaysia [email protected]

Abstract

Kashmir dispute is the most important issue between India and Pakistan as they have fought three major wars and two conflicts since 1947. Kashmir dispute arose when British India was separated into Pakistan and India on 15th August 1947 under Indian Independence Act 1947. Independent Indian States could accede either to Pakistan or India as on 26th October 1947, Hari Singh signed treaty of accession with Indian Government while the Governor General of India Mountbatten remarked that after clearance from insurgency, plebiscite would take place in the state and people of Kashmir would decide either to go with Pakistan or India. During war of Kashmir in 1947, India went to the United Nations (UN) and asked for mediation. The UN passed resolution on 20th January 1948 to assist peaceful resolution of Kashmir dispute as another resolution was passed on 21st April 1948 for organization of plebiscite in Kashmir. India holds 43% of the region, Pakistan holds 37% and remaining 19% area is controlled by China. Dispute of Kashmir is required to be resolved through mediation under UN resolutions. Purpose – This research is an analysis of Kashmir dispute under the light of historical perspective, law passed by British Parliament and UN resolutions to clarify Kashmir dispute and recommend its solution under the light of UN resolutions. Design/methodology/approach – This study is routed in qualitative method of research to analyze Kashmir dispute under the light of relevant laws passed by British Parliament, historical perspective, and resolutions passed by the UN. Finding – This study would help people of the world to understand Kashmir dispute, its historical perspective, relevant laws and resolutions passed by the UN. Kashmir dispute should have been resolved under UN resolutions and plebiscite should have held in Kashmir as fate of Kashmir should be decided by Kashmiris themselves. Pakistan and India have fought three major wars and various small conflicts due to Kashmir dispute which is required to be resolved for peace in South Asia. Research limitations/implications – This study is an analysis of Kashmir dispute under historical perspective, laws passed by British Parliament, and UN resolutions. This research does not go into detailed analysis of Pakistan and India wars, other major issues with Pakistan and India as this research sticks into Kashmir dispute between Pakistan and India and its possible solution. Practical implications – This study aims to point out and wipe out misconceptions about Kashmir dispute while clarifying the issue, analyzing important relevant laws, UN resolutions and come up with possible solution of Kashmir dispute. Originality/Value – This study is personal and original work of the author on the chosen topic and there are not many articles written on related topic and this research is conducted keeping in mind principles of piracy and illegal methods of doing research. Keywords: Kashmir, Pakistan, India, China, United Nations. Research type: general review.

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Introduction

Settlement of Kashmir dispute is important for peace in Asia. Kashmir is a disputed territory between India and Pakistan as both countries have fought three major wars in 1947, 1965 and 1971 and two conflicts in 1984 and 1999. The main cause of all wars and conflicts is Kashmir dispute. Kashmir handed over to Gulab Singh on 16th March 1846 under Treaty of Amritsar by the East India Company. It is pertinent to mention that Treaty of Amritsar ceased to exist under section 7 of Indian Independence Act 1947 which states that all treaties in between British Indian States with other states ceased to exist after implementation of Indian Independence Act 1947. India holds 43% of the region includes Jammu and Kashmir, Pakistan holds 37% of the region includes Azad Kashmir and Gilgit Baltistan and remaining 19% area is controlled by China called Askai Chin. The first Muslim ruler of Kashmir was Rinchon, who was Buddhist later converted to Islam and known as Sadruddin Shah. His friend Shah Mir came into power after his death in 1399 and established Shah Mir dynasty which went on until Kashmir was captured by Mughal army in 1586 during the reign of Akbar. Thereafter, Ahmad Shah Abdali established Durrani Empire in major parts of Afghanistan and India in 1747 and captured parts of Kashmir in 1751 until the area was captured by Sikh Empire in 1820. Sikh Empire was established by Ranjit Singh on territories of Punjab and Kashmir in 1799 and ceased to exist after losing battle to the East India Company (Anglo-Sikh Wars 1846-1849). The East India Company sold Kashmir to Gulab Singh in 7.5 million rupees under Treaty of Amritsar signed on 16th March 1846, thenceforth Dogra Rule started in Kashmir. Gulab Singh ruled over Kashmir until his death in 1857. His son Ranbir Singh took charge as ruler of Kashmir after death of his father Gulab Singh and ruled over Kashmir until his death in 1885. Pratap Singh was son of Ranbir Singh, ruled over Kashmir until his death in 1925 and succeeded by his son Hari Singh who ruled over Kashmir during partition of India in 1947. Accession of Hari Singh to India was under pressure of Indian Governor General Mountbatten, who stated that after clearance of Kashmir from outsiders, plebiscite will be organized and people of Kashmir will be given chance to decide either to go with Pakistan or India. Indian Prime Minister Nehru went to the UN where two resolutions were passed affirming plebiscite in Kashmir. Most people of Kashmir are Muslims thus they are most likely to decide in favor of Pakistan. Pakistan and India have fought three major wars in 1947, 1965 and 1971 and two major conflicts in 1985 and 1999. It is highly recommended that the UN should interfere and play its effective role as mediator for settlement of Kashmir dispute between India and Pakistan which would be done in accordance with resolutions passed by the UN. India should not terrorize political struggle of Kashmiris as Hari Singh recently stated that Kashmir is not an integral part of India and the Supreme Court of India dismissed petition asserting that separatist leaders of Kashmir are not terrorists, their funding should not be stopped as all persons are innocent unless proven guilty.

Kashmir

Kashmir is a region in South Asia bordering Pakistan, India and China. Pakistan controls 37% of the region includes Azad Kashmir and Gilgit Baltistan as small part of Gilgit Baltistan was captured by India on 13th April 1984 called Siachen. India controls 43% of the region includes Kashmir Valley, Jammu and Ladakh as China captured small part of Ladakh during Sino-Indian war 1962 but unilaterally withdrew from it as well as from Arunachala Pradesh.

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China controls 19% area of Kashmir including Askai Chin and Trans Karakoram Tract (Alam, 2016; Puri, 1993). Kashmir controlled by Pakistan is consisted of Azad Kashmir and Gilgit Baltistan. 100% of the population of Pakistani part of Kashmir belongs to the religion of Islam. The area of Gilgit-Baltistan is approximately 70 thousand kilometers with 2 million people. The capital of Gilgit Baltistan is Gilgit, the region contains more than 50 peaks over 7000 meters high above sea level. The Gilgit Baltistan and Azad Kashmir are the most literate areas of Pakistan as literacy rate of Azad Kashmir is 72%. Population of Azad Kashmir is around 5 million people with 100% Muslim majority. Total area of Azad Kashmir is around 13000 kilometers while its capital is Muzaffarabad. Hari Singh attacked Muslim population of area in 1947, they defended themselves against oppression of illegal ruler of the region and their struggle was supported by people of Pakistan. Pakistan started military support to oppressed Muslim population of Kashmir on 22nd October 1947. Indian army entered Kashmir on 26th October 1947 on the request of Hari Singh, who signed statement of accession under pressure of Indian Governor General Mountbatten. The UN passed resolutions on 20th January 1948 and 21st April 1948 to offer mediation to India and Pakistan on settlement of Kashmir dispute on the request of Indian Prime Minister Jawaharlal Nehru. Ceasefire Agreement solemnized between India, Pakistan and the UN Commission on 27th July 1949 in Karachi, Pakistan. Ceasefire line was established on 1st January 1949 under Ceasefire Agreement 1949 which was converted into Line of Control on 2nd July 1972 under Shimla Agreement. Gilgit Baltistan and Azad Kashmir are militarily administered by Pakistan. Indian army violated Ceasefire Agreement 1949 and Shimla Agreement 1972 by capturing Siachen Glacier on 13th April 1984, which was under control of Pakistani Security Forces (Lyon, 2008; Wani, 2013). Indian Kashmir is consisted of Jammu, Kashmir Valley, and Ladakh. Jammu known as the city of temples, its majority belongs to Hinduism, it has 10 districts and it is drained by Chenab River. Kashmir Valley is drained by Jhelum River and its majority belongs to the religion of Islam. It also has 10 districts. Ladakh is closely related with Tibet, China. Askai Chin is claimed by India as part of Ladakh region. China and India fought war in 1962 over Askai Chin and Arunachal Pradesh. The Sino-Indian war started on 20th October 1962 and unilaterally finished by China on 21st November 1962. It is pertinent to mention that Arunachal Pradesh is declared 25th Indian State in the reign of Rajev Gandhi (Ankit, 2016; Huttenback, 1961). Chinese Kashmir is consisted of Trans Karakoram Tract and Askai Chin. Trans Karakoram Tract is an area of almost 1000 kilometers administered by China. There was a small dispute over the area between China and Pakistan which was resolved through negotiations by foreign ministers of both states and Sino-Pakistan Frontier Agreement was signed on 2nd March 1963. Askai Chin is disputed territory between India and China with Arunachal Pradesh. India claims Askai Chin as part of Jammu and Ladakh, which was acceded to India in 1947. Arunachal Pradesh was part of Tibetan Government and was acceded to British Government by Tibetan Government under Shimla Accord 1914. The territory came under control of India after independence in 1947 and became 25th Indian state during the reign of Rajiv Gandhi. China does not recognize Shimla Accord 1914 and consider whole Tibet region as its territory including Arunachal Pradesh. During Tibetan uprising 1959, India granted asylum to Dalai Lama. China launched simultaneous offensive against India in Ladakh and Arunachal Pradesh on 20th October 1962, won Sino-Indian war 1962 convincingly, captured territories in both localities and made unilateral ceasefire on 20th November 1962 while withdrawing unilaterally from captured territories (Behera, 2016; Devereux, 2009).

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Governments of Kashmir

Kashmir was first ruled by Hindu Maharajas and Buddhist rulers until Rinchan, who embraced Islam and his friend Shah Mir established Shah Mir Dynasty which is the first Muslim dynasty in Kashmir established in 1339 and went on until invasion of Mughal Empire in 1586. The Mughal ruled over Kashmir until entrance of Durrani Tribes in 1751. Sikh Empire established by Ranjit Singh and Kashmir acceded to Sikh Empire in 1820 but did not last along and at the end of first Anglo-Sikh war in March 1846, Kashmir was given to Dogra Singh in 7.5 million rupees under Treaty of Amritsar. Indian Independence Act 1947 demolished Treaty of Amritsar thus Dogra Dynasty ceased to exist but Hari Singh illegally acceded state of Kashmir to India while people of Kashmir did not accept his decision and started freedom struggle against him and conquered more than 37% of the area. People of Pakistan supported them as India went to the UN and asked for mediation. The UN formed commission, promised plebiscite in Kashmir which has not been organized yet to decide fate of Kashmir in accordance with will and wishes of Kashmiri people (Hasan, 1956; Wirsing, 1998). Mongol invaded Kashmir during the reign of Suhadeva and defeated him. Prime Minister of Ramachandara took an advantage and took over power and appointed Rinchan as his administrator, who later took charge as ruler of Kashmir in 1320. Ramachandara’s son Ravachandara was appointed by Rinchan as his chief advisor and administrator of Ladakh. Rinchan married with Ramachandara’s daughter Kota Rani, converted to Islam with 10,000 people and changed his name to Sadruddin Shah after meeting with Islamic Scholar Bulbul Shah. Sadruddin Shah was assassinated in 1323 and buried near Bud Masheed. Kota Rani married with Udayanadeva and had two sons (i) Haidar Khan from Sadruddin Shah, and (ii) Bhatta Bhikshana from Udayanadeva. Kota Rani did a lot of social works for people of Jammu and Kashmir including development of Kutte Canal in Srinagar City. She and her husband Udayanadeva died in 1339 and Shah Mir came into power and established Shah Mir Dynasty in 1339. Shah Mir died in 1342. Jamshed and Alauddin were two sons of Shah Mir ruled over Kashmir from 1342 until 1354. Later Shihab-ul-Din and Qutub-ul-Din were two sons of Alauddin ruled over Kashmir from 1354 until 1389. Sikandar ruled over Kashmir from 1389 until 1413. He made efforts to convert Hindus into Islam. Alishah was the son of Sikandar who ruled over Kashmir from 1413 until 1419 as power was designated to his brother Shahi Khan with the support of army chief Jasrat Khokar. Shahi Khan ruled over Kashmir from 1419 until 1470. His sons Adam Khan and Bahram Khan rebelled against him but they were unsuccessful. Haidar Khan took over power and ruled over Kashmir for two years from 1470 until 1472. Later, Hassan Shah ruled over Kashmir from 1472 until 1482. Thereafter, Ibrahim Shah, Fateh Shah and Nazuk Shah struggled for power in Kashmir until 1535 and later Ismail Shah and Habib Shah ruled over Kashmir until 1561 when Shah Mir Dynasty was demolished by Mughal Empire while conquering Kashmir in 1586 during the reign of Akbar (Hasan, 1959; Siddiqui, 1991) Mughal dynasty of Kashmir started in 1586 when its army captured major parts of Kashmir in the reign of Akbar. First Pani-put battle took place between Mughal army and Lodhi army in which Mughal army won as Ibrahim Lodhi was killed in the battle on 21st April 1526. Mughal Empire came into being in India with the entrance of Baber, who ruled over India from 1526 until 1530. He defeated Rana Sanga in the battle of Khanwa in 1527. General Mustafa Rumi and Commander Ali Quli were two notables of Mughal army in that battle. Baber died in 1530 and buried in Kabul, Afghanistan. Thereafter his son Humayu ruled over India from 1530 until 1556 as during his tenure, Sher Shah Suri captured India and ruled over India from 1540 to 1545 and his son from 1545 until 1554 when power was recaptured by

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Hamayu. Sher Shah Suri was a commander in Mughal army under Baber and later appointed governor of Bihar. In the reign of Humayu, he captured Bengal and later Delhi and came into power in India. He (i) introduced currency notes, (ii) reorganized postal system, (iii) extended Grand Trunk Road from Kabul to Bengal, (iv) built Purana Qila fort in Delhi and was killed in 1545 while leaving his son to succeed him. Islam Shah was son of Sher Shah fought with his elder brother Adil Khan in which he won the battle and Adil Khan fled and never seen again. Humayu attacked once during the reign of Islam Shah but the attack was unsuccessful as Islam shah died in 1554 and his son Feroz Shah became ruler and later killed by nephew of Sher Shah Adil Shah. Adil Shah appointed Hemu as his Prime Minister. Hemu was a non- Muslim Hindu, fought over 22 battles with Mughal army and won all of them and at last won the battle of Delhi in 1556 and became de facto king Vikramaditya. Second Pani-put war held between Hemu and Mughal army of Humayu on 5th November 1556. Mughal army was commanded by Ali Quli Khan, Sikander Khan and Abdullah Khan. Army of Hemu was commanded by Hemu himself with General Ramaiya on his left side and Shadi Khan Kakar on his right side. He was about to win the war, suddenly an arrow came and hit on his eye, a fear of loss spread among his army personals and suddenly 5000 soldiers of his army were killed as Mughal recaptured India by winning the war. Humayu regained power and remained ruler of India until his death in 1556. He was considered a perfect man due to his devotion for people of the area (Bhardwaj, 2000; Smith, 1916). Akbar was crowned in 1556 AD after death of his father Humayu. Akbar introduced mix principles of Islam and Hinduism to seek support of non-Muslims in India. Mughal dynasty tripled in size during his tenure. Kashmir came into territorial jurisdiction of Mughal Empire in the reign of Akbar in 1586. Non-Muslims were given administrative posts in his tenure as Muslim Jurists were not happy with him. Akbar ruled over India from 1556 until 1605. The East India Company was established in 1600 AD during the reign of Akbar as his son Jahangir gave permission to British Traders in 1609 to trade in Indian sub-continent. Jahangir married to a widow of Ali Kuli Beg who was given the title of Nur Jahan in 1611. She ordered Prince Khurram to go and defend Khandar but he refused to go to a battle field in a fear that she may support her son in law Sheryar in his absence thus Khandar was lost. Jahangir ruled over India from 1605 until his death in 1627 and buried in Shahdara Bagh, Lahore. Prince Khurram took power with a title of Shah Jahan. Khurram was third son of Jahangir and built famous Jamia Masjid New Delhi in 1656. Shah Jahan married with step daughter in law of Nur Jahan Arjumand Banu known as Mumtaz Mahal. Taj Mahal was built in her memory by her husband Shah Jahan. Construction of Taj Mahal started in 1632 and completed in 1653. Mumtaz Mahal died while giving birth to 14th child of Shah Jahan in 1631. Shah Jahan got ill in 1658 and confined by his son Orangzaib Alamgir in Agra Fort where he died in 1666. After death of Mumtaz Mahal, her daughter Jahanara Begum became imperial princes of Mughal Empire. Jahanara Begum was born in 1614 and died in 1681 at the age of 67 as she and her sister Roshanara Begum never married because there was a ban imposed by Akbar on marriages of Mughal Princess. Jahanara Begum devoted herself for care of his father at Agra Fort until his death in 1666. Orangzaib Alamgir took charge as ruler of India in 1658. Alamgir was a prominent and strong ruler expanded Mughal Empire into its largest expansion. He compiled Legal Opinions of Hanafi School of thought in a book Fatawa Aalamgiria. Badshahi Masjid Lahore built during his reign in 1673. Orangzaib Alamgir died in 1707, thereafter Mughal Empire ruled by weak rulers approximately 13 rulers came after him and they all indulged in luxuries and people of India were in a difficult situation at that time because of war between the East India Company and Mughal Empire. Mughal Army was defeated by Durrani Tribes of Afghanistan in 1751 as they ruled over Kashmir for 70 years until Sikh Empire was

40 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) established by Ranjit Singh and Kashmir was accessed to Sikh Empire in 1820 (Prashad, 1931; Richards, 1995). Durrani dynasty established in 1747 in major parts of modern day Afghanistan and Pakistan. Durrani dynasty started in Kashmir in 1751 until Kashmir was taken over by Sikh Empire in 1820. Ahmad Shah Abdali took over Afghanistan in 1747. Ahmad Shah Abdali is the founder of Durrani Empire and the founder of modern day Afghanistan, died in 1772. Third battle of Pani-put took place between Maratha Hindus and Durrani Muslims on 14th January 1761. Ahmad Shah Abdali came with his army on the request of Islamic Scholar Shah Waliullah as the battle won by Durrani Muslims. Ahmad Shah Abdali was succeeded by his son Timur Shah Durrani, who died in 1793 and was succeeded by his son Zaman Shah Durrani who ruled until 1800 when he was imprisoned by his brother Mahmud Shah Durrani until his death in 1840. Mahmud Shah ruled from 1801 until 1803 and later from 1809 until his death in 1840. His step brother Shuja Shah Durrani ruled from 1803 till 1809 and then from 1817 until his death in 1842. Three wars were fought between the East India Company and Afghanistan. First war took place in 1839 until 1842, which was won by the East India Company. Second war took place from 1878 until 1880, which was also won by the East India Company. Third Anglo Afghan war took place in 1919, which was won by Afghans and it was agreed between the Government of Afghanistan and the East India Company that current territories of Afghanistan would remain an independent state (Durrani, 2016; Fremont, 2014). Kashmir came under administrative control of Sikh Empire in 1820. Sikh Empire was established by Ranjit Singh in 1799 as region of Kashmir was added to Sikh Empire in 1820 and continued to be under its control until 1846. Ranjit Siingh died in 1839 and his son Kharak Singh became leader of Sikh Empire after him but poisoned to death after one year in 1840 and Nau Nihal Singh became next leader of Sikh Empire in 1840. Two wars took place between the East India Company and Sikh army in between 1846-1849. Treaty of Lahore solemnized between Sikh Empire and the East India Company on 9th March 1846 and Sikh Empire ceased to exist at the end of Second Anglo Sikh War in 1849. The region of Kashmir was given to Gulab Singh in 7.5 million rupees under Treaty of Amritsar solemnized on 16th March 1846 (Karl, 2012; Lawrence, 1878) Dogra Rule established over Kashmir under Treaty of Amritsar solemnized between Gulab Singh and the East India Company. Kashmir was given to Gulab Singh in 7.5 million of Nanak Shahi Rupees. Gulab Singh died in 1857 and his son Ranbir Singh acceded his father and ruled over Kashmir until his death in 1885. Ranbir Singh is succeeded by his son Pratap Singh and his nephew Hari Singh succeeded him in 1925 who was the last ruler of Dogra Rule. Indian Independence Act was passed in 1947 by British Parliament demolished treaties signed by British Indian Empire with other states. Section 7 of Indian Independence Act 1947 states that suzerainty of his majesty over Indian States lapses with all treaties and agreements in force at the date of passing of this Act between his majesty and rulers of Indian States. Treaty of Amritsar ceased to exist on 15th August 1947, thenceforth declaration of accession signed by illegal ruler of Kashmir Hari Singh to accede Kashmir to India does not have any effect whatsoever in the book of law (Ian Talbot, 2009) Independent states Pakistan and India established under Indian Independence Act 1947. One Governor General could be appointed for both dominions. Mount Batten wanted to become Governor General of Pakistan and India. Pakistan refused to appoint him as its first Governor General and Muhammad Ali Jinnah took oath on 11th August 1947 as first Governor General of Pakistan. Mountbatten pressurized Redcliff Line Commission to put Muslim populated areas to Indian state thus Kashmir dispute started. Pakistan and India have fought three major wars and many small conflicts since 1947. Two constituent assemblies were

41 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) formed for making of new constitution as well as for making new laws and amending existing laws of British India. From 1947 onwards, assent of King/Queen has no weighed in Indian Subcontinent as British Parliament cannot legislate for Indian subcontinent and office of the Secretary of State of India dissolved and all agreements solemnized between British Indian State with other states ceased to have effect (Chandra, 2000; Menon, 2015). Pakistan has been supporting struggle of oppressed people of Kashmir started from 22nd October 1947. India call them terrorists as the Supreme Court of India stated that all persons are innocent unless proven guilty and nobody has right to call someone terrorist without proving an allegation of terrorism. The Supreme Court of India dismissed petition filed by advocate M. L. Sharma, against Separatist Leaders of Jammu and Kashmir. Petitioner alleged that separatist leaders of Kashmir are terrorists hence their funding should be stopped. Justice Misra stated that all persons are innocent unless proven guilty, it is not good to call someone terrorist before conviction (Catherine, 2016; Venkatesan, 2016).

Wars and Conflicts between India and Pakistan

Three major wars have taken place between India and Pakistan. Further Siachen and Kargil Conflicts. First war started on 22nd October 1947 and ended in a ceasefire agreement enforced since 1st January 1949. Second war started on 6th September 1965 and went on for 17 days, ended in a Tashkent Declaration on 10th January 1966. Third war took place between India and Pakistan on East Pakistan issue, resulted in establishment of Bangladesh on 16th December 1971. India captured Siachen Glacier on 13th April 1984 and never withdraw while Pakistan did same practice in Kargil in May 1999 and withdrew its troops under pressure (Richards, 1991; Schofield, 2003) Hari Singh wanted to suppress Muslim majority population of the region and ordered security forces to kill rebellions who came out against illegal ruler in Kashmir. Muslims of tribal areas of Pakistan and other parts of the region entered Kashmir to support oppressed people against oppression of illegal ruler of the region. Hari Singh wrote a letter to the Governor General of India to help him and interfere. Mountbatten put a condition that if Hari Singh accedes Kashmir to India then India would interfere. Hari Singh did not have power to accede Kashmir into India as he ceased to be the ruler of Kashmir under section 7 of Indian Independence Act 1947. Somehow, he acceded Kashmir to India and Mountbatten stated that accession would only completed if people of Kashmir themselves decide in favor of India after its clearance from belligerents (Jha, 1996; Rizvi, 1995). Indian troops entered Kashmir on 26th October 1947 and India raised issue of Kashmir in the UN while asking for mediation. The UN passed Resolution 38 on 20th January 1948, offered mediation and proposed 3 members committee; one member to be appointed by Pakistan, one by India and third would be appointed by two states. Purpose of the committee would be to suggest the UN what course of action would be suitable to resolve Kashmir dispute. United Nations Commission for India and Pakistan (UNCIP) established to mediate India and Pakistan on Kashmir hence Ceasefire Agreement solemnized between India, Pakistan and the UN on 27th July 1949 (Schofield, 2003; Varshney, 1991). On 21st April 1948, the UN passed Resolution 47 as per which Pakistani troops were required to evacuate Jammu and Kashmir while Indian troops could remain in the region. A ceasefire took place between India and Pakistan effected from 1st January 1949 undersigned General Gracey on behalf of Pakistan and General Roy from Indian. Karachi Agreement solemnized on 27th July 1949 at Karachi, Pakistan signed by Major General J. Caw-thorn from Pakistani, Satyawant Mallannah from Indian and Hernando Samper, M. Delvoie signed from the UN. The UNCIP demolished without completion of its task to mediate India and Pakistan to

42 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) resolve Kashmir dispute. The United Nations Military Observer Group for India and Pakistan (UNMOGIP) established to monitor ceasefire line demarcated under Karachi Agreement (Bose, 2009; Ganguly, 1999). India violated Karachi Agreement 1949 and attacked Lahore, Pakistan on 6th September 1965 while violating Ceasefire Line established under it. It was a second major war between India and Pakistan after 1947. Indian troops crossed International borders on 6th September 1965 and war went on for 17 days and finished on 23rd September 1965. Later, Tashkent Declaration was signed on 10th January 1972 in which both countries agreed to went back to actual Ceasefire Line location according to Karachi Agreement 1949 (Makeig, 1987; Musa, 1983). East Pakistan converted to Bangladesh due to political inconvenience between major political parties of East and West Pakistan and bad administrative decisions by President General Yahya Khna. Awami League won majority seats in East Pakistan general elections of 1970 while Pakistan People’s Party won majority seats in West Pakistan. Yahiya Khan delayed transfer of power as political parties played their tactics in their support to gain power. Awami League chanted for separation of East Pakistan into Bangladesh on 25th March 1971. Operation Searchlight took place from 26th March 1971 to 25th May, 1971 to evacuate insurgents as Indian Army trained Mukti Bahani fought with Pakistani Military Forces. Pakistan tried to engage India into western border and launched air strikes under Operation Chengiz Khan on 3rd December 1971 to incite India to fight in western front, resultantly a full fledge war, ended in surrender of Pakistan Army. Shimla Agreement solemnized between India and Pakistan on 2nd July 1972 which converted Ceasefire Line into Line of Control (LOC) as both parties agreed to respect Line of Control (Bremner, 1999). Delhi Agreement took place between Pakistan, India and Bangladesh on 28th August 1973 to send back surrendered prisoners of Pakistan Army to Pakistan. India violated Line of Control on 13th April 1984 by capturing Siachen Glacier and Pakistan did same practice by capturing Kargil hills in May 1999. India still holds Siachen Glaciers while Pakistan have given back Kargil hills and went back to actual position of Line of Control (Ganguly, 2013; Richard, 1991) It was agreed between India and Pakistan under Karachi Agreement 1949 and Shimla Agreement 1972 that Ceasefire Line would be respected by both sides and no side unilaterally seek to alter it but India launched Operation Meghdoot on 13th April 1984 and violated Karachi and Shimla agreements while unilaterally altered Line of Control and still holding Siachen Glaciers. Pakistan captured Kargil hills in May 1999. India asked help from USA. The Prime Minister of Pakistan was pressurized by the President of USA to withdraw back to actual position of Line of Control. Pakistan Army withdrew thus Kargil hills were recaptured by Indian troops (Riedel, 2002; Ganguly, 2008)

Conclusion and Recommendations

Kashmir is a region in South Asia bordering Pakistan, India and China. 80% of the population of Kashmir is Muslims. Pakistani Kashmir is consisted of Azad Kashmir and Gilgit- Baltistan. According to Karachi Agreement 1949 and Shimla Agreement 1972, India was bound to observe Ceasefire Line/ Line of Control but it violated Line of Control on 13th April 1984 and captured Siachen Glacier. Indian Kashmir includes Kashmir Valley, Jammu and Ladakh. Chinese part of Kashmir includes Askai Chin and Trans Karakoram Tract. Ladakh is a disputed territory between India and China including Indian State Arunachal Pradesh. Sino- Indian war took place between India and China from 20th October1972 until 21st November 1962. China convincingly won the war but unilaterally withdrew from occupied territories. Pakistan and China had a small mapping dispute over Trans Karakoram Tract which was

43 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) resolved through negotiations by foreign ministers of both countries and Sino-Pakistan Frontier Agreement solemnized on 2nd March 1963. As per stated facts and issues, it is highly recommended that UN Resolutions of 20th January 1948 and 21st April 1948 should be implemented in a true sense and mediation should be made by the UN between India and Pakistan on Kashmir dispute to resolve it permanently to spread peace and prosperity in South Asia. It is also recommended that publicist should be organized in Kashmir as per promises made by the first Governor General of India Mountbatten and affirmed by resolutions of the UN. It is also recommended that voice of 80% Muslims of Kashmir should be heard against illegal occupation of India. It is also suggested that freedom movement of Kashmir should be respected by world powers as oppressed people should be protected against oppressors. It is also recommended that UN observers and fact-finding missions should be sent to Indian Occupied Kashmir as killings of freedom fighters and innocent Kashmiri children and women are increasing day by day. It is also recommended that International Community should find truth behind false accusations of India about Kashmir and its freedom struggle and India should be forced to stop inciting violence in the region.

References

Wolpert, S. 1993. Zulfi Bhutto of Pakistan: His Life and Times, Oxford University Press, United States of America. Zaidi, S. A. 2005. The Political Economy of Decentralisation in Pakistan, NCCR North-South, Islamabad.Pakistan. Alam M. S. 2016. Kashmir Conflict between India and Pakistan: A Realist Perspective. Journal of Asian and African Social Science and Humanities, 2 (1): 13-23. Ankit, R. 2016. The Kashmir Conflict: From Empire to the Cold War. Routledge, USA. 1945-66. Behera, N. C. 2016. The Kashmir Conflict: Multiple Fault Lines. Journal of Asian Security and International Affairs, 3 (1): 41-63. Bose, S. 2009. Kashmir: Roots of Conflict, Paths to Peace, Harvard University Press, United States of America. Bhardwaj, K. K. 2000. Hemu: Napoleon of Medieval India, Mittal Publications, New Delhi, India. Bremner, J. 1999. Bloodshed in Kashmir. Peacekeeping & International Relations, 28 (5/6): 11. Catherine, C., et al. 2016. Innocent until Proven Guilty. Mathematics Teacher, 109 (9): 686-692. Chandra, B. 2000. India after Independence: 1947-2000. Penguin Books, United Kingdom. Durrani, A. S. 2016. Durrani Empire. The Encyclopedia of Empire. Devereux, D. R. The Sino-Indian War of 1962 in Anglo-American Relations. Journal of Contemporary History, 44 (1): 71-87. Fremont, G. 2014. The Anglo-Afghan Wars 1839–1919. Bloomsbury Publishing, United Kingdom. Ganguly, S. 2013. Conflict unending: India-Pakistan tensions since 1947. Columbia University Press, New York, USA. Ganguly, Š. 1999. The Crisis in Kashmir: Portents of War, Hopes of Peace. Cambridge University Press, USA. Huttenback, R. A. 1961. Gulab Singh and the Creation of the Dogra State of Jammu, Kashmir, and Ladakh. The Journal of Asian Studies, 20 (04): 477-488. Hasan, M. 1959. Kashmir under the Sultans. Aakar Books, Delhi, India. Hasan, K. S. 1956. Plebiscite in Kashmir: Indian Commitments. Pakistan Horizon, 9 (1): 24-29. Ian, T., et al. 2009. The Partition of India. Cambridge University Press. New York, USA. Jha, P. S. 1996. Kashmir, 1947: Rival Versions of History. Oxford University Press. New Delhi, India. Karl, A. H., et al. 2012. Travels in Kashmir and the Panjab: Containing a Particular Account of the Government and Character of the Sikhs. Cambridge University Press. New York, USA. Lyon, P. 2008. Conflict between India and Pakistan: an Encyclopedia, ABC-CLIO, United States of America. Lawrence, A. J. H. 1878. Commentaries on the Punjab Campaign, 1848-49: Including Some Additions to the History of the Second Sikh War, from Original Sources, WH Allen, UK Menon, V. P. 2015. Transfer of Power in India. Princeton University Press, India.

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Makeig, D. C 1987. War, No-War, and the India-Pakistan Negotiating Process. Pacific affairs, 60 (2): 271- 294. Musa, M.1983. My Version: India-Pakistan War, 1965. ABC Publishing House; Wajidalis, Lahore, Pakistan. Puri B., Kashmir towards Insurgency, Orient Longman, New Delhi, India, 1993. Prashad, I. 1931. A Short History of Muslim Rule in India, the Indian Press Limited, Allahabad, India. Riedel, B. 2002. American Diplomacy and the 1999 Kargil Summit at Blair House. Policy Paper Series. United States of America, the Center for the Advance Study of India, 1: 10-14. Rizvi, G. 1995. Nehru and the Indo‐Pakistan rivalry over Kashmir 1947–64. Contemporary South Asia, 4 (1): 17-37. Richards, J. F. 1995. The Mughal Empire. Cambridge University Press, United Kingdom. Richard, S. et al. 1991. War and Secession: Pakistan, India, and the Creation of Bangladesh, University of California Press, United Kingdom. Sumit, G., et al. 2008. Nuclear Proliferation in South Asia Crisis Behaviour and the Bomb (Chapter 6: The Kargil War) Routledge, United Kingdom. Schofield, V. 2003. Kashmir in Conflict: India, Pakistan and the Unending War. IB Tauris, London & New York. Siddiqui, A. 1991. Muslims of Tibet. The Tibet Journal, 16 (4): 71-85. Smith, V. A. 1916. The Death of Hemu in 1556, After the Battle of Panipat. The Journal of the Royal Asiatic Society of Great Britain and Ireland, 527-535. The Shimla Agreement. 1972. Pakistan - India. The Indian Independence Act. 1947. United Kingdom. Venkatesan J. 2016. Hurriyat Conference Leaders Not Terrorists, Says Supreme Court. The Deccan Chronicle. Varshney, A. 1991. India, Pakistan, and Kashmir: Antinomies of Nationalism. Asian survey, 31 (11): 997- 1019. Wani, H. A. 2013. Understanding Kashmir Conflict: Looking for its Resolution. SUSURGALUR. 1 (2). Wirsing, R. G. 1998. India, Pakistan and the Kashmir Dispute: on Regional Conflict and Its Resolution, St. Martins Press, New York, USA.

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CULTURE, ADVERTISING AND THE PLAY WITH ‘RELIGION’

Gintarė Kriaučiūnaitė-Lazauskienė

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose – The primary purpose of this article is to identify theoretical fundamentals that can be used in research in the context of culture and advertising research. An additional aim is to identify future research directions for advertising building theory in relation to religion. Design/methodology/approach - A conceptual framework is grounded in the literature review. As few cross‐cultural studies have been absorbed, the theories and their presentation will likely progress in the future. Finding – There is a choice for moving advertising strategy onward from religious advertising and its influence in our culture to one in which the focus is on the exchange of values beyond self- interest. Research limitations/implications – Since this article is only a primary attempt to develop an understanding of the advertising approach to social and cultural trends in society, which provides a strong stimulus for the further conceptual development of the symbolic religious consumption concept and valuation of its use and usefulness in the real world. Practical implications – The proposed conceptual framework provides marketing strategists with a template for a radically different approach to advertising management and a new glance into religion, which offers the potential for enduring customer loyalty. Originality/Value –– This paper contributes a new perspective on advertising and religion in it. Keywords: Advertising, consumerism, culture, religion, religious economy, market theology. Research type: general review.

Introduction

XXI century culture symbolizes new informational and communication technologies by making use of the flow of mass media. Its Media influences affect our worldviews, moral values, and even our personal beliefs (convictions). Moreover, there is a new millennial generation that grew up with new cultural, informative and educational TV programs, social networks, TV stars and influencers and all this is defined as pop culture. In order to elucidate the role of advertising in modern culture, we will introduce keywords, definitions and terms. We tend to clarify the link between religion and culture in particular. We also need to consider the popular culture of today, since this has a real impact on advertising. As Jhally (1987) states, children recognize Santa Claus and Mickey Mouse from Disneyland more easily than the Christian cross or other religious symbols. This is the kind of cultural context in which we are living\. We live in times of a religious mix with different or new religious movements cropping up on a daily basis. From this perspective, one may be very critical of this religious confusion or spiritual ‘shopping,’ but this is an undeniable phenomenon in our pluriform and democratic

46 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) society (keeping in mind Western society). The question arises if this kind of spirituality is acceptable? It brings about many misunderstandings and questions. Concepts which were clear for many years lose their meaning: for instance, as to what religion or symbols mean in the context of advertising? How does advertising in our consumer-driven community try to replace spiritual meanings and is this an irreversible fact? How has this misunderstanding of religious values come into our lives and to what extent does it change us or our shopping attitudes/values? Our daily needs? In this article we are going to demonstrate the present situation in our culture and on part of it – advertising. We will elaborate on the definition, the meaning and how it operates in our daily society, how advertising became a part of religion and how it became unclear where religion started and where just a simulacra of it is in commercial. This present situation has created a new phenomenon – market theology (religious economy), or the “play” of spiritual messages in advertising and especially symbols.

Theoretical background

Culture is quite difficult to describe. One could broadly say that the word ‘culture’ could fit into many categories that fall outside the classical approach of culture in the past. Moreover, it could be derived from how we react in our daily lives to things which we feel or are impressed by. Culture gives us language, categories, narratives and other organizational schemes by which we make sense of ourselves and everything we deal with. Consequently, scholars from various disciplines have tried to describe culture differently (Hofstede 1991, Fischer 2009, 2001, de Mooij 2013; Hofstede, and Minkov 2010; McSweeney 2013; Triandis 2018). Supportively, scholars have detailed that culture is shaped from people’s mutual environmental context (Hofstede and Minkov 2010), life understanding (Heine 2008), and basics of life (Keith 2011). Essentially, Matsumoto (2009) emphasized that culture survives for pursing a happy and significant life. For sure it is almost impossible to find a consensus regarding culture’s definition; therefore, culture is a part of an individual’s link to physical and psychological well-being. We must take into account that culture represents or portrays our lives, and even more, the popular arts popularize and glamorize the ideals, values, attitudes and beliefs that exist within our culture to shape our lives. Romanowski (2001) argues that: “Culture involves both creating meaning for things and living. It shapes experience and expectations, and gives us a means of coping with the new and unexpected. A culture can shape what we come to know and value – how we understand “God’s word”. In a KFC, McDonald’s and H&M world, we become part of our fast-paced society. More often we communicate via smart phones instead of seeing real people and more often forget real things. Even more people prefer short relationships than real love and marriage. We become “McDonaldish” ourselves. We are used to drinking from plastic cups, eating from paper plates, and it is not just fast food, but we have also become fast thinkers and fast talkers. Moreover, it has become a part not just of our culture; therefore, it has become who we are. Instead of choosing an unknown director, we watch cheap and easy Hollywood movies. We could talk for hours about the last advertisement we saw, and we have no idea what the exhibition was about in our town’s art museum. A book becomes important when it has been bought by enough people or sufficiently advertised (becomes one of the best if it is on the shelf of the ‘best-sellers’). As for more, the market stands as the ground of our postmodern being according to Detweiler and Taylor (2003). It is already normal to live in a society of “cut and paste”, bricolage, cafeterias, take-away coffee keeping in mind that these words already express current culture.

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Despite acknowledgment and persistent pointing out cultural issues for many decades academics have endlessly worried about the importance of culture in advertising (Okazaki and Mueller 2007, de Mooij and Hofstede 2010; Taylor 2005, 2018, House, Quigley, and de Luque 2010; La Ferle and Lee 2012). We consume everything: health services, things and ideas, political representation, even all kinds of culture (Twitchell, 1999). We can conclude that it is not so easy to eliminate the changes in the world. Even if we do not like them, we have to adjust.

The Advertising Plot and Religion

The most debatable source of present culture influenced by consumerism and moral relativism is advertising. Advert could be small and quickly forgotten, or it can be huge with colourful images in front of your face which you cannot forget all day or maybe all week. In order to give a more secure description of the term “advertising,” one of the dictionaries of religion says, “Advertising donates a competition-oriented form of mass communication, through various media, for economic, cultural, or religious purposes” (Petley, 2003) describes this term more precisely, and he argues that advertising means, “The goods or services are promoted to the public. The advertiser’s goal is to increase sales of these goods or services by drawing people’s attention to them and showing them in a favorable light” (Petley, 2003). Yet it has been suggested that the word “advertising” originates from the Latin word “advertere,” which means “to turn around.” In the marketing context, “advertising” has been defined “as a paid and non-personal form of presentation and promotion of ideas, goods or services by an identified sponsor” (Kumar & Mittal, 2002). To define more precisely what we mean by advertising, according Singer (1986) the verb “to advertise” means to take notice of rather than to call attention to, which is our modern meaning. The latter nuance then branches out into three related functions of advertising: the first function is “to call attention to”; the second is “to inform,” for advertising contains information that seeks to meet different levels of standards; and the third - taken from the point of view of the interests of the adviser - is “to persuade” (Singer, 1986). Furthermore, through advertising, the advertiser intends to spread his ideas about his products or offerings among his customers and prospects (it is the basic aim of the activity). Today, we cannot find anything the same as it used to be (not even comparable with the 19th century). Advertising is almost everything and everywhere and it includes our consumer behaviour, markets fostering our little traditions (or even addictions) in malls or supermarkets. Moreover, we could say that, from a psychological point of view, one can understand someone’s personality and worldview just simply based on someone’s participation in buying and in everyday shopping. Furthermore, in the 21st century, advertising manipulates, rules, plays, seduces, and easily leads us into temptation (Singer, 1986). It is generally agreed that advertising and consumption are not as pure as they were in the beginning (keeping in mind the beginning of the 19th century) and that now even our identity is based on production, distribution and consumption, all characteristics and functions of modern consumer culture (Chasin, 2000). Advertising is no longer just a way to present products and to attract consumers. It has become a guru, a religion, a prayer. It has become a way to salvation. Moreover, we advertise ourselves every day in our daily life, and we do that so naturally and regularly through our behaviour and our body language that we do not catch ourselves doing this. It has even become second nature, like thinking (Tiwari, 2003). The reason why advertising is so attractive is that it helps us be recognizable for others, like flowers with their colours and smell in order to attract bees. As Tiwari (2003) states, humans are the most creative of all

48 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) animals and natural creatures because they have the artificial commination to get the effect out of each other. He says, “Though the basic animal instincts remain the same, man-made cues like seductory clothing, cosmetics, lighting, music, visual imagery, vocabulary, etc. often acts as overt and gestures and signs” (Tiwari, 2003). Advertising operates as a connection between society and the economy. Most of the time, the goal is to advertise a product or brand with specific advantages. Companies who present the same product compete with each other and one of their goals is to promote the advantages of specific brands (Wiener & Lohnert, 2007). In another way, in the commercial world, advertising is meant to communicate to the consumers how the advertised product or service can satisfy some relevant need of theirs in a meaningful way: “Advertising also provides the option to choose one partner (brand) that will satisfy his or her needs the best” (Tiwari, 2003). Meanwhile, it creates a better living standard by nourishing people’s consuming power, showing one the goals of a better home, clothing and food for his or her family and himself. The most important aspect is not the commercial itself but the way it decides to show a product, the form which reaches the customer and what kind of value makes this product special and desirable. In a consumer–oriented society advertising demonstrates the free way of everything related with goods “wrapped” in sexuality, which have become just the tool for the mass media and massive production of goods helps to multiply brands and increase “brands values” (Baudrillard, 1998). Hence, we may continue to state that advertising has a strong influence on the present cultural situation and on the market. Moreover, the role of advertising today is to transmit rich, intimate and astute, cultural and subcultural messages and images as well as universal, biological desires, to seduce us and leave us with wonderful images and dreams, which will inspire us to fulfill them, so we need to work more, in order to spend more and find even spiritual satisfaction.

The Place of Religion in Advertising

Religion is as much a global phenomenon as advertising is. Some people take advertising as a religion. Religion is one of the main elements of social behaviour and effects consumers as well as society (Mokhlis, 2009). Consumer behaviour is directly influenced by the religion its decrees and taboos. One of these behaviours is fasting, and Muslims, Hindus as so Christians have the same tradition. The term religion is to be understood in a lot of different ways, and it is more than mere spirituality. In its original Latin usage (“religio”), Cicero defined it as the giving of proper honour, respect and reverence to the divine, by which he meant the gods. This thinker distinguished “religion” as a dutiful honouring of the gods, from “superstition,” an empty fear of them (MacRea, 2016). Unfortunately, this definition does not fully describe religion as a part of belonging to consumerism and believing it is divine. Apparently, it is necessary to find out how it influences our spiritual experience. It is useful to start with this narrower definition of religion as a belief in God or gods, together with the practical results of such a belief as expressed in worship, ritual and a particular view of the world and of nature as well as a destiny of man and the way someone ought to live his daily life. It is also useful to distinguish, as Cicero did, between religion itself and other things which may be associated with it or are a part of it (Cenkner, 1990). According to cultural anthropologist Clifford Geertz (1966), religion can be described as a cultural system in five categories: 1) A system of symbols which acts to 2) establish powerful, pervasive, and long-lasting moods and motivations in men by 3) formulating conceptions of a general order of existence and 4)

49 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) clothing these conceptions with such an aura of factuality that 5) the moods and motivations seem uniquely realistic (Sheffield, 2006). Looking from a different perspective, in addition to these definitions, a different term could be used. It is called “implicit religion,” practiced in religious education to cover the study of things which are not religious themselves but can have religious significance to religious people (Cenkner, 1990). This dispute raises the question if (to improve the term of “implicit religion”) for instance, Buddhism is a religion or not. In its broader forms, where there is worship of gods, and perhaps of Buddha himself, it is clearly a religion. Meanwhile, in its narrow form, it may be considered as a philosophy of life. Keep in mind that Buddhists state that they do not have a God, but just a teacher and a system of religious praxis. On the contrary, everybody agrees that one of the main world religions is Buddhism, of course, not without a reason, as we are trying to claim. It cannot be just a system of teaching. We can argue that, just as Buddhism has no god but just a teaching system, the same goes for consumerism, and we already have a new religious movement which shares the same characteristics. Furthermore, consumerism has a strong theory as well. Advertising will fit in this category very clearly and all the magazines full of worship advice (what to buy and what not to), could be compared to religious books. In other words, “advertising” (along with religion has a clear vision, a sense of belonging, an enemy, sensory appeal, storytelling, grandeur, evangelism, symbolism and rituals) can have some conventional religious aspects, even if it does not have a formalized ideology as religions usually do. Furthermore, in the way “advertising binds together certain groups of people through class differences, purchasing power, and brand names into a recognizable community through image, language, ritual, and seemingly supernatural powers, it is very much as religion” (Sheffield, 2006) True religion has to be distinguished from sects (movements with the same implicit form of religion). Let us look at some examples. For instance, looking from a different point of view, Marxist analysis argued that advertising functioned as a fetish religion in late capitalism. Jhally states, “A fetish is an object believed to have magical properties and thought to contain the spirit of its creator, or a spirit that will serve some practical, everyday value.” The author continues to say that advertising is related to fetish religion, whereby fetishism is not a total spiritual belief system, but rather a part of a larger belief or higher spiritual power, such as a Supreme Being (Sheffield, 2006 ). Exist an opinion that advertising could be a religion itself but despite the fact that advertising borrows icons and images from religion to increase its power it does not make it one. Advertising uses and evokes already familiar images which are easy to recognize and attribute to traditional religious symbolism (Sheffield, 2006). For example, in an advertisement for mobile phones, a woman and a man are entering a wonderful garden, and they both look very happy. Birds are singing, flowers are blowing in the wind, and it is obvious, that it has used an image of Adam and Eve in the Garden of Eden (Paradise). However, from this image we do not feel more sacred than before. Whether the strong feelings in religion come directly from God, or whether they are generated at least in part by association, they are at any rate linked with religious belief. According to psychologists So, Achar, Han, Agrawal, Duhachek,& Maheswaran (2015), the emotions involved in sports and in religion may be very similar but that does not justify including sports in the category of religion, as some do. The similarity is only superficial and on one level. The present situation of mass media, as the dictionary describes, it is presented in general through films, sports, advertising and music, which puts the religion on the defensive. Consequently, it makes new waves, but it does not mean that traditional religion will disappear.

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Postmodernity and Religion

The question rises as to how religious and economic products (advertising) started to be mixed together in the pop culture of our society. One of the answers could be that religions are capable of fostering reflection and conviction. Popular culture purveys and instantiates a religion, as well as religious and quasi– religious impulses. Scholars raise the question that if pop culture and advertising have an impact on our society and one of the answers is on the affirmative: “The cultural context of advertising may capture lifestyles, demographic characteristics or values” (Pollay & Gallagher, 1990). It is argued that “to create the economic impact of selling goods, advertising operates psychologically, changing attitudes, images, cognitions of values and feelings” (Pollay & Gallagher, 1990). Advertising frequently contains values relating to leisure, productivity, being modern and traditions which change. The three most common values used in advertising include pleasure, wisdom and family security. The study concludes that advertising has a more constant cultural character than may appear on casual inspection (Williams, Lee & Haugtvedt, 2004). The main difference between religion and advertising is that religion speaks about the afterlife, prepares the soul for the next world, while advertising addresses the here and now. We contradict the idea that religion speaks just about the past. It speaks about the present as well, unfortunately, as for more it is not the essence of this research paper (Detweiler & Taylor, 2003). Religion helps us to make decisions, develop values, and take risks. In our consumer- driven society, advertising often serves as our language (Detweiler & Taylor, 2003). In fact, not so much is known about religion in advertising even though religion significantly influences culture in many countries. Consequently, advertising has a significant effect on the wealth of companies and plays a significant role on consumer behaviour (Li & Lo, 2015), which affects peoples’ attitudes towards advertisement (Soares et al., 2007; Yılmaz and Enginkaya, 2015; Makienko, 2014). One of the reasons why companies are using religious symbols and even Jesus himself is, “There is a cause: a God” (Barton, 2011). The main purpose for using Jesus in advertisements is because his legend has survived for twenty centuries, and he is one of the most potent influences in the world. In this perspective, Bruce Barton continues to state that Jesus is effective: “Foremost, it could be recognized as the basic principle that all good advertising is news. He was never trite or commonplace, he had no routine. Second, he was advertised by his service, not by his sermons” (Barton, 2011). Advertising reflects not only some cultural values, but also religious thoughts and symbols which may be reflected in different contents. Religion functions in society in a lot of ways, such as personal values, beliefs, icons, symbols, rituals and social gatherings. Of course, it is not surprising that religious organizations have led very successful boycotts of products and promoted the use of others. Further, modern and popular culture is heavily mass-mediated and commodified. In its mass-mediated and commodified forms, it appeals especially to the crowd. We should keep in mind that the crowd’s characteristics include a tendency to take on a life of its own, overwhelming the considered judgment and stifling the imagination of the individuals and communities who comprise it. The crowd is motivated by the grossest, simplest, most elemental dreams and dreads; the crowd is easily manipulated by demagogues or demagogic techniques (Laytham, 2014).

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Does Advertising Replace Religion?

During the past few decades, advertising has made extreme changes in the perspective of their expressions and ways to reach the audience. More in particular, advertising has “appealed to economic-utilitarian motives, to psychological needs or ‘instincts’, and most recently, to social motives, we should admit, including religious needs as well” (Barton, 2011). Advertising suggests all kind of promises strongly related with religion we start to think, that belongings can help us become more attractive to another person as well give us power over other people’s affections, cure us of all illnesses, capture and package nature for our use and become desirable persons in a community we belong. The most evident difference between religion and advertising is that religion expresses how to talk about the “beyond,” while advertising talks about the “here and now” (Twitchell, 1999). Therefore, the best approach to understand advertising is to state that it is like religion. First of all, it has an organizing system of meaning for surpluses (plenty). In both cases, the system appears to be coming from the top down, from the priests to the parishioners, from the producers to the consumers. In truth, it works just as well the other way around. To a considerable degree, the parishioners (consumers) set the agenda and the priests (producers) are forever predicting where the demand will appear next. These two comparable objectives share the same meaning and make the same promise, “the same redemption with ‘one through faith’, together with a promise of salvation” (Twitchell, 1999). Advertising, at the same time, has a lot of power, as we have mentioned before, from the arts to the science of building brands through persuasive communication and positioning them in the consumer’s perception, with a constant vigil on the market situation and consumer expectations. It gives the possibility to change even social rules and adapting new paradigms, such as visual, economic, sociological and political ones (Kumar & Mittal, 2012). The reason why people sometimes change a product into a symbol which is marked by the religious influence it becomes the “object with an aura of the sacred” as well it opens the new segment of buyers (Sheffield, 2006). On the contrary, “advertising also has its own collective rituals.” In a way, they change an object into a product, and in this manner expresses, as Sedgwick says, “intimacy and happiness which we lack” (Sedgwick, 2009). Commercials express themselves through coding themselves and goods as a type of sacrament. In advertising, symbols can become everything – words, objects, goods by themselves. They start to be desirable. Then advertising companies put in them a type of divine grace that brings the people (community) together for a time of appreciation and reminiscence. The sacraments are a religious ceremony or ritual that gives divine grace, or a symbol that communicates in the sacred. In advertising, through the meaning of sacramentality, this grace becomes imported to the individual, who could purchase more. Thus, it could be, for instance, diamonds or fancy shoes. By transforming an object to a product and afterwards to a symbol, the divine is present and subsequently imparted to the consumer. Of course, we do not try to destroy the understanding and we respect the meaning of the sacraments, but rather we wish to demonstrate the assimilation with advertising. The power of advertising has generated such an image around the purse that people desire to be a part of a certain consumption class. Sacramentality here becomes the consumer person by the image attached to the object. “Advertising, through the religious dimensions of a divine mediator, sacramentality, and ultimate concern, maintains the binaries of culture in such a manner that the fiction of a ‘nature order’ is given legitimacy by appeal to the religious. For instance, it is natural to be hungry or thirsty, but these conditions of nature were shifted into consumer desires as the US developed as an industrial society.” (Sheffield, 2006).

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Insofar as advertising bestows identity through the ownership of commodity–totems, it rewards those whose objects (images) subtend normative practice of gender, race, class, and sexuality. Advertising, then, according Sheffield (2006), maintains the fictive practices of normative binaries through sacramental symbols. Advertising mediates the image of the object to the individual, and then he or she has an ability to become a part of a “consumption community” marked by object. For instance, Rolex has an image considered to be a symbol of wealth. The community then forms a clan (Rolex clan) linked through the totem and the image given to it by advertising.

Conclusion

We all have a strange relationship with advertising. On the one hand, we cannot stand it, it is everywhere, we find it annoying and frustrating, we cannot escape from it, we cannot make our own decisions or be in a quiet and still place to reflect on them, advertising disturbs it as the most powerful force. On the other hand, we cannot imagine our lives without these distractions. They are not just sparking views or exaggerated words. They help to make decisions and even shape our preferences and they show our selves around our social attitudes and character features. They even have become a way to communicate with God (or super natural powers). Advertising with symbolic religious meaning does not just shock or wake us up, but it embarrasses us as well. It demonstrates the weak sides of our society, the fragile and tempted soul in ourselves. To make this statement more argumentative, Twitchell (1999) says that advertising is “ubiquitous, anonymous, syncretic, symbiotic, profane and, particularly, magical.” Complexity and misunderstanding starts, as we mentioned before, in these times. Human beings are surrounded by thousands of advertisements like being exposed to technologies all the time. It is anonymous because the sponsor of advertising is almost never known. It is symbiotic since there is a link between advertising and trends in a world of culture. It is also profane; therefore, it directly reaches ephemeral goods as well as services. And it is always magical. You never know what a symbolic meaning refers to beyond itself with the seductive idea that it will solve all your problems.

References

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Hofstede, G., Hofstede, G.J.& Michael Minkov (2010), Cultures and Organizations: Software of the Mind, 3rd ed., New York: McGraw-Hill. House, R. J., Narda R., Quigley, and de Luque M.S (2010), “Insights from Project GLOBE: Extending Global Advertising Research through a Contemporary Framework,” International Journal of Advertising, 29 (1), 111–39. Jhally, S. (1987) The Codes of Advertising: Fetishism and the Political Economy of Meaning in the Consumer Society London: Pinter. Kenneth, K. (2011), Cross-Cultural Psychology: Contemporary Themes and Perspectives. Hoboken, NJ: Wiley- Blackwell. Kumar N. & Mittal, R. (2012). Advertising Management. Anmol Publications. MI: Brazos Press. La Ferle, C., and Lee W.N.(2012). “How Advertising Works within a Cultural Context: Theories and Frameworks Informing the Process,” in Advertising Theory, Shelly Rodger and Esther Thorson, eds., New York: Routledge, 162–73. Li, H. and Lo, H-Y. (2015) ‘Do you recognize its brand? The effectiveness of online in-stream video advertisements’, Journal of Advertising, Vol. 44, No. 3, pp.208–218. Laytham, D.B. (2014) God Is Not: Religious, Nice, "One of Us," an American, a Capitalist. Grand Rapids: MI, Brazos Press. Makienko, I. (2014) ‘Perception of humour banner advertising: a conceptual framework’, International Journal of Internet Marketing and Advertising, Vol. 8, No. 3, pp.181–198 MacRae, D. (2016). Legible Religion Books, Gods, and Rituals in Roman Culture. Harvard University Press. Matsumoto, D. (2009), Teaching about Culture, in Getting Culture: Incorporating Diversity across the Curriculum, Regan A. Gurung and Loreto R. Prieto, eds., Herndon, VA: Stylus, 3–10. McSweeney, B.(2013), “Fashion Founded on a Flaw: The Ecological Mono-Deterministic Fallacy of Hofstede, GLOBE, and Followers,” International Marketing Review, 30 (5), 483–504. Mokhlis, S. (2009). “Relevancy and Measurement of Religiosity in Consumer Behavior Research.” International Business Research 2 (3): 75–84. Miller, A. (2002) The Price: A Play. The Viking Press. Taylor, C. R. (2005), “Moving International Advertising Research Forward,” Journal of Advertising, 34 (1), 7–16. Taylor, C. R. (2018), “Global Consumer Culture and Advertising Research,”International Journal of Advertising, 37 (4), 505–07. Triandis, H. C. (2018), Individualism and Collectivism. London, United Kingdom: Routledge. Tiwari, S. (2003). The (Un)common Sense of Advertising: Getting the Basics Right (New Delhi: Response Books. Twitchell, B. (1999). Lead Us into Temptation: The Triumph of American Materialism. New York: Columbia University Press. Okazaki, S & Mueller, B. (2007), “Cross-Cultural Advertising Research: Where We Have Been and Where We Need to Go,” International Marketing Review, 24 (5), 499–518. Okazaki, Shintaro (2012), Handbook of Research on International Advertising. Cheltenham, United Kingdom: Edward Elgar. Petley, J. (2003), Advertising-Technology, People, Process. Black Rabbit Books. Pollay, R.W & Gallagher, K. “Advertising and Cultural Values: Reflections in the Distorted Mirror. “International Journal of Advertising, no. 9. (1990): 359. Romanowski, W.D. (2001). Eyes Wide Open: Looking for God in Popular Culture. Grand Rapids. Schudson, M. (1984). Advertising, the Uneasy Persuasion. New York: Basic Books. Sheffield, T. The Religious Dimensions of Advertising. New York: Palgrave Macmillan, 2006 Singer, B. D. (1986) Advertising and Society. Wokingham: Addison-Wesley. Sedgwick, P. (2009). The Market Economy and Christian Ethics. Cambridge: Cambridge University press. Soares, A.M., Farhangmehr, M. and Shoham, A. (2007) ‘Hofstede’s dimensions of culture in international marketing studies’, Journal of Business Research, Vol. 60, No. 3, pp.277–284. So, J., Achar, C., Han, D., Agrawal, N., Duhachek, A. & Maheswaran D. The psychology of appraisal: specific emotions and decision-making. Journal of Cons Psychology, 25 (2015), 359-371. Wiener, R.D. & Lohnert, M.R. (2007). “The Pleasure of Seduction: The Role of Christian Symbols in Advertising,” in Reconfigurations: Interdisciplinary Perspectives on Religion in a Post-Secular Society, eds. Stefanie Knauss, and Alexander D. Ornella. Muenster: LIT. Yılmaz, H. and Enginkaya, E. (2015) ‘Brand followers: motivations and attitudes of consumers to follow brands in social media’, International Journal of Internet Marketing and Advertising, Vol. 9, No. 1, pp.3–20.

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VIDEO SURVEILLANCE AND THE GDPR

Aurimas Šidlauskas

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose – to present some recommendations that would help organizations to compliance video surveillance under GDPR. Design/methodology/approach – analysis and synthesis of scientific literature and legal documents, generalization. Finding – after analyzing the theoretical aspects of video surveillance compliance under GDPR, there were introduced the main recommendations that would reduce the risk of GDPR non- compliance. Research limitations/implications – The main limitation of this study is that the research is based on scientific literature review. Practical implications – the present research allows to identify the challenges of GDPR implementation for video surveillance. Originality/Value – On May 25, 2018, the General Data Protection Regulation or GDPR officially took effect, requiring better protection of personal data across the EU region. In this regard, making video surveillance GDPR compliant has become critical. Keywords: video surveillance, GDPR, Research type: general review.

Introduction

In the world of today's information technologies, data may spread through cyber space at the speed of lightning (Limba, & Šidlauskas, 2018). 2018 is a big year for data privacy and data processing regulation. On July 27, 2018, India published a draft bill for a new, comprehensive data protection law to "be called the Personal Data Protection Act, 2018," only a few weeks after the European Union General Data Protection Regulation (GDPR) took effect on May 25, 2018 and California enacted the California Consumer Privacy Act of 2018 at the end of June. Brazil already followed with a new General Data Protection Law (Law No. 13,709/2018) only a few weeks later, on August 14, 2018. The new Indian Personal Data Protection (PDP) Act adopts and further develops many existing principles of EU-style data processing regulation and some aspects of U.S.-style data privacy laws. Global companies can, and should try to, address the requirements of the new Indian Data Protection Law, the GDPR, the California Consumer Privacy Act (CCPA) and other privacy regimes simultaneously and holistically, in the interest of efficiency (Determann, & Gupta, 2018). The PDP Act is along the lines of the GDPR, it largely regulates all processing of personal data with the prohibitive character by providing for a blanket data protection law. It aims at instituting a data protection authority and subjecting companies to numerous administrative duties which include the appointment of data protection officers, local representatives, data

55 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) protection impact assessments, record keeping, privacy by design and frequent audits among other things (Determann, 2016). The CCPA also provides for blanket protection, but the intention is not to replace existing data privacy laws at the U.S. Federal and California State level. As a result, it does not create any such administrative obligations and is implemented to address the specific risks for individual privacy created by data trading. While the PDP Act and GDPR secure any information related to an identifiable individual, CCPA takes one step further to additionally includes information relating to households (California Civil Code). If companies collect or process personal data from or in any of the three above mentioned territories, they will be subject their respective data protection laws. In order to avert the consequences of non-compliance, the companies would have to stop doing business in each jurisdiction (Bahl, & Bharsakle, 2018). Privacy and protection of personal data (or more aptly, the lack thereof) has become a topic of concern for the modern society. GDPR defines the privacy of personal data as a fundamental right of all the European people, and accordingly regulates the entire lifecycle of personal data. Thus, any company dealing with EU people’s personal data is legally bound to comply with GDPR (Banakar et al., 2019). One of the GDPR goals is to protect the fundamental rights and freedoms of the data subjects by creating a protective regiment with regards to the processing of personal data. This is because new technologies and organisational models both in the private and public sector have made it easy to gather, use, combine, aggregate or otherwise process a vast amount of personal data without sufficient controls or oversight (Kotsios et al., 2019). The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Under GDPR organizations in breach of GDPR can be fined up to 4% of annual global turnover or €20 Million (whichever is greater). This is the maximum fine that can be imposed for the most serious infringements e.g. not having sufficient customer consent to process data or violating the core of Privacy by Design concepts (Vojkovic, 2018). Interdisciplinary approaches are mandatory to ensure that legal problems are not overlooked. In addition to economic, ethical and social aspects, technical aspects play an increasingly important role in the law, with technical infiltration into daily human life being reflected in the relevant laws. However, there is often a great deal of uncertainty as to whether technical innovations are compatible with existing legal standards (Bretthauer, 2016). In addition to technological advancement of surveillance systems, there are also concerns about the potential trade-off with human rights and freedoms of citizens. Thus, there is a need for means that allow for the protection of freedoms and human rights, while also ensuring security (Wurster et al., 2018). One particular form is data protection law; this was created as a reaction to technology specific hazards and is based on a risk analysis of data processing. Authors Limba and Šidlauskas (2018) states that the data subject should be involved as an active participant in the personal data protection process in order to avoid violations related to the personal data. Video surveillance systems are becoming ubiquitous. They are widely deployed in many strategic places such as airports, banks, public transportation or busy city centers. While people usually appreciate the sense of increased security brought by video surveillance, they often fear the loss of privacy which comes along (Dufaux, & Ebrahimi, 2006). Video footage is included in the GDPR as personal data. With this in mind, it is vital for those collecting and

56 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) processing the data produced by video surveillance are ensuring they do so in line with guidelines.

GDPR Overview – Principles, Key roles, Data Processing Lawfulness, Security

Apparently, the GDPR does not contain an express regulation on video surveillance. However, this is a false representation, as the GDPR does not expressly regulate every circumstance or situation governed by its provisions. In order to understand its scope, it is necessary to define the key-element. Personal data is any information relating to an identified or identifiable natural person (data subject): 1. Any information is subjective or objective information. 2. Information in term of its content. 3. Information format. 4. Regardless the modality of capture, storage or presentation. The principles of the GDPR are focused on the privacy rights of every person when it comes to collecting and processing their data (see Table 1).

Table 1. Six Basic Principles of the GDPR The Principles Definition Lawfulness, Fairness, These dictate that the personal data needs to be processed in a way that is and Transparency lawful to the subject Purpose Limitation The data processors can only use the data for the objectives they’ve explicitly described and justified Data Minimization The information that is required has to be relevant for its purpose and limited to what is necessary Trueness, Accuracy If some of the data is inaccurate, it should be removed or rectified Storage Limitation Data is kept in a form which permits identification of persons for no longer than is necessary for the purposes for which the personal data is processed Integrity and This principle stands for taking all required measures to ensure all the Confidentiality personal data is protected

Compliance with the spirit of these key principles is a fundamental building block for good data protection practice (Šidlauskas, 2019). On the most fundamental level data protection offers a binary system of two opposed actors: a controller and a data subject. A person processing personal data and the person to whom this data is relating. A data subject is any person whose personal data is being collected, held or processed (see Figure 1).

Source: Ahmed Badr, 2018 Figure 1. Data controller vs data processor

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Under GDPR, businesses must comply as either data processor or data controller, in relation to specific data: 1. Data processors process personal data on behalf of the controller, but they don’t decide the purpose or the means. 2. Data controllers determine the purpose of the processing and the means to achieve that purpose. Essentially they decide why and how the processing should take place. However, the GDPR does not limit itself to this traditional scenario and offers more possible roles. According to the GDPR, a Controller is any (natural or legal) person that, alone or jointly, determines the purposes and means of the processing of personal data. It is a role that is always determined in relation to a specific act or set of acts of processing. These can include the collection, recording, organization, structuring, storage, adaptation, usage, disclosure, cf. In order to limit risks from acts of processing, the GDPR enjoins controllers with certain obligations that are meant to safeguard data subjects' rights. Data Protection Officer (DPO) is a new position implemented in the companies as the GDPR requires certain companies to appoint a DPO to ensure compliance within the company. These officers should inform the organisation on the GDPR and maintain compliance internally. For every act of processing is in need of a legal basis, making it the controller’s duty to make sure that and declare which one of the legal grounds listed in the provision applies. Under GDPR, the processing of personal data is only lawful when it falls under one of six approved justifications (see Figure 2).

Source: Todd Grennan, 2018 Figure 2. Personal data processing under GDPR

Furthermore, certain organizational and technical measures need to be taken in order to ensure that the controller is also in compliance with all the GDPR’s specific data protection and data security provisions and is able to prove said compliance at any time. What makes the determination of the scope of these obligations difficult is the rather abstract way in which they are defined. The measures that a controller has to take are dependent on the scope,

58 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) context and purpose of the processing and on the severity and the probability of occurrence of the risks for data subjects' rights and need to be “suitable” and “appropriate”. In summary, there is no general way of defining measures that every controller can take without taking into account the context and specifics (Kurtz et al., 2019). The GDPR reinforces the rights of Data Subjects, namely the right to information and access to personal data, their correction or deletion, limiting their processing, data portability, as well as opposing automatic decision including profile definition, thus forcing Organizations to adopt organizational and/or technical procedures so as to comply with the rights of the data subjects. The effectiveness of security measures depends on how they manage to reduce the risk (Šidlauskas, 2017). As the scale and sophistication of attacks grow, the controllers should invest in cyber security compliance within GDPR in order to protect information business systems. The emphasis it given on the fact that they should have to remain vigilant and try to put in place sufficient processes and policies to best protect their businesses and remain in compliance with GDPR. Ultimately, cybersecurity and GDPR are one and the same: the common denominator is data management: designing efficient cybersecurity frameworks in terms of end-point protection – based on privacy by design and also antivirus, malware tools, firewalls – and also designing security policies based on GAP analysis on GDPR with permissions to access data by their employees creating robust governance system with adequately protected personal data belonging to the customers (Boban, 2018). The factors relevant to information security are combined within the strategic, human and technological dimensions of information security management. Information is the greatest asset and the most important security object (Šidlauskas, 2018).

Video Surveillance Under GDPR

GDPR applies to all data processing operations, even if not all of these are expressly regulated. One of these personal data modalities is represented by the video surveillance. Despite not expressly regulated by GDPR, this is one of the most commonly used means of personal data processing. Video surveillance as a data processing method should be assessed very carefully by any organization that has the capacity of controller or processor, in order to be fully compliant with the provisions of the GDPR (Cliza, Olanescu, & Olanescu, 2018). The GDPR raises for companies the question of how they can ensure that operations conform with external data processors according to the regulation (Kurtz, & Semmann, 2018). Organizations that collect, access, store or process personal data are now obliged to inform data subjects about what data they collect and what are their objectives in processing those data in an understandable and transparent way, using clear and simple language (Tesfay et al., 2018). Information Governance in an Organization describes how information is managed and all the procedures involved. The following should be known about the data: their source, how they are processed, reliability in terms f integrity and accuracy, and traceability (Wróbel et al., 2017). In some cases, prior consent of data subjects is now compulsory for the Organization to be able to collect, store and process personal data and, at any moment, data subjects may withdraw their consent (Safari, 2016). Consent must be concise, understandable, easily accessible and written clearly and accurately (Chowdhury et al., 2017). The use of digital surveillance technology is rapidly growing as it becomes significantly cheaper for live and remote monitoring (Caputo, 2014). The UK is often cited as being one of the most video monitored societies globally, with up to 5.9 million CCTV cameras in operation in 2015 alone (one camera for every eleven people) (Andrew Kuemmerle, 2018). The way CCTV video footage is captured and handled must change to fit with the new GDPR guidelines introduced by EU, ensuring that more stringent rules and regulations are implemented in

59 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) order for business owners and organisations looking to install new CCTV systems. A business owner will now need to have a valid reason for CCTV placement within their businesses, which requires viable reasoning. One such reason may be to help protect their stocks or assets, the wellbeing of their employees when it comes to health and safety, or to capture footage of any incidents that may occur within the company. In the workplace, CCTV surveillance could frequently be justified by a claim that it was there to prevent or detect crime, with only notice to employers needed (Edwards, Martin, & Henderson, 2018). There has been an accelerated expansion of Closed-Circuit TeleVision (CCTV) surveillance in recent years, largely in response to rising anxieties about crime and its threat to security and safety (Gong, Loy, & Xiang, 2011). There are many different types of CCTV systems available – analogue and digital, wired and wireless and their modes of operation vary; however, the basic components are more or less the same: a camera, a lens, a monitor, and (for wired systems) cables that carry the signal from one place to another. Many systems also use video recorders to record the video footage (Murungi, 2009). Video surveillance, closed-circuit TV and IP-camera systems became virtually omnipresent and indispensable for many organizations, businesses, and users. They also became increasingly complex, comprising many communications means, embedded hardware and non-trivial firmware (Costin, 2016). Surveillance footages are often used merely as passive records or as evidence for post- event investigations. Miss-detections of important events can be perilous in critical surveillance tasks (Gong, Loy, & Xiang, 2011). However, the sensitive nature of the surveillance use case imposes high requirements on privacy/confidentiality, authenticity, and availability of such systems. (Obermaier, & Hutle, 2016). It’s an important part of security system because of its visualized, accurate, timely and rich information content. Video surveillance has become the main tool due to its rich, intuitive and accurate information (Xu, Hu, & Mei, 2016).

Recommendations of video surveillance compliance under GDPR

A video recording of an identifiable person naturally forms part of an individual’s personal data. The GDPR applies throughout the European Union and has affect camera system operators. The European Data Protection Supervisor (EDPS) is the European Union’s (EU) independent data protection authority which presented the main video surveillance data protection issues: 1. Data quality - Cameras can and should be used intelligently and should only target specifically identified security problems thus minimising the gathering of irrelevant footage (data minimisation). This not only reduces intrusions into privacy but also helps to ensure a more targeted, and ultimately, more efficient, use of video-surveillance. 2. Right of information - Notices can be found in EU institution buildings informing staff and visitors about the security cameras in place. These signs are mandatory because individuals affected by video-surveillance must be informed upon its installation about the monitoring, its purpose and the length of time for which the footage is to be kept and by whom. 3. Retention period - Although the installation of cameras might be justified for security purposes, the timely and automatic deletion of footage is essential. The EDPS requires all EU institutions to have clear policies regarding the use of video surveillance on their premises including on potential storage.

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The Article 29 Working Party (WP29) has issued Opinion 2/2017 on data processing at work, The Opinion closes with a number of conclusions and helpful recommendations: 1. Fundamental rights. Based on the current Data Protection Directive employers may only collect the data for legitimate purposes, with the processing taking place under appropriate conditions (e.g., proportionate and necessary, for a real and present interest, in a lawful, articulated and transparent manner), with a legal basis for the processing of personal data collected from or generated through electronic communications. 2. Consent; legitimate interest. Given the imbalance of power, employees can only give free consent in exceptional circumstances, when no consequences at all are connected to acceptance or rejection of an offer. The legitimate interest of employers can sometimes be invoked as a legal ground, but only if the processing is strictly necessary for a legitimate purpose and the processing complies with the principles of proportionality and subsidiarity. 3. Transparency. Effective communication should be provided to employees concerning any monitoring that takes place, the purposes for this monitoring and the circumstances, as well as possibilities for employees to prevent their data being captured by monitoring technologies. Policies and rules concerning legitimate monitoring must be clear and readily accessible. 4. Proportionality and data minimization. Data processing at work must be a proportionate response to the risks faced by an employer. The information registered from the ongoing monitoring, as well as the information that is shown to the employer, should be minimized as much as possible. Employees should have the possibility to temporarily shut off location tracking, if justified by the circumstances. Employers must take the principle of data minimisation into account when deciding on the deployment of new technologies. The information should be stored for the minimum amount of time needed with a retention period specified. Whenever information is no longer needed it should be deleted. The Article 29 Working Party Opinion 8/2001 on the processing of personal data in the employment context and the 2002 Working Document on the surveillance of electronic communications in the workplace, stated the position and conclusions that when processing employees’ personal data: 1. Employers should always bear in mind the fundamental data protection principles, irrespective of the technology used. 2. The contents of electronic communications made from business premises enjoy the same fundamental rights protections as analogue communications. 3. Consent is highly unlikely to be a legal basis for data processing at work, unless employees can refuse without adverse consequence. 4. Performance of a contract and legitimate interests can sometimes be invoked, provided the processing is strictly necessary for a legitimate purpose and complies with the principles of proportionality and subsidiarity. 5. Employees should receive effective information about the monitoring that takes place. 6. Any international transfer of employee data should take place only where an adequate level of protection is ensured. Secure Insights (2018) identified how the GDPR affects camera system: 1. No obligation to notify the Office for Personal Data Protection of the installation of the camera system (the CS). 2. Obligation of the administrator to provide more information about the method of data processing with the help of the CS. 3. Obligation of the administrator to keep a written record of CS operation.

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4. Obligation of the administrator to report leaks of personal data (or security breach) to the Office for Personal Data Protection. 5. Obligation to develop a Data Protection Impact Assessment (DPIA) with regards to “extensive systematic monitoring of publicly accessible premises.” 6. Obligation to appoint a so-called data protection officer (applies to public entities or specialists for the processing of personal data). How to ensure your video data is compliant. It is a complex balance between making sure that you’re protecting people without compromising their privacy. Roobol (2018) gives some things to consider (see Table 2).

Table 2. A suggestion to video surveillance and the GDPR Suggestion Explanation Use a secure To significantly reduce the chances of a breach, invest in high-end security software and system secure hardware for your video surveillance and connectivity, stay abreast of the latest cybersecurity best practices and make sure your system is regularly updated and maintained in line with patches and guidance from the manufacturer. Be selective Check where the major risk/interest points are on the site and focus your strategy on these areas. Also, remember when setting up a new system, there is an obligation to develop a Data Protection Impact Assessment (DPIA) with regards to “extensive systematic monitoring of publicly accessible premises”. By making your surveillance targeted, you are only gathering necessary data, meaning you have reasonable grounds to store it, analyse it and catalogue it. Work with GDPR compliance or instances of breach largely depend on how you are using the trusted services provided by third parties. What type of GDPR obligations that arise – and who partners owns those obligations – must be examined on an application-specific basis. It is vital to use a reputable company to ensure your footage is managed correctly. Source: Roobol, 2018

Video surveillance is increasingly omni-present in our everyday life and is a key component of many security systems. Not only is the increasing number of cameras, but also the resolution of visual sensors and the performance of video processing algorithms. This evolution generates some important privacy concerns (Ruchaud, 2015).

Conclusions

GDPR went into effect on May 25, 2018. The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world. In addition to economic, ethical and social aspects, technical aspects play an increasingly important role in the law, with technical infiltration into daily human life being reflected in the relevant laws. Personal data is any information relating to an identified or identifiable natural person (data subject). Video footage is included in the GDPR as personal data. With this in mind, it is vital for those collecting and processing the data produced by video surveillance are ensuring they do so in line with guidelines. Six Basic Principles of the GDPR – Lawfulness, Fairness, and Transparency; Purpose Limitation; Data Minimization; Trueness, Accuracy; Storage Limitation; Integrity and Confidentiality. The principles of the GDPR are focused on the privacy rights of every person when it comes to collecting and processing their data.

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On the most fundamental level data protection offers a binary system of two opposed actors: a controller and a data subject. A person processing personal data and the person to whom this data is relating. For every act of processing is in need of a legal basis, making it the controller’s duty to make sure that and declare which one of the legal grounds listed in the provision applies. Under GDPR, the processing of personal data is only lawful when it falls under one of six approved justifications – Consent; Contract; Legal obligation; Vital Interests; Public task; Legitimate interests. Certain organizational and technical measures need to be taken in order to ensure that the controller is also in compliance with all the GDPR’s specific data protection and data security provisions and is able to prove said compliance at any time. Recommendations of video surveillance compliance under GDPR: 1. Cameras can and should be used intelligently and should only target specifically identified security problems thus minimising the gathering of irrelevant footage. 2. There is a need to notify individuals of surveillance information processing, such as their presence in an area where CCTV is in operation, and their rights of access to recordings/images of themselves. 3. CCTV recordings that no longer serve a purpose need to be deleted. The information should be stored for the minimum amount of time needed with a retention period specified. Whenever information is no longer needed it should be deleted. 4. Organizations may only collect the data for legitimate purposes, with the processing taking place under appropriate conditions, with a legal basis. 5. Given the imbalance of power, employees can only give free consent in exceptional circumstances, when no consequences at all are connected to acceptance or rejection of an offer. 6. Policies and rules concerning legitimate monitoring must be clear and readily accessible. Clear documentation of the information retention policy which is clearly understood by CCTV system operators. 7. Data processing at work must be a proportionate response to the risks faced by an employer. Employers must take the principle of data minimisation into account when deciding on the deployment of new technologies. 8. The contents of electronic communications made from business premises enjoy the same fundamental rights protections as analogue communications. 9. Any international transfer of employee data should take place only where an adequate level of protection is ensured. 10. Obligation to appoint a so-called data protection officer (applies to public entities or specialists for the processing of personal data). 11. Invest in high-end security software and secure hardware for your video surveillance and connectivity, regularly update and maintain in line with patches and guidance from the manufacturer. 12. It is vital to use a reputable company to ensure your footage is managed correctly. 13. Conduct a Privacy Impact Assessment (PIA) to be sure all CCTV cameras serve a legitimate purpose. 14. Recordings from CCTV systems need to be securely stored and access restricted to authorised personnel. Video surveillance should be assessed very carefully by any organization, in order to be fully compliant with the provisions of the GDPR.

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References

Costin, A. (2016, October). Security of cctv and video surveillance systems: Threats, vulnerabilities, attacks, and mitigations. In Proceedings of the 6th international workshop on trustworthy embedded devices (pp. 45-54). ACM. Dufaux, F., & Ebrahimi, T. (2006, June). Scrambling for video surveillance with privacy. In 2006 Conference on Computer Vision and Pattern Recognition Workshop (CVPRW'06) (pp. 160-160). IEEE. Xu, Z., Hu, C., & Mei, L. (2016). Video structured description technology based intelligence analysis of surveillance videos for public security applications. Multimedia Tools and Applications, 75(19), 12155-12172. Gong, S., Loy, C. C., & Xiang, T. (2011). Security and surveillance. In Visual Analysis of Humans (pp. 455- 472). Springer, London. Obermaier, J., & Hutle, M. (2016, May). Analyzing the security and privacy of cloud-based video surveillance systems. In Proceedings of the 2nd ACM International Workshop on IoT Privacy, Trust, and Security (pp. 22-28). ACM. Working Party 29, Opinion 2/2017 on data processing at work, WP249, 8 June 2017, Retrieved from http://ec.europa.eu/newsroom/document.cfm?doc_id=45631 Ruchaud, N. (2015, September). Privacy protection filter using stegoscrambling in video surveillance. In MediaEval. Kurtz, C., & Semmann, M. (2018). Privacy by Design to Comply with GDPR: A Review on Third-Party Data Processors. Information Systems Security And Privacy (Sigsec). Edwards, L., Martin, L., & Henderson, T. (2018). Employee Surveillance: The Road to Surveillance is Paved with Good Intentions. Murungi, M. (2009). Video surveillance system design. University of Nairobi. Retrieved from http://eie.uonbi.ac.ke/sites/default/files/cae/engineering/eie/VIDEO%20SURVEILLANCE%20SYSTEM%20DES IGN.pdf Vojkovic, G. (2018, May). Will the GDPR slow down development of Smart Cities?. In 2018 41st International Convention on Information and Communication Technology, Electronics and Microelectronics (MIPRO) (pp. 1295-1297). IEEE. Working Party 29, Opinion 8/2001 on the processing of personal data in the employment context, WP48, 13 September2001, Retrieved from https://ec.europa.eu/justice/article-29/documentation/opinion- recommendation/files/2001/wp48_en.pdf Bretthauer, S. (2016). Law by technology or technology by law?–An illustration using the example of video surveillance. Interdisciplinary Approach to Law in Modern Social Context, 69. Wurster, S., Kamara, I., Sveinsdottir, T., & Krempel, E. (2018). Certified Video Surveillance Systems for More Resilient Urban Societies. In Urban Disaster Resilience and Security (pp. 313-330). Springer, Cham. Cliza, C., Olanescu, S., & Olanescu, A. (2018). Video Surveillance: Standpoint Of The EU And National Legislation On Data Protection. Challenges of the Knowledge Society, 465-471. Working Party 29, Working document on the surveillance of electronic communications in the workplace, WP55, 29 May 2002, Retrieved from https://ec.europa.eu/justice/article-29/documentation/opinion- recommendation/files/2002/wp55_en.pdf Šidlauskas, A. (2017). Users electronic data protection features. Master‘s Work in Cyber Security Management. Vilnius: Mykolas Romery University. Regulation (EU) 2016/679 Of The European Parliament And of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation). Retrieved from: http://eur- lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016R0679&from=EN Tesfay, W., Hofman, P., Toru, N., Kiyomoto, S. and Serna, J. (2018). PrivacyGuide: Towards an Implementation of the EU GDPR on Internet Privacy Policy Evaluation. In ACM Proceedings of the 4th ACM on International Workshop on Security and Privacy Analytics (pp. 15-21). https://doi.org/10.1145/3180445.3180447 Šidlauskas, A. (2019). Opportunities For DPO (Data Protection Officer) Occupational Training And Improvement. INTED2019: 13th International Technology, Education and Development Conference, Valencia, Spain, 11-13 March, 2019. (pp. 3413-3419). Caputo, A. C. (2014). Digital video surveillance and security. Butterworth-Heinemann. Safari, B. A. (2016). Intangible Privacy Rights: How Europe's GDPR Will Set a New Global Standard for Personal Data Protection. Seton Hall L. Rev., 47, 809.

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Chowdhury, M. J. M., Colman, A., Han, J. and Kabir, M. A. (2018). A Policy Framework for Subject-Driven Data Sharing. In Proceedings of the 51st Hawaii International Conference on System Sciences. https://doi.org/10.24251/HICSS.2018.594 Wróbel, A., Komnata, K. and Rudek, K. (2017). IBM data governance solutions. In IEEE Behavioral, Economic, Socio-cultural Computing (BESC), 2017 International Conference on (pp. 1-3). Boban, M. (2018). Cyber Security Foundations For Compliance Within GDPR For Business Information Systems. Economic and Social Development: Book of Proceedings, 541-553. The European Data Protection Supervisor, Video-surveillance, Retrieved from https://edps.europa.eu/data-protection/data-protection/reference-library/video-surveillance_en Kotsios, A., Magnani, M., Rossi, L., Shklovski, I., & Vega, D. (2019). An Analysis of the Consequences of the General Data Protection Regulation (GDPR) on Social Network Research. arXiv preprint arXiv:1903.03196. Limba, T., & Šidlauskas, A. (2018). Secure personal data administration in the social networks: the case of voluntary sharing of personal data on the Facebook. Entrepreneurship and Sustainability Issues, 5(3), 528-541. Banakar, V., Shah, A., Shastri, S., Wasserman, M., & Chidambaram, V. (2019). Analyzing the Impact of GDPR on Storage Systems. arXiv preprint arXiv:1903.04880. Grennan, T. (2018). 17 Things You Need To Know About GDPR. Blaze. Retrieved from https://www.braze.com/perspectives/article/gdpr-compliance-need-to-know Kurtz, C., Wittner, F., Semmann, M., Schulz, W., & Böhmann, T. (2019, January). The Unlikely Siblings in the GDPR Family: A Techno-Legal Analysis of Major Platforms in the Diffusion of Personal Data in Service Ecosystems. In Proceedings of the 52nd Hawaii International Conference on System Sciences. Secure Insights (February 27, 2018). Video surveillance and the GDPR. What will change?. Retrieved from https://www.axis.com/blog/secure-insights/video-surveillance-gdpr-guest/ Roobol, E. (August 29, 2018). Faces as data: A guide to video surveillance and the GDPR. Retrieved from https://gdpr.report/news/2018/08/29/faces-as-data-a-guide-to-video-surveillance-and-the-gdpr/ Šidlauskas, A. (2018). Users Electronic Data Protection Features. In Social transformations in contemporary society: proceedings of annual international conference for young researchers (pp. 78-88). Mykolas Romeris University. Kuemmerle, A. (October,2018). Is your CCTV system GDPR compliant?. Opinion, Technology & media. Retrieved from https://www.roydswithyking.com/is-your-cctv-system-gdpr-compliant/ Determann, L., & Gupta, C. (2018). Indian Personal Data Protection Act, 2018: Draft Bill and Its History, Compared to EU GDPR and California Privacy Law. Compared to EU GDPR and California Privacy Law (September 3, 2018). Determann, L. (2016). Adequacy of data protection in the USA: myths and facts. International Data Privacy Law, 6(3), 244-250. California Civil Code, 1798.140. Retrieved from https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml Bahl, A., & Bharsakle, S. (2018). The Privacy Jungle–comparative Study Of The Indian Personal Data Protection Act, 2018 With Eu Gdpr And California Privacy Law.

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65 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

THE SIGNIFICANT ROLE OF LEGAL REGULATIONS AND STANDARDISATION IN THE DEVELOPMENT OF TELEMEDICINE IN THE EU

Mikołaj Maśliński

Adam Mickiewicz University, Poland [email protected]

Abstract

Purpose – The main aim of this article is to analyze and evaluate EU policies and legislation concerning telemedicine. Therefore, the article aims to identify the legal instruments which could be implemented to guarantee the development of telemedicine among the Member States of the EU, which will take place with respect to patient welfare and interoperability of healthcare systems. Design/methodology/approach – As for its methodology, this research focuses on the EU policies, legislation and a few recent initiatives that were undertaken by Poland and other EU Member States in the area of telemedicine. This research utilizes qualitative research methods. The textual analysis method has been used to examine the content and meaning of legal texts and other documents as well as their structure. Findings – The phenomenon of telemedicine is an extremely complex issue. This implies that the attempt to provide health services based on such solutions requires a comprehensive approach, taking into account not only the normative material related to the healthcare but also a number of sectoral regulations relating to, for example, personal data protection and cybersecurity rules, patients’ rights, or to the provisions governing electronic commerce. On the other hand, most regulations concerning directly telemedicine occur in the area of soft law. Due to this fact, there are significant differences in national regulations. Therefore, institutions involved in the EU legislation should focus on implementing general standards in telemedicine, which would guarantee patient welfare. Finally, the significant challenge is to provide interoperability between telemedicine solutions available around the European Union. This is a sine qua non condition for a greater utilization of telemedicine solutions by EU citizens. Research limitations/implications – The scope of the research covers the examination of the EU policies and legislation on telemedicine. This article does not cover wide and complex research on sectoral regulations relating to, for example, personal data protection and cybersecurity rules, patient rights, or finally to the provisions governing electronic commerce. It covers the comparative analysis of telemedicine in Poland and only general analyses concerning different countries, e.g. France or the USA. Practical implications – The findings may give some reference to institutions involved in the EU legislation, especially to the European Commission. Therefore, they can be useful for improving the Member States’ legal frameworks on telemedicine. Originality/Value – Contrary to the majority of papers on telemedicine, this article does not concentrate on the barriers and challenges for the successful implementation of telemedicine but focuses on solutions. What is more, this research covers the latest regulations and publications. Finally, the article presents the current Polish legislation promoting telemedicine solutions, which may prove an interesting case study for researchers from different countries. Keywords: telemedicine, telehealth, teleconsultations, healthcare, eHealth, interoperability Research type: research paper.

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Introduction

The development of Information and Communication Technologies (ICT) has created hitherto unknown possibilities of providing health services at a distance. The above trend led to the formulation of the term "telemedicine". According to the definition proposed by the European Commission, “telemedicine is the provision of healthcare services, through use of ICT, in situations where the health professional and the patient (or two health professionals) are not in the same location. It involves secure transmission of medical data and information, through text, sound, images or other forms needed for the prevention, diagnosis, treatment and follow-up of patients”1. The potential of telemedicine technologies is indisputable: it can provide new cost- effective and efficient methods of delivering healthcare as well as improve health and quality of life of thousands of patients (PWC, 2018). Furthermore, numerous studies have already demonstrated improved clinical outcomes through the use of telemedicine applications (Khan and Driessen, 2018). Taking into account the dynamic development of new technologies as well as the growing demand for medical services - which results even from the aging of the population - it seems inevitable that telemedicine solutions will expand in current treatment activities. This tends to confirm the results of last research: he number of mHealth apps available in the market has increased substantially. In 2017 there was over 318,000 health apps available on the top app stores worldwide, nearly double the number of apps available in 2015 – with more than 200 apps being added each day (IQVIA, 2017). It is therefore not surprising that the authors of the report on Global Markets for Telemedicine Technologies anticipate the rapid development of telemedicine. As a comparison, in 2018 the global telemedicine market totalled $31.2 billion and is estimated to reach $72.5 billion by 2023, growing at a compound annual growth rate (CAGR) of 18.3% for the period between 2018 and 2023 (BCC Research, 2018). On the other hand, the contemporary development of telemedicine among the Member States of the European Union leaves a lot to be desired. Although the concept of telemedicine has been present in EU policies and strategies for over 15 years, the total EU market share of these services still remains marginal. According to a survey requested by the European Commission, in the last 12 months before March 2017, less than one in five respondents have used health and care services provided online (18%), 5% have used these "once", 6% "twice" and 7% "three times or more". The majority (81%) have "never" used these services”(TNS Political & Social, 20172). One indication of this syptome is the European Parliament Resolution of 12 February 2019 on the Implementation of the Cross-Border Healthcare Directive. In this Resolution, the European Parliament pointed out that “the application of the directive with regard to telemedicine – health services provided remotely – has led to a certain lack of clarity concerning reimbursement schemes, as some Member States do reimburse or provide consultation with general or specialised practitioners at a distance, while others do not”3. In this respect, the European Parliament calls upon the European

1 Communication of 4 November 2008 from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on telemedicine for the benefit of patients, healthcare systems and society. COM (2008) 0689 final. 2 This survey was carried out by TNS Political & Social network in the 28 Member States of the European Union between 18th and 27th of March 2017. Some 27,901 EU citizens from different social and demographic categories were interviewed face-to-face at home and in their native language on behalf of the Directorate- General for Communications Networks, Content and Technology. 3 European Parliament Resolution of 12 February 2019 on the Implementation of the Cross-Border Healthcare Directive. 2018/2108 (INI).

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Commission to “support the uptake of the reimbursement rules, in accordance with Articles 7(1) and 4(1), so that they also apply to telemedicine, where appropriate”. Moreover, the European Parliament pointed out that the European Commission should “encourage the Member States to align their approaches to the reimbursement of telemedicine”1. Furthermore, ensuring that patients have access to the convenience and benefits afforded by telemedicine technologies is not enough. Telemedicine malpractice cases are likely to increase the more widely it is used. Thus, there is a question of the legislative strategy: do we need a law for regulating the use of telemedicine technologies in the practice of medicine to guarantee the appropriate standards of care in the delivery of medical services directly to patients via telemedicine technologies? Or maybe the better solution is to depend on liberalisation and the free market. In light of these considerations, the question arises of what the EU legislation is concerning telemedicine. Therefore, the article aims to identify the legal instruments which could be enforced to remove barriers to widespread appropriate adoption of telemedicine technologies for delivering care while ensuring the public health, patient welfare and safety.

Definition and genesis of telemedicine

On the basis of the EU legal system, there is currently no legal definition of the concept of telemedicine. Moreover, in many documents of the international organizations, as well as in the literature, there is a noticeable terminological chaos concerning this issue. This is evidenced on the one hand by a multitude of concepts related to the aspects of modern healthcare under development in recent years (e.g. telemedicine, telehealth, telecare, eHealth, mHealth, cybermedicine), and on the other hand, no consistency in their application (Mazurkiewicz and Klach, 2017; Botrugno C. 2018). The lack of a unified nomenclature is present also in the legislation of the United States of America. According to the research of the Center for Connected Health Policy (CCHP), the states alternate between using the term “telemedicine” or “telehealth”. In some states, both terms are explicitly defined in law and/or policy and regulations. ”Telehealth” is sometimes used to reflect a broader definition, while “telemedicine” is used mainly to define the delivery of clinical services (CCHP, 2018). In addition, the authors of a Market study on telemedicine suggest that “telehealth is a more generic term that refers to health-related procedures, while telemedicine refers more specifically to treating people from distance” (PWC, 2018). On the other hand, they pointed out that “eHealth and mHealth are terms that are as generic as telehealth in terms of health services, but specific to the technologies used in delivering these services from distance: the Internet and mobile devices respectively” (PWC, 2018). Given the above, a lot of researchers describe “telemedicine” as “providing medical care at a distance”2. This definition derives from a combination of a prefix “tele”, (from Ancient Greek τῆλε [têle], “at a distance”), which is a typical part of compound words that indicate their semantic connection with distance actions (e.g. telephone, teleoperator, telemarketer)

1 Ibidem. 2 See: Volkert S. E. 2000. Telemedicine: Rx for the Future of Health Care. Michigan Telecommunications and Technology Law Review., Vol. 6. 147 (2000). For more definitions see: Darkins A. W., Cary M. A. 2000. Telemedicine and Telehealth: Principles, Policies, Performances and Pitfalls. New York: Springer Company Publishing Inc. pp. 1-24; Maheu M.M., Whitten P., Allen A., E-Health, Telehealth, and Telemedicine: A Guide to Startup and Success, San Francisco 2001, pp. 2-4.

68 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) and a Latin term “medicina”1. As a result, the term telemedicine is defined as “healing from a distance”. It should be noted that Dr. K. Bird may be considered to be the author of the term “telemedicine” (Murphy and Bird). During his research in the 1960s he started to use the term telemedicine. What is more, in their papers published in 1974, Bird and Murphy described the telediagnosis as “system which utilizes diagnostic instrumentation to reproduce closely the normal clinical setting wherein patient and doctor are in the same room”. What is interesting, the first example of using technology to deliver medical care from a distance was implemented in the early 1900s by a Dutch physiologist - Dr. Willem Einthoven. In 1903 W. Einthoven mastered the art of recording electrocardiogram among patients in a hospital located 1 km from the place where he read the results. This was done using a string galvanometer (the so-called Einthoven galvanometer) and telephone lines. As a result, W. Enithoven is considered to be the founder of the first electrocardiography, as well as the first scientist-clinician, who on a relatively large scale applied technology of a similar purpose to that used for the needs of modern telemedicine utilizing a string galvanometer that he designed and was the birth of clinical electrocardiography (Stowe and Harding, 2010). By the 1960s, technology progressed to represent the modern form of telemedicine. Military and space industries were the first to create and adopt the technology required to deliver this modern care (WHO, 2010). The advancements and continued development of medical and communications technology have had a profound impact on present understanding of telemedicine. As a result, the simplest definition of telemedicine (providing medical care at a distance) seems to be a too far-reaching simplification. Therefore, the common idea is to limit the definition of telemedicine by requiring utilisation of ICT. As Maurice and Caron rightly pointed out the “use of ICT or telecommunications to the definition of telemedicine limits the scope of activities but incorporates ICT-based activities that are not necessarily considered to be ‘telemedicine’”. As an example, these authors quote the use of ‘telephone’ in clinical practice, which was reported in the Lancet in 1879. Despite its slow uptake and early resistance from conservative physicians, the telephone is now an integral part of medicine, for communication with colleagues and patients, at a distance, to facilitate healthcare (Maurice and Caron, 2010). Because of that, the Federation of State Medical Boards (FSMB)2 in the Model policy for the appropriate use of telemedicine technologies in the practice of medicine, stated that “generally, telemedicine is not an audio-only, telephone conversation, e-mail/instant messaging conversation, or fax”. Regardless of this policy, telemedicine “means the practice of medicine using electronic communications, information technology or other means between a licensee in one location, and a patient in another location with or without an intervening healthcare provider (…). It typically involves the application of secure videoconferencing or store and forward technology to provide or support healthcare delivery by replicating the interaction of a traditional encounter in person between a provider and a patient” (FSMB, 2014).

1 Wiktionary, the free dictionary. "Tele-“, [interactive]. [accessed 2019-05-04]. . 2 The Federation of State Medical Boards represents the 70 state medical and osteopathic regulatory boards— commonly referred to as state medical boards—within the United States, its territories and the District of Columbia. It supports its member boards as they fulfill their mandate of protecting the public health, safety and welfare through the proper licensing, disciplining, and regulation of physicians and, in most jurisdictions, other healthcare professionals. See: The Federation of State Medical Boards official website: .

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An important point of reference in defining the concept of telemedicine is the acquis of the World Health Organization. For example, in its famous Report the WHO explains that telemedicine is “the delivery of health care services, where distance is a critical factor, by all health care professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for the continuing education of health care providers, all in the interests of advancing the health of individuals and their communities” (WHO, 1998). Another crucial definition, especially among the EU Member States, was proposed in Communication of 4 November 2008 from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on telemedicine for the benefit of patients, healthcare systems and society (further also: “Communication COM (2008) 689”). As mentioned before, in this document the European Commission described telemedicine as “the provision of healthcare services, through use of ICT, in situations where the health professional and the patient (or two health professionals) are not in the same location”. According to Communication COM (2008) 689 “it involves secure transmission of medical data and information, through text, sound, images or other forms needed for the prevention, diagnosis, treatment and follow-up of patients”. In the further part of the Communication, the Commission states that telemedicine encompasses a wide variety of services. Those most often mentioned in peer-reviews are “teleradiology, telepathology, teledermatology, teleconsultation, telemonitoring, telesurgery and teleophthalmology”. Other potential services include call centers/online information centers for patients, remote consultation/e-visits or videoconferences between health professionals. It is worth noting that the European Commission excludes from the telemedicine services catalogue “health information portals, electronic health record systems, electronic transmission of prescriptions or referrals (e-prescription, e-referrals)”. In conclusion, the definition of telemedicine, in spite of what may appear, is not just an object of an academic dispute. The legal understanding of telemedicine may be crucial both - in medical and legal practice. The regulation in this area may alter the scope of practice or authorize the delivery of remote healthcare services. Such decisions may be also crucial for a number of physicians and other medical professionals, as well as producers of medical devices. In consequence, the institutions involved in the EU legislation should take into consideration what is the expected model of telemedicine among the Member States. This discussion should deliver a proposition of telemedicine definition. Without the precise scope of activities which are classified as telemedicine practice, there will be a wide range of systems among the 28 old EU countries. As a result, the telemedicine systems would be just local, limited to a maximum one or several states. Furthermore, it will be very difficult or even impossible to guarantee the interoperability of the telemedicine system around the EU Member States.

Telemedicine in the light of EU policies and regulations

Although telemedicine has not yet been legally defined under EU law, this concept has been present in the area of EU soft law acts for over 15 years1. Namely, for the first time it

1 Some authors, among the initiatives that increase the use of telemedicine in Europe, present also older European acts. For example, Vera Lúcia Raposo cataloged among them Decision No 276/1999/EC of the European Parliament and of the Council of 25 January 1999 adopting a multiannual Community action plan on promoting safer use of the Internet by combating illegal and harmful content on global networks (OJ L 33, 6.2.1999, pp. 1–11) and Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - eEurope 2002: Quality Criteria for Health

70 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) appeared in Communication of 30 April 2004 from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions e-Health - making healthcare better for European citizens: an action plan for a European e-Health Area1. In the Communication cited, the European Commission clearly exposes the potential of telemedicine services as one of the key areas of eHealth. Interestingly, already in 2004 the European Commission noticed the possibility of implementing telemedicine systems, and within them, such services as, tele-consultations (second medical opinion), telemonitoring and telecare, either in the home or the hospital. One of the first documents referring directly to the issue of telemedicine was the European Parliament Resolution of 23 May 2007 on the impact and consequences of the exclusion of health services from the Directive on services in the internal market2. In the above-mentioned Resolution, the European Parliament invites the Commission to encourage the Member States to actively support the introduction of e-health and telemedicine. In addition, the European Parliament pointed out that “telemedicine and e-health are developing on such a scale that new rules of play need to be agreed in the areas of social protection, funding and access to such care”. Finally, the European Parliament “calls on the Commission to draw up technical standards, and calls on the governments of the Member States to actively support the introduction of interoperable transparent information systems allowing effective exchange and sharing of information on health between health care providers in different Member States”. Although, since 2004, telemedicine has been more and more clearly marking its place in the EU health policy, it has not been particularly highlighted in the Commission White Paper of 23 October 2007 entitled “Together for Health: A Strategic Approach for the EU 2008- 2013”3. Nevertheless, the document recognizes the impact on healthcare systems of the rapid development of new technologies, including information and communication technologies (so-called ICT). There is no doubt that the milestone for the development of telemedicine in the EU was the previously cited Communication of 4 November 2008 from the Commission on telemedicine for the benefit of patients, healthcare systems and society. The purpose of this Communication was, on the one hand, to identify the main obstacles to a wider use of telemedicine, and to identify ways to overcome them. Therefore, Communication COM (2008) 689 expressly indicated that the aim of this Communication is to support the Members States in achieving a large-scale and beneficial deployment of telemedicine services, by focusing on three strategic sets of actions: 1) building confidence in and acceptance of telemedicine services 2) bringing legal clarity 3) solving technical issues and facilitating market development. Importantly, the European Commission has not only indicated the general direction of activities in the field of telemedicine, but also identified specific actions to achieve them.

related Websites (COM (2002) 0667 final). Nevertheless, the above documents do not refer directly to telemedicine. See: Raposo V. L. 2016. The legal framework (or the lack of it) in Europe, GMS Health Technology Assessment. Vol. 12. pp. 1-12.` 1 Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions e-Health - making healthcare better for European citizens: an action plan for a European e-Health Area. COM (2004) 0356 final. 2 OJ E 102, 24.04.2008 P. 0279 – 0286. 3 COM (2007) 630 final.

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Among them, there were soft activities1, pilot and implementation activities2, activities supporting the exchange of experiences and good practices3 and – last but not least - standardisation activities4. In addition, the Commission called on Member States to carry out: 1) by the end of 2009, the assessment of their needs and priorities in telemedicine, indicating that these priorities should be part of the national health strategies; 2) by the end of 2011, the assessment and adoption of their national regulations enabling wider access to telemedicine services. The direction of action indicated by the Commission was favourably received by the European Economic and Social Committee5 and was then included in other soft law level papers at the EU level and in principle is still a key reference point in the telemedicine discussion. Nevertheless, it seems that Communication (2008) 689 did not bring the expected results in such a short time as the European Commission expected. As an example, in Poland the first system regulations regarding telemedicine entered into force on 12 December 20156. The above delays may arise from the fact that Communication COM (2008) 689 - being solely a soft law source - does not give the European Commission real legal instruments to enforce its assumptions. Another important document from the point of view of the development of telemedicine was - nota bene currently implemented - Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions eHealth Action Plan 2012-2020 - Innovative healthcare for the 21st century (COM/2012/0736 final)7. The unambiguous depiction of telemedicine in the second eHealth Action Plan confirmed the priority of this element in the EU health policy. In addition, this document showed numerous opportunities related to the development of the telemedicine market. The important position of telemedicine in the EU health policy was further confirmed in the Green Paper of 10 April 2014 on mobile health ('mHealth')8. In this document, the European Commission indicated that mHealth “includes applications (…) such as lifestyle and wellbeing apps that may connect to medical devices or sensors (e.g. bracelets

1 For example, the Commission decided to support the development, by 2011, of guidelines for consistent assessment of the impact of telemedicine services, including effectiveness and cost effectiveness. This was based on the work of experts in the field, the Commission supported studies, large-scale pilot schemes and relevant research projects. 2 For example, the Commission decided to support via its Competitiveness and Innovation Programme a large- scale telemonitoring pilot project. This included a network of procurers and payers of healthcare services. 3 For example, the Commission proposed to contribute to European collaboration between health professionals and patients in key areas with the potential for a greater application of telemedicine, in order to make specific recommendations on how to improve confidence in and acceptance of telemedicine, also taking into account ethical and privacy related aspects. 4 By the end of 2011, in cooperation with Member States, the Commission decided to issue a policy strategy paper on how to ensure interoperability, quality and security of telemonitoring systems based on existing or emerging standards at the European level. 5 See: Opinion of the European Economic and Social Committee on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on telemedicine for the benefit of patients, healthcare systems and society (COM(2008) 689 final). 2009/C 317/15. OJ C 317, 23.12.2009, pp. 84–88. 6 See: Act of October 2015, 9 amending the Act on the information system in health care and certain other laws; Journal of Laws of 2015, item 1991. Original title: ustawa z dnia 9 października 2015 r. o zmianie ustawy o systemie informacji w ochronie zdrowia oraz niektórych innych ustaw. 7 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions eHealth Action Plan 2012-2020 - Innovative healthcare for the 21st century. COM (2012) 0736 final. 8 Green Paper on mobile Health ("mHealth"). COM (2014) 0219 final.

72 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) or watches) as well as personal guidance systems, health information and medication reminders provided by sms and telemedicine provided wirelessly”. In the debate on the development of telemedicine, one cannot overlook the EU acquis in the area of the EU digital policy. In fact, telemedicine has got a dualistic character: it regards not only the healthcare regulations but also the whole package of legislation concerning digital and telecommunication aspects. For example, in Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions EU titled eGovernment Action Plan 2016-2020 - Accelerating the digital transformation of government, the Commission has declared that it is going to “support Member States in the development of eHealth services that also enable cross-border exchange of e-prescriptions, based on the e-prescription guidelines adopted by the eHealth Network and telemedicine and tele-monitoring solutions, in particular for the successful provision of treatment by the European Reference Networks” 1 However, one of the latest EU documents relating to the issue of e-Health, and indirectly also to telemedicine, was the Communication of the European Commission of 25 April 2018 on enabling the digital transformation of health and care in the Digital Single Market - empowering citizens and building a healthier society2. The European Commission pointed out from the very beginning that “health and care systems require reforms and innovative solutions to become more resilient, accessible and effective in providing quality care to European citizens”. At the same time, the Commission recognizes that digital solutions in the field of health and social care can contribute to the well-being of millions of citizens and radically change the way healthcare and social services are delivered to patients, provided that they are deliberately designed and implemented in a cost-effective manner. In connection with the above, a number of activities are planned by the European Commission in the near future. However, from the point of view of the development of a telemedicine concept, the following are crucial: 1) support cooperation to stimulate the supply and uptake of digital health by promoting common principles for validating and certifying health technology; 2) support the exchange of innovative and best practices, capacity building and technical assistance for health and care authorities (for using open standards and interoperable digital solutions to promote health, prevent and manage chronic conditions, empower people and centre care on the person), with financial support from Horizon 2020, the Structural Reform Support Programme 57 and the third "Health" programme, within the current budgets, while considering making proposals for further support under the next multi-annual financial framework; 3) promote knowledge and skills of citizens, patients and health and care professionals in using digital solutions in collaboration with health professional organisations and academia. What is important, the above-mentioned plans correspond to the general ideas which were presented in Communication from the Commission entitled “A Digital Single Market Strategy for Europe” in which it was stressed that “the Commission will launch an integrated standardisation plan to identify and define key priorities for standardisation with a focus on the technologies and domains that are deemed to be critical to the Digital Single Market,

1 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions EU titled eGovernment Action Plan 2016-2020 - Accelerating the digital transformation of government. COM (2016) 0179 final. 2 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on enabling the digital transformation of health and care in the Digital Single Market; empowering citizens and building a healthier society. COM (2018) 233 final.

73 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) including essential sectoral interoperability and standards in areas such as health (telemedicine, m-health), transport (travel planning, e-freight), environment, and energy”1. To sum up, it should be pointed out that telemedicine has been present in the EU policies for more than 15 years. Nevertheless, telemedicine is only an element of the main EU policies (e.g. eHealth and digital policies). Therefore, it seems that the further development of telemedicine among the EU countries requires a dedicated strategy or policy for the development of such solutions in healthcare.

Telemedicine in the light of Directive 2011/24/EU (patients’ rights in cross-border healthcare)

It should be pointed out that there are also hard law regulations directly relating to telemedicine. However, currently it is only Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare2. The above EU normative act refers to telemedicine in Art. 3 (d) and Art. 7 para. 7 of Directive 2011/24/EU. In accordance with Article 3 (d), ‘Member State of treatment’ means “the Member State on whose territory healthcare is actually provided to the patient. In the case of telemedicine, healthcare is considered to be provided in the Member State where the healthcare provider is established”. In addition, Art. 7 of Directive 2011/24/EU also deserves to be noted because it sets out the general rules for the reimbursement of costs incurred by the insured benefitting from cross-border healthcare. In the light of the above-mentioned Article, “the Member State of affiliation may impose on an insured person seeking reimbursement of the costs of cross-border healthcare, including healthcare received through means of telemedicine, the same conditions, criteria of eligibility and regulatory and administrative formalities, whether set at a local, regional or national level, as it would impose if this healthcare were provided in its territory”. It should be noted that the provisions of the cross-border directive, in principle, apply to patients who decide to seek healthcare in a Member State other than the Member State of affiliation. In other words, if the patient for whom the country of insurance is Poland decides to use medical services in another EU Member State (Member State of treatment), then under the terms of the above-mentioned Directive and the laws of the Member States concerned, he or she will be able to claim reimbursement of cross-border healthcare. From the point of view of the issue under discussion, the key is that the reimbursement also includes the costs of "healthcare received through telemedicine". Nevertheless, the practical recovery of costs incurred by the insured who has used cross-border healthcare with the use of telemedicine solutions can be quite difficult. In principle, a Member State is to reimburse the costs incurred by the insured person who benefits from cross-border healthcare if the healthcare in question falls within the range of benefits to which the insured person is entitled in the Member State of affiliation. This means, therefore, that both the treatment state and the Member State from which the insured person comes from should provide public funding for a particular benefit. For example, in Poland, telemedical services financed from the resources of the National Health Fund are, inter alia, the cardoridical teleconsilium and geriatric teleconsilium, referred to in Regulation No. 127/2017/DSOZ of the President of the National Health Fund of 19 December 2017 on determining the conditions for the conclusion and implementation of

1 COM (2015) 192 final. 2 OJ L 88, 4.4.2011, pp. 45–65.

74 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) contracts such as health services separately contracted1. In view of the above, a patient insured in another EU country would be able to demand reimbursement from the state of insurance if he or she took treatment in Poland including one of the above-mentioned services. Nevertheless, the real barriers to obtaining reimbursement for services classified as telemedicine are both their low availability in the public health service2 and the lack of standardization at the level of individual Member States (Raposo, 2016). Therefore, patients may have in practice difficulty getting these benefits. However, even if they are implemented, there may be difficulties in obtaining reimbursement (e.g. due to the fact that for a given range of benefits a patient seeking a refund will not be entitled in the Member State of affiliation). Therefore, it is not surprising that the refund system established by Directive 2011/24/EU does not have a real impact on EU citizens. As follows from the most recent report from the Commission on the application of patients' rights in cross-border healthcare, in all three years covered by the report (2015-2017), the total number of such claims for reimbursement was relatively small as part of the total patient care, and had stayed at a stable level3. Thus, in 2015, a total of 180 704 applications were positively examined in 19 Member States and Norway; in 2016, 209 568 applications were positively examined in 22 Member States; and in 2017, a total of 194 292 applications were positively considered in 20 Member States. Also in the financial dimension, the value of funds covered by the regulations of Directive 2011/24 / EU does not make a special impression. The expenditure across the EU on cross-border healthcare incurred under the Directive may therefore be estimated at 0.004% of the EU-wide annual healthcare budget. These are of course roughfigures, but when read in conjunction with the figures of the cost of cross-border healthcare under the Regulations (which amounts to approximately 0.1%), it is clear that the vast majority of healthcare budgets is spent domestically. As the figures have been moderate and stable over the years, the impact on national health budgets arising from patients wishing to access cross- border healthcare appears marginal. This is true for all countries, no matter whether they introduced prior authorisation or not. Transferring the above observations to the field of telemedicine considerations, it can be concluded that between 2015 and 2017, the reimbursement of costs incurred by insured persons who used cross-border healthcare received via telemedicine does not generally exist or constitutes a margin of the entire refinancing system. Importantly, the European Parliament reached similar conclusions. In Resolution of 12 February 2019 on the Implementation of the Cross-Border Healthcare Directive, the European Parliament pointed out that “application of the directive with regard to telemedicine – health services provided remotely – has led to a certain lack of clarity concerning reimbursement schemes, as some Member States do reimburse or provide consultation with general or specialised practitioners at a distance, while others do not”4. While the above-mentioned initiative should be evaluated

1 Original title: Zarządzenie Nr 127/2017/DSOZ Prezesa Narodowego Funduszu Zdrowia z dnia 19 grudnia 2017 r. w sprawie określenia warunków zawierania i realizacji umów w rodzaju świadczenia zdrowotne kontraktowane odrębnie 2 For example, according to the Informator of the Małopolska Branch of the National Health Fund, as of December 2017, only four medical doctors in the whole Małopolskie voivodeship offered Geriatric Teleconsyllium. Data regarding Teleconsylium cardiology (4 sites) were not much better. It is worth noting, however, that all branches that contracted telemedicine services financed by the NFZ were located in Cracow. See: Informator of the Małopolska Agency of the National Health Fund titled: Jak i gdzie się leczyć [interactive]. [accessed: 09.05.2019]. . krakow-jak_i_gdzie_sie_leczyc_luty2018.pdf (dostęp dnia: 01.02.2019). 3 COM (2018) 651 final. 4 2018/2108(INI).

75 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) positively, previous experience confirms that similar activities have not yet brought the expected results. It seems, however, that patients who see the benefits of telemedicine solutions often do not wait for their implementation into public health services, but decide to cover the costs of teleconsultation or telecare on their own (TGR, 2018).

The impact of EU sectoral legislation on medical services utilizing telemedicine solutions

To make the picture complete, it must be noted that the considerations regarding the legal framework for the provision of medical services using telemedicine solutions also requires the inclusion of a number of EU sectoral legislation (Raposo, 2016). The basic act in this area is undoubtedly Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (so- called General Data Protection Regulation: GDPR)1. An obvious issue is the fact that due to the use of various types of IT systems for the purpose of providing health services, sensitive data is processed and covered by special legal protection. It was provided, among others in Art. 9 GDPR, which introduces a general ban on processing, inter alia, personal health data. Because of that, any processing of personal data with regard to telemedicine solutions should be carried out in accordance with this Regulation, regardless of whether the processing itself takes place within the Union. For example, the abovementioned ban does not apply if a patient as the data subject has given explicit consent to the processing of those personal data for one or more specified purposes, except where the Union or Member State law provide that the prohibition referred to in Art. 9 para. 1 GDPR may not be lifted by the data subject. The protection of personal data is not limited to the provisions of the GDPR and national regulations related to it. Due to the fact that ICT systems are particularly vulnerable to various types of attacks, measures have been taken for several years to increase the so-called cybersecurity. An expression of this trend is Directive (EU) 2016/1148 of the European Parliament and of the Council of 6 July 2016 concerning measures for a high common level of security of network and information systems across the Union2. For example, in Poland, the provisions of this Directive are implemented by the Act of 5 July 2018 on the national cyber security system3. From the point of view of the aforementioned telemedicine, this means that entities operating in the health care sector, including healthcare entities, are counted among the group of operators of essential services. As a result, there are special obligations in the field of cyber security imposed on these entities, and therefore also on entities providing health services with the use of telemedicine solutions.. Admittedly, the freedom to provide services, although it is subject to certain limitations in the case of telemedicine (e.g. sensitive data), Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce') still remains important for this kind of activities4. Other EU regulations relevant to telemedicine are undoubtedly the EU legislation relating to the protection of consumer rights.

1 OJ L 119, 4.5.2016, pp. 1–88. 2 OJ L 194, 19.7.2016, pp. 1–30. 3 Journal of Laws of 2018, item 1560, as amended. (Dz.U. z 2018 r. poz. 1560). 4 OJ L 178, 17.07.2000, pp. 1–16.

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Finally, the newly issued Regulation 2017/745 on medical devices has repealed former provisions of Directive 93/42/EEC and provided a very detailed framework, including 123 articles and 17 technical annexes1. Pursuant to recital 1 of abovementioned act, “this Regulation aims to ensure the smooth functioning of the internal market as regards medical devices, taking as a base a high level of protection of health for patients and users, and taking into account the small- and medium-sized enterprises that are active in this sector”. As the Botrugno quite rightly points out “although the Regulation does not explicitly mention telemedicine or mHealth, it is worth remembering that the implantable devices are playing an increasing role in the development of remote care services, especially in the field of telemonitoring and mHealth” (Botrugno, 2018). Furthermore, the same Author states that “Regulation 2017/745 does contain provisions that might apply to telemedicine, especially where it states that devices intended with both a medical and a non-medical purpose must fulfil cumulatively the requirements applicable to both categories (…)” (Botrugno, 2018). An attempt to comprehensively address the phenomenon of telemedicine from the point of view of EU law goes well beyond the scope of this study. Summing up this part of the considerations, it should be emphasized that the phenomenon of telemedicine is an extremely complex issue. It means, therefore, that an attempt to provide health services based on such solutions requires an extremely comprehensive approach, taking into account not only the normative material related to the health sector but also a number of sectoral regulations.

The EU Member States’ perspective

Under EU law, there are no regulations that would address the issue of telemedicine in a comprehensive manner. aAlthough some of the provisions are subject to harmonization (e.g. protection of personal data, consumer rights), EU Member States have still the jurisdiction in telemedicine. One limitation of this research is that the studies were limited only to few UE countries. Despite this, it can be state that the minimum harmonisation of law in this area has caused legal fragmentation in the Member States regulations which regard telemedicine. As a result, the legal frameworks, approaches and levels of telemedicine development differ enormously among the Member States. Incidentally, it should be also pointed out that the telemedicine Market is very dynamic. Therefore, it is difficult to compare the present situation in the EU Member States. Admittedly, there are some studies which examine the telemedicine market in Europe, for example PWC report in 2018, but some data used in these studies come from research or surveys carried out in 2013. Of course, such reports should be assessed positively, although you may have doubts as to the extent of their the time they cover. Studies on the regulation among the EU Member States also leave a lot to be desired. Even though there are available some general conclusions, nowadays it is difficult to find a summary guide of telehealth-related policies, laws, and regulations for all EU Member States. Therefore, the activity of the Center for Connected Health Policy in the United States of America may be an example of good practice for the EU institutions. Namely, the CCHP has produced a comprehensive 50 state survey of telehealth laws and Medicaid reimbursement policies which is utilized by key stakeholders including the Center for Medicare and Medicaid Services. The above-mentioned project was financed by the Department of Health and Human Services of the USA, in particular from the resources of the Office for the Advancement of

1 OJ L 117, 5.05.2017, pp. 1–175.

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Telehealth, Health Resources and Services Administration1. Nowadays, the activity of the CCHP results in wide transparency on the telehealth (telemedicine) policy in the USA. For example, the CCHP publishes the current state laws and reimbursement policies, legislation and regulation tracking and additional reports. In conclusion, it must be stressed that telemedicine legislation is not harmonized around the EU Member States. However, some of the EU Member States are aware of the limitations of their legal regulations in relation to the challenges of telemedicine. Hence, it should not come as a surprise that the countries initiate legislative activities aimed at creating convenient conditions for the implementation of telemedicine solutions. For example, such initiatives were taken in France. According to G. Lacroix, in France, “since September 15, 2018, healthcare professionals are entitled to conduct remote consultations at the same rate as face-to-face appointments. The reimbursement procedure by the Health Insurance Fund and supplemental healthcare insurance schemes are similar to the procedure currently applicable to standard appointments” (Lacroix, 2018). Another EU Member State that is trying to regulate this area is Switzerland (Pietro and Francetic, 2018).

Some remarks on Polish regulations on telemedicine

Poland is one of the EU Member States that recognises the advantages of telemedicine. It should be pointed out that the term "telemedicine" has been present in the Polish legal system since 2011 (Walczak and Polkowski). Nevertheless, the first attempt to regulate some aspects of telemedicine was the Act of 9 October 2015 amending the Act on the healthcare information system and certain other laws2. The above-mentioned Act amended, inter alia, the Act of 15 April 2011 on medical activity3. It should be pointed out that before 12 December 2015, the provision of Art. 3 (1) of the Act on medical activity provided that "healing activities consist in providing health services4". In relation to the aforementioned amendment, the cited provision was supplemented with the information indicating that "these services may be provided via information and communication technologies systems or communication systems". Although the legislator did not use expressly the term telemedicine, it is beyond discussion that the new provisions aimed to create a legal framework for the development of telemedicine solutions in healing activities. What is more, there were a few significant amendments in the Act of 5 December 1996 on the professions of a physician and dentist5. As a result, from 12 December 2015, we can talk about a kind of "legalization" of telemedicine solutions in Poland. Nevertheless, the process of adopting legal solutions enabling a wider use of information and communication technologies in the area of health protection is still in progress. This is demonstrated by further interventions of the legislator in this area, such as the Act of 1 March 2018 on amending certain acts in connection with the introduction of an e-prescription6 or the Act of 20 July 2018 amending the Act on the

1 Grant #G22RH30365. See: . 2 Journal of Laws of 2015, item 1991. Original title: Ustawa z dnia 9 października 2015 r. o zmianie ustawy o systemie informacji w ochronie zdrowia oraz niektórych innych ustaw. 3 Journal of Laws of 2018, item 2190 as amended. Original title: ustawa z dnia 15 kwietnia 2011 r. o działalności leczniczej. 4 Brzmienie oryginalne: Działalność lecznicza polega na udzielaniu świadczeń zdrowotnych. 5 Act of 5 December 1996, the professions of a physician and dentist. Journal of Laws of 2019, item 537 as amended. Original title: ustawa z dnia 5 grudnia 1996 r. o zawodach lekarza i lekarza dentysty. 6 Journal of Laws of 2018, item 697. Original title: ustawa z dnia 1 marca 2018 r. o zmianie niektórych ustaw w związku z wprowadzeniem e-recepty.

78 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) information system in protection of health and some other laws1. Finally, the very recent regulation on telemedicine in Poland is the Regulation of the Minister of Health of 11 April 2019 on the organizational standards of healthcare in the field of radiology and imaging diagnostics performed via IT systems2. There is no doubt that the last Act of law should be crucial in the physicians’ practice. For example, the above-mentioned Regulation specifies the conditions for the implementation of teleradiology services. In addition, the regulation clearly states that “a teleradiology service is not performed if the method of radiological examination, the radiological image quality or clinical data sent by the contracting authority are not sufficient to assess the radiological image”. It can therefore be concluded that the indicated regulations constitute one of the first attempts to standardize the way of performing one of the types of telemedicine in Poland (teleradiology). While the legislator tries to respond to the demand of the practice, still the entities interested in the development of telemedicine (starting from entities conducting medical activities, through people performing medical professions, and ending with patients) report numerous objections to the current regulations. As a result, there are still legal doubts about the activities which healthcare professionals may conduct using the telemedicine solutions. Probably, it is one of the biggest barriers to the development of telemedicine in Poland. Therefore, the telehealth market revenue per inhabitant in euros is in Poland one of the lowest among the EU Member States (1.62 Euro per inhabitant)3. In comparison, in Denmark it is above 6 Euro, in Sveden above 5 Euro and in Netherlands, Germany, Austria, Finland and France above 4 Euro. Another reason for such a situation concerning the telehealth market revenue may be lack of an overall strategy for telemedicine in Poland. There is also lack of awareness among the patients about such solutions (LekSeek and GABINETdrWidget, 2018). On the other hand, the competition on the Polish telemedicine market it still not impressive. To sum up, the Act of 9 October 2015 amending the Act on the healthcare information system and certain other laws did not contribute to the dynamic development of telemedicine services in Poland. As a result, access to health services provided in a telemedicine manner is still quite limited. It seems, therefore, that the current regulations in the field of telemedicine solutions require further revision to adapt to the real needs of patients as well as healthcare providers.

Conclusions

As stated in the Introduction, the main goal was to analyse and evaluate EU policies and legislation concerning telemedicine. In the light of the research conducted, it must be stressed that the European Union is consistently trying to promote telemedicine solutions in healthcare systems around the EU Member States. The evidence for this is quite an important place of telemedicine in the EU health and digital policies. On the other hand, most regulations concerning directly telemedicine occur in the area of soft law. As a result, the EU Member States have still jurisdiction in telemedicine. Because of that, the legal frameworks,

1 Journal of Laws of 2018, item 1515 as amended. Original title: ustawa z dnia 20 lipca 2018 r. o zmianie ustawy o systemie informacji w ochronie zdrowia oraz niektórych innych ustawy. 2 Regulation of the Minister of Health of 11 April 2019 on the organizational standards of healthcare in the field of radiology and imaging diagnostics performed via teleinformatic systems. Journal of Laws of 2019, item 834 as amended. Original title: rozporządzenie Ministra Zdrowia z dnia 11 kwietnia 2019 r. w sprawie standardów organizacyjnych opieki zdrowotnej w dziedzinie radiologii i diagnostyki obrazowej wykonywanej za pośrednictwem systemów teleinformatycznych. 3 The telemedicine market revenue per inhabitant is lower only in Hungary (1.25 Euro), Bulgaria (1.11 Euro) and Romania (1.04 Euro).

79 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) approaches and levels of telemedicine development differ enormously among the Member States. It should be also noted that the provisions of Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross- border healthcare guarantee the reimbursement of “healthcare received through telemedicine". Nevertheless, the application of Directive 2011/24/EU has led to a certain lack of clarity concerning reimbursement schemes, as some Member States do reimburse or provide consultation with general or specialised practitioners at a distance, while others do not. What is more, in some countries there is still low availability of telemedicine solutions financed by public health service systems. Therefore, patients may have difficulty getting these benefits. However, even if there are implemented, there may be difficulties in obtaining reimbursement (e.g. due to the fact that for a given range of benefits a patient seeking a refund will not be entitled in the Member State of affiliation). Returning to the question posed at the beginning of this study, it is now possible to state that the phenomenon of telemedicine is an extremely complex issue. This implies that the attempt to provide health services based on such solutions requires a comprehensive approach, taking into account not only the normative material related to healthcare but also a number of sectoral regulations relating to, for example, personal data protection and cybersecurity rules, regulations on medical devices, patient rights, or to the provisions governing electronic commerce. Such a level of complexity may be a huge barrier for entrepreneurs, especially for young start-ups which try to implement new services on the EU market. This has led authors such as for instance Botrugno to conclusion that there is a need for an adequate regulatory framework to address the challenges posed by telemedicine in routine healthcare. On the other hand Raposo states that the EU can only aspire to create a legal framework for those domains in which European law had already had any kind of inventions and adapt it to the specificities of telemedicine. In the discussion about telemedicine there are also some fears, which may affect the future regulations in this area. For example, in the European Economic and Social Committee opinion, adopted at the plenary on 19 September 2018, it was stressed that “in the course of the changes generated by digital transformation, people must be at the centre of care”. In this context, the European Economic and Social Committee pointed out that “the rapid expansion of telemedicine, connected devices and nanotechnology, biotechnology, information technology and the cognitive sciences (NBIC) must not result in patients being seen as mere connected bodies which can be analysed, monitored and overseen remotely by an all- powerful IT programme”. As a result, the technical development of health in fact encourages - in the European Economic and Social Committee’s opinion – the opposite: it places interpersonal relationships and social ties back at the centre of medical practice and care. Therefore, bearing in mind both, the benefits of telemedicine and the threats resulting from it, a fundamental question arises: how to ensure the development of telemedicine in the EU, which will also properly protect the welfare of patients. The findings of this study indicate that it is necessary to enact a uniform strategy for the development of telemedicine. For that purpose, the precise legal definition of telemedicine should be proposed. Secondly, the institutions involved in the EU legislation should focus on implementing general standards in different areas of telemedicine (e.g. technology, data protection, professionals behaviours etc.). It is no doubt that such standards should increase patients’ welfare. Although such standards and guidelines exist but they are usually passed by medical boards or informal associations, which means that these documents are not legally binding regulations. In this context, the EU institutions should consider a certification system for entities or for technologies which classify as telemedicine solutions. There should be also precise

80 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) regulations which solve the problem of responsibility in case of malpractice or an accident. Another type of guarantees for patients, as well as for physicians and other medical professionals, may be an obligatory insurance for the entities and professionals that provide such services. Finally, the significant challenge is to provide interoperability between telemedicine solutions available around the European Union. This is a sine qua non condition for cross-border utilization of telemedicine solutions by EU citizens. This work has proved that there should be a wide, interdisciplinary discussion around the EU. It should be pointed out that regulating such a complex area is a huge challenge. On the one hand, over-regulation could place unnecessary restrictions on the telemedicine development. On the other, legal instruments may promote and stimulate the implementation of telemedicine solutions. Because of that, it is so important to find adequate regulations in this area. Consequently, the proposed area of research may be very attractive for scientist in the field of public economic law.

References

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Report from the Commission to the European Parliament and the Council on the operation of Directive 2011/24/EU on the application of patients' rights in cross-border healthcare. COM (2018) 651 final. TGR (Telemedyczna Grupa Robocza). 2018. Jak skutecznie wykorzystać potencjał telemedycyny w polskim systemie ochrony zdrowia? [interactive]. Warsaw. [accessed 2019-05-04]. . TNS Political & Social. 2017. Eurobarometer 460 – March 2017. Attitudes towards the impact of digitilisation and automation on daily life. Summary. doi:10.2759/25616. Volkert S. E. 2000. Telemedicine: Rx for the Future of Health Care. Michigan Telecommunications and Technology Law Review. Volume 6 (147), pp. 147-246. Walczak M.; Pólkowski Z. 2013. The e-Health Systems In Poland, Scientific Bulletin – Economic Sciences. Volume 12, Issue 2, pp. 54 – 66. White Paper - Together for Health: A Strategic Approach for the EU 2008-2013. COM (2007) 630 final. the Commission White Paper of 23 October 2007 entitled ‘Together for Health: A Strategic Approach for the EU 2008-2013’ (COM(2007)0630), WHO (World Health Organization). 1998. A health telematics policy in support of WHO’s Health-For-All strategy for global health development: report of the WHO Group Consultation on Health Telematics 11-16 December, Geneva 1997 [interactive]. Geneva 199, [accessed 2019-05-04]. [https://apps.who.int/iris/bitstream/handle/10665/63857/WHO_DGO_98.1.pdf?sequence=1&isAllowed=y]. WHO (World Health Organization). 2010. Telemedicine: opportunities and developments in Member States: report on the second global survey on eHealth. Global Observatory for eHealth Series, 2 [interactive]. Geneva: WHO Library Cataloguing-in-Publication Data. [accessed 2019-05-04]. . Yang T. 2016. Health policy brief: telehealth parity laws. Health Affairs [interactive]. [accessed 2019-06- 20]. https://www.healthaffairs.org/do/10.1377/hpb20160815.244795/full/healthpolicybrief_162.pdf> Accessed 1 June 2018.

This work is licensed under a Creative Commons Attribution- NonCommercial 4.0 International License.

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EVALUATION OF CYBER INSURANCE AS A RISK MANAGEMENT TOOL PROVIDING CYBER-SECURITY

Julija Gavėnaitė-Sirvydienė

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose – to clarify the characteristics of cyber risk and cyber insurance. More specifically to identify key parts of cyber insurance contract and analyse cyber insurance market. Design/methodology/approach: methodologically this research paper concentrates on analyses and study of scientific literature in order to provide the proper description and classification of cyber risks. Also statistical data was collected and analysed to provide a cyber-risk insurance market overview. Moreover, to prepare the underwriting methodology part in this paper, the scientific literature deduction was used, to reach conclusions from collected information sources. Findings: firstly, this research paper provides an explicit definition of a cyber-risk and cyber insurance. In general, financial institutions and regulators of insurance market categorize cyber type risks as a part of operational risk because it is related to technology and information assets. Therefore, cyber risk is described as operational risk that affects technology assets, information, databases and other sensitive online storage. According to guidelines provided in Solvency II and Basel II documents, cyber risks can be put into four categories: technology and system failures, unsuccessful internal processes, act of people, external processes. These four categories of potential cyber risks are described particularly in this article. Secondly, the comprehensive cyber insurance market analyses is provided following the article. According to AXA Insurance Solutions company there was 170 insurers offering cyber liability policies in 2017 and about 30 more new carriers joined the market in 2018. According to the Cyber Policy Inc. the number 5 cyber insurance carriers in the marker is: AIG; Chubb; Hiscox, Liberty Mutual, HSB. With the beginning of 2019 it is expected from buyers to keep pressuring the insurance companies to deliver even more comprehensive services, more coverage options and potential. In general, cyber insurance market is supposed to remain stable, but the quality of policy language should evolve together with other endorsements to general cyber insurance policy. Thirdly, the general guidelines of underwriting the cyber insurance coverage policy is provided within this paper. In order to implement any form of risk reduction for cyber risk (also including insurance), the company at first should very clearly expose its potential vulnerabilities and weaknesses. Three types of general internal company’s information can be marked out for preparing the cyber insurance coverage background: IT related information; human resources; finance, internal audit, legal issues. For insurance company to better understand the company the general business information is most important part. In order to extent the company’s disclosure to cyber threats and to better prepare the solutions if insurance this business profile information should be conducted very carefully. Prevention is one of the most important factors of a cyber-risk insurance policy. Companies that are buying cyber risk insurance may get access to pre-breach assessments, prevented suppliers or cybersecurity information for this purpose. Research limitations: this research paper concentrates on the European Union insurance market and experience of the insurer located in the EU. Moreover, this field of research is very unstable and the changing very fast together with continuously development of IT services sector. More studies and analyses should be made together with the changing environment of cyber security.

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Practical implications: this research paper may serve not only for further studies and scientific discussion. Moreover, it could be useful for the businesses as a valuable tool to better understand what cyber insurance is, how to prepare for implementing cyber security policy in the company. Keywords: insurance, risk management, business, cyber security, cyber insurance policy, cyber insurance market. Research type: research paper.

Introduction

During the past year, society and business have a growing dependence on IT, Internet, mobile devices. Therefore, the possibility of cyber-attacks and cyber risk for business increases drastically. According to the Global Risk report presented by the World Economic Forum, cyber security is one of the five biggest risks faced by governments and businesses across the world during the past year. Officers are implementing requirements regarding business to prevent from cyber-attacks, especially if they are processing personal data. In the EU General Data Protection Regulation was one of the major actions to ensure the security of personal data. These new regulations are expected not only to be one of the instruments of cyber security management but also to make an impact to companies to become aware and concerned about their data security. According to Price Waterhouse Couper’s report, there are more than one-third of companies in the USA that are using cyber insurance protection. Also, cyber insurance is expected to reach 7,5 billion USD of premiums paid by 2020. Despite the growing importance of cyber security, the market of Cyber Risk Insurance in Europe is still in the developing stage and the full potential is not reached yet. It is calculated that almost 90% of cyber insurance policies are issued in the USA, and approximately 5% to 9% in Europe. Because of this significant difference of market size, most of information, reports and surveys are based on USA cyber insurance market or the global view and a very little attention is given specifically to European market. Therefore, European insurers are in a very need of deeper understanding and managing of cyber security. Cyber security and cyber risk management should become one of the top priorities to a businesses and individuals. In particular, a profound understanding of cyber risk is necessary to achieve for both supply and demand parts. This means a higher assessment and treatment of cyber related risks, not to mention a deeper analysis of the buyer’s needs and expectations. Driven by the effective regulations and increasing awareness of businesses and individual’s cyber insurance industry is expected gradually growth. Together with expected significant economy increase the importance and relevance of cyber coverage is supposed to develop and expand.

Categorising Cyber risks

The term of cyber risk is related to various of different sources that may affect the technology assets, information databases or other online storage of a firm or an individual. Generally, financial institutions and regulators of insurance market categorize cyber type risks as a part of operational risk because it is related to technology and information assets. Therefore, cyber risk may be defined as operational risk to technology assets and information that have subsequence to availability, integrity and confidentiality of information. Generally, cyber risks can be divided into two general groups depending on the source of the risk: insider (financial damage, fraud, data and identity theft made be the employees) or outsider

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(company’s confidential information, money). Because of these cyber risks businesses may not only loss secret information and money but also experience a loss of reputation, respectful name and credibility. (Cebula, J. J. and Young, L. R. 2010) According to guidelines provided in Solvency II and Basel II documents, cyber risks can be put into four categories: technology and system failures, unsuccessful internal processes, act of people, external processes.

Table 1. Categories of cyber risk

Category Definition Factors Act of people 1. Inadvertent Actions taken without harmful Errors, mistakes intentions 2. Intentional Actions taken intentionally to cause Fraud, theft, vandalism harm 3. Inaction Failure to act in a harmful situation Lack of skills and knowledge Technology and system failures 1. Hardware Risks traced to failures in manual Failure because of performance, equipment capacity, maintenance 2. Software Risks caused by programs, Security settings, coding, testing, applications, operating systems configuration management 3. System Failures as integrated systems does Integration, design, specifications not perform as expected Unsuccessful internal processes 1. Process Failure due to poor process design Documentation, information flow, design or execution responsibilities, alerts, notifications. 2. Process Poor control of the process Periodic review, process control operations ownership, monitoring 3. Process Failure to deliver appropriate Accounting, staffing, training, support resources to supporting process development External processes 1. Catastrophes Human and natural events over Weather event, fire, flood which the organization has no control 2. Legal issues Risks caused by legal arguments Legalisation, regulations, litigations 3. Business Risks caused by the changes in Supplier failure, market condition, issues business environment economic causes 4. Service Risks arising from the organization’s Utilities, fuel, emergency services, reliance reliance on external parties transportation, other suppliers

The insurance policy for cyber risk (also may be referred as cyber liability insurance coverage – CLIC) is created as a protection tool that reduces losses caused by cyber interruptions, network damages. Cyber insurance is designed to reduce the harm of cyber- attacks and data breaches. It first emerged because existing insurance policies did not include such losses as coverable.

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Cyber risk insurance significance for risk management strategies

First recommendations on the use of cyber risk insurance to encourage cyber security was made in 1994. In 1997, the first cyber risk insurance policy was written by Steve Haase, employed at a US-based insurance company, even if it can be described as a traditional third- party liability policy (Wells, 2018). This approach of risk management, especially used in the financial sector, could also be used for internet related risks was first announced by Dan Geer in 1998. (Geer, 1998). In 2001, Bruce Schneier presented the concept of cyber-risk insurance into the academic debate. (Schneier, 2001). Despite the fact that the history of academicals researches on cyber risk insurance has been available for more than twenty years, cyber insurance products still have not reached the level of other insurance products. More thank 25% of companies in Europe are not even aware of the existence of such type of insurance for cyber risk, and only 10% have purchased a cyber-risk insurance coverage. (Tøndel et al, 2015). Increasing awareness and creating technical measures for companies against cyber related risks will significantly reduce the risks encountered, but will never be able to guarantee full protection. Moreover, small organizations usually do not have enough budget to invest in high-cost security measures such as next-generation firewalls; intrusion detection and prevention systems, and email security solutions. Through this point of view, the importance of cyber risk insurance for small organizations only increases. These are a particular reasons cyber risk insurance is significant for business: 1. Data are among our most important assets and results in financial losses if it is stolen or lost. 2. Information and communication technologies are critical in daily operations. The interruption of the system will cause a lot of financial loss. 3. The obligation to protect data of third parties is stipulated in laws and if they are lost or stolen, are exposed to serious penal and punitive sanctions. 4. All of these cyber-attacks which are occurred lead to material losses as well as the loss of reputation of the organization in the sector (Sloan, 2017). The reputational losses mentioned above sometimes even overtake financial losses and can cause very damaging consequences for the company. The financial loss caused by cyber- attacks to organizations can be extremely significant to the financial stability and credibility, and a loss of brand value can negatively affect the organization's revenues for many years, and excessive resources may need to be spent to repair it. Despite the fact organizations have taken a number of measures to ensure safety in cyberspace, they can still be affected by cyber threats. When they are affected by these cyber threats, there is a cyber-risk insurance to cover permanent damages. The resulting risk will be transferred to the cyber risk insurance and the financial and moral losses mentioned above will be totally or partially acceptable.

Cyber insurance market overview

In the 2017, the industry of insurance faced a major threat of ransomware (a type of harmful software created to block access to a computer system until a requested amount of money is paid). The names of these harmful viruses are better known as Petya, NotPetya, and WannaCry malware attacks. These dangerous programs infected computer software’s in more than 150 countries across different types of industries as governments, hospitals, universities and private industries. It is very difficult to calculate the final and exact general loss caused by all these cyber-attacks, but approximately it is estimated that the NotPetya caused about 10

87 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) billion dollars, WannaCry virus caused 4 billion dollars. Despite these major losses the market of cyber insurance is still in the development stage. (Eling, M., Wirfs, J. H. 2016) According to AXA Insurance Solutions company there was 170 insurers offering cyber liability policies in 2017 and about 30 more new carriers joined the market in 2018. According to the CyberPolicy Inc. the number five cyber insurance carriers in the marker is: 1. AIG: multinational corporation is a key player in the insurance industry and carries about 22% of the cyber insurance market during 2019 2. Chubb: is the world's largest publicly traded property and casualty insurer. It also covers about 12% of the cyber insurance market. 3. Hiscox: the company is well known for specializing in niche areas of coverage including classic cars, fine art, aerospace, kidnapping, ransom, and hacking. Their cyber policy is designed to cover privacy, data, and network exposures up to a $10 million capacity. It's also built to cover business interruptions, employee negligence, third-party data breaches, and more. 4. Liberty Mutual: insurer released Data Compromise and CyberOne, two products designed to mitigate the damages associated with data breach. 5. HSB: is now part of Munich Re. HSB's cyber insurance covers computer-attacks, cyber extortion, data breach response, misdirected payment fraud, identity recovery, network security liability, electronic media liability, and more. It appears that in the past few years’ cyber insurance market was developing very fast, offering vide range of coverage, but actually it does not mean that this abundance of supply automatically means that all the possible risks are covered. The types and possibilities of cyber-attacks also have changed and together brought these major and significant changes in the cyber insurance market during 2018: 1. Increased number of ransomware attacks. Even though there was no major and significant impact to a market last year, the number and severity of cyber-attacks should be alerting. The frequency of cyber-attacks has significantly increased. It should be also noted that most of the cyber-attacks recently were ransomware attacks. This is because the ransoms have gone up exponentially. 2. The thieves become more sophisticated. In 2018 social engineering reached its pitch. Attention now is paid not to hacking exactly, but into developing smart systems and software’s, building them to explore within the company or individual, destroy possible security utilities and help to reach financial gain. 3. Changes in the regulatory environment. With the increase of cyber-attacks, the security of important company or personal data is also in a higher danger. As the harmful software are developed the accessibility of personal information has become easier and faster. In May 2018 the General Data Protection Regulation (GDPR) became in force. This new regulation put a responsibility and obligations to companies to protect the data there are disposable that are related to European Union (EU) citizens.

Cyber insurance market predictions for 2019

With the beginning of 2019 it was expected from buyers to keep pressuring the insurance companies to deliver even more comprehensive services, more coverage options and potential. Companies that are buying cyber risk protection should continuously turn into insurers for better risk management offers and services. In general, cyber insurance market is supposed to remain stable, but the quality of policy language should evolve together with other endorsements to general cyber insurance policy.

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Clearing and building the cyber risk policy language should be one of the most priority questions for the insurers. This is because there are still plenty of conditions and descriptions to be clarified and described. For example, all the cyber risk events that do not typically fall under this policy umbrella – most relevant will be the crime and property policies. The insurers must keep clarifying the policy language as it would be totally clear under what policy the risk should be insured – the property or liability? The buyers of insurance should also play a role here to help their insurers better understand the type and shadings of the insured business to better avoid incidents in the future when claims happen. As the need to clarify and upgrade cyber insurance policies become one of the priorities, the data and analytics will be helpful and important. The use of data analytics to create a cyber coverage contract is expected to increase significantly in 2019. As the insurance companies tries to reduce the impact of an aggregate event that could affect multiple policies, they will keep trusting on outsourcing data analytics to keep more efficiency and finally more profitable underwriting processes. The traditional methods that are usually used to underwrite risks and create the insurance contract, such as questionnaires are supposed to be replaced by more sophisticated risk engineering decisions, data analytics methods that work case-by-case and can provide higher efficiency and accuracy in risk underwriting.

Underwriting cyber risk insurance policy

In order to implement any form of risk reduction for cyber risk (also including insurance), the company at first should very clearly expose its potential vulnerabilities and weaknesses. Therefore, the first step to cyber risk management is organizing the internal research in the company to put up a picture of possible cyber risks and any other possible threats. If the company does not have a responsible person of risk management, conducting this research may be challenging. There are a vide spectrum of information that can be found in the organization and is very essential for managing cyber risk and implementing insurance protection in the organization. Three types of general internal company’s information can be marked out for preparing the cyber insurance coverage background (Ridd, J., 2002).

Table 2. Internal information types for cyber risk contract

IT related Finance, internal audit, legal Human resources information issues  Information system  The corporate culture and  General business information security approach on cybersecurity (profile, links between market,  IT suppliers  The human issue (possibility to cyber threats)  Management of IT rise awareness and organize  Oversight and internal audit updates trainings)  Personal data

Conducting all this information from internal company’s sources is the crucial background to create an accurate cyber risk insurance contract that would include coverage for all possible threats and meet all the requirements that company may have or is vialing to discover.

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Business information and profile for cyber risk coverage

For insurance company to better understand the client, basic business information is most important part. In order to extent the company’s disclosure to cyber threats and to better prepare the solutions if insurance this business profile information should be conducted very carefully. (Varian, H. 2000). To shape the insurer’s profile this general information is most important: 1. Company’s main activities: services that company provide, business sector, business type, general business market, competitors. This kind of information helps to understand what potential claims and third-party losses may occur. 2. Business to client rate: this percentage of the amount of business that are customer end type enables to evaluate the personal data that company may dispose – consumer’s personal information, banking data, payment systems. This information characterizes the possible third-party loss risk. 3. Business to business activity: this type of information can clarify the possible first party loss possibility. 4. Geographical information: specifically, information about branches, the locations of offices, supply chains, assets and processes of production. This helps to evaluate legal and political risks. 5. Financial details: income, turnover, profit. The annual turnover is generally the most significant indicator of the company’s potential exposure. 6. The budget of IT security: to the insurance company this number clarifies the financial commitment of the company to cybersecurity. Moreover, this is a great indicator that shows the risk maturity of the client.

Cyber insurance policy

The insurance coverage may be very specific or vide, but there are some significant parts and types of information that must reflect in the insurance policy. It is strongly recommended to a buying company to look very carefully though the cyber insurance proposal because they can: 1. Change between different offers or insurers 2. Control the affect how the insurance policy responds in the event of specific cyber issue 3. Useful to find and notice possible gaps or drawbacks The risk factors discussed in table 3 are a very useful tool for the company to consider how cyber risk insurance coverage could implement in their organization’s security politics and other essential factors of their activity.

Table 3. Risk factors in cyber insurance contract

Prevention Assistance Operations Liability  Assessments  Judiciary investigators  Costs incurred to keep  Damages or legal before violation  Legal services or return the business costs from  Access to prevent  Notifications to operational claims alleging vendors  Monitoring of the credit  Loss of turnover, privacy breach  Information of  Call centre services income, revenue or network cybersecurity  Public relations, crisis  Restoring/recreating security failure management information, data

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Prevention is one of the most important factors of a cyber-risk insurance policy. Companies that are buying cyber risk insurance may get access to pre-breach assessments, prevented suppliers or cybersecurity information for this purpose. On the other hand, it often does come down to cost. Commonly, cyber risk insurance policies, which are likely to include the scope of a various cyberattack, may often be too expensive to afford for a small business. But even then, the small companies are able to take some cybersecurity actions and put measures of protection in place. Here are some effective and simple tools to reduce cyber risk on a smaller budged if a company cannot afford the cyber insurance: 1. Create internal data protection regulations: put a limit of how many employees can handle personal data, limit the access to customer data storage. Organize trainings to employees on how they should handle working with personal data or any other sensitive information. 2. Invest in latest antivirus software: responsibly take care that all the devices used in the company are provided with latest antivirus programs, regularly update this software. 3. Usage of firewalls: this protection tool may make it harder to hackers to reach company’s networks. Encrypting all data and putting passwords on wi-fi network is also helpful. 4. Personnel training: organizing trainings to a staff as they would be able to notice and identify a potential threat. Also put a reasonable and strong requirement on how personnel should crate their passwords and any other security tools. These tools are a very good and useful options for the small to mid-sized businesses to create a protection from cyber risks. Even if a company does not stock a large online data it still has a certain level of cyber risk that could be very harmful and unprofitable to the business. The activity without any measures of coverage is very unsafe to any type or size of company. Even simple and consistent tools of cybersecurity can help a company to keep it safe and less risky.

Conclusions

The digital transformation in the world is continuing with no signs of slowing down. Every day the consumption of online data, services and activities is increasing. Businesses are becoming more and more dependent on online tools, modern technologies and inter- connectivity. Together with these changes the online hackers are also becoming more sophisticated. The amount of reported cyber-crimes keeps growing because these criminals are expanding their networks, discovering new vulnerabilities to achieve their targets. Continually changing environment of online technologies makes it even more challenging for businesses to keep up with newest protection utilities, security options and cyber insurance solutions. Because of these causes the cyber risk insurance market will keep a very significant role in the future to support companies in managing their exposure to possible cyber threats. In order to make cyber risk insurance product more accessible in the future, the following items should be indicated in the cyber security coverage contract and also carefully discussed between the insurer and a buying company: 1. According to cyber risk categories – what risk factors are most possible to occur, taking into account company’s profile, activity, vulnerabilities and possible threats. 2. Insurer is supposed to clarify and explain the importance of cyber security to the company, also involving a research of sensitive data or information that the company may are disposable of.

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3. The internal information that are curtails for underwriting cyber risk policy should be carefully collected, discussed and analysed to ensure that all the potential risks are considered and taken under insurance policy protection. To summarize, cyber risk insurance is one of the most effective tool to ensure cyber security for business, to protect essential data, and to guarantee sustainable activity. Furthermore, it should be strongly recommended to companies that are involved in doing online business or in any case dispose a significant data to pay more attention to possible cyber-threats, take into consideration any possible cyber security measures.

References

Anderson R.; Moore T. 2018. Information security economics and beyond. Information Security Summit. Biener, C.; Eling, M.; Wirfs, J. H. 2015. Insurability of Cyber Risk – An Empirical Analysis. The Geneva Papers on Risk and Insurance – Issues and Practice 40(1). Geneva. Bohme R.; Schwartz G. 2010. Modeling cyber-insurance: Towards a unifying framework. WEIS. Borghesi A.; Gaudenzi B. 2013. Risk Management: How to Assess, Transfer and Communicate Critical Risks. Springer-Verlag: Milan. Cebula, J. J.; Young, L. R. 2010. A Taxonomy of Operational Cyber Security Risks’, Technical Note CMU/SEI- 2010-TN-028. Software Engineering Institute, Carnegie Mellon University Chapelle, A.; Crama, Y.; Huebner, G.; Peters, J.-P. 2018. Practical methods for measuring and managing operational risk in the financial sector: a clinical study. Banking & Finance 32(6). Chavez-Demoulin, V.; Embrechts, P.; Hofert, M. 2015. An Extreme Value Approach for Modeling Operational Risk Losses Depending on Covariates. Journal of Risk and Insurance, DOI: 10.1111/jori.12059. Eling, M.; Wirfs, J. H. 2016. Cyber Risk: Too Big to Insure? – Risk Transfer Options for a Mercurial Risk Class. I.VW Schriftenreihe, Band 59, St. Gallen. European Union (2016) Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC. Geer D. Risk Management is Where the Money Is. [interactive]. Talk Before Digital Commerce Society of Boston, 2018 [accessed 2019-06-18]. < https://www.researchgate.net/publication/2956022_Risk_Management_is_Still_Where_the_Money_is> Marsh&McLennan. Companies Global Risk Center. MMC Cyber Handbook. 2018. Perspectives On The Next Wave Of Center. Majuca, R. P.; Yurcik, W., & Kesan, J. 2006. The evolution of cyberinsurance. ACM Computing Research Repository (CoRR), Technical Report cs.CR/0601020. McNeil, A. J.; Frey, R.; Embrechts, P. 2015.Quantitative Risk Management: Concepts, Techniques, Tools – Revised Edition, Princeton University Press. Muermann, A.; Kunreuther, H. 2008.Self-protection and insurance with interdependencies. Journal of Risk and Uncertainty, 36(2), p.103-123. Ogut, H.; Raghunathan, S.; Menon, N. M. 2005. Information security risk management through self- protection and insurance. The University of Texas at Dallas. Romanosky S.; Ablon L.; Kuehn A.; Jones T. Content Analysis of Cyber Insurance Policies: How do carriers write policies and price cyber-risk? [interactive]. Axa Insurance solutions. [accessed2019-03-18]. . Ridd, J., 2002. Insuring Digital Risk: A Roadmap for Auction. Information Assurance Advisory Council. 28, 771-780. Schneier B. 2001. Insurance and the Computer Industry. Communications of the ACM. 44(3): 114-115. Sloan R. Cyber Matters: The Importance of Cyber insurance for SMEs. [interactive]. Cubb INC USA. [accessed 2019.05.13] Tanaka, H.; Matsuura, K.; Sudoh, O. 2005. Vulnerability and information security investment: An empirical analysis of e-local government in Japan. Journal of Accounting and Public Policy, 24(1), p. 37-59. Tøndel IA; Meland PH; Omerovic A; Gjære EA; Solhaug B. Using Cyber-Insurance as a Risk Management Strategy: Knowledge Gaps and Recommendations for Further Research [interactive]. The New York Times. [accessed 2019-03-18].

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Vaughn, R.; Henning, R.; Siraj, A. 2003. Information assurance measures and metrics: State of practice and proposed taxonomy. HICSS '03, Hawaii, p. 34-52. Zhao, X., Xue, L.; Whinston, A. 2009. Managing Interdependent Information Security Risks: An Investigation of Commercial Cyber insurance and Risk Pooling Arrangement Thirtieth. International Conference on Information Systems, p. 189-239. Wells A. What Agent Who Wrote First Cyber Policy Thinks About Cyber Insurance Now [interactive]. Insurance Journal. [accessed 2019-05-07] < https://www.insurancejournal.com/news/national/2018/03/01/481886.htm>

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CROSSING METACOGNITIVE AWARENESS IN UNIVERSITY STUDIES: AN EMPHASIS ON BELIEFS

Marjan Masoodi

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose – Initially, this cross-cultural comparison paper aimed to compare and contrast lecturers’ and learners' beliefs about learners' level of metacognitive awareness and related subcomponents in Lithuanian and Iranian university studies. Additionally, it looked at investigating lecturers' justifications for assigned students' level of metacognitive awareness. Design/methodology/approach – Two instruments were applied. Firstly, a researcher-created questionnaire was developed to collect data from 20 Lecturers to analyze trends in the lecturers’ beliefs about their students' metacognitive awareness. Secondly, Schraw and Dennison's (1994) metacognitive awareness inventory was completed by 755 students to access their metacognitive awareness. Mixed methods research combined with quantitative and qualitative methods was appropriate for this study. The quantitative data was collected from the Likert scale parts of the researcher-made questionnaire for the lecturers and whole parts of the questionnaire for the students. Both descriptive and inferential analysis were done. The lecturers' written responses to the open- ended questions were analyzed applying deductive qualitative content analysis using an iterative approach. It was a recursive process in which the data were reviewed to determine the major themes in the written responses by the researcher and 3 raters. Finding – By comparing and contrasting the lecturers and the students’ beliefs about the students’ subcomponents levels of metacognitive awareness, we realized that both Iranian and Lithuanian lecturers’ and Iranian student’s beliefs regarding the sequence of knowledge of regulation subcomponents from the strongest to the weakest were the same (Declarative, Procedural and conditional) while Lithuanian students believed that they had a higher level of declarative knowledge and a lower knowledge in procedural subcomponents. By comparing the Lithuanian and Iranian lecturers’ beliefs with their students’ beliefs, we can realize that both of them considered monitoring and debugging weaker than planning and evaluation. Both Lithuanian lecturers and Lithuanian students considered the level of metacognitive awareness as medium. Furthermore, among the three detected key themes categorized by 3 raters through deductive content analysis from lecturers' responses for the reasons for determined students' level of metacognitive awareness, "students’ characteristics" was considered as the main reason for both groups. Research limitations/implications – The first limitation is the use of questionnaires where various methods such as think aloud or interview can be applied as well. Another limitation is that the number of lecturers was limited which can influence the generalizability of findings. Finally, the sample size for both groups of lectures and learners was randomly selected from Tehran and Vilnius which is not appropriate for overgeneralizing to other cities. Practical implications – It not only contribute to both lecturer and student development of metacognitive awareness but also guides the design and implementation of future metacognitive awareness programs for lecturers. The findings can increase lecturers’ pedagogical knowledge which is associated with their practices Originality/Value – Despite the fact that learner metacognitive awareness at university studies is gaining momentum as an educational phenomenon, there is very little simultaneous and

94 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) comprehensive research globally on assessing students' beliefs and identifying those of lecturers about the students’ subcomponents level of metacognitive awareness. Therefore, the research is new and unique since no research has compared and contrasted lecturers' and students beliefs about the topic in both contexts of study. Keywords: Metacognitive awareness, Regulation of cognition, Beliefs, University Studies, Iranians, Lithuanians. Research type: research paper.

Introduction

A high level of Metacognitive awareness in a learner is broadly acknowledged as the most valuable qualification for successful learning since it can help learners to take control of their learning, realize how to learn, manage the process of learning from planning to assessing with the support of their teachers. It is becoming as a tool for learners to adopt not only to educational demands but also to general concerns of life which cannot be developed in traditional teaching which limits the context of learning (Schraw & Dennison, 1994; Schraw et al., 2012). Moreover, the poor level of metacognitive awareness is not enabling learners to participate in the modern multilingual society. In fact, sociological perspectives emphasized on the effect of context, including globalization and global economy, not isolation of this process (Richard, 2007). Beliefs have significant effects on driving one’s actions, utilizing metacognitive awareness strategies (Bullock, 2010) and accepting and rejecting new information and how knowledge is employed (Borg, 2009, 2015, 2018; Mansour, 2013; Pajares, 1992). Despite the interlocked complex and dynamic process of learning and teaching, a clear connection emerged between lecturers and learners’ beliefs. Beliefs also have a connection to the level of expectation from learning and teaching (Bernat, 2008) and class practices (Borg, 2009; Bullock, 2010; Mansour, 2013; Pajares, 1992; Zheng, 2013). According to Bernat (2008) and Eliss (2008) the students’ beliefs can be reformed by teachers’ beliefs which is essential for eradicating students’ misconception and improving their learning. The significance of assessing metacognitive awareness as an essential factor in university studies, on one hand, and the necessity of understanding the nature of lectures’ beliefs about students’ metacognitive awareness and students’ beliefs in this regard, on the other hand, have been the impetus for the researcher to conduct this study. Previous researches stipulated that there are few empirical ones globally about finding the similarities and differences between teachers’ and students’ beliefs. Besides, this concept is a relatively unexplored area in Iranian and Lithuanian university studies. The purpose of this paper is initially to compare and contrast lecturers’ and students’ beliefs about the levels of students’ metacognitive awareness and related subcomponents in both Lithuanian and Iranian university studies and secondly to investigate the lecturers’ justifications for assigned metacognitive awareness students’ level. The research object is crossing the beliefs about metacognitive awareness in university studies. The following research questions arise: RQ1. How do Lithuanian and Iranian lecturers’ beliefs about students’ level of metacognitive awareness differ/compare with those of university students? RQ2. How do lecturers justify their assigned level of metacognitive awareness to their students?

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The impetus for conducting this comparative research has come from both personal interest of the researcher as an Iranian national doing her research in Lithuania and the significance of contextual factors, which has impact on global research. While globalization helps us achieve the latest information across the globe, we can investigate and solve different educational and learning problems from an international-comparative perspective. The Iranian and Lithuanian students and lecturers are different from each other culturally, linguistically and socially which all of them are effective factors on learning process. Therefore, finding out similarities and differences between the metacognitive awareness beliefs of both lecturers and students in university studies of these two countries assists us to reach precious information to improve learning in both these two settings and other university contexts globally.

Literature review

Learners’ and teachers’ beliefs

Beliefs as a confusing and messy concept affect making sense of the world, perceiving, accepting and rejecting new information and how knowledge is employed (Borg, 2009, 2015; Mansour, 2013; Pajares, 1992). Understanding one’s beliefs needs inference being made about the underlying mind state of that person such as one’s saying, intention and behavior consciously or unconsciously which is not an easy task since that person may be unable or unwilling to express one’s beliefs (Borg, 2009; Bullock, 2010; Mansour, 2013) that causes inconsistency between beliefs and practices (Mansour, 2013). Students’ beliefs in the field of learning indicate an overall picture of their expectation from the learning process (Bernat, 2008). Beliefs can be shaped according to the students’ personal practices, evidences, rules originated from any method or approach and personality and brought to the class. Assessing the students’ beliefs can assist teachers not only to reflect on their teaching and modify it in a creative way based on their students’ requirements and expectations but also to guide the students to get rid of their detrimental notions in learning (Bernat, 2008; Eliss, 2008). If there is a systematic metacognitive awareness program imposed by the University for teaching, it will be finally the lecturers who intentionally or unintentionally bring or reject it based on his beliefs. Teachers’ beliefs are considered as their educational or pedagogic beliefs on their teaching (Pajars, 1992; Borg, 2009, 2018). Successful experience in teaching makes a positive effect on the sense of efficacy and engage the teacher to repeat the same behavior in teaching (Bullock, 2010). Beliefs are associated to the teacher’s social systems, economic and political situations, class observation and experience, selections of objectives in the class, what language he thinks, acts and believes and the level of consciousness (Bullock, 2010). Teachers’ actions habitually or spontaneously are driven by their deep-rooted beliefs more than determined methodology and course book that they have to follow. Teachers’ beliefs and their expectations from students are closely connected to each other and many students perform in the manner that their teacher even unintentionally and non-verbally expect them to perform. (Hornstra, et al., 2010; Klehm, 2013; Rosenthal, 1997). Base on Rosenthal’s (1997) affect-effect theory, the teacher’s level of expectations of their students’ performance have a direct influence on both the students and ones’ own effort for teaching quality. In fact, any class can enjoy merits of not only climate which is the teacher’s effect but also those of input, which is training qualification (Rosenthal, 1997; Woodrock & Vialle, 2011). Some researchers (Borg & Al-Busaidi, 2012; Mansour, 2013; Zheng, 2013) found that always beliefs and practice do not coincide while others indicated that teachers’ beliefs have a

96 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) great impact on their class practices (Borg, 2009; Bullock, 2010; Mansour, 2013; Pajares, 1992; Zheng, 2013).

Metacognitive awareness beliefs, knowledge and practice

There have been some researches on the links between teacher knowledge, beliefs and practices on metacognitive awareness. Buehl and Fives (2009) implicitly found these links after gathering data from both informal sources consisting of personal experience, observation and reflection and formal sources containing academic research through an open- ended questionnaire from 100 teachers. Their findings were in line with Pajares (1992) findings that the formal sources lead to more accurate and less noticeable in any context than the informal ones. Wilson and Bai (2010) through a questionnaire data gathering from 105 teachers investigated that their metacognitive awareness impacted their understanding of how to teach metacognitive strategies and their teachers had a good understanding of the metacognitive awareness concept. Spruce and Bol (2015) and Kistner et al (2010) administered questionnaires and interviews and observed a classroom with teachers. They could not find a consistent alignment among teachers’ beliefs, knowledge and class practice regarding metacognitive awareness. Their findings suggested that though teachers’ beliefs were positive about metacognitive awareness, their related knowledge and actual practices in the class was low. They practiced monitoring greatly in the class yet not goal setting and evaluation. Taylor and Ntoumanis (2007) in their studies highlighted the influence of teachers’ beliefs and expectations on their applied metacognitive strategies in their classroom. Bidabadian & Tabatabaei (2015) in their researches on 60 EFL male and female Iranian lecturers with teaching experience ranging from 5 to 25 years in different universities about the construct of their beliefs system regarding different writing strategies discovered that they took into account mostly compensational and social strategies of writing and ignored metacognitive strategies.

Methodology

Research Participants. Student participants, who were selected randomly, totaled 755 undergraduate students, 296 from 3 universities in Vilnius (Lithuania) and 459 from 3 universities in Tehran (Iran). For lecturers, 10 lecturers from MRU in Vilnius and 10 from Azad University in Tehran, where randomly selected to participate. The demographic profile of the participants in the two groups were similar, given that the populations had the same background in gender, age, teaching experience, teaching courses and fields of study. Tools. The students completed a questionnaire, named MAI, developed by Schraw and Dennison (1994) to measure metacognitive awareness. It consisted of 52 items classified into eight sub-components subsumed under two broader components: knowledge of cognition with 3 sub-components of procedural knowledge, declarative knowledge and conditional knowledge, and regulation of cognition with 5 sub-components of information management strategies, debugging strategies, planning, comprehension monitoring and evaluation. Furthermore, the data for lecturers was collected using the researcher-created instrument with strategies designed by Schraw & Dennison (1994) with two parts. To identify lecturers’ beliefs about the level of metacognitive awareness of their students, parts 1 and 2 were designed. There were 16 statements, two for each metacognitive awareness subcomponent for Q.1. Q2 was asking about “How do lecturers justify their assigned level of metacognitive awareness for their students?”

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Piloting phase. 833 students and 80 lecturers with the same characteristics of the real participants of this study completed the related questionnaire to check the validity and reliability. Cronbach alpha reliability of both questionnaires was calculated and they were reliable. Procedure. The quantitative data was collected from the Likert scale parts of both questionnaires. The data was coded for descriptive and inferential analysis. For qualitative analysis, first the written responses to the open-ended questions were analyzed applying deductive qualitative content analysis. It was a recursive process in which the data was reviewed to determine the major themes (Krippendorf, 2013). Only one participant from the Lithuanian group did not reply to all open-ended questions.

Data analysis and results

Comparing and contrasting lecturers’ and students’ beliefs about the level of students’ metacognitive awareness

Both questionnaires had five likert options of “strongly agree”, “agree”, “neutral”, “disagree” and “strongly disagree” which were given values from 5 to 1 respectively. Then, the sum of values for each item was calculated and divided by the number of participants. The results were presented in Table 1. The criteria for judging medium level of students’ metacognitive awareness level for knowledge of cognition, for instance, based on both lecturers groups (Iran=3.25, Lithuania=3.3) and Lithuanian students (2.71) is the mean range between 2.5 to 3.4 while Iranian learner's metacognitive awareness levels were low (2.27).

Table 1. Knowledge of cognition and regulation of cognition descriptive statistics for lecturers and learners of both groups Number Metacognitive of Awareness Std. Number of Sum of Students Mean Mean Components Deviation Lecturers Ir/Lt Scores Ir/Lt Knowledge of 10/10 195/200 3.25/3.3 cognition 456/296 2.27/2.71 .698/.348 Declarative 459/296 2.32/2.77 .827/.405 10/10 85/80 4.25/4 Procedural 459/296 2.25/2.66 .837/.588 10/10 60/65 3/3.25 Conditional 459/296 2.22/2.67 .777/.504 10/10 50/55 2.5/2.75 Regulation of 459/296 2.20/2.68 .652/.260 10/10 305/340 3.05/3.4 cognition Planning 459/296 2.24/2.71 .761/.458 10/10 70/85 3.5/4.25 Information 459/296 2.23/2.64 .743/.402 10/10 65/65 3.25/3.25 Management Evaluation 459/296 2.19/2.76 .832/.515 10/10 65/80 3.25/4 Comprehension 459/296 2.13/2.67 .683/.475 10/10 55/60 2.75/3 Debugging 459/296 2.20/2.63 .770/.572 10/10 50/50 2.5/2.5

As can be seen in table 1, any mean lower than 2.5 was considered as low and higher than 3.4 as high level of metacognitive awareness for other subcomponents as well. Also, Figure 1 illustrated the mean scores depicted in the previous table.

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Debugging 2,50 2,20 2,63 2,5

Comprehension Monitoring 2,75 2,13 2,67 3

Evaluation 3,25 2,19 2,76 4

Information Management 3,25 2,64 2,23 3,25

Planning 3,50 2,24 2,71 4,25

Regulation of Cognition 3,05 2,20 2,68 3,4

Conditional 2,50 2,22 2,67 2,75

Procedural 3,00 2,25 2,66 3,25 Metacognitiveawaeness components

Declarative 4,25 2,32 2,77 4

Knowledge of Cognition 3,25 2,27 2,71 3,3

5,00 4,00 3,00 2,00 1,00 0,00 1,00 2,00 3,00 4,00 5,00 Mean Scores

IR lecturers IR learners LT lectures LT learners

Figure 1. Mean Values of Metacognitive awareness components for Iranian and Lithuanian Lectures and learners

As can be depicted in Figure 1, declarative mean scores had the highest mean scores among the knowledge of cognition subcomponents in all groups (IR lecturers=4.25, IR learners=2.32, LT lecturers=4 and LT learners=2.77).

Lecturers’ justifications for assigned metacognitive awareness students’ level

The lecturers’ statements in reply to open-ended questions of what your justifications are for assigned metacognitive awareness students’ level were presented in Table 2.

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Table 2. Lecturers’ justifications for assigned students’ level of metacognitive awareness Justifications for Determined Students’ Level of Metacognitive

Awareness

Lecturers’ Statements

of Process

Students’

Lecturers’

Characteristic Characteristics Characteristics I assume that metacognitive awareness is a more advanced as an intuitive skill with some more gifted students, with the students who have problems in my + subject, I think, the learning capacity and self-reflection is not developed in the same way. Their metacognitive skills are less developed in my subject. Sometimes they really are aware of the best strategy, sometimes they totally + forget about it. I have chosen medium as students' awareness depends on the task and on the group. There are cases when they are active, understand the task and are + + inquisitive and eager to learn. Nowadays students are conscious and smart to evaluate whether teaching + strategies are effective and teaching / learning process is being successful. I find that many university students already know themselves and the better + ways of learning which suit them personally Sometimes they are quite conscious of what they are doing; sometimes they are + not. I think so because of their work and my assumption that they rarely think in- + depth about their metacognitive strategies. Students are very different, so it is difficult to generalize. But in every group there are some students whose metacognitive awareness is really high. I have + described namely these students. It depends on the class. + Lithuanian frequency of chosen justification 10 9 0 1 Percentage of chosen justification 100% 90% 0% 1% Some are really good in using augmentative awareness and only a few students know nothing about it. + Some of my colleagues and I sometimes motivate the students to become self- regulated through instruction then we find out that they are trying to use more + metacognitive strategies. They have sometimes critical thinking. + Some students in each class of mine consciously and unconsciously use + metacognitive strategies. Some even do not know anything about it. We have many students with good performance and academic achievement that + apply these strategies consciously or automatically. They can have higher level of metacognitive awareness if we consider their emotional factors, interest, motivation and so on, which are associated with + confidence and the level of success in learning. Half of the class is good at it and half is not. In most of my classes, the students are looking for a higher competence so they + believe in their goals and interests so they are motivated enough and these are factors to have higher metacognitive awareness. I have both experienced and unskillful learners in my classes somehow equally. + Sometimes they use metacognitive awareness strategies sometimes not. + Iranian frequency of chosen justification 9 7 2 0 Percentage of chosen justification 100% 77.8 % 22.2 % 0%

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As it can be detected in table 2, it was found through deductive content analysis of responses that all of them could have been categorized under three themes of “characteristics of the students”, “characteristics of the lecturers” (what they did in the class) and “characteristics of the metacognitive awareness process”. One score was given to the participants’ responses for mentioning any theme. Both groups mostly considered “students characteristics” as the main reason for the metacognitive awareness level they assigned to their students (See Figure 2).

22,2 Lecturers' Characteristics 0 0 Characteristics of Process 1 Themes 77,8 Students' Characteristics 90

0 50 100 Percent Iranian Lithuanian Figure 2. Themes related to lecturers’ reasons for assigned level of metacognitive awareness to their students, 100%

It can be concluded from Figure 2 that the highest theme stipulated by the lecturers was “students’ characteristics”. “Lecturers’ characteristics” and “characteristics of process” themes were ignored or considered slightly.

Discussion

The sequence of strongest to weakest knowledge of cognition subcomponents according to Iranian students’ and both Iranian and Lithuanian lecturers’ beliefs was declarative, procedural and conditional while the sequence of those of Lithuanian students was declarative, conditional and procedural. The regulation of cognition subcomponents of both lecturers’ groups had a very similar pattern, while Lithuanian lecturers had lower scores in information management and debugging, their counterpart group had lower scores in monitoring and debugging respectively. In fact, Lithuanian students considered themselves weaker in information management and debugging than in the other subcomponents, which revealed that Lithuanian lecturers should increase their practical activities with these subcomponent strategies in mind. The Iranian students’ beliefs about their own weakest subcomponents were somehow on the same wavelength as their lecturers’ beliefs. Therefore, Iranian lecturers should focus on teaching and arranging their class activities more on monitoring and debugging strategies rather than other strategies. Our finding is not congruent with Spruce and Bol (2015) and Kistner et al (2010) investigations that their lecturer applied highly monitoring strategies but not planning and evaluation and with that of Bidabadian & Tabatabaei (2015) findings that their teachers did not apply any metacognitive awareness. Both lecturers’ groups and Lithuanian students evaluated the students’ level of metacognitive awareness as medium while Iranian students considered their level to be low, which conveyed their level of expectations as well. This finding is in agreement with Hornstra, et al. (2010) and Woodrock & Vialle (2011) results and Rosenthal’s (1997) affect-effect theory that confirmed that teacher’s beliefs and expectations may be unintentionally and non-

101 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) verbally transferred to the students. Therefore, teacher can express his high expectation with a positive tone to enhance students’ motivation and self-efficacy and get to mastery rather than only teaching the content and hope for the best with considering each student’s strengths and requirements (Levy, 2008). The reasons for the Iranian students’ underestimated level might be due to lack of self- esteem or motivational and emotional factors which self-efficacy based on Bandura (1997) or the inconsistency between beliefs and practice (Borg, 2009; Bullock, 2010; Mansour, 2013) which can be the base for further research. Bandura (1997) further stated that “a sense of efficacy enables individuals to do extraordinary things by productive use of their skills in the face of overwhelming obstacles” (p.37). Since the most frequent theme related to reasons for determined students’ metacognitive awareness level based on both group lecturers’ beliefs was connected to “students’ characteristics”, the lecturers should also consider their own preparation and seek more training in this area. It should be notified that we could not find any social perspective among their comments such as learning in pair and groups, as if they ignored the role of collaborate working as socially mediated learning for promoting metacognitive awareness. Furthermore, nothing can be explored regarding the power to control ones’ learning and situation such as decision-making. In addition, there is no sign of considering the role of a teacher in fostering metacognitive awareness. They ignored that lecturers had a responsibility to help learning. Also, no lectures defined anything related to age limit, cultural hindrances and learner/learning-centered environment. There was not found any sub-theme found that reflected any cultural differences between the beliefs held by Lithuanian and Iranian participants.

Conclusion

The metacognitive awareness findings in this study provide significant information for educationalists and lecturers how their students could take control of their learning and a variety of metacognitive strategies that the learners apply or ignore while learning in both Lithuanian and Iranian university studies. Although both lecturers’ groups and Lithuanian students reported metacognitive strategy mean scores, applied by the students, fall into the medium range, Iranian students’ group claimed that their metacognitive strategy mean is low. In our study, the sequence of the knowledge of cognition subcomponents from the strongest to the weakest in Lithuanian students’ group was declarative, conditional and procedural while the sequence of those of both lecturers’ groups and Iranian students was declarative, procedural and conditional. It should be notified that in Lithuanian students’ group, there was very small difference between the mean score of conditional knowledge and that of procedural one. The majority of the students’ highest application of strategy was in association with planning while debugging strategy had the lowest frequency among the strategies used by the students. According to both the lecturers’ and learners’ beliefs in each group, Lithuanian students had lower scores in information management and debugging while their Iranian counterpart had lower scores in monitoring and debugging. The finding regarding the most frequent theme based on both Lithuanian and Iranian lecturers’ beliefs for the reason for assigned students’ metacognitive awareness level was “students’ characteristics”. “Lecturers’ characteristics” and “characteristics of process” themes were ignored or considered slightly. This implies that lecturers should not avoid their own role in teaching the metacognitive awareness learning process in the classroom.

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According to the above findings, we can conclude that both lecturers’ groups can have more emphasis on teaching conditional knowledge. Lithuanian lecturers with more emphasis on practical activities related to information management and debugging strategies and Iranian lecturers with more focus on monitoring and debugging strategies can make the discussion of metacognitive awareness strategies as a part of the everyday discourse of the classroom. This will assist peers and teachers share related information and help students to talk about their own cognition and learning process. In fact, there will be more concentration on the role of teachers on improving the learning process in the classroom. Another lecturers’ reflection can be modeling of strategies, accompanied by explaining them and the reasons for applying them for solving any specific problem. Consequently, they can foster metacognitive awareness more with collaborate activities as socially mediated learning. The outcomes of this research are essential in many other ways. First, the data created a possibility to scrutinize the similarity and differences among students and lecturers beliefs in both contexts. Generally, the obtained results from two lecturers’ contexts are consistent with each other while the settings are not close in proximity and culture and is not according to some posited literature that culture affects learning and metacognitive strategy application. This conveyed that the resident culture did not limit the metacognitive awareness. Second, this research can contribute to broadening the related literature exploring the contexts that varied from previous studies. Third, we discovered the interlocked complex and dynamic process of learning and teaching. As the result, in spite of this complexity, a clear connection emerged between lecturers and learners’ beliefs. The following recommendations have been furnished to contribute the development of learners’ metacognitive awareness in the settings under study: 1. The results gained can contribute to detecting obstacles and find out how to navigate around them in the field of teaching and learning metacognitive awareness and assist the learners to look at learning as problem solving exercises to deploy the most suitable metacognitive strategies. 2. Since introducing metacognitive strategies and making them a natural part of the learning process are time-consuming, it gives sufficient time to learners to adjust to the new learning environment especially for those who came from teacher-centered approach classes to adopt to a learner/learning-centered approach and break down the previous educational habits. 3. The revision of the current curriculum, teacher and learner training and examination system is required based on consideration of the findings taking into account both learners’ and teachers’ beliefs about metacognitive awareness. 5. Prolonged and in-depth class observation and triangulating data from various sources which is gathered through different types of tools of measurement is needed.

References

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Borg, S., & Al-Busaidi, S. (2012). Learner autonomy: English language teachers’ beliefs and practices. ELT Research Paper 12-07. London: British Council. Buehl, M. M., & Fives, H. (2009). Exploring teachers’ beliefs about teaching knowledge: Where does it come from? Does it change? The Journal of Experimental Education, 77, 367–407. Bullock, D. (2010). Learner self-assessment: An investigation into teachers‘ beliefs. ELT Journal, 65(2), 114–125. Ellis, R. (2008). Learner Beliefs and Language Learning. Asian EFL Journal, 10 (4). Conference Proceedings, 7-25. Hornstra, L. Dennessen, E. Bakker, J. van den Bergh, L. & Voeten, M. (2010). Teacher attitudes toward dyslexia: Effects on teacher expectations and the academic achievement of students with dyslexia. Journal of Learning Disabilities, 43(6), 515-529. Kistner, S., Rakoczy, K., Otto, B., Dignath-van Ewijk, C., Buttner, G., & Klieme, E. (2010). Promotion of self- regulated learning in classrooms: Investigating frequency, quality, and consequences for student performance. Metacognition and Learning, 5, 157–171. Klehm, M. (2013). High-stakes testing and students with disabilities: A teacher attitude survey (HST- SWD). Teacher attitudes: The effects of teacher beliefs on teaching practices and achievement of students with disabilities. Doctoral dissertation, University of Rhode Island and Rhode Island College. Krippendorf, K. (2013). Content Analysis: An introduction to its methodology (3rd Edition). Thousand Oaks: Sage. Levy, H. M. (2008). Meeting the needs of all students through differentiated instruction: Helping every child reach and exceed standards. Clearing House: A Journal of Educational Strategies, Issues, and Ideas, 81, (4), 161-164. Mansour, N. (2013). Consistencies and inconsistencies between science teachers’ beliefs and practices. International journal of science education, 35 (7), 1230-1275. Doi: 10.1080/09500693.2012.743196. Pajares, M. F. (1992). Teachers’ beliefs and educational research: Cleaning up a messy construct. Review of Educational Research, 62(3), 307–332. Richards, J. C. (2007). Second language teacher education today. Paper sent to the First Professional Development Congress: "Mentoring: The key to professional development in English Language Teaching", organised by the Humanities Department of Universidad de Los Lagos in Osorno, Chile, from 15 to17 October 2007. Rosenthal, R. (1997). Interpersonal Expectancy Effects: A 40 Year Perspective. American Psychological Association Convention. (Chicago, Illinois, August 16, 1997). Schraw, G. and Denison, R. (1994). Assessing Metacognitive Awareness. Contemporary Educational Psychology, 19, 460-475. Schraw, G., Olafson, L., Weibel, M. & Sewing, D. (2012). Metacognitive knowledge and field-based science learning in an outdoor environmental education program. In A. Zohar & Y.J. Dori (Eds.), Metacognition in science education (pp. 57-77). Springer Netherlands. Spruce, R., Bol, L. (2015). Teacher beliefs, knowledge and practice of self-regulated learning. Metacognition Learning, 10, 245-277. Taylor, I. M., & Ntoumanis, N. (2007). Teacher motivational strategies and student self-determination in physical education. Journal of Educational Psychology, 99, 747–760. Wilson, N. S., & Bai, H. (2010). The relationships and impact of teachers’ metacognitive knowledge and pedagogical understandings. Metacognition and Learning, 5, 269–288. https://doi.org/10.1007/s11409-010- 9062-4 Woodrock, S., &Vialle, W. (2011). Are we exacerbating students’ learning disabilities? An investigation of preservice teachers’ attributions of the educational outcomes of students with learning disabilities. Annals of Dyslexia, 61(2), 223-241. Zheng, H. (2013). Teachers’ beliefs and practices: a dynamic and complex relationship. Asia- Pacific Journal of teacher education, 41(3), 331- 343. Doi.10.1080/1359866X.2013.809051.

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CHINA'S ONE BELT ONE ROAD INITIATIVE AND THE EU’S FDI SCREENING REGIME: SCOPE, EU’S ATTITUDE AND IMPACT

Andrius Bambalas

Mykolas Romeris university, Lithuania [email protected]

Abstract

Purpose – the purpose of this paper is to provide a general review of One Belt One Road initiative, the changing attitude of Europe towards China’s FDI and potential effects of recently adopted Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union. Design/methodology/approach – this analysis is based on material gathered from academic papers and other publications, media reports, as well as data from official sources and independent research centres. Systematic analysis, generalisation, secondary data analysis, as well as linguistic methods were used in this research paper. Finding – as Peoples’ Republic of China (China) became one of the most important trade and investment partners of the EU, its rapid growth in economic and political influence and use of development policies, such as OBOR initiative, made the EU to label China as ‘economic competitor’ and ‘strategic rival’. As around half of the EU members do not have investment screening mechanisms, the EU decided to adopt regulation for this matter – the Framework Regulation. It will become applicable from 11 October 2020 and will allow the EU and its Member States to raise concerns about effect of China’s FDI on national security and public policy grounds and provides framework for screening of FDIs. Moreover, as the Framework Regulation establishes the list of projects of Union interest, which includes Trans-European Networks for Transport, whereas OBOR initiative is aiming at connecting China and Europe through land and sea route infrastructure, the European Commission will have an instrument to express its opinion regarding Chinese FDI, which are connected to OBOR initiative and related to transport infrastructure. Although such opinion will not binding, the member state will not be able to simply ignore but will have to provide explanation to the Commission if its opinion was not followed. Research limitations/implications – there are several research limitations: firstly, there is a lack of comprehensive information on implementation of OBOR initiative, as even the official webpage of Belt and Road does not provide such information; secondly the Framework Regulation will become applicable from 11 October 2020. As the latest data indicates a substantial decrease of China’s investment in EU (in 2017 and 2018), the flows of China’s capital under OBOR initiative in general and FDI in particular might further decline before the Framework Regulation comes into force in 2020. Furthermore, without the actual practice of the Commission or EU Member States in the use of Framework Regulation regarding the China’s FDI, this analysis serves as an early and theoretical assessment of potential impact of such investment screening on projects under China’s OBOR initiative. Finally, this general review paper does not seek to analyse problematic aspects of the Framework Regulation or procedural issues on implementation of screening mechanisms. Practical implications – as the OBOR initiative is broad in scope and vague in terms, this analysis allows to better understand its contents, China’s rising importance in field of EU FDIs and provides introduction into the Framework Regulation, indicating its potential use by the EU or member states in regards to China’s FDI related to OBOR initiative.

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Originality/Value – this analysis provides explanation on changing EU-China economic policy and serves as a sound starting point for further research on China’s investments in Europe, OBOR initiative or the impact of Framework Regulation to China’s FDI. Keywords: China, EU, OBOR, BRI, FDI, investment screening, Regulation 2019/452. Research type: general review.

Introduction

The story of China’s economic development from Great Chinese Famine in 1959-61 to second biggest economy of the world is miraculous. But China is not the first economic miracle of Asia, as modern Japan, Singapore, Hong Kong, South Korea or Taiwan are early examples of developmental state. This economic rise of China was based continuous and successful economic policies: from Opening of China started by Deng Xiaoping in December 1978, to China’s accession to WTO in 2001 and ‘Going Out’ strategy of 2000, which seek promote national champions and to create sophisticated, high value-added, brand-name Chinese companies with their own intellectual property, as well as internally restructure low- end industry (Bambalas, 2017 ). China’s newest policy concerning the further development of its economy is One Belt One Road (OBOR, in Chinese Yi Dai Yi Lu) initiative (BRI), which was announced in 2013 and aims to connect China and Europe via land route (Belt) and sea route (Road). China is the EU's second-biggest trading partner, whereas the EU is China's biggest trading partner (Eurostat data, 2019). And although China and the EU have deep economic interdependence, the changing attitude of the EU towards inflows of capital from China and about China’s role in the global system, led not only to a dramatic political shift in attitudes towards China, but also to a regulatory change: the introduction of new investment screening regime, which raises questions about its effects on execution of OBOR initiative in the EU. This article seeks to provide a general review of BRI, changing attitude of Europe towards China and China’s investments and review the recent legislation of the EU: the Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (Framework Regulation)1.

The OBOR initiative, its main features and link to the EU

In September 2013 during a speech in Kazakhstan, Xi Jinping, president of China and general secretary of the Communist Party of China officially announced about the Silk Road Economic Belt, which connects China and Europe overland (Verlare, 2016). During a speech at the Indonesian Parliament in October 2013, Xi Jinping also announced about the 21st Century Maritime Silk Road, which links Asia, Africa and Europe through sea route (China daily, 2013). As major policy changes or foreign policy initiatives are usually announced by the senior officials of China’s communist party and the reference to Silk Road Economic Belt and 21st Century Maritime Silk Road where announced by the highest official of Chinese government (general secretary of the Communist Party of China), there was a keen interest on details about such policy initiative. On 28 March 2015 National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People's Republic of China, with State Council

1 Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union. OJ L 79I , 21.3.2019

106 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) authorization adopted a policy document called Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road (the OBOR Vision)1. That was the first policy document to provide more details on policy initiative announced by Xi Jinping in 2013 and it consisted of 8 chapters, which elaborated on the purpose, scope, principles, areas of interest and financing of such initiative. Involvement of National Development and Reform Commission and State Council are strong indications of importance of such initiative. The National Development and Reform Commission is one of the departments of State Council that is in charge with macroeconomic issues, such as formulation and implementation of national economic development strategies, and deals with approvals of foreign funded key projects, key investment projects for overseas resources development, and investment projects utilizing large amount of foreign exchange (NDRC webpage, 2019). Authorization of State Council gives political weight of such initiative, as State Council is the highest executive institution (i.e. government) in China2, which under Article 89 Paragraph 3 of the Constitution of People’s Republic of China exercises unified leadership over the work of the ministries and commissions and directs all other administrative work of a national character that does not fall within the jurisdiction of the ministries and commissions. Moreover, the fact that the same main points were reiterated in 13th Five-Year Plan for Economic and Social Development of The People’s Republic of China3, which included BRI as part of China’s ‘All-around opening up’ strategy, indicates the importance and relevance of One Belt One Road initiative. It is interesting that in one of the first chapters of the OBOR Vision (chapter II), China indicates the principles of BRI, in particular five principles of peaceful coexistence: mutual respect for each other's sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other's internal affairs, equality and mutual benefit, and peaceful coexistence. These five principles of peaceful coexistence constitute a major pillar of China’s foreign policy and were originally enshrined in Panchsheel Treaty4. The principle of non- interference in each other’s internal affairs is the foundation of China’s foreign policy and is still persistently invoked by China, whenever issues related possible human rights or international law violations such as: arbitrary detention of an estimated one million Turkic Muslims in China’s Xinjiang region (Human Rights Watch, 2019), status of Taiwan, treatment of Tibetans (Ren, 2013), development of artificial islands in South China Sea, etc., are invoked. The text of the OBOR Vision, which prescribes that ‘it [OBOR initiative] upholds the Five Principles of Peaceful Coexistence’, indicates the expectations from China for other participants in OBOR initiatives. The preface of the OBOR Vision specifies that the purpose of such initiative is to connect more closely not only European but also African countries. The chapter ‘Framework’ reiterates that OBOR is comprised of The Silk Road Economic Belt which will bring together China, Central Asia and Europe (the Baltic) on the one hand, and 21st-Century Maritime Silk Road, on the other. The Silk Road Economic Belt has become known as the ‘Belt’, whereas

1 Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road. [interactive] 2015-03-28 [accessed 2019-04-20]. . 2 Article 85 of the Constitution of the People’s Republic of China [interactive]. [accessed 2019-04-30]. 3 Chapter 51 of 13th Five-Year Plan for Economic and Social Development of The People’s Republic of China (2016-2020). [interactive] [accessed 2019-04-29]. . 4 Agreement on trade and intercourse between Tibet Region of China and India (Panchsheel Treaty) (China– India) (signed at Peking with exchange of notes on 29 April 1954). 299 UNTS 57.

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21st-Century Maritime Silk Road – as the ‘Road’. Under the OBOR Vision, the scope of Road includes New Eurasia Land Bridge and five economic corridors: China-Mongolia-Russia; China-Central Asia-West Asia; China-Indochina; China-Pakistan Economic Corridor and the Bangladesh-China-India-Myanmar Economic Corridor. Meanwhile the Road should connect China's coast to Europe through the South China Sea and the Indian Ocean in one route, and from China's coast through the South China Sea to the South Pacific in the other. The OBOR Vision indicates 5 cooperation priorities: policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people ties. Under the Vision the facilities connectivity is a priority area which includes construction of transport infrastructure, including railways and highways; construction of port infrastructure and advanced port cooperation; cooperation in the connectivity of energy infrastructure (oil, gas pipelines, power-transmission routes) and construction of cross-border optical cables and other communications trunk line networks creating an Information Silk Road. On 20 June 2017 a new policy document called ‘Vision for Maritime Cooperation under the Belt and Road Initiative’ was announced1, which indicated that Road should consist of building three ‘blue economic passages’: China-Indian Ocean-Africa- Mediterranean Sea Blue Economic Passage; China-Oceania-South Pacific, travelling southward from the South China Sea into the Pacific Ocean; and new blue economic passage leading up to Europe via the Arctic Ocean.

Figure 1. One Belt One Road (source: merics, 2018)2

1 Vision for Maritime Cooperation under the Belt and Road Initiative. [interactive] 2015-03-28 [accessed 2019- 04-20]. < https://www.yidaiyilu.gov.cn/wcm.files/upload/CMSydylgw/201706/201706200153032.pdf>. 2 The Belt and Road initiative map. [interactive] Mercator Institute for China Studies, May 2018 [accessed on 2019-03-29]. .

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The OBOR Vision also contains provisions concerning establishment of Asian Infrastructure Investment Bank and Silk Road Fund, which would act as financing tools for the OBOR initiative. On 25 December 2015, the China’s proposed Asian Infrastructure Investment Bank (AIIB) was officially launched, with a legal capital of USD 100 billion1 and focusing on regional connectivity and industrial development. AIIB provides funding in forms of loans (including loans to states) and equity investment, such as acquisition of shares or loan, that is convertible into shares (AIIB Financing operations, 2019). As under the Article 11 of Articles of Agreement of AIIB2 this bank can provide or facilitate financing only to members or entities and enterprises operating in a member country, considerable amount of countries joined AIIB, including some EU members. At the end of April 2019 AIIB had 43 regional member countries (excluding Hong Kong) and 26 non-regional member countries, such as Germany, France, Italy, United Kingdom, Canada (AIIB members, 2019). The Silk Road Fund was established on December 2014 and has a capital of USD 40 billion and RMB 100 billion (Overview: Silk Road Fund, 2019). As of beginning of April 2019 Silk Road Fund had signed contracts to provide financing for 19 projects (Belt and Road Portal, 2019) and Fund acts as a lender, equity investor or investor in sub-funds (Types of investment, 2019). Finally, the OBOR Vision also includes a chapter on cooperation mechanisms (Chapter V), which provides that China take full advantage of the existing bilateral and multilateral cooperation mechanisms to push forward the building of the Belt and Road and to promote the development of regional cooperation and encourage signing of cooperation Memorandums of Understanding. A cooperation format between China and Central and Eastern European Countries known as “16+1 Cooperation”, which includes 11 EU member states and 5 Balkan countries (with Greece joining this format, it became ‘17+1’) and which convenes in annual summits, was founded in 2012 and serves as a platform to promote the OBOR, which is the major cooperation priority under the OBOR Vision and essential component of OBOR. The BRI projects that were coordinated and concluded through “16+1 Cooperation” mechanism and BRI includes Serbia’s E763 Highway project (which is part of European Route E 75), the Hungarian section of Budapest-Belgrade Railway and a bridge in Croatia (China-CEEC webpage, 2018). The Budapest-Belgrade Railway, which was announced in 2013 meeting of the “16+1 Cooperation” in Bucharest was considered to be the first stage of a project that would ultimately connect the China-run Piraeus port in Greece with the heart of Europe (Shepard, 2017). Moreover, China claims that it has signed 171 cooperation documents with 29 international organizations and 123 countries related to BRI (Zhu, 2019). Although the Belt and Road portal does not provide a list of such instruments or of such countries, these documents usually are in the form of memorandums of understanding (MoU). They are non- binding legal instruments, but they serve as a necessary political requirement for China to engage into BRI projects with other countries. Moreover, they are used as diplomatic tools legitimizing the OBOR, where parties reach an understanding of cooperating on usually the five cooperation priorities (Ibold, 2018) prescribed in the OBOR Vision. It should be noted that the fact that some MoUs were concluded with countries that are not located near Belt or Road (e.g. Nigeria, Senegal or Sierra Leone) demonstrate that OBOR initiative is not limited or

1 Article 4, Asian Infrastructure Investment Bank Articles of Agreement [interactive] [accessed on 2019-04-30] . 2 Ibidem.

109 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) exclusively is directed to Europe and reflects a much broader economic development policy of China. Some authors even indicate that OBOR is neither strategy, nor vision, but is a process that changes depending on China’s economic development policy goals (Stec, 2018).

Changing attitudes of the EU towards China and its investments: from friends to strategic rivals

According to OECD FDI Regulatory Restrictiveness Index1 EU member states have the world’s most open investment regimes for foreign investment (from 0.004 in Luxemburg to 0.106 in Austria, where 0 is least restrictive and 1 – absolutely restrictive). Whereas, China scores 0.251 for the year of 2018, meaning it is much more restrictive than EU. Throughout the years, China made a substantial amount of investment in the EU, especially as after the global financial crisis of 2008 and European sovereign debt crisis of 2009-2012, the region was hungry for foreign investments. Although it is difficult to calculate the exact aggregate value of China’s foreign direct investment in the EU member states, the EU countries are a preferable destination for China’s Foreign direct investment (FDI). According to Hanemann and Huotari (2015) from 2000 to 2014 China invested EUR 46.112 billion in EU- 28 member states. A study of Mercator Institute for China Studies (Seaman at all., 2017) notes that from 2000 to 2016 the EU-China FDI Monitor dataset recorded more than 1,400 individual FDI transactions by Chinese investors in the EU worth a combined EUR 101 billion. A study by Bloomberg (Tartar at all, 2018) put a total number of China’s European investments (including Switzerland), encompassing mergers and acquisitions and green-field investments (investments creating a new enterprise or economic activity rather than acquiring an existing company) to at least USD 318 billions over the period from 2008 to 2018, which included the acquisition of around 360 companies. Although there are difficulties regarding the measurements of aggregate number China’s FDI in the EU, the data on the flows of FDI in EU are more accessible. From 2017 the Chinese FDI to EU started to decrease. According to data from Rhodium Group (Hanemann et al, 2019) in 2018 Chinese FDI in the EU-28 dropped2. The combined value of completed FDI transactions fell to EUR 17.3 billion in 2018, down 40 percent from 2017 levels (EUR 29.1 billion) and a drop of over 50 percent from the peak of EUR 37 billion in 2016. However, the share of investments from State-owned-enterprises remained high (71% in 2017, 41% in 2018). The reasons for such slump originated in China: in 2018, Beijing maintained its tight grip on outbound capital flows; it pressured highly leveraged firms to sell off overseas assets; and it reduced liquidity in the financial system (Hanneman et al, 2019). Notwithstanding to such slowdown of inflow of Chinese FDI, China became one of the biggest investors in the EU. Such levels of Chinese FDI and China’s active support of BRI, raised several concerns about China’s investments in the EU in particular and in Europe in general. First of all, as substantial part of FDI in EU were performed by Chinese State-owned enterprises (71% in 2017, 41% in 2018), which at very least raised to suspicion that FDI serves China’s policy goals instead of purely commercial interests. Secondly, success of Chinese companies in the majority of BRI procurements and the lack of transparency in processes through which firms are selected to execute BRI projects (Ghossein at all., 2018), caused concerns that they create debt traps for developing countries, leaving them with unsustainable debts. Center for Global

1 OECD FDI Regulatory Restrictiveness Index [interactive] [accessed on 2019-04-29] . 2 Report indicates, that there were some substantial investments that did not reach the threshold of 10%, e.g. Geely’s EUR 7.3 billion acquisition of a 9.7 percent stake in Daimler in February 2018. If such acquisitions had been included in calculation the level of China’s investment in EU would be similar to the level in 2017.

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Development identified Montenegro as one of the countries which could suffer from debt distress due to BRI-related financing (Hurley et al, 2018). According to this study Montenegro’s big debt problem has one source – a very large infrastructure project, which being part of BRI, was financed by China through loan to the government– a motorway linking the port of Bar with Serbia, which would integrate the Montenegrin transport network with those of other Balkan countries, the cost of which constitutes over 25 percent of GDP. Thirdly, interference of some EU member states, which belong to the “16+1 Cooperation” group with substantial Chinese investments in the EU’s foreign relations connected to China’s human rights record, created concerns about the influence of China and its effect to unity of EU, as well as to the erosion of the EU’s fundamental values (such as human rights and rule of law). Due to strong opposition of Greece, Hungary, and Croatia the EU did not “support” or “welcome” the Permanent Court of Arbitration tribunals decision on the disputes in the South China Sea (where it found that there was no legal basis for China to claim historic rights to resources within the sea areas falling within ‘nine-dash line’), but merely “acknowledged” it (Fallon, 2016). In June 2017 for the first time the EU failed to make an annual statement at the U.N. Human Rights Council, criticizing China’s human rights record, because Greece blocked it and EU did not have the agreement from all 28 EU member states (Emmott and Koutantou, 2017). In 2017 Hungary similarly blocked a joint letter on the torture of Chinese human rights lawyers and fears started to grow that Italy could begin to act in a similar way following its endorsement of the BRI (Marques, 2019). The EU tried to accommodate Chinese FDI and BRI, by establishing the EU-China Connectivity Platform in 2015, a policy forum between EU and Chinese officials to promote synergies between the BRI and EU policies and cooperation on infrastructure, including financing, interoperability and logistics (MEMO/16/2258, 2017). In 2018, on the third meeting of the EU-China Connectivity Platform, the Short-Term Action Plan was agreed. Under this plan the EU and China agreed to strengthen the synergies between China's BRI and the EU's Trans-European Transport Network's policy (which includes rail, road, water ways) and establish a rolling implementation mechanism and jointly identify the list of pilot projects and priority actions, focusing on the key multimodal hubs and missing links on the Trans- European Network for Transport and the EU-China cargo train routes1. However, although China joined the Connectivity Platform, thus accepting an institutional approach with the EU, it still prefers a bilateral approach which is based on direct negotiations with individual EU member states (Barbieri and Miranda, 2018). As such behaviour created a huge embarrassment for the EU on international stage (failure to denounce human right violations) and threatened the unity of the block, the EU’s position towards China has shifted2. In March 2019 the European Commission announced about a new policy towards China3, noting that the balance of challenges and opportunities presented by China has shifted and that China was not only a negotiating partner, but also was an economic competitor in the pursuit of technological leadership, as well as a systemic rival, promoting alternative models of governance. The European Commission reiterated that such new reality required a flexible and pragmatic whole-of-EU approach enabling a principled defence of interests and values. Moreover, the Commission indicated that unity of all EU member states is required and provided 10 actions points which reflects the roadmap for future EU engagement with China.

1 EU-China Connectivity Platform Short-Term Action Plan [interactive] [accessed on 2019-04-30] 2 It should be noted that those were only few of the reasons for the policy towards China to change. 3 Joint communication to the European Parliament, the European Council and the Council. EU-China – A strategic outlook. JOIN(2019) 5 final. 12.3.2019.

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However, such stark policy change towards China and labelling of China as an ‘economic competitor’ or a ‘systemic rival’ were not the only changes, as the EU also joined several other major economies, which had already had instruments related to investment screening on the grounds of national security1, by adopting a new legislative instrument – Framework Regulation – which provides EU level screening mechanism for FDI from third countries.

Main provisions of the Framework regulation

As foreign direct investment is included in the list of matters falling under the common commercial policy pursuant to Article 207(1) Treaty on the Functioning of the European Union (‘TFEU’)2, under Article 3(1)(e) of the TFEU, the European Union has exclusive competence with respect to the common commercial policy. The EU started considerations on common framework for investment screening regime in 2017 and there already were concerns about FDI in the EU’s strategic industries, infrastructure and key future technologies and the protection of access to them3. As only around half of EU Member States had mechanisms for screening foreign direct investments, which varied in scope (review of intra- or extra-EU FDI; differing screening thresholds, breadth of sectors covered beyond defense) and design (pre-authorisation vs. ex-post screening of FDI) (Grieger, 2018) in place, the Commission proposed to solve it through regulation, thus ensuring a single centralized FDI screening mechanism. On 19 March 2010 the Framework Regulation was adopted, which established a framework for the screening by Member States of foreign direct investments into the Union on the grounds of security or public order and for a mechanism for cooperation between Member States, and between Member States and the Commission, with regard to foreign direct investments likely to affect security or public order4. It will become applicable from 11 October 20205. The Framework Regulation provides a broad definition of FDI. Under Article 2(1) of the Framework Regulation, FDI means “an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity in a Member State, including investments which enable effective participation in the management or control of a company carrying out an economic activity”. Such wording does not seem to follow the international investment treaties or free trade agreements concluded by EU, but rather follows statistical description of foreign direct investment used by Eurostat (Eurostat metadata, 2017). It also should be noted that the Recital 9 of the Regulation provides that portfolio investments are not covered, which might cause impression that equity investments (investments in shares that do not give controlling

1 In USA The Committee on Foreign Investment in the United States (CIFUS) reviews transactions involving foreign investment in regards to national security under The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA); in Canada a national security review process is performed against foreign investment under Investment Canada Act; in Australia foreign investor requires approval from the Foreign Investment Review Board which involves national security issues under Foreign Acquisition and Takeovers Act; in Japan there is post-investment and limited pre-investment reporting system that allows screening of investment on national security grounds under the Foreign Exchange and Foreign Trade Act of 2017. 2 Consolidated version of the Treaty on the Functioning of the European Union. OJ C 326, 26.10.2012. 3 Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions Welcoming Foreign Direct Investment while Protecting Essential Interests. COM(2017) 494 final. 13.9.2017. 4 Article 1 of the Framework Regulation. 5 Article 17 of the Framework Regulation.

112 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) stake) are not covered by Framework Regulation. However, considering the Eurostat descriptions of ‘direct investment’, ‘immediate direct investment relationship’ and ‘foreign direct investment’ (Eurostat metadata, 2017), portfolio investment should be regarded as equity investment (acquisition of shares) that do not reach 10% of the voting power in investment enterprise. The Framework Regulation does not impose an obligation on Member States to have a screening mechanism, but should a member state decide to have one, the Regulation establishes certain requirements for such mechanism. They include transparency of rules and procedures, non-discrimination among foreign investors, confidentiality of information exchanged, the possibility of recourse against screening decisions, and measures to identify and prevent circumvention by foreign investors1. Although the Framework Regulation is silent on what constitutes security or public order and leaves it for each Member State to decide on this issue2, but it does provide a non- exhaustive list of factors that have to be taken into account while deciding whether foreign direct investment is likely to affect security or public order. While determining the effect of investment the Member State may consider its potential effects on: critical infrastructure, such as energy, transport, water and other; critical technologies and dual use items, supply of critical inputs, including energy or raw materials, as well as food security, access to sensitive information and freedom and pluralism of the media. Moreover, it should be noted that under Article 4(2) the control of the foreign investor (through ownership or financing) and pursuit of State-led outward projects or programmes3 should also be taken into account. The fundamental part of the Framework Regulation creates an expedient cooperation mechanism in relation to FDIs which either undergo screening (Article 6) or do not (Article 7). If FDI undergoes screening, then the Member State, conducting the screening, has obligation to notify the Commission and other Member states about such screening and provide information on such FDI. Such data includes information about the investor and the target company, the sectors in which they operate, the value of the investment and its funding, as well as the date of its completion4. Member States and Commission can then provide comments on whether such FDI is likely to affect its security or public order (the Commission provides opinion). When a planned or completed FDI does not or did not undergo screening any Member State or Commission may request the Member State of location of such FDI to provide information on such FDI (as described above and such Member State is under obligation to provide such information) and can provide comments on how such planned or completed FDI is likely to affect its security or public order (the Commission provides opinion). It should be noted that in any case the Member State performing the investment screening or were FDI is planned or has been completed without the screening, is under no direct obligation to follow on concerns expressed in comments of opinion of other Member States or Commission. However, the Regulation requires such Member State give due consideration to such comments or opinion. Finally, the Framework Regulation also provides that that the Commission can issue an opinion on planned or completed FDI that is likely to affect projects or programmes of Union interest on grounds of security or public order. Such projects and programmes are listed in Annex to the Framework Regulation and includes Galileo, Copernicus programmes, Horizon 2020, Trans-European Networks for Transport (TEN-T), Trans-European Networks for

1 Article 2 of the Framework Regulation. 2 Article 1(2) of the Framework Regulation. 3 Recital 13 of the Framework Regulation. 4 Article 9(2) of the Framework Regulation.

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Energy (TEN-E). In such a case the Member State where the foreign direct investment is planned or has been completed cannot simply dismiss the Commission’s opinion, but must take utmost account to it and provide an explanation to the Commission if its opinion is not followed. Although such screening mechanism might not seem sufficient, as the final decision making is still left for the Member State where the FDI is planned or has been completed, but it provides a mechanism for information sharing with the Commission and other Member States and sends a clear message to investors about the factors that are important for assessment of FDIs impact on security or public order.

Conclusions: potential impact of the Framework Regulation on OBOR initiative projects

The Framework Regulation will have immense regulatory effect on Chinese FDI related to OBOR initiative. One of the pillars of the OBOR initiative is construction of land transport and sea transport infrastructure, with the aim of creating Belt and Road to Europe. Moreover, Chinas SEOs are the usual winners of BRI projects, which are financed mainly by loans from China. Furthermore, the EU has labelled China as ‘economic competitor’ and ‘systemic rival’. All such factors will be relevant while applying the Framework Regulation: 1. Trans-European Networks for Transport (TEN-T) is explicitly indicated as project of Union interest, which gives to the Commission some leverage regarding screening o FDI’s related to OBOR initiative in Member States (e.g. acquisition of equity in port operators) and requires such Member States to provide explanation to the Commission if its opinion is not followed; 2. Member State during the screening process and sometimes even when there was no screening process at all (if another Member State or Commission provides comments or opinion on such FDI under the Framework Regulation) should take into account the potential effects of FDI on critical transport and energy infrastructure; 3. Equity investments of China’s state-owned enterprises in EU will be scrutinised due to their ownership structure and ways of financing and pursuit of state-led outwards projects or programmes, especially considering EU’s opinion about China as ‘economic competitor in pursuit of technological leadership’; 4. Framework Regulation will bring transparency to Chinese FDI, as it requires Member States to reveal information about the FDI, including information about investor’s ownership structure, the sectors in which they operate, the value of the investment and its funding, as well as date of its completion. However, some caution is warranted, because not all OBOR projects will fall under the Framework Regulation, which deals only with FDI. Thus, the Framework Regulation will not include BRI projects that are structured through loans to governments and public tenders of construction works, as such projects are not considered as FDI. Finally, it should be noted that although the Framework Regulation will affect EU member states ranking in OECD FDI Regulatory Restrictiveness Index, but the mere existence of such screening framework will not necessarily have a big affect on FDI flows from China. EU is still an attractive place for China’s FDI. The FDIs from China to EU have started to slow even before the Framework Regulation has been adopted and for the reasons related to China’s internal policy changes (capital controls, financial system’s liquidity control). Therefore, the true impact of the Framework Regulation to China’s FDI flows to the EU in general and FDI related to OBOR initiative in particular will become known only after the Framework Regulation becomes applicable. Only after we have some practice of the Commission or EU

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Member States in use of Framework Regulation for the China’s FDI in the EU, we can make conclusions on real impact and effect of such new screening mechanism for the Chinese FDI related to BRI in the EU.

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CIRCULAR ECONOMY – ONE OF THE MOST IMPORTANT CHALLENGES FOR THE EUROPEAN UNION

Tymoteusz Mądry

Adam Mickiewicz University in Poznań, Poland [email protected]

Abstract

Purpose – The main aim of this article was to analyze and evaluate EU legislation concerning the concept of circular economy. Throughout the paper the author presents the main aims and challenges pertaining to the implementation, by the member states, of the directives implementing the concept of circular economy into the EU legal system by discussing the legislative steps necessary to take within the next years, on the basis of Polish waste management system. Design/methodology/approach – Methodologically the present research focused on the legislation of European Union and some recent initiatives that had been undertaken by Poland and other EU Member States in the area of waste management. Findings – Practical implementation of circular economy into the legal order of EU member state law remains one of the most fundamental, albeit complex challenges posed to the domestic legislators. A number of wide-ranging but extremely meticulous and well-thought actions are necessary for implementing the ambitious provisions of the amended directives regulating the waste management framework on the Community level. Worth mentioning have been, for example, solutions limiting the generation of waste, introducing improved systems for selective collection, and finally allowing wider-ranging reuse of the generated waste in subsequent manufacturing processes. The huge amount of the necessary changes will indubitably lead to the necessity of deep changes to the approach towards the waste management model, equally by the public administration bodies, the businesses and entities within the branch of waste management, as well as common citizens. Thus only such comprehensive approach shall actually provide implementation of the concept of circular economy in everyday life of the Europeans. Research limitations/implications – The present paper has presented the main problem areas concerning the implementation of circular economy based on the Polish legal system. It is neither a wide nor a comprehensive analysis of the necessary modifications to all the normative acts; however, it is an attempt to encapsulate globally the main problem areas, which all of the member states implementing circular economy to their respective legal orders have to face. Practical implications – Establishment of effective waste management system via implementation of circular economy concept within the next years remains a challenge for all of the European Union member states. Therefore the discussions within the present paper are added value due to presenting problem areas for the implementation of new Community regulations and due to discussing prospective legislative solutions within the abovementioned area. Originality/Value – The present paper is an innovative attempt to encapsulate the main problem areas and to find the key challenges posed to the Community member states implementing the concept of circular economy. Throughout the paper, the author attempts to present the directions of the desired and necessary legislative changes for the implementation. Taking into consideration the current relevance and relative novelty of this research area this publication represents a substantive added value and might be a starting point for further, more comprehensive research. Keywords: circular economy, waste management, recycling Research type: research paper.

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Introduction

Implementation of effective waste management is one of the key contemporary challenges faced by humanity. Creation of a suitable model for reducing the amount generated and reusing waste seems necessary to prevent global ecological disaster and ensure stable future for the generations to come. The European Union as the Community of the most developed countries stands at the forefront of the effort towards cleaner world. For this purpose multiple legislative measures have been undertaken over the years, for the purpose of minimising the amount of waste generated and to ensure the highest possible level of recycling thereof within particular member states. The latest solution emerging from this area is the so called concept of circular economy. This concept aims at implementing a model of economy where by using a given product, and therefore generating waste, the waste will be processed so as to become a useful material for further manufacturing process. In order to implement this concept, on 22nd of May, 2018, the EU Council adopted a package of four directives introducing changes to the Union law regulating waste management. The changes to the Union law came into force on 4th of July, 2018; from then on two-year implementation period began for the new provisions of the directives into domestic law of member states. Therefore the main burden of implementing "circular economy" model into practice is actually put on the member states. The present research paper focuses on discussing the main tenets of circular economy and presenting the implications of putting this concept into reality for the EU member states. Naturally, a respectable number of scientific works have been devoted to the concept itself and the impact of circular economy on particular sectors of the economic system, (e.g. Korhonen, Honkasalo, Seppälä 2018; Pomponi, Moncaster 2017, Hobson 2015; Murray, Skene, Haynes 2017.) Taking into consideration the volume and scope constraints of the present article, I would therefore like to focus on discussing circular economy model presented within the bodies of legal acts and strategy papers of the European Union. As such, a closer scrutiny shall concern but a snippet of problems related to the concept of circular economy and focus on its normative aspect and implementation challenges faced by the member states, waste management in particular. The main goal of this article is identify and indicate main problem areas concerning the implementation of circular economy, which all of the member states have to face, based on the Polish legal system. To realize this aim I will analyze European legal acts and strategy papers and some recent initiatives that had been undertaken by Poland government in the area of waste management.

Concept of the Circular Economy – the key preliminaries

To begin discussing the challenges faced by European Union Member states concerning implementation of the circular economy over the coming years it is necessary to define the main tenets of this concept. Putting it simply and rather succinctly, the circular economy should be defined as such a model of economy where a product’s life cycle is not linear (produce, use, dispose), but cyclical, i.e. (produce, use, recover, re-use). The beginning of real legislative actions towards implementation of this concept to the European legal order should be considered as the European Commission's communication of 2.12.2015, entitled "Closing the loop – An EU action plan for the circular economy". Therein,

119 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) the European Commission defined the four key sectors where actions are to be taken for completion of the abovementioned programme of the circular economy, which are:1 1) Production; 2) Consumption; 3) Waste management; and 4) Secondary raw material market and water reuse. In the present article, I shall mainly focus on the challenges relevant to two of the areas listed above, i.e. waste management and secondary raw material market; however, a short presentation of the key circular economy concepts of the other sectors is still of value. Production sector. In its communication of 2.12.2015, the European Commission opens the discussion of particular sectors which have production steps, and indicates primarily the need of an adequate design phase and use of high-grade materials to ensure that the manufactured products be, first of all, more durable and easier to repair, upgrade or remanufacture, and secondly, allowing easier disassembly of these products in order to recover valuable materials and components during recovery and recycling processes. Additionally, here the Commission also draws the attention to the need of adequate shaping of manufacturing processes, which should be designed and implemented to ensure effective resource use and not lead to the generation of excessive waste. In particular, the Commission emphasises here the so-called industrial symbiosis, which allows waste or by- products of one industry to become inputs for another. This idea reoccurs around the waste management sector discussion, especially end-of-waste procedure. Consumption sector. On the topic of consumption, the Commission's communication mainly focuses on the necessity of appropriately making consumers aware of the actual product features and environmental impact, due to the fact that only an appropriately informed consumer is able to make a conscious purchasing decision. Further, the Commission encourages the Member States to utilise drivers for use of economic instruments, such as taxation, to ensure that product prices reflect their real environmental production and use costs. Another theme discussed is the adoption and effective enforcement of legal regulations concerning consumer protection against defective products, and where needed, ensuring the possibility of their repair paid for by the manufacturer. The Commission rightly notices, though, that the extent of product life cycle, especially concerning electronic goods, correlates closely with consumer rights' protection. The final aspect concerning consumption pointed out by the Commission is the necessity of shaping policies by the respective Member States encouraging re-use and repair of products, thus preventing wastage. Waste management sector. The third sector indicated by the Commission in the communication of 2.12.2015 is waste management. Detailed analysis of the relevant concerns, based on Polish legislation, will follow further in the present article. It is worth mentioning here though, that the Commission draws attention to the fact, that at present, only 40% of the waste generated in community households is being recycled; the recycling index reaches in some regions as high as 80%, while in others this is below 5%.

1Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Closing the loop - An EU action plan for the Circular Economy, COM/2015/0614 final, [accessed 2019-05-15] .

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In light of the above, the Commission has presented proposals for new recycling targets within the scope of landfilling of municipal waste and packaging waste, as well as dividing those targets into specific fractions, referring to packaging waste. Another problem spotted by the Commission within this area is illegal waste shipments, both within the Union itself and outside its borders. Here it should be stated, as it was also noted by the Commission, that in 2014 the amended regulation concerning shipments of waste was ratified, therefore the main challenge posed here concerns effective execution thereof. In the Polish context it should be noted that the matter of cross-border waste shipments was widely publicised in mid 2018; in consequence, applicable domestic regulations were amended, to be exact, in the act of 29.06.2007 on cross-border waste shipments. This amendment led to full prohibition on waste import to Poland with the intention of disposal characterised as D1 to D15 in annex to directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 as well as prohibition of importing mixed municipal waste and municipal waste processing. It is important to note that the latter of the abovementioned prohibitions is not limited to waste disposal processes, therefore it covers mixed municipal waste and waste generated during their processing imported to Poland for recovery processing purposes. The sole exception to this prohibition is import of separately collected waste destined for recycling.12 Such restrictive regulations together with the procedure of their ratification raises some suspicions over their compliance with Regulation (EU) No 660/2014. Notably, these suspicions were partially raised by commentators based on previous legal status, when the list of waste prohibited from entry to Poland was included in the body of the corresponding Ministry of the Environment regulation (Jerzmański, 2014).3 Within the body of the analysed communication of 02.12.2015 the Commission also emphasises the need to homogenise technological standards concerning waste processing devices by stating that it is necessary to support their voluntary certification systems, especially those which process certain key waste types (for example, used up electronic devices or plastic waste) in order to ensure high-quality recycling. The last aspect of waste management discussed by the Commission is underlining that where waste generation and recycling is unavoidable the emphasis should be placed on recovering their energy. As indicated by the Commission, by taking into account a number of environmental conditions and following waste hierarchy procedures, the energy recovered from waste may play a key role and synergise with Community climate and energy policy. Sector of the market for secondary raw materials and water reuse. Within the fourth sector indicated by the European Commission in its communication of 2.12.2015 it has been underlined that above all, in the circular economy, materials that can be recycled are to be injected back into the economy as new raw materials, which may replace the 'original raw resources' obtained from traditional natural resources. In light of the above, the end of waste procedure gains special importance, which should be employed in practice by public authorities more widely, to ensure adequate 'supply' of new raw materials. What is also important is the functioning of quality and technical norms regulating, among others, the level of impurities or usefulness of given waste for high quality recycling. This problem has been publicly debated for at least a few years. Notably, at the

1Regulation (EU) No 660/2014 of the European Parliament and of the Council of 15 May 2014 amending Regulation (EC) No 1013/2006 on shipments of waste. [2014] OJ L189/135. 2 Act of 29.06.2007 on cross-border waste shipments (consolidated text published in Journal of Laws 2018 item 296, as amended). 3 J. Jerzmański, Act on cross-border shipments of waste, Comment, 2014 [accessed 2019-05-15], .

121 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) present moment, there are only three technical regulations, on the Community level, concerning the criteria for loss of waste status by particular fractions, those are: 1) Council Regulation (EU) No 333/2011 of 31 March 2011 establishing criteria determining when certain types of scrap metal cease to be waste under Directive 2008/98/EC of the European Parliament and of the Council,1 2) Commission Regulation (EU) No 1179/2012 of 10 December 2012 establishing criteria determining when glass cullet ceases to be waste under Directive 2008/98/EC of the European Parliament and of the Council,2 3) Commission Regulation (EU) No 715/2013 of 25 July 2013 establishing criteria determining when copper scrap ceases to be waste under Directive 2008/98/EC of the European Parliament and of the Council.3 The last aspect, slightly overshadowed by the other discussions on circular economy is water reuse. Within the Communication, the Commission, in fact, only limits its commentary to stating that it is necessary to implement adequate measures for effective water use and reuse purified waste under safe and economical conditions. To put those measures forward, the European Commission initialised in May of 2018 work on Regulation of the European Parliament and of the Council on minimum requirements for water reuse.4

Legal acts for implementation of circular economy

Having discussed the circular economy concept itself, the main normative acts for implementation of this idea to the legal order of the Member states should be indicated. In order to meet the abovementioned Commission Communication of 2.12.2015's demands, Community bodies created particular legislative solutions, which after the working stage in the European Parliament were formed as legislative proposals for amending four directives on broadly speaking, the area of waste management, which comprise the so-called 'circular economy package'. On the basis of the above, in Spring 2018, legislative work within the scope of implementing circular economy on Community level were about to be finished, as their finalisation required only positive decision of the Council. Eventually, on 22.05.2018 the Council of European Union accepted, without amends, a package of four directives, which are: 1) Directive (EU) 2018/849 of the European Parliament and of the Council of 30 May 2018 amending Directives 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and

1Council Regulation (EU) No 333/2011 of 31 March 2011 establishing criteria determining when certain types of scrap metal cease to be waste under Directive 2008/98/EC of the European Parliament and of the Council. [2011] OJ L 94/2. 2Commission Regulation (EU) No 1179/2012 of 10 December 2012 establishing criteria determining when glass cullet ceases to be waste under Directive 2008/98/EC of the European Parliament and of the Council. [2012] OJ L 337/31. 3Commission Regulation (EU) No 715/2013 of 25 July 2013 establishing criteria determining when copper scrap ceases to be waste under Directive 2008/98/EC of the European Parliament and of the Council. [2013] OJ L 201/14. 4Proposal for a regulation of the European Parliament and of the Council on minimum requirements for water reuse, COM(2018) 337 final, [accessed 2019-05-15] .

122 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment,1 2) Directive (EU) 2018/850 of the European Parliament and of the Council of 30 May 2018 amending Directive 1999/31/EC on the landfill of waste,2 3) Directive (EU) 2018/851 of the European Parliament and of the Council of 30 May 2018 amending Directive 2008/98/EC on waste,3 4) Directive (EU) 2018/852 of the European Parliament and of the Council of 30 May 2018 amending Directive 94/62/EC on packaging and packaging waste.4 In practice, acceptance of the above normative acts means that the burden of legislative work concerning implementation of the circular economy was moved to the Member States, which thus faced the challenge of implementation of the provisions of the directives listed above to their respective legal orders. It is important to note that the timeframe for implementation of this process is not long, as it is only two years, counting from the date the abovementioned directives enter into force, i.e. 4.07.2018. This timeframe might, especially in the Polish context, be really problematic, taking into consideration the rather evident tendency, over the last years, of Polish legislators implementing Community regulations at the very last moment, especially concerning environmental protection. Such actions therefore often lead to errors in shaping particular legal instruments, and consequently to inadequate implementation of legal provisions of the directives, as it has been perfectly exemplified by CJEU decision on Poland's incorrect implementation of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy.5 Naturally, it should be taken into consideration that the adopted package of directives – similarly as is the case of all Community legal acts of this category – leaves substantial leeway for Member states in terms of choice of measures for completion of the new regulations. It appears though that through analysing the main objectives and premises of the changes in question, and considering the difficulties that have arisen so far in Polish debate on the waste management sector, certain predictions might be justified, to indicate main problem areas connected to implementation of the premises of the circular economy to the Polish legal order. Due to the constraints of the current paper, I would prefer to focus on an area, which in my opinion, both on the Community and Polish level, will prove the greatest hindrances for practical implementation, namely separate collection and recycling of municipal waste.

1 Directive (EU) 2018/849 of the European Parliament and of the Council of 30 May 2018 amending Directives 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment. [2018] OJ L 150/93. 2 Directive (EU) 2018/850 of the European Parliament and of the Council of 30 May 2018 amending Directive 1999/31/EC on the landfill of waste. [2018] OJ L 150/100. 3 Directive (EU) 2018/851 of the European Parliament and of the Council of 30 May 2018 amending Directive 2008/98/EC on waste. [2018] OJ L 150/109. 4 Directive (EU) 2018/852 of the European Parliament and of the Council of 30 May 2018 amending Directive 94/62/EC on packaging and packaging waste. [2018] OJ L 150/141. 5 Case C-648/13, European Commission v Republic of Poland [2016] OJ C 335/2.

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Separate collection of municipal waste - the greatest difficulty of the circular economy

I am substantiating my view on the difficulty of implementing effective separate waste collection systems and of attaining municipal waste recycling targets based on both Polish experiences surrounding implementation of solutions within this area and on a report presented by the European Commission on 24.09.2018 on implementation of Community regulations concerning waste, including an early warning system for Member States in danger of not attaining 2020 target within the scope of preparation for municipal waste re- use/recycling.1 In this document, the European Commission clearly stated that even though municipal waste constitutes only 10% of total waste generation within the EU, they constitute one of the most difficult waste flows to manage, due to its diverse composition, a large number of waste generators and dispersal of responsibility. According to the data provided in 2016, the average municipal waste generated by Europeans was 480 kg per capita, out of which 46% was recycled or composted. Bearing in mind, as already presented in the communication of the Commission of 2.12.2015, that there is a large discrepancy between particular regions, and some regions reach recycling target as high as 80%, while others below 5%. Before continuing to detailed analysis of the hindrances concerning effective implementation of regulations within the areas in question, the legal acts regulating the concepts of municipal waste recycling targets and separate waste collection on Community level have to be provided. The provisions of Directive (EU) 2018/851 of the European Parliament and of the Council of 30 May 2018 amending Directive 2008/98/EC on waste entering into force introduced within this area rather substantial changes, whose implementation to legal orders of Member states, especially Polish legal system, might prove to be difficult in practice. Above all, amendment of Article11 (2) of Directive 2008/98/EC should be highlighted, as its new form provides that: a) by 2020, preparation for reuse and recycling of waste materials, at least such as paper, plastics, glass, originating in households and from other places, if possible, given that those waste flows be similar to household waste, shall increase to 50% by weight minimum; [...] c) by 2025, preparation for reuse and recycling of municipal waste shall increase to 55% by weight minimum; d) by 2030, preparation for reuse and recycling of municipal waste shall increase to 60% by weight minimum; and e) by 2035, preparation for reuse and recycling of municipal waste shall increase to 65% by weight minimum. Amendment of this provision via the entering into force of Directive (EU) 2018/851 was carried out by appending letters c to e, which include ambitious municipal waste recycling targets for the following years up to as far as 2035. Before the circular economy implementation amendment, the time constraints of Article 11(2) reached only the year 2020. Considering the pessimistic conclusions of the Commission report of 24.09.2018 concerning

1 Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of EU waste legislation, including the early warning report for Member States at risk of missing the 2020 preparation for re-use/recycling target on municipal waste, COM/2018/656 final, [accessed 2019-05-15]

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Member State attainment of 50% municipal recycling targets in 2020, which will be analysed more in depth below, the newly appended targets might prove overly optimistic. In order to complete the above-mentioned targets of Article 10(2) and Article 11(1) of Directive 2008/98/EC the Member States shall collect separately paper, metal, plastics and glass, and starting 1.01.2025, textiles. Additionally, Article 22(1) of Directive 2008/98/EC should be highlighted here, where Member States shall ensure, by 31.12.2023 at the latest, that bio-waste be source separated and recycled or separately collected and not mixed with other types of waste. Article 10(3) of Directive 2008/98/EC includes conditions for derogations from the abovementioned separate waste collection regulations. According to these provisions, decisions not to collect waste separately might be made based on the following factors: a) collection of certain mixed waste does not impact their recyclability, reusability, or other recovery processes according to Article 4, and the obtained output material of these processes is of comparable quality to that of separately collected waste; b) separate collection does not provide the best possible outcome for the environment, when considering total environmental impact; c) separate collection is technically infeasible, when waste collection best practices are taken into account; d) separate collection would lead to disproportionately high economical costs, taking into account the negative impact costs of collection and treatment of mixed waste on the environment and human health, feasibility of improvement of collection and treatment effectiveness, secondary raw material sale income, and adhering to the polluter-pays principle and extended producer responsibility. Considering further analysis of the difficulties of implementing separate municipal waste collection system within the Polish context, letter d is especially relevant to the enumeration above, which refers to economic criteria. However, it should be noted that due to the fact that this provision is an exception to the principle of separate collection, the listed criteria for derogations are to be understood as narrowly as possible and used with extreme care, always having conducted adequate environmental and economic analyses. Transferring the abovementioned Community regulations to the Polish legislative environment it should be noted that the main Polish act regulating the matter of municipal waste management, in a systemic manner, is the Act of 13.09.1996 on maintaining cleanliness and order in municipalities. Notably within the context of further discussion, according to the provisions of the Polish legal system, the parties responsible for management of municipal waste flows are, by rule, municipalities which are base local government entities. According to the Polish system, the central administration empowers lowest level local government entities to carry out local tasks, so as to ensure optimal use of resources for municipal waste management and to ensure as close control as possible, on the local level, over the waste flow.1 It is evident that the act of 13.09.1996 is a rather antiquated normative act, which has been amended several dozen times. Unfortunately, it led to substantial loss of legibility and clarity. The key problem is the marking of the provisions, which over the course of consequent amendments became truly illegible - suffice to say that within the act an article marked as Article 9 zaa exists. Consequently, creation of a brand new legislative act regulating the matter of cleanliness and order within municipalities, including municipal waste management, seems

1 Act of 13.09.1996 on maintaining cleanliness and order in municipalities (consolidated text published in Journal of Laws 2018 item 1454, as amended).

125 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) desirable. As of today, no such project is being prepared or worked on; nevertheless, legislative work is in progress on another amendment to the Act of 13.09.1996. Provisions for implementation to the Polish legal order of amendments found in Directive (EU) 2018/851 are actually found within the draft law currently worked on by the Council of Ministers – an amendment to the Act of 13.09.1996 on maintaining cleanliness and order in municipalities and to some other acts. The provisions of the draft law transfer the recycling targets of Article 11(2) of Directive 2008/98/EC directly to the Polish legal system. Notably, the provisions of the draft law include certain limitations of separate textile collections. According to the draft law makers' intentions, a source separated collection of this fraction, for example via additional type of textile-specific bins is not to be established within the Polish law. The presented draft law only includes provisions for forcing separate municipal waste collection facilities to accept textile waste, starting 1.01.2025. These are, according to the Polish system, particular facilities ran by municipalities, which allow the citizens to donate source inseparable or difficult to separate waste, such as, among others, bulky waste, tyres, or waste electrical and electronic equipment. Implementation of this solution within the context of textiles might however negatively impact recycling targets and reusability of this waste fraction, as in order to collect them separately, the citizens will be forced to go to a separate municipal waste collection facility, which more often than not is rather remote from their place of residence. For instance, in the ca. 500.000 citizen city of Poznan, there are barely two such facilities, located in the outskirts of the city. Therefore such implementation raises concerns over fulfilling the necessity of separate textile collection and appears not to comply with the aims and provisions put forward by Directive (EU) 2018/851. However, even proposing these changes met with negative reception of some Polish municipalities as too organisationally and budgetary taxing.12 The negative approach of municipalities to systemic changes to separate municipal waste collection is an aftermath of a pervasive approach among local governments towards separate municipal waste collection which is based on only two fractions, which are so-called dry and wet fractions. The former comprised mixed glass, plastic, metal and paper waste; the latter comprised all of the remaining fractions, including bio-waste. This approach was meant to be suppressed with Ministry of Environment regulation of 29.12.2016 on exact method of separate collection of specific waste fractions. The explanatory statement to this bill claims that the bill was necessary to implement due to the fact that municipalities, acting on their own behalf, organised separate municipal waste collection systems, often establishing wet and dry waste divisions. Such separate waste collection method does not provide a high-grade raw material.34 Additionally, the Minister of Environment, writing the body of the aforementioned act, highlighted that one of the ex ante conditions for collection of European funds for waste management investments according to the new EU financial perspective for 2014-2020 is an undertaking by Poland of actions towards meeting the targets defined by the EU directive

1 Draft law on amendments to the Act of 13.09.1996 on maintaining cleanliness and order in municipalities and to some other acts, n. UD332, [accessed 2019-05-15] 2 Raport of public consultations on Draft law on amendments to the Act of 13.09.1996 on maintaining cleanliness and order in municipalities and to some other acts, n. UD332, p. 10-11, [accessed 2019-05-15] . 3 Ministry of Environment regulation of 29.12.2016 on exact method of separate collection of specific waste fractions (Journal of Laws 2017 item 19). 4 The explanatory statement to Ministry of Environment regulation of 29.12.2016 on exact method of separate collection of specific waste fractions, [accessed 2019-05-15]

126 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) which are, for instance, recycling and reuse preparation indices for the following municipal waste fractions: paper, metal, plastics and glass. In consequence of the above, the regulation of 29.12.2016 introduced the necessity of organising, by the municipalities, separate municipal waste collection divided into 5 fractions, which are 1) paper; 2) glass; 3) metals; 4) plastics; 5) biodegradable waste, especially bio-waste. It should be noted here that transitional provisions of the regulation might cause adjustment of municipal selective collection systems to be implemented, in specific cases, as late as 2021. According to Paragraph 6(3) of the regulation, agreements on municipal collection and management of municipal waste, even noncompliant with the regulation's separate collection standards, remain valid until 30.06.2021. All of the factors above result in problems in some Polish municipalities with attaining municipal waste recycling and reuse targets, at a level well below the 50% forecast for 2020. According to the Annex to the regulation of the Minister of the Environment of 14.12.2016 on recycling levels, preparation for reuse and recovery by other methods of municipal waste fraction, the level of recycling and preparation for re-use of municipal waste required for municipalities in 2017 was 20% and in 2018 - 30%. The most up-to-date data published by the Ministry of the Environment in October 2018 do indeed show that 96% of municipalities in Poland reached the required in 2017 level of waste recycling. However, it should be noted that this is a level more than two times lower than expected to be achieved in 2020, and municipalities are already voicing that the level of 50% is unattainable in such short time constraints. It is worth mentioning here one of the comments made to the aforementioned project UD 332 by Stowarzyszenie Gmin i Powiatów Wielkopolski [Wielkopolska Association of Municipalities and Poviats], in which the entity stated that obtaining the levels of recycling and re-use in the amount indicated in the bill (i.e. in accordance with Directive 2008/98 /EC) is impossible to implement. Most municipal waste is subject to disposal processes. These wastes are the heaviest to be managed, while the fractions separated from municipal waste selectively collected will never account for 50% of the total municipal waste, and only after they have been fully cleaned, some of them are actually subjected to the recycling process.123 In addition, Najwyższa Izba Kontroli [the Supreme Audit Office] in the information of April 2018 on the results of the audit entitled 'Implementation of municipal tasks in the scope of municipal waste management', indicates that 'Poland may not reach by the end of 2020, the recycling level of 50% set by the Community regulations. In order to avoid fines being imposed on this account, the municipalities should intensify the remedial actions and constantly monitor the achieved recycling rates.'4

1 Minister of the Environment regulation of 14.12.2016 on recycling levels, preparation for reuse and recovery by other methods of municipal waste fraction (Journal of Laws 2016 item 2167). 2W Polsce w 2017 r. większość gmin osiągnęła wymagany poziom recyklingu odpadów, [accessed 2019-05-15] . 3 Raport of public consultations on Draft law on amendments to the Act of 13.09.1996 on maintaining cleanliness and order in municipalities and to some other acts, p. 20, [accessed 2019-05-15] . 4The results of the audit 'Implementation of municipal tasks in the scope of municipal waste management', p. 9, [accessed 2019-05-15] .

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The European Commission is of similar view, in terms of Poland's failure to achieve the 50% recycling target and certain use of municipal waste in 2020, as stated in the abovementioned report of 24.09.2018, specifically the accompanying report under the early warning system regarding Poland, the Commission stated that 'based on the analysis of the current and binding policy in the field of waste management and taking into account the results of Poland so far, it is considered that there is a risk that Poland will not reach the 2020 target for the preparation of 50% of municipal waste for re-use / recycling'. Among the reasons for this, the Commission not only draws attention to the fact that Poland has not introduced a fully effective system of separate collection of recyclable waste, but also the lack of economic incentives for household waste segregation. In addition, the Commission pointed to concerns about the quality of waste data, undermining the credibility of high recycling rates reported by Poland to Eurostat. The problem of reliability of data obtained in Poland regarding recycling rates is a separate topic worthy of a separate scientific study, it is worth noting here though that it was also noted in the NIK report mentioned above, whose authors stated that "in 50% of communes covered by the audit were revealed unreliable report data, in particular data on recycling rates. [...] The reliability of reporting data remains at a low level".12 All of the above show that the implementation of standards for the separate collection and recycling of municipal waste in Poland in accordance with the provisions of Directive (EU) 2018/851 can be a very difficult task in practice. Poland has a problem achieving already much lower standards of recycling resulting from the provisions of domestic law and collecting reliable data in this area, while the deadline of 2020 is approaching inexorably. As it seems, this situation stems from, on the one hand, too late an implementation on the domestic level of the obligation to conduct separate collection of municipal waste divided into five factions, and on the other hand, the shortcomings of environmental education and public awareness of the need for waste segregation. Focusing on the abovementioned Polish problems, it cannot be overlooked that difficulties in reaching the 50% level of recycling and re-use of municipal waste in 2020 according to the Commission report of 24.09.2018 may also apply to 13 other Member States. These are Bulgaria, Estonia, Greece, Spain, Croatia, Cyprus, Latvia, Hungary, Malta, Portugal, Romania, Slovakia and Finland. The Commission therefore concedes that half of the European Union Member States may be in danger of not reaching appropriate levels of recycling in 2020, and thus the prospect of completing the provisions of the circular economy, within this scope, is actually jeopardized. It also shows perfectly that the disparity in the levels of municipal waste recycling achieved by individual member states already signalled in the Commission's communication of 2.12.2015 has not been reduced yet.

1Commission staff working document The Early Warning report for Poland Accompanying the document Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of EU waste legislation, including the Early Warning report for compliance with Article 11(2)a of Directive 2008/98/EC, SWD/2018/426 final, [accessed 2019-05- 15], https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:52018SC0426 2The results of the audit 'Implementation of municipal tasks in the scope of municipal waste management', p. 12, [accessed 2019-05-15] .

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Conclusion

Concluding the discussion, it is indubitable that implementation of the circular economy enables reduction of generated waste and increase of waste reuse indices, and therefore might actually improve natural environment conditions. This concept adopts a holistic approach towards the entire life cycle of a product and also emphasises innovative solutions, equally within the sectors of production and consumption, and especially, waste management and functioning of secondary raw material market. However, the conducted analysis on separate municipal waste collection and recycling using Poland as an example shows that practical implementation of the provisions and targets of the circular economy might prove problematic. Therefore during the process of implementing the provisions completing the concept of the circular economy, on the one hand, effective mechanisms for control and monitoring fulfilment of the Community targets by the Member States are necessary on the Community level, on the other hand, sensible Community institution support of the Member States in implementation of domestic legal instruments is also required. Adjusting economic systems to the circular economy shall prove to be a grave challenge over the following years, especially within the context of the less economically developed Member states, such as East-Central Europe countries.

References

Act of 13.09.1996 on maintaining cleanliness and order in municipalities (consolidated text published in Journal of Laws 2018 item 1454, as amended). Act of 29.06.2007 on cross-border waste shipments (consolidated text published in Journal of Laws 2018 item 296, as amended). Case C-648/13, European Commission v Republic of Poland [2016] OJ C 335/2. Commission Regulation (EU) No 1179/2012 of 10 December 2012 establishing criteria determining when glass cullet ceases to be waste under Directive 2008/98/EC of the European Parliament and of the Council. [2012] OJ L 337/31. Commission Regulation (EU) No 715/2013 of 25 July 2013 establishing criteria determining when copper scrap ceases to be waste under Directive 2008/98/EC of the European Parliament and of the Council. [2013] OJ L 201/14. Commission staff working document The Early Warning report for Poland Accompanying the document Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of EU waste legislation, including the Early Warning report for compliance with Article 11(2)a of Directive 2008/98/EC, SWD/2018/426 final, [accessed 2019-05-15], https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:52018SC0426 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Closing the loop - An EU action plan for the Circular Economy, COM/2015/0614 final, [accessed 2019-05-15] . Council Regulation (EU) No 333/2011 of 31 March 2011 establishing criteria determining when certain types of scrap metal cease to be waste under Directive 2008/98/EC of the European Parliament and of the Council. [2011] OJ L 94/2. Directive (EU) 2018/849 of the European Parliament and of the Council of 30 May 2018 amending Directives 2000/53/EC on end-of-life vehicles, 2006/66/EC on batteries and accumulators and waste batteries and accumulators, and 2012/19/EU on waste electrical and electronic equipment. [2018] OJ L 150/93. Directive (EU) 2018/850 of the European Parliament and of the Council of 30 May 2018 amending Directive 1999/31/EC on the landfill of waste. [2018] OJ L 150/100. Directive (EU) 2018/851 of the European Parliament and of the Council of 30 May 2018 amending Directive 2008/98/EC on waste. [2018] OJ L 150/109. Directive (EU) 2018/852 of the European Parliament and of the Council of 30 May 2018 amending Directive 94/62/EC on packaging and packaging waste. [2018] OJ L 150/141.

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Draft law on amendments to the Act of 13.09.1996 on maintaining cleanliness and order in municipalities and to some other acts, n. UD332, [accessed 2019-05-15] https://legislacja.rcl.gov.pl/projekt/12315504/ Hobson, K., 2016, Closing the loop or squaring the circle? Locating generative spaces for the circular economy. Progress in Human Geography, 40(1), p. 88–104. Jerzmański, J., Act on cross-border shipments of waste, Comment, 2014 [accessed 2019-05-15], . Korhonen J., Honkasalo, A.,Seppälä, J., 2018, Circular Economy: The Concept and its Limitations, Ecological Economics, Volume 143, p. 37-46. Merli, R., Preziosi, M., Acampora, A., 2018, How do scholars approach the circular economy? A systematic literature review, Journal of Cleaner Production, Volume 178, p. 703-722, Minister of the Environment regulation of 14.12.2016 on recycling levels, preparation for reuse and recovery by other methods of municipal waste fraction (Journal of Laws 2016 item 2167) Ministry of Environment regulation of 29.12.2016 on exact method of separate collection of specific waste fractions (Journal of Laws 2017 item 19). Murray, A., Skene, K., Haynes, K., 2017, The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context. J. Bus. Ethics 140, p. 369-380. Pomponi, F., Moncaster, A., 2017, Circular economy for the built environment: A research framework, Journal of Cleaner Production, Volume 143, p. 710-718. Proposal for a regulation of the European Parliament and of the Council on minimum requirements for water reuse, COM(2018) 337 final, [accessed 2019-05-15] . Raport of public consultations on Draft law on amendments to the Act of 13.09.1996 on maintaining cleanliness and order in municipalities and to some other acts, n. UD332, [accessed 2019-05-15] . Regulation (EU) No 660/2014 of the European Parliament and of the Council of 15 May 2014 amending Regulation (EC) No 1013/2006 on shipments of waste. [2014] OJ L189/135. Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of EU waste legislation, including the early warning report for Member States at risk of missing the 2020 preparation for re-use/recycling target on municipal waste, COM/2018/656 final, [accessed 2019-05-15] The results of the audit 'Implementation of municipal tasks in the scope of municipal waste management', [accessed 2019-05-15] . W Polsce w 2017 r. większość gmin osiągnęła wymagany poziom recyklingu odpadów, [accessed 2019-05- 15] .

This work is licensed under a Creative Commons Attribution- NonCommercial 4.0 International License.

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THE LEGAL RESPONSIBILITY FOR THE VIOLATION OF E-WASTE MANAGEMENT IN CONTEMPORARY SOCIETY

Erika Statkienė

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose – the field of electrical and electronic equipment waste management has become very relevant over the last decade. The amount of these type of waste is still increasing not only in Lithuania, but in other countries (developed and developing) as well. The improvement of regulation of legal responsibility of the violations of e-waste management in contemporary society is the one way to try to deal with the problem. In the age of technological progress, computing, the contemporary society is changing, therefore it became more cautious, the intellectual activity is evolving, so the legal legislation and legal rules have to be created and implicated taking into account the inevitable change of the thinking and operating of the society. The purpose of this article is to reveal the legal regulation of responsibility for the violation of e-waste management in Lithuania and by analyzing and comparing legal regulations and court practices to provide the solution for improvement of effectiveness and efficiency in this area. Design/methodology/approach – the paper is based on qualitative document analysis and comparative analysis method by comparing different legislation and its implications as well as court decisions. Scientific literature analysis, legal literature content analysis techniques are used to systematically evaluate legal documents. Qualitative data comparative and summarization methods, will be used during the research to better understand the challenges of the issue. Finding – the effectiveness of legal responsibility mechanism depends on improvement of legal legislation taking into account the change and evolvement of contemporary society in this age of technology, information and consumption. Research limitations/implications – to reveal the dysfunctions of legal responsibility and legal legislation in the field of e-waste management, it is necessary to investigate and compare the nature of the offences and how often they are made, what are the measures obtain them and to obviate them in the future, thus The Environmental Protection Agency, The Ministry of Environment of the Republic of Lithuania and The Environmental Protection Department under the Ministry of Environment as well as the internet and Official Statistic Portal does not provide this information, so available are only those cases, which are appealed in the court. Practical implications – the comparative analysis provides a background on further discussions concerning legal responsibility for violation of e-waste management legislation. Originality/Value – not many scientific research was made in the field of analysis of electrical and electronic equipment management. There is still a lack of academic insights into the issues of effectiveness of responsibility mechanism for the offences of WEEE. The paper provides insights into the liability and responsibility of such waste use, disposal, production, distribution and selling and points out the solutions for legal regulation improvement in this area will be provided. Keywords: e-waste management, legal responsibility, contemporary society. Research type: general review.

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Introduction

The contemporary society is changing, everyday life cannot be separated from technology use and science, thus the society has more responsibilities to ensuring our environmental protection, therefore, the waste management area is one of the most important task to comply. According to Saldukaityte „techno-science transforms everyday life only quantitatively but not qualitatively. In view of this, everyday life remains banal, superficial, inaccurate, without deeper reflection. <...> techno-sciences do not seek to educate society and transform superficial knowledge of everyday life but rather are utilized to exploit it for economic profit” (Saldukaityte, 2017). Electrical and electronic waste is a result of such situation, the main problem is that society lack of knowledge and understanding how the consumption and use of electrical and electronic equipment effects our environment, therefore the responsibility for the grow of these types of waste depends not only on Government actions, but on our society as well. Therefore, the legal legislation in the field of WEEE management are adapted to prevent these type of waste from growing ant to ensure, that these hazardous waste would be disposed properly, by not harming the environment. Purpose – the field of electrical and electronic equipment waste management has become very relevant over the last decade. The amount of these type of waste is still increasing not only in Lithuania, but in other countries (developed and developing) as well. The improvement of regulation of legal responsibility of the violations of e-waste management in contemporary society is the one way to try to deal with the problem. In the age of technological progress, computing, the contemporary society is changing, therefore it became more cautious, the intellectual activity is evolving, so the legal legislation and legal rules have to be created and implicated taking into account the inevitable change of the thinking and operating of the society. The purpose of this article is to reveal the legal regulation of responsibility for the violation of e-waste management in Lithuania and by analyzing and comparing legal regulations and court practices to provide the solution for improvement of effectiveness and efficiency in this area. The research is based on qualitative document analysis and comparative analysis method by comparing different legislation and its implications as well as court decisions. Scientific literature analysis, legal literature content analysis techniques are used to systematically evaluate legal documents and contemporary society description. Qualitative data comparative and summarization methods are used to better understand and evaluate the challenges of the legal responsibility in the case of the violation of the e-waste management regulations. It should be noticed, that the effectiveness of legal responsibility mechanism depends on improvement of legal legislation taking into account the change and evolvement of contemporary society in this century of technology, information and consumption. To seek the goal to reveal the dysfunctions of legal responsibility and legal legislation in the field of e-waste management, it is necessary to investigate and compare the nature of the offences and how often they are made, what punishments they implicate. To properly investigate and determine what measures should be taken to obtain such offences and to obviate them in the future, the drawback appears to be the lack of statistical information in the field of e-waste management and conducted legal offences information in this manner, therefore the available are only those cases, which are appealed in the judicial proceedings. There are not many academic insights in the manner of effectiveness of responsibility mechanism for the offences of WEEE. The analysis of legal documents points out, that the legal regulations of legal responsibility for the violations of e- waste requirements, is not directly applicable to a single individual user of EEE, but mainly refers to legal entities and their employees, whose activities are related to e-waste management. It is necessary to take note, that in accordance with of the Constitution of the

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Republic of Lithuania, responsibility for preservation of environmental protection falls on every citizen's shoulders, that the state and every person must protect the environment („The Constitution of the Republic of Lithuania“, 2014), therefore legal responsibility should be established for e-waste producers and users (all citizens) as well. The contemporary society is evolved enough to understand the responsibility for the EEE use and the proper disposal of e- waste and its impact of environment, human health and the preservation of the society well- being, therefore the proper regulation of legal responsibility and its implications should be adapted and constantly improved by setting both administrative and criminal liability for every responsible person for the violation of e-waste management. Modern society must be aware of the requirement to separate WEEE from other waste, of the damage to the environment and human health from inappropriate WEEE handling, to understand and fulfill WEEE proper disposal. The legal legislation in the field of e-waste management in Lithuania is quite thorough, thus it has to be improved accordingly by the growth of such waste and the capabilities of the contemporary society to handle disposal accordingly. Thus the implementation of legal requirements still has some difficulties in Lithuania, as the regulations are not evaluated constantly, there is a lack of information dissemination for users, therefore the additional collection systems are not being implemented efficiently, hence the process of implementation of legal regulation should be improved and monitored more effectively.

Contemporary society and e-waste management

According to Ľubomir Belas, the Kant points out that „All forms of state are based on the idea of a constitution which is compatible with the natural rights of man, so that those who obey the law should also act as a unified body of legislators“ (Ľubomir Belas, 2017, p. 205), therefore Lithuanian legislation states, that every person must protect the environment from harmful effects ((Constitution of the Republic of Lithuania, 2010), article 53). The Constitution indicates, that not only the State but the society and its individuals are responsible for the protection of the natural environment, fauna and flora, individual natural objects and particularly valuable areas ((Constitution of the Republic of Lithuania, 2010) article 54). The perception of legal awareness of society is analyzed by Тарасов (2018, resume), who refers to Ponomarenko E. V. thoughts on the problem of person’s alienation from the forms of activities in law „A person exists in the world around in isolation from legal humanitarian and pan- human values, in isolation from his own legal awareness and a law-cognizing interest. The solution of the issue of person’s alienation can be found through the category of legal mastering, development of which constitutes a difficult scientific problem“ (2018, p. 203), thus the evaluation, improvement of legal regulation, especially in e-waste area is very important not only to the society, but for all the nature and environment as well, therefore this paper will evaluate legal responsibility measures in Lithuanian legislations. Using comparative analysis (analyzing and comparing legal practices of other countries in the field of e-waste management) the solution for improvement of the legislation in Lithuania will be proposed. It is worth mentioning that the natural and constitutional human right to a safe environment may clash with the interests of the economic sector, according to Samanskas “interests of the economic sector are essentially public interests, and therefore should be coordinated with each other, or otherwise – regulated” (2018, p. 151). It should be noted that the transformation of modern society is very important and it should be taken into account when implementing the norms of the law. According to Melnik, "the quality of the intellectual potential of society and the ability of society to use its intellectual potential efficiently is perceived as a key factor in the achievement of social, economic, political development and

133 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) progress, cultural, scientific and technological progress, harmonious and sustainable development" (2016, p. 38). ), and only by understanding public thinking, needs and opportunities there can be created and appropriately implemented a proper legal regulation in waste management sphere, as society and lawmaking are an integral part of proper legal regulation. E-waste management becomes a challenge not only for Lithuanian legal regulation, but for other countries as well. Even in United States, who is a one of the biggest producers of e- waste, the management practice and policy regulation are not sufficient enough to meet the challenge (Seeberger, Grandhi et. al. 2016). The authors notice, that „Public awareness of toxicants in e-waste should be raised to motivate environmentally friendly disposal of end-life electronic products and to prevent unnecessary exposure to toxicants among e-waste handlers and recyclers“ (2016, p. 13). It should be pointed out that the electronic equipment industry is mostly situated where outsourcing of manufactured products is practiced, in result most of labor-intensive production activities have moved to developing countries such as Singapore, South Korea, Malaysia, India, Taiwan, China (Osibanjo & Nnorom, 2007), thus not only Lithuanian legislation must be improved and maintain relevant to social conditions in the country. According to authors „Consumer electronic are the fastest growing sector of municipal solid waste (MSW) in both developed and developing countries and is arguably one of the most toxic“ (2007, p. 493). The Kumar analyzes e-waste management regulations in different countries such as United States, China, Thailand, Korea, Bangladesh, Pakistan, India and European Union countries and concludes that „With regard to the import or illegal transmigration of product from the major stake holders i.e. developed countries, the laws are either not sufficient to handle e-waste purposefully or have been left loose so that the piling e waste can find easy excess to developing countries.“ (Kumar & Singh, 2013). Therefore, it can be assumed, that migration of e waste ban or restrictions would contribute in solving the problem, but it seems less likely since it will be difficult and costly to implement and might destroy a potentially beneficial source of income for some of nations poor who depend on these activities. Efforts for finding ways to address the root causes behind the imports and the illegal recycling sector may be looked upon. The efforts for economic incentives to promote a more sensible use of EEE are required, as well as the more effective legal responsibility mechanism for the offences in the field of e-waste management.

Legal responsibility for violation of e-waste legal regulations in Lithuania

The legal regulation of Lithuania foresees that the main duties of the producers and importers of EEE are: to register according to the established procedure; to organize collection, transportation, treatment of waste, to participate in organizing the management of such waste in municipal waste management systems organized by municipalities; to pay the costs of collection, transportation and processing of the specified WEEE, the costs of organizing and carrying out public education and information; to manage EEE accounting and provide reports; is required to put a standard mark on the EEA for business purposes and to educate and inform the public about e-waste management (VIII-787 Law on Waste Management of the Republic of Lithuania, 2003). It should be noted, that the regulations for e- waste management customized mostly for legal entities and their employees, whose activities are related to e-waste management, not for general consumers of EEE. It should be emphasized that, in accordance with the provisions of the Constitution of the Republic of Lithuania, the responsibility for preservation of environmental protection depends on very person in the society, therefore legal responsibility should be addressed to all EEE users. Modern society must be aware of the following issues: the requirement to separate WEEE

134 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) from other waste; hazardous substances contained in EEE; damage to the environment and human health from inappropriate WEEE handling; WEEE handling options and collection locations, etc. The implementation of legal legislation in the area of e-waste management, has some difficulties, as the mentioned requirements are not properly implemented, there is a lack of information dissemination for users, providing of reports is hampered due to information system interruptions, additional collection systems are not being implemented, therefore the improvements must be made. The European Council Directive, indicates measures that can affect the basic conditions associated with waste generation: use of economic instruments that promote resource efficiency; promotion of research and development to produce less polluting products and technologies; development of environmental problems related to waste generation indicators to contribute to waste prevention (Directive 2008/98 / EC 2008). The Directive also distinguishes between measures that may affect the consumption and use phase: economic measures, such as the setting up of an eco-purchase initiative or a mandatory fee to be paid by the consumer for a particular good or part of a package that would otherwise be provided free of charge; an information campaign for the general public or a specific group of consumers; promotion of reliable eco-labeling; agreements with industrial enterprises, for example on product commissions, that operate under the integrated product policies; in the field of public and private procurement - inclusion of environmental and waste prevention criteria in calls for proposals; the re-use and repair of certain discarded products or their components, in particular through the use of educational, economic, logistical or other means, such as support for or establishment of accredited repair and re-use networks, particularly in densely populated areas (“Directive 2008/98 / EC”) ”2008). A lot of requirements of this Directive are already implemented in our legislation, but still Lithuanian e-waste management sphere requires much more attention and improvement, which could be achieved by adaptation of mentioned actions especially setting up of an eco- purchase initiative or a mandatory fee to be paid by the consumer for a particular good or part of a package that would otherwise be provided free of charge; support for or establishment of accredited repair and reuse networks, particularly in densely populated areas). The legal responsibility in the field of e-waste management in Lithuania is based on injunctions, which are regulated in the Code of Administrative Offences of the Republic of Lithuania (CAO) ((“XII-1869” 2015), article 249), The Criminal Code of the Republic of Lithuania (CC) ((“VIII-1968” 2003), article 270-2702) and the Environmental Protection Act (EPA) ((“I-2223” 2018) article 94–101)). “Legal acts indicates the principle of producer responsibility to inform and educate the society (D1-554, 2012). Therefore, the system is based on the legal obligations (I-2223, 2018) and sanctions imposed on them, which constitutes, that everyone who is responsible for violation of WEEE legislation requirements will be punished by a fine” (Statkiene, 2019). It should be emphasized that in the process of this study, there have been observed some limitations, the cases of violations of administrative law proceedings relating to waste management are inaccessible to the public. Information on offenses and imposed administrative penalties is not publicly available either on the website of the Department of Statistics, on the website of the Environment Department or on the Environment Agency's website, which raises the question of the transparency of the penalty system itself, as personalized data should be accessible to every individual. Availability of such data would not only serve the purpose of the study, but could also be one of the preventive measures to deal with such violations, as informing individuals about the violations of the waste management area and the amount of penalties imposed would disprove individuals from committing offenses. A very good example is the website of the

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Lithuanian State Labor Inspectorate, which contains all the data on violations, penalties, prevention plans and their implementation, and other relevant information for the public today (State Labor Inspectorate information, 2019). This article analyzes the cases that come to court because only court cases are publicly available through information technology and the Internet. By analyzing the levels of legal sanctions for violations in the e-WEEE area, it should be noted that the amount of fines for the same offences are different in Lithuanian legislation. For example, in CAO 249 article, it is stated, that for non-labeled EEA supplies, there is imposed a fine of € 550-1200, thus in EPA article it is states that for non-labeling of EEA there is imposed a fine of 600-1200 euro; in CAO it is stated that for the non-registration in the Manufacturers and Importers' book results into a fine of 300-560 euro, thus in EPA article 96 it is stated that failure to register EEA products results into a fine of 700-1400 euro; In the EPA article 99 it is stated that for a failure to inform the public about WEEE, there is imposed a fine of 1400-3000 euro, thus in CAO it is stated that for the failure to provide information on hazardous substances in the EEA, their environmental and human health hazards or information on these substances, the disposal and acceptance of equipment waste at the point of sale, a fine of 300-560 euro is imposed; in the EPA article 101, it is stated that non-execution of the obligation to have a document proving that WEEE handling will be financed, will result in a fine of 1400-3000 euro, thus in CAO article 249 it is state that for the EEE supply without a document, proving that the management of electrical and electronic waste equipment will be financed, imposes a fine from 550-1500 euro, therefore it should be regulated properly, trying to unify the amount of the fines for the similar offences. It is believed that one of the ways to repress the public in terms of violations in the field of e-waste is to adjust the level of fines, by increasing and harmonizing financial sanctions there can be improved the implementation of legal regulation and its application in extreme situations, as the modern information society has a clear and concrete legal regulation, its application and, of course, dissemination (appropriate access to legislation through information systems). It should be noted, that in Lithuanian law, liability for violations of legal acts, regulating environmental protection and use of natural resources, applies not only to natural persons, but mostly to legal persons. The legislator removes the possibility of evading the guilt by shifting the blame onto the one of employees, when a fine could be imposed on an employee who did not even have the opportunity to take care of proper waste management. According to the law, a fine is imposed on the one who makes a violation (for the legal person oneself) and not for one employee, who often does not have the real possibilities and resources to ensure the fulfillment of environmental duties within his competence, thus the inevitability of liability is ensured by law. The purpose of criminal liability is to defend legitimate interests and protected values of the society in those cases, where less restrictive means is not effective. According to the Lithuanian court decisions “the purpose of criminal law and general law principles established in Lithuanian legal democratic state jurisprudence, imply that formation of legal practice is not possible, when the norms of the criminal law are applicable to the offenses reglamented by other legal responsibility norms” (Statkienė & Granickas, 2017). According to author “administrative responsibility arises due to person`s committed the administrative offense, guilt, thus criminal responsibility is a criminal offense committed by a person whose guilt has to be proven”. In each case, the court, when assessing the nature of each liability in a particular case, should decide whether administrative or criminal liability should apply. Depending on the nature of violation of environmental pollution, the nature and degree of its hazard, administrative or criminal liability, together with material (civil) liability measures (2K-7-76 / 2012, 2012) may be applied to the environmental polluter. By delimiting administrative and

136 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) criminal liability for violations of environmental or natural resource use rules, it is necessary to evaluate the committed act according to the content of the objective and subjective features, their manifestation, to follow the principles of reasonableness, proportionality, justice and other general principles of law. The extent of the infringement is a key element of the division between criminal and administrative liability for environmental violations. In this case, the identification of potential harm to the environment and the magnitude of the threat of such damage is a decisive criterion for addressing the delimitation of criminal and administrative liability for environmental offenses. In such cases, the justification for the threat to the environment becomes very important. Therefore, according to the Constitution of the Republic of Lithuanian Constitutional principle non bis in idem, means that if a person for counter-law action is brought to administrative justice, and received a penalty for an administrative offense, he cannot be prosecuted in criminal terms for this offense (Baltusis, 2013). The comparative analysis of legal practice of Lithuania in the field of WEEE, reveals that there are some spheres, where the improving of legislation must be made, to fulfill our obligation to protect environment. Thus, it should be noted, that the constitutional right to a good and safe environment conflicts with our right to choose, buy and use only the equipment on the market we want (freedom to consume, use), so freedom of consumption and use contradicts the possibility of restricting this freedom, because by extensively using WEEE we violate our environment, because our equipment becomes a waste that is harmful to the environment.

Law practice in E-waste management infringement cases

It should be noted, that accordingly to the Lithuanian court practice for violations of e- waste management, not only administrative but also criminal liability is provided for such violations of law. Lithuanian Supreme Court practice concludes that in order to prosecute a person under Article 270, the preconditions for triggering a danger are clearly insufficient, there should be identified various aspects of detecting damage to the environment (special features). The cassation order also refers to the criteria for the separation of administrative and criminal liability (2K-96/2014, 2014). The Court of Appeal found that the unlawful way of disposing of waste and very high quantity and type of waste could have had serious consequences for the environment, but there is no evidence in the case file to suggest that it has occurred and that all the features required to admit a person as guilty are necessary. criminal offense. The above-mentioned case did not investigate the soil surface and deeper layers of soil, so it is unclear whether it was actually contaminated. It is not enough to just presume the threat to the environment, but it is necessary to prove it. Nevertheless, the appellate court concluded that the contaminated ground and its deeper layers on the plots of land, mixed with waste, threatened the contamination of groundwater and environmental damage, could have had serious environmental consequences due to the applicant's intentional illegal actions, and qualified one’s actions according to the 1st part of СС Article 270. It should be noted that, in accordance with the «polluter pays» principle, an entity causing environmental damage or imminent threat of such damage should in principle compensate for the necessary damage prevention or remedial measures. Another important Directive of the European Parliament and Council as of 19 November 2018 on the protection of the environment through criminal law, which also does not require such extensive criminalization and punishment solely for the emergence of environmental risks. It is believed that only the assumptions of the danger are obviously not enough to bring a person to justice, such a form of responsibility is only extreme. Environmental damage can be regarded as a particular type of damage, as it cannot be attributed unconditionally to property or non-

137 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) pecuniary damage. This type of damage has both property and non-pecuniary damage aspects. It is therefore a matter of addressing the question of how to identify an environmental object that is being harmed, as well as the degree of exposure and actions that threaten the environment. The Supreme Court of Lithuania has held that the distinction between civil liability for environmental damage and civil liability for a real threat of damage implies that the first responsibility is related to the negative consequences for the environment and the application of its restoration measures and the related costs, while the second one to preventive measures reimbursement of the costs (3K-7-465/2008, 2008). According to the Supreme Court of Lithuania, such practice of the application of criminal law cannot be accepted, when the behavior of a person under exclusively civil, administrative or disciplinary legal relations is treated as a criminal offense (2K-324/2013, 2013). It should be noted that administrative responsibility is the main type of liability for environmental, including environmental pollution, violations. Legislators use the first part of СС Article 270 of imposed risk to many people's life or health or a serious threat to fauna, flora or other serious consequences, to separate criminal liability for such acts from administrative liability for similar administrative offenses. The court must give full reasons why the perpetrator is subjected to criminal rather than administrative liability (2K-7-201 / 2008). The appellate court in general did not give reasons for criminal or administrative liability for violating the rules on environmental protection or use of natural resources (2K-96/2014, 2014). When analyzing violations for e-waste management in Lithuania, there appear cases where the main sanction is not a pecuniary penalty but a deprivation of certain rights, in the analyzed case - a license. By the decision of the Environmental Protection Agency dated 2017-02-22, canceled Association’s "EEPA" licenses Nr. 001 and Nr. 003, authorizing the management of electrical and electronic equipment waste management. The validity of the licenses has been revoked, because over the last two years Association received 3 warnings on possible suspension of licenses due to violations of the requirements of the Republic of Lithuania Law on waste management. By the Order of the Vilnius Regional Administrative Court of 2017-09-27, at the request of the Association, the application of the means of securing the claim - temporarily suspended decision of the Agency, which revoked the validity of the Association’s License No. 001 and Nr. 003, providing the right to organize the management of electrical and electronic equipment waste ("EEPA electrical and electronic equipment waste management organization licenses revocation, 2017"). The adoption of this decision proves that the legal regulation of the WEEE management organization is inadequate, as there are surplus measures, such as withdrawal of the license, which does not help the processors to improve, but only creates additional difficulties, because failure to act will not guarantee the financial stability of the entity, but only hinders company’s activities. The system should teach, inform and seek to help such waste managers to work more efficiently. In comparison, the similar case was situated in Court of Justice of the European Union (C-534/13, 2015). Land in Tuscany, which had suffered serious industrial pollution as a result of past industrial activities, was classed as a site of national interest for the purposes of its rehabilitation. By administrative acts the Italian administrative authorities ordered the applicant companies, which had since become the owners of the land, to adopt specific “emergency safety” measures for the rehabilitation of the land. Relying, on the fact that they were not responsible for the pollution, the companies brought proceedings before a regional court, which annulled the measures in question on the ground that, by virtue of the “polluter pays” principle, specific to the national legislation and European Union law, the administration could not impose the measures on undertakings which bore no direct responsibility for the contamination observed on the site. The particular importance for the

138 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) application of the “polluter pays” principle, hence for the liability mechanism, of the condition relating to a relationship of causality between the operator's activity and the environmental damage, was apparent from the provisions of that Directive which related to the inferences to be drawn from the fact that the operator did not contribute to the pollution or to the risk of pollution. Where no causal link could be established between the environmental damage and the activity of the operator, the situation fell to be governed by national law, with due observance of the rules of international legislation. Very similar situation with responsibility of violation of e-waste regulation in Lithuania. The Lithuanian court decision are based on national legislation, of course in accordance with European Union law and the “polluter pays” principle is the most important one solving similar cases. One case investigates violations of stored waste: scrap metal, plastic, useless car tires, unfit for use vehicles, stored outside the land plot. The area, where the waste is stored is state land (II-48-951 / 2016, 2016). The petitioner accumulates the above mentioned waste without the allowance to do so. When collecting waste, he does not sort according to the nature and type of waste, does not ensure that the accumulated waste does not adversely affect the society and the environment, the waste is mixed with other waste, stored without complying with the terms provided in the waste management regulations. The court received a complaint in which he, disagreeing with the decision of the chief specialist of the Šiauliai Regional Environmental Protection Department, asked for its annulment. In the complaint it is stated that he does not agree with the fine, because he did not contaminate but cleaned the nature, whereas his individual activity is the collection of secondary raw materials. In the court the complaint is rejected. According to Lithuanian legislation, Code of Administrative Offences, indicates that responsibility for collection, transportation and treatment of waste without the right to engage in such activities is imposing a penalty (ATP-79-350 / 2016, 2016). In the present case, the offender admitted that he was holding timber, metal, tires, plastic, unfit for use cars and other waste on the state land, but explained that he was engaged in individual waste management activities and did not pollute the nature and, on the contrary, cleaned it. He also claimed that he had not applied for the pollution permit license because he did not know that he had to, meanwhile he knows the rules of waste management and adheres to them, but does not follow the terms of waste storage, because physically does not manage to do it as well as does not sort them. According to the Waste Management Act, waste collection, transportation and treatment activities may be carried out by permits obtaining companies registered in the State Register of Waste Managers (2AT-17-942 / 2016, 2016). It is clear from the facts of the case that the applicant did not have such an authorization. Based on these circumstances, the court, having verified the evidence of the case, has no reason to doubt the fault of the person charged with the administrative liability, and decided not to satisfy the complaint as well as leave the decision to impose the fine. It can be said that Lithuanian courts strictly adhere to the rules provided for in legal acts and make decisions based on them, however, this does not deny the fact that legal regulation has to be improved, legal acts should be constantly reviewed, re-valued and systematized, the levels of sanctions for offenses with the same characteristics should be harmonized, statistics of legal violations must be publicly available and publicized, administrative penalties for violations of e-waste management, their size, nature, should be made public (personalized), the implementation of legislation should be constantly monitored and made more effective by attracting today's society ( realizing its intellectual potential and its benefits) to the process of improving the supply chain and ensuring its implementation.

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Conclusions

According to Lithuanian case law and national legislation acts, administrative, civil or criminal liability may be applied for environmental violations, but the latter shall apply only in extreme cases, the main form of liability is administrative penalties. The main violations implicating administrative penalties are: the execution of accounting for the supply of EEE to the domestic market without complying with legal requirements; the submission of obviously false or counterfeit data in the accounting records of EEE; failure to provide the data; distribution EEE, which is not registered by the manufacturer or importer according to the procedure; failure to comply with the obligation to dispose of the product in the prescribed manner; the supply of unmarked electrical and electronic equipment; obligation to provide a document proving that the management of WEEE will be financed; failure to comply with, or inadequate enforcement, of the obligation to educate or inform the society about the management of e-waste products. The main drawback of this type of infringement research is publicity and availability of information. In order to investigate the causes, the frequency, the size, etc. of imposing penalties on waste management, the data is available only after a complaint to the judicial authorities (Court of appeal or Supreme Court). The Environmental Protection Agency, the Ministry of the Environment and the Department of Environmental Protection do not publish the data of offences in the field WEEE, nor are there any data on this topic in the Department of Statistics of Lithuania. The availability of such information would be one the step closer to contemporary society to gain some prospective on this topic and to increase consciousness in this manner. Meanwhile, in terms of separating civil liability for environmental damage from civil liability for real threat of damage, the first responsibility relates to the negative consequences for the environment and, as a result, to the recovery measures and the associated costs, and the second one relates to reimbursement of the costs of the prevention measures. In order to improve the efficiency of legal liability for e-waste management, it is necessary to harmonize sanctions for offenses with similar characteristics; to publicize information on the nature of such offenses, fines and their frequency; to develop legislation and ensure their proper implementation; to take into account the evolution of modern society - the public thinking, needs, potential and their values; to include fines for WEEE offences to the society individuals as well, not just manufactures, importers, sellers and others legal entities; to encourage society to be involved in WEEE prevention by awarding society and legal entities, not only by punishing them and to search the right solution for the creation of the right legal regulation and for ensuring its effective implementation.

References

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141 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

SOCIAL RESILIENCE ASSESSMENT FRAMEWORK IN THE CONTEXT OF ORGANIZATIONS OPERATING IN RURAL AREAS: CONCEPTUAL REVIEW

Jolita Gečienė

Mykolas Romeris University, Lithuania [email protected]

Abstract

The article analyses the social resilience factors that influence the activity of organizations operating in rural regions. Revealing how the concept of social resilience becomes more and more important in modern society to create risk management factors within an organization. The article presents an analysis of social resilience, determines the theoretical principles and empirical results based on which the social resilience factors are planned. In order to identify the factors that are important for the assessment of the social resistance of organizations in rural areas, the research is the analysis of scientific literature. Based on the results of the research, the model of social resistance assessment of the organizations was formed. Purpose – to identify the key factors in evaluating rural region organizations‘ social resilience through theoretical analysis. Design/methodology/approach – systematic and logical analysis of organizational social resilience. In order to conceptually define the factors of organizational social resilience, a scientific literature analysis was carried out. Finding – Scientific literature analysis allowed to identify key factors in evaluating rural region organizations’ social resilience. A model for evaluating organizational social resilience factors was prepared. Research limitations/implications – The constraint of the article is low attention given to economic resilience factors which literature describes as important in connection with social resilience. Practical implications – The results of this research can be useful in strengthening social resilience in rural organizations. Originality/Value – On the basis of the research results, the author of the article developed a model of social resistance assessment of organizations. Keywords: social resilience, organizations, rural regions. Research type: literature review.

Introduction

The social changes taking place in a modern work, increasingly active processes of globalization, development of open market and developing technological processes motivate organizations operating in rural regions to look for new activity mechanisms, take on social responsibility, broaden collaboration, adaptivity and strengthen social resilience (Nijkamp and Kourtit 2013). The question that has lately been raised frequently – why some organizations, after experiencing difficulties, crisis situations and unfavourable evens are able to overcome

142 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) tension, maintain structure and continue functioning while others are unable to overcome the difficulties, they face substantiates the relevance of the article. The article presents answers to this question taking into consideration the fact that rural region organizations work in a closely connected and interactively difficult world where unexpectedness and unwanted events are frequently experienced in everyday situations (Rosset and Martínez-Torres, 2012). Organizational structures face upheavals such as decrease in social capital, loss of property rights, abrupt change in economic policy and others which directly influence the regions‘ ability to develop social resilience (Dawley, 2013). It is more and more frequently observed that social resilience theory provides understanding about how regions and organizations cope with misfortunes, tension and huge obstacles and how they adapt to the changing situation (Acemoglu et al, 2014). Exploration of the topic – the activity of organizations in rural regions was explored by Andersson and Koster (2011); Balland, Rigby and Boschma (2014), organizational competitiveness in regions was investigated by Bristow, (2010), regional economic and social aspects were analysed by Bristow and Healey (2013) while structural changes and networking between regional organizations were researched by Huggins and Thompson (2014), Neffke, Hartog, Boschma and Henning (2014). The theoretical and empirical perspectives of social resilience theory were analysed by Christopherson, Michie and Tyler (2010), Gilly, Kechidi and Talbot (2014), Martin, and Sunley (2013), resilience and adaptation were studied by Pike, Dawley, and Tomaney (2010). Scientific problem – the problematics of rural regions is widely discussed in scientific sources. However, social resilience of organizations that seek effective activity results in unfavourable circumstances is quite a new phenomenon and not well studied.

Theoretical background: conception and factors of organizational social resilience

Considering the peculiarities of organizations in rural regions, it is necessary to mention that these organizations face unfavourable circumstances, crisis situations and risk factors (Coombs, 2010) which may be mitigated by developing social resilience. Various researchers define the concept of social resilience differently. Luthar et al, (2000) notes that resilience is a dynamic process of positive adaptation to significantly unfavourable circumstances. The fact that resilience is a key factor of social resilience is supported by Chandra et al, (2010) who emphasizes that adaptation is invoked to reduce the negative impact of crises. Other authors (Cummings et al, 2000) claim that the main criterion of social resilience is risk factors which define the probability of negative consequences. Therefore, if there is no risk, there is no need to develop social resilience and on the contrary – the higher the risk, the higher the probability of impairments (Cummings et al, 2000). Meanwhile, Rudolph and Repenning (2002) define resilience as positive adjustments in difficult conditions (mistakes, crises, upheavals, routine disruptions, constant risk, tension) in order for organizations to become stronger and more innovative after facing difficulties. Norris et al, (2008) observes that social resilience is organizations‘ and other social systems‘ ability to maintain balance between various elements in crises by focusing the available resources and competences, change, requirement and challenge management skills. Therefore, the main social resilience characteristics can be distinguished, which are the organization‘s or system‘s ability to react to negative impacts, and to adapt to changes. With social resilience defined, it is important to analyse the factors and elements of rural region organizations which allow the organization to overcome unfavourable events. Social resilience in rural region organizations emerges due to the dynamic and processes which are flexible and easily formed in order for organizations to successfully overcome unexpected

143 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) situations (Magis, 2010). According to Simmie and Martin (2010), the region in which the organization operates needs to take problem solving into consideration as well because strengthening social resilience requires not only organization‘s but also region‘s ability to appropriately react to risks and crises. Depending on the region in which a crisis occurs, social resilience should be related to adaptivity because every location has different abilities to adapt to change. The research of abovementioned authors determined that attention should be focused on region’s’ ability to strengthen social resilience factors by considering the economic, technological and environmental challenges. It is important to collaborate with organizations in the region when planning and implementing changes and to take into consideration their limits. The region’s ability to cope with structural changes, create new ways to grow in order to compensate unwanted events and decline processes in its regional environment is the main foundation of resilience, as Swanstrom (2008) states. In addition, the author claims that no region can trust its past successes when looking to the future. In an evolutional perspective, regions may be linked with the consensus between adaptivity and accessibility because organizations are dependent on their past and nature of activity while with the emerge of new types of activities, new organizations that satisfy a specific need emerge as well (Munari et al, 2012). Resilience is also dependent on the regional process, structures and practices which motivate the increase of competence of organizations, renew effectiveness and stimulate growth (Sutcliffe and Vogus, 2003). A resilient organization is a sustainable and willing organization because will is trust based on a realistic evaluation of challenges in the circumstances of a particular region. Resilient organizations tend to conduct self-analyses in order to verify expectations that are already met (Gittell et al, 2006). Kimbi (2014) distinguished three levels of social resilience: individual, societal and national. It is important to understand what skills allow organizations to effectively function and seek for positive results in extreme situations. Other scientists (Chandra et al, 2013) reveal that in order to endure crisis situations and protect from extreme unwanted events, it is mandatory to distinguish the fundamental elements of social resilience: social and economic justice; common welfare; effective risk management; integration and communication between governmental and non-governmental organizations. The researchers state that these elements are the main leverages for strengthening social resilience (Chandra et al, 2013). Scientific studies define the following factors that stimulate social resilience: collaboration processes that allow to execute changes (Wolfe, 2010); organizational leaders’ role where the main characters are managers and leaders that are able to execute changes in institutions (Bristow and Healey 2013); conceptualized organizations that are involved in complex feedback interactions with other institutions where changes and abilities to adapt take place on different levels and at different speeds (Williams et al, 2013). Boschma and Capone (2014) determined that regions can strengthen social resilience via the following actions: strengthening local resources or organizational skills; invoking the specialized knowledge base in order to diversify new activities by associating with other regions and organizations with strong knowledge base which can share their resources. Scientific source analysis revealed that social resilience manifests through reacting to upheavals, adapting to changes and overcoming unfavourable situations. The main factors that stimulate social resilience are collaboration and communication, leaders’ role in adapting to changes, local resources, knowledge base and skills of the organization, effective risk management.

144 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

Research methodology

In order to conceptually define the factors of organizational social resilience, a scientific literature analysis was carried out. Search for publications was conducted in the academic literature search platform Google Scholar. The following keywords were searched: social resilience, organizational social resilience, rural organization social resilience. The period of search was set to the past five years. In the first stage of research, a total of 11 articles fully reflecting the research topic were selected. The second stage included the same keywords without applying a time frame in order to find better topicality for the research and distinguish authors who conduct the most research and are authorities on the topic. In this stage, 30 articles were selected for analysis. The stage of article analysis clarified the organizational social resilience factors. Systematized research results are presented in tables. General research results are presented in the model for organizational social resilience factor evaluation (Fig. 1). Methods: systematic and logical analysis of organizational social resilience.

Results

Scientific literature analysis allowed to identify key factors in evaluating rural region organizations’ social resilience. The results are presented in Table 1.

Table 1. Organizational social resilience factors

No. Social resilience factors Author 1. Structural, organizational factors, Zahner, S. J., 2005; Proactive attitude; Barca, F. et al, 2012; Organization’s experience; Oostindie, H. et al, 2010; Organizational skills; Bolman, L.G. and Deal, T.E., 2008; Adaptivity; Kitchen, L. Marsden, T., 2011; Consensus between adaptivity and accessibility; Wheelen, T. L., et al, 2015; Effectiveness; Effective risk management; Van der Ploeg J. D. and Schneider, S., Innovation; New ideas; 2015; Strategic changes; Change planning; Simmie, J. Martin, R., 2010; Activity plan coordination with goals; Swanstrom, T., 2008; Structural changes; Wolfe, D.A., 2010; Organizational culture; Williams, N. et al, 2013; Organizational transparency; Starr, R. et al, 2003; Trust; Reliability; Morgan, D. et al, 2014; Shared responsibility; Gittell, H. et al, 2006; Understanding of cause - consequence; Magis, K., 2010; Flexibility; Flexible processes; Norris, F., H. et al, 2008. Chain action sequences; Ability to maintain balance; Dynamics; Self-analyses. 2. Human resources; Pakalnienė, R., 2015; Experience; Morgan, D. et al, 2014; Knowledge; Specialized knowledge; Wheelen, T. L. et al, 2015; Skills (mobilization skills); Norris, F. H. et al, 2003; Insightfulness; Boschma, R. and Capone, G., 2014; Innovations; Starr R. et al, 2003; Panoramic thinking; L.G. and Deal, T.E., 2008. Competences.

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No. Social resilience factors Author 3. Leadership, management; Morgan, D. et al, 2014; Management means: administration; Norris, F. H. et al, 2008; Management and accountability Bristow, G. and Healey, A., 2013. Ability to manage requirements, challenges and changes; Organizational leaders’ role; Strategic management; Resource management; Negotiation skills; Seeking common welfare. 4. Communicational factors; Simmie, J. and Martin, R., 2010; Collaboration development; Munari, F. et al, 2012; Connections that create successful partnership Williams, N. et al, 2013; organizational networks; Pakalnienė, R., 2015; Concentration; Morgan, D. et al, 2014; Partnership process, effectiveness; Chandra, A. et al, 2013; Variety of partners; Williams, N. et al, 2013; Synergistic results; Bolman, L.G. and Deal, T.E., 2008; Community involvement; Gittell, H. et al, 2006. Unidirectional activity; Communication, agreements; Feedback interaction with other organizations; Hope, belief in success. 5. Economic growth; Barca, F. et al, 2012; Economic challenges; Morgan, D. et al, 2014; Economic justice; Van der Ploeg, J.D. et al, 2010; Finance management; Oostindie, H. et al, 2010; Use of material and non-material resources; Simmie, J. and Martin, R., 2010; Technological challenges; Chandra, A., et al, 2013; Industry and technology. Boschma, R. and Capone, G., 2014. 6. Social and social resilience factors; Barca, F. et al, 2012; Social conditions; Oostindie, H. et al, 2010; Social justice; Simmie, J. and Martin, R., 2010; Social capital. Chandra, A. et al, 2013. 7. Legal environment; Chandra, A. et al, 2013; Laws regulating organizational activity; Barca, F. et al, 2012. Legal base; 8. Political factors; Barca, F. et al, 2012; Political conditions. Simmie, J. and Martin, R., 2010. 9. Environmental factors; Oostindie, H. et al, 2010; Environmental protection challenges. Simmie, J. and Martin, R., 2010.

The distinguished organizational social resilience factors (Table 1) may be separated into bigger groups: structural-organizational; human resources; leadership; communication- collaboration; economic; social; legal; political and environmental factor groups (Fig. 1).

146 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

Structural organizational factor group Human Environmental resources factor group factor group

Political Leadership factor group factor group Organizational social resilience factors

Communica- Legal factor tional factor group group

Social factor Economic group factor group

Source: prepared by the author Figure 1. Model for evaluating organizational social resilience factors

A model for evaluating organizational social resilience factors was prepared (Fig. 1) which separates organizational social resilience factors into bigger factor groups. The factors in every group are important for strengthening social resilience in organizations operating in rural regions.

Conclusions

Through theoretical analysis, key factors for evaluating the social resilience of organizations operating in rural regions were identified. It was observed that separate factors, which scientific sources distinguish as having the strongest impact on strengthening organizational social resilience constitute nine groups of resilience factors. The most important of these are four groups which combine the most factors which were scientifically proven to be the best for evaluating social resilience in an organization. These groups were the following: structural-organizational; human resources; leadership and communication factor groups. The model for evaluating organizational social resilience factors reveals the key social resilience factors which enable organizations to overcome unfavourable events and help organizations to effectively function and seek for positive results in extreme situations.

147 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

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JURISDICTION IN THE SUCCESSION MATTERS UNDER THE REGULATION (EU) NO 650/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 4 JULY 2012 IN THE FACE OF POLISH INTERNATIONAL CIVIL PROCEDURE

Marta Lewandowska-Mroczkowska

Adam Mickiewicz University in Poznań, Poland [email protected]

Abstract

Purpose – The aim of the article is to present the impact of EU Regulation no. 650/2012 on determination of jurisdiction in succession matters. The paper presents the distinction between Polish and European system of admitting jurisdiction and its consequence. Design/methodology/approach – Paper is based on the legal-comparative and legal-historical methods of law research. The chosen methods provide a complete picture of the situation, which should be consider from the Member States perspective as well as from EU ones. Finding – Todays reality encourage people to travel or move to another country and the European Union Treaty treats freedom of movement as one of the protected rights. Over the time, this possibility has evolved into a difficulty. Lack of unified succession procedure meant that each Member States has its own regulation regarding to the succession. As an outcome of above, foreign people, especially successors met a great difficulty to obtain their inheritance. Hence, the unification of procedure, which took place in 2012, facilitates it, but it also brought new practical problems and questions, which are resulted using the state law. Research limitations/implications – For the purpose of this paper, the core of research has been limited to the issue of jurisdiction in Regulation (EU) no 650/2012 and its juxtaposition with jurisdiction in matters succession in polish civil procedure code and Regulation (EU) 1215/2015 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. For the purpose of this speech, the issues regarding to recognition and enforcement of judgments on the territory of European Union have not been included. Practical implications – Establishing the proper jurisdiction in matters of succession will help successors in resolving those cases in more efficiently and effectively way. Additionally, this issue will provide more stable principles of inheritance in cases with a foreign element. Originality/Value – The issue of European successor law is not popular agenda and the problems concerning the jurisdiction for cases is extremally invisible for the doctrine. In the light of the foregoing the is a need to develop this aspect of law and introduced them to the wider public. Keywords: European Law, European procedure law, jurisdiction, succession law, polish civil procedure. Research type: research paper.

Introduction

European Regulation No. 650/2012 on succession matters begins the long-awaited process of unification of the European Succession law. The main purpose of this Regulation was to facilitate the succession matters within EU countries which became very important

150 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) implication of freedom of movement established by Title IV of the Treaty on the functioning of European Union. One of the basic assumptions was to find the proper jurisdiction (the legal system which applies to particular succession case) (Rodríguez-Uría Suárez, 2013). Consequently, the Succession Regulation was aimed to establish the new standards which help to avoid the divided jurisdiction. Pursuant to the recital 27 of Succession Regulation the rules of Regulation were devised so as to ensure that the authority dealing with the succession will, in most situations, be applying its own law. Owing the above, we should consider the Regulation no. 650/2012 as the outcome of long-term works, done by the EU members, in order to make forum (competency of hearing the case) and ius (succession State) coincide. As the result, the court which have jurisdiction in particular succession case should, in principle, follow the law of respective State. However, the assumptions of the Succession Regulation require from the Member State to unify the national law in order to comply with its provisions. In this paper, the author will signalize part of the problems related with determination of jurisdiction after introduction of the Succession Regulation in Poland. Nevertheless, the subject matter taken up in this article is very broad, as the result the author will concentrate on the main problems connected with determination of jurisdiction in succession matters on the basis of EU regulations and the Polish Civil Procedure Code. The problems in question raised mostly from the fact that the Regulation has extended its scope to cover procedural law, which in principle falls within the competence of the Member State (Załucki, 2015).

The genesis of constructing the EU regulation on the succession matters

First ideas on unification of the European Union regulation in scope of succession appeared at the beginning of the 90’s, along with the creation of the European group of Private International Law. The above – mentioned group started working on the family and succession law for all EU members. Nevertheless, these have never been enforced. Consequently, various groups within EU structures, working on this project but none of them have achieved their goals1. The first draft of succession regulation was published in October 2009, which was widely commented2 on by the EU members. These opinions led to the integration of changes in current regulations’ (not the introduction of the current regulation). The level of cooperation has resulted in investments throughout the European Union. Consequently, the Regulation no 650/20123, issued in 2012, should have been considered as the popularization of the cross-border investments. The main difference between the Succession Regulation and the previous international agreement was its character. Contrary to the previous international legislation, the Regulation no. 650/2012 is universal because it is used in every succession case recognized by the States

1 In 1998, The European Community adopted so-called “The Vienna action plan” which together with Tampere’s Program, resulted in the publication of a rapport in 2002 on the unification of international succession law. Later time, in 2004, at the meeting of the European Council in Hague ended with establishing Hague’s Program which provided for the development of green book. This book has been published in 2005. Above mentioned actions started the new dialogue on succession matter, so in 2008 EU issued Documet de reflexion sur les successions à cause de mort. 2 See more: Max Planck Institute for Comparative and International Private Law, Comments on the European Commission’s Proposal for a regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession an the creation of a European Certificate of Succession, Rabel Journal of Comparative and International Private Law (RabelsZ, Vol. 74, No.3, pp.522-720. 3 Official Journal of the European Union L 2012, No. 201, p. 107 (hereinafter: Succession Regulation or Regulation no. 650/2012).

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Members courts’. Consequently, this regulation is being characterized as the erga omnes kind (Fallon and Kruger, 2013, p. 21). The effects of this regulation are widely recognized and have often led to revolutions in legal systems of EU members. Some of them decided to amend their law, other to change its interpretation. The changes in question were made in conjunction with revolutionising the way in which succession cases were considered within the past. Nevertheless, the problems of legal basis, on which the jurisdiction is admitted have not disappeared. Hence, it is difficult to find the applicable scope of European Union law for Polish jurisdiction in the succession cases.

The scope of the Succession Regulation

The implementation of succession regulation by European Union, opened the new chapter in the history of the EU integration. Hitherto, those issues have not been covered by judicial cooperation in the civil matters, so their implementation might be seen as the beginning of the new time in EU integration. One of the reasons of its introduction was a significant discrepancy between succession regulation of the Member States, which caused serious practical problem (Załucki, 2015, p. 6). Over time, these have become a growing challenge for all judicial authorities within EU counties. However, the EU Parliament has drawn a line between old and new order. This decision was a consequence of long-term works on Succession Regulation, which results in Regulation no. 650/2012. One example of a comprise, which is a Regulation, is the restriction on its use (Rath-Bosca, Barmos and Stanescu, 2016, p. 36). According to Article 83(1) of Succession Regulation, the provisions of this regulation apply only to the people who died on or after 17th August of 2015, i.e. at the moment when this act came into force and therefore restricted to the deceased to whom this regulation applies. Furthermore, cases which might be proceeded under the Succession Regulation are characterized by their cross-border nature. Without those factors, using the Regulation no. 650/2012 would be unsubstantiated1. However, the determination of jurisdiction, on the basis of the Succession Regulation requires the ascertainment of the main pillar of proceedings. Thereby, the nature of this regulation determines which will apply to these cases. Where succession is only a part of another civil procedure, then regulation no. 650/2012 should not be used.

Jurisdiction under the Regulation no 650/2012

Connecting factors in Succession Regulation

The Succession Regulation includes the rules on determination of the jurisdiction of Member State courts’, as proper one on ruling. These rules are based on habitual residence where testator used to live before their death creating the most important factor for allocating the proper jurisdiction under Regulation no. 650/2012. What is more, the scope of general jurisdiction under the succession regulation includes the entirety of testator´s succession matters. Unfortunately, there is no definition of habitual residence2, but both doctrine and practice benefit from the definition established in the Court of Justice of the EU (hereinafter:

1 Recital 67 of the explanatory memorandum to the Regulation. 2 Literature underline the compromise between legal systems of common law countries, where there are two kinds of domicile – domicile of choice which is connected with the permanent of indefinite, and the domicile of

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CJEU) case law1 in relation to the Regulation 2201/20032. Therefore, the habitual residence should be understood as the “centre of existence”3. The definition is based on the facts and it is not referred to the person’s will. In consequence, the determination of jurisdiction requires an assessment of the facts about the testator in recent years and on the day of death. Nevertheless, having the habitual residence within the EU at the time of death does not necessary mean that the Succession Regulation will apply4. It raises two fundamental questions – where and due to which law5 these proceedings should take place? The answer, unlike most EU regulations, was emphasised in one of the most important judgments of CJUE C-523/076. Due to this assessment, the physical presence in a particular country is not sufficient to hold the jurisdiction of the State. CJUE pointed out that the integration, including language skills and family and social relations involves a sign of belonging to a national community (Weitz, 2015, p. 54). Therefore, the assignment of the jurisdiction, under the Regulation no. 2201/2003, depends on the above circumstances which were transmitted to the EU succession law.

General jurisdiction

Established by Article 4 of Succession Regulation, general jurisdiction creates the general rule according to which jurisdiction of the State are usually determined. The base of its determination is habitual residence (Weitz, 2015, p. 49) which has excluded the previously used citizenship factor, which until the entry into force the rules of the Succession Regulation, was the most important connecting factor determining the jurisdiction of a particular State. According to Article 4 jurisdiction in cross-border cases should be determine if a deceased has, at the time of death, his/her habitual residence on the territory of particular country. The principle under Article 4 forms the backbone of the succession legislation of the European Union and its based on the principle of the unity of the succession conflict of laws. This rule has been always supported by the doctrine (Rzewuski, 2018; Rebel, 1958, p. 251; Ferid, 1976, p. 96; Lein, 2009, p. 116). In results, Recital 37 of Succession Regulation indicates that for the reasons of legal certainty and in order to avoid fragmentation of the succession, the law should govern the succession as whole. Owing above under consideration, Article 4 establishes general origin. This dualism imposes introduction of the new category – habitual residence into European law. See: M. Rzewuski, [in:] Unijne Rozporządzenie spadkowe nr 650/2012. Komentarz., M. Załucki (eds.), Warsaw 2015, p. 78. 1 See: Judgment of ECJ, 13 October 2016, Mikołajczak, C-294/15, pt. 48; Judgment of ECJ, 16 July 2009, Hadadi, C- 168/08, pt. 50. 2 Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (OJL EU 338, 28.12.2003, p. 1-29). 3 Likewise: Judgment of ECJ, 2 April 2009, Kokein hallintooikeus,C-523/07, pt. 44; Against the background of the Regulation no 2201/2003: K. Weitz, Jurysdykcja krajowa w sprawach małżeńskich oraz sprawach dotyczących odpowiedzialności rodzicielskiej w prawie wspólnotowym, „Kwartalnik Prawa Prywatnego” 2007, z. 1, p. 96-97; and also see: H. Haladová, Habitual Residence in Brussels II bis, «https://www.law.muni.cz/sborniky/cofola2011/files/normotvorba/Haladova_Hana_6294.pdf », [access: 05.14.2019]. 4 See Article 10 of the Regulation. In this case the only requirements are to have another connection with the EU. 5 The issue of material law is not the subject of this article, but it should be underlined that the according to Article 20 of the Succession Regulation, the possibility to choose the applicable law is not limited to the legal orders of the Member States. 6 Judgmental of the Court of Justice of 2 April 2009 pt. 44« http://curia.europa.eu/juris/document/document.jsf?text=&docid=73639&pageIndex=0&doclang=EN&mode=l st&dir=&occ=first&part=1&cid=8549436», [access: 2019.05.18]

153 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) jurisdiction which concern all succession cases. Nevertheless Article 4 does not distinguish between litigation and non-litigation cases. Lack of this distinction was deliberate action of the EU legislator1. Therefore, it is not necessary to give a statement in order to determine the jurisdiction of particular State2. Consequently, Article 4 establish a principle of unity of forum which becomes the general rule of succession within EU member countries. As the result the court recognized under Article 4 of Regulation no. 650/2012 is legitimized to rule on succession propriety as whole. This solution excludes diversification of the jurisdiction because of its placement or subject. In consequence, the court of the State, where a testator had his/her habitual residence, could rule on the succession proprieties located on the territory of different member country. Therefore, establishing the jurisdiction on the above-mentioned basis excludes double ruling on the same issue. The derogation of this rule concerns very limited number of cases, mainly in order to exercise the authority of third-party State where the descant had the last habitual residence. Thus, the jurisdiction on the basis of Succession Regulation is detached from the location of succession property.

Jurisdiction in the event of choice of law

Under the regime of Succession Regulation, the European legislator provided two additional mechanism aimed at providing coincidences between ius and forum – using the direct (Article 7 letter c) or silent form (Article 9) of prorogation of the jurisdiction. Both of these forms are strictly connected with procedural position of the sides. While Article 6 of the Regulation indicates situations in which a particular court should decline the jurisdiction, then Article 7 enumerate the events when the courts of a chosen State have the jurisdiction to rule on this succession matter case. The first case concerns the situation of declining the jurisdiction on the basis of Article 6 of Succession Regulation. The situation is related with relinquishing of jurisdiction by the State which law has been chosen by a testator3. The consequence of declining the jurisdiction due to Article 6 results in determination of the necessary jurisdiction of another Member State. The absence of such regulation might be seen as the great obstacle which results in the impossibility of obtaining judicial protection against the parties to the succession proceedings. As a result, disclaiming of the jurisdiction of the State whose law has been chosen by the testator shall have the effect of conferring jurisdiction of the State based on the general rules (Bonomi, 2016, p. 203). One of the situations indicated in Article is determining the jurisdiction of courts of the particular State is jurisdiction agreement. Such a choice results not only in the indication of, applicable to the succession, material law but also in determination of jurisdiction of this State. This rule is connected with an assumption of better knowledge about the own State’s law than the foreign one, which should be evaluate as the most rational solution. Third situation where jurisdiction of the particular State is determined under Article 7 is its adjustment by the parties of the proceedings. As opposed to Article 9, the adjustment must be explicit by the State and the jurisdiction should be approved by all of the parties. Moreover, the regulation does not specify the date of the proceedings to which such recognition may take place leaving this issue to the procedural legislation of the particular State4. Part of

1 Recital 57 of Succession Regulation. 2 Judgement of ECJ, 21 June 2018, Vincet Pierre Oberle, C-20/17, pt. 44. 3 Article 6 mentions only cases where applicable law was chosen by the testator on the basis of Article 22 of Succession Regulation, Opt. cit. M. Rzewuski, Comment for the Article 6 of the (EU) Regulation No. 650/2012, [in:] Unijne Rozporządzenie spadkowe Nr 650/2012 (…), E/Legalis. 4 Ibidem.

154 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) doctrine thinks that interpretation of Article 7(c) amounts to the conclusion of a prorogation agreement during the succession proceeding.

Additional jurisdiction

The Succession Regulation foresees only one habitual residence. This has been reinforced by Article 10 which establish additional jurisdiction. According to the above- mentioned regulation, auxiliary jurisdiction requires fulfilling at least one of two conditions in order to determine the jurisdiction in one of the Member States. Due to the Regulation if the habitual residence at time of death is not in a Member State, the courts of a Member State, in which the assets, including real-estate, are located, should gain jurisdiction to rule on succession of whole property. However, this exception could be used if testator, at time of his/her death, held citizenship of this particular Member State. If this condition fails, then the court may rule on the whole succession whether the deceased had his previous habitual residence in that Member State or not. Nevertheless, the change of his/her habitual residence should take place in the period not longer than five years before factor has elapsed. However, this regulation is subsidiary to determination of the general jurisdiction in art. 4 of Succession Regulation. Consequently, the usefulness of Article 10 of Regulation arises if the general jurisdiction or other jurisdiction imposed by this law could not be applied.

Connecting factors

Polish Civil Procedure Code (also: the Act) imposes domestic jurisdiction and determinates it through the connecting factors. These connecting factors are perceived as factual circumstances which are binding the case with the territory of the territory of a particular country. The representatives of Polish doctrine indicated two types of connecting factors – subjective and objective. Until 20081, there were two most popular connecting subjective factors in the Polish civil procedure law – the citizenship and domicile2. The citizenship factor is connected with the international public law problem related with jurisdiction established over citizens residing outside the State if there is no other link. However, on signing the Lisbon Treaty3, which grants second citizenship to the citizens of the Member States, this connector has been reduced and at the moment is not being applied to EU citizens or entities4. A similar change has appeared in relation to the place of residence. The main modification refers to habitual residence which responds to factual state and does not require willingness of person or entity. The reason for implementing this rule was to introduce the same rule in the legal orders of the Member States, which ensured intensification of their cooperation.

1 Act of 5 December 2008 amending the Act – Civil Procedure Code and certain other acts, (Journal of Laws of 2008, No. 234, item 1571). 2 Domicile in polish civil law (art. 25 of Polish Civil Law; Journal of Laws of 2019, item 1145 as amended) should not be understand as a synonym of habitual residence in EU law. Contrary to the concept of habitual residence domicile requires the willingness of the person to stay in the place when the habitual residence responds only to factual circumstances. 3 The Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community (implemented in Poland in Journal of Laws of 2009, No 203, item 1569). 4 The order of the Polish Supreme Court of 30 June 2017, I CSK 668/16 which underlying the supervision of European Union Law over the Polish Civil Procedure Code, «http://sn.pl/sites/orzecznictwo/Orzeczenia3/I%20CSK%20668-16-1.pdf» [access: 2019.05.21].

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Jurisdictions under Polish Civil Procedure Code

Polish Civil Procedure Code provides two kinds of jurisdiction – alternate and exclusive (which are part of direct jurisdiction), indirect jurisdiction and necessary jurisdiction. The first allows one to determine the jurisdiction of Polish court but does not exclude the possibility of its overlapping with jurisdiction of other States. The situation is different if one’s wants to determine the case, according to Polish procedure Code. In order to determine the exclusive application to the code, one should prevent recognition or enforcement of the foreign State statement in Poland. The above-mentioned jurisdictions are subtypes of direct jurisdiction, whereas the indirect jurisdiction appears as a connection factors adopted in the similar cases. Practically, it is used to control the competence of foreign state courts during the proceedings intended to result in a decision of recognition or enforcement on the territory of Poland. The last jurisdiction, known to Polish Civil Procedure Code, is necessary jurisdiction1. The occurrence of this jurisdiction results from the need to ensure judicial protection if there is no other legal basis for the Polish court to hear the case and there is no other court or other authority of the foreign state who could accept it for recognition. In such cases, the jurisdiction of Polish courts ensures the protection of the parties of proceedings rights. However, even in those cases Polish law requires the connection with Polish legal area. The absence of such circumstances affects the inability of establishing the jurisdiction of Polish courts.

Polish jurisdiction in the succession matter

As for national jurisdiction in succession matters, it should be indicated that Polish Civil Procedure provides two kind of proceedings – litigation and non-litigation. Depending on the type of the proceeding we are dealing with, other legal bases will apply. In case of litigation proceedings connecting factors are regulated by Article 1103 of the Polish Civil Procedure and includes the factor of citizenship and habitual residence. As opposed to non-litigation proceedings in succession matters, the litigation ones do not distinguish between a separate regulation applicable only to succession and other regulation. Hence, jurisdiction in all the succession cases is based on Article 1103 or 11037 pt. 6 of The Act, which establishes the general conditions for all cases conducted in the course of litigation. However, most of succession matters in Polish law are resolved in non-litigation proceedings. In result, as Polish Civil Procedure Code established in Article 1108 separate legal regime to these succession matters giving it an autonomous character. Consequently, the general rules introduced by article 1103 and 11037 pt. 6 of the Polish Civil Procedure Code2 have been reintroduced into provisions by virtue of Article 1108 par. 1 and Article 11102 of the Polish Civil Procedure Code and should be understood as self-regulation. Besides, article 1108 extends the general factors by adding the additional one – the place of inherited

1 Art. 10991 §1 of the Polish Civil Procedure Code: If there are no grounds to justify domestic jurisdiction in a given case and it is impossible to conduct proceedings or to request proceedings to be conducted before a court or another authority of a foreign state, the case shall fall under domestic jurisdiction if it is relevant to the Polish legal order. This conception derives from succession case considered by Polish Supreme Court. The equivalent of this provision in the succession regulation is Article 11which establish forum necessitates. 2 These rules refer to connection factors of habitual place of residence or usual stay (also a registered office) in Poland, as well as the location of immobility.

156 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) property1. However, jurisdiction of Polish courts is an absolute prerequisite for hearing a case and without it the proceedings should not be conducted in Poland2. Nevertheless, the jurisdiction of Polish courts based on Article 1108 of the Polish Civil Procedure Code is limited to cases concluded in non-contentious proceedings i.e. the acquisition of an inheritance or its department3. The existence of these factors is taken under consideration ex officio at any stage of a case. The negative result of this recognition shall result in the rejection of a complaint or a petition4, unless the confirmation of jurisdiction can be given by entering an appearance5. Thus, the types of succession property may have an impact on the change of national jurisdiction as well as changes in other factors enumerated in Article 1108 of the Act. In result, determination of Polish jurisdiction in the succession matters should take into consideration the location of the property and its nature6. According to the wording of the analysed provision, if the jurisdiction is based on Polish Civil Procedure Code, the existence of at least one of these connecting factors concludes in the conferring jurisdiction to the Polish courts. Thus, the jurisdiction of the Polish courts could be determined even if there the succession property is not placed in Poland. The only exception from this assumption is real estates, in the of which case the applicable of where there is located (Trocha, 2019). On the top of that, determination of jurisdiction on the basis of Article 1108 of the Polish Civil Procedure Code, it does not matter where the place of death is. That circumstance may be of an ancillary nature during the proceedings of establishing the jurisdiction of the Polish courts, but it is not necessary.

Influence of Succession Regulation on the Polish domestic law

Along with introduction of Regulation (EU) no. 650/2012 the basis of trans-border succession within the European Union have changed7. Since 17th August of 2015 most of the civil aspects of succession are conducting under the regime of Succession Regulation. The

1 The jurisdiction of polish courts could be determined also if significant part of succession property is placed in Poland. In order to assess whether the part is significant or not we should not consider the full amount of succession property, but only this which is place in Poland; See also: A. Wysocka-Bar, Jurysdykcja krajowa sądów polskich a kolizyjna jednolitość spadku, “Problemy Współczesnego Prawa Międzynarodowego Europejskiego i Porównawczego” no. 14/2016, p. 95; The Order of Polish Supreme Court of 19 June 2012, I CSK 159/13, Lex no. 1360155. 2 Besides the except discussed in the previous part of this Article. 3 These cases are imposed in Articles 633 to 691 of the Polish Civil Procedure Code. 4 Art. 1099 of the Polish Civil Procedure Code: §1 The court takes a lack of domestic jurisdiction at any stage of a case into consideration ex officio. If lack of domestic jurisdiction is determined, the court rejects a complaint or petition, subject to Article 1104 §2 or Article 1105 § 6. §2 Lack of domestic jurisdiction constitutes grounds for the nullity of proceedings. 5 The order of Polish Supreme Court of 19 June 2013, I CSK 159/13, Lex no. 1360155. 6 The order of Polish Supreme Court of 9 August 2000, I CKN 804/00, «http://www.sn.pl/sites/orzecznictwo/orzeczenia3/i%20csk%20312-16-1.pdf», [access: 2019.05.22], The order of Polish Supreme Court of 11 March 2016 r., I CSK 64/15, « http://www.sn.pl/sites/orzecznictwo/Orzeczenia3/I%20CSK%2064-15-1.pdf », [access: 2019.05.27]; The Order of Polish Supreme Court of 11 April 2014, I CSK 325/13, OSNC – Additional series 2015 No C, item 36, p. 45, Legalis; See also: P. Czubik, Krytyczna analiza postanowienia Sądu Najwyższego z dnia 11 marca 2016 r., I CSK 64/15, “Problemy Współczesnego Prawa Międzynarodowego, Europejskiegi i Porównawczego”, no.15/2017, p. 168-175. 7 The one of the biggest changes took place in regulation concerning the succession matters regulated by Private International Law Act (Journal of Laws of 2015, item 1792 as amended) where the Articles 65 – 66 have been removed and superseded by Article 66a. According to Article 66a the applicable law in the succession matters is regulated by Succession Regulation.

157 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) jurisdiction in succession matters are not different. The Succession Regulation replaced Polish regulation and the Article 65-66 of the International Private Law Act. In second case, Polish legislator amended the law by delating the previous existing provisions and replacing them with the regulation of Regulation (EU) no. 650/2012. Nevertheless, that action have not been taken by legislator in case of Polish Civil Procedure Code where the previous provision had not been rescinded. Consequently, determination of jurisdiction might be different under the provisions of Polish Civil Procedure Code and the Succession Regulation. The biggest changes are related with connecting factors which exclude the previous citizenship The distinctions between above-mentioned regulations are noticeable, especially in case of determination of jurisdiction in matters of succession which involves the real estate. According the Polish Civil Procedure Code, jurisdiction of Polish courts may apply only to part of a succession’s property. Such situation occurs when real estate is located outside Poland1. Consequently, the scope of Polish regulation is limited and does not occurred immovable property which are not located in Poland. As the result, national jurisdiction in the succession mater under Polish Civil Procedure Code could be partial2, which might have been seen as an obstacle. The issues are differently dealt in the Succession Regulation which establish the principle of unity of forum. Pursuant to this rule the jurisdiction could not be divided between several Member States, even when one of the objects of proceeding is real estate. In opposition to Polish Civil Procedure Code is the Succession Regulation, which does not connect the existence of national jurisdiction with the location of real estate. Nevertheless, Polish legislator has not excluded Article 41 of Polish Private International Law3 which together with Article 30 of Succession Regulation might have a significant in process of determine the jurisdiction. In face of aforementioned regulations, it is difficult to indicate, according to which regulation the jurisdiction should be adjust, especially when the succession property involves real estate. Article 30 of Succession Regulation should be considered in the light of the concept of mandatory provisions. However, the provisions to which this rule is applying must be connected or have an impact for succession matters. Thus, not every provision will fulfil these requirements (Macierzyńska-Franaszczyk, 2015, p. 184; Contaldi, 2016). Consequently, the order of Polish court, having the jurisdiction on the basis of Article 4, 10 or 7 of the Succession Regulation, will apply the real estates located in Poland as well as those located in other Member States (and sometimes in third-party countries). However, when the assets of deceased are located in a third State, the party may request the court to

1 Article 11038 §1 Cases involving immovable property rights and possession of immovable property located in the Republic of Poland as well as cases arising from a lease or rental relationship or other relationship involving the use of such immovable property, except cases involving rent and other charges related to using or benefitting from such immovable property, fall under exclusive domestic jurisdiction. §2 Moreover, cases other than those listed in § 1 fall under exclusive domestic jurisdiction insofar as their adjudication concerns property rights or possession or use of immovable property located in the Republic of Poland.(litigation cases) and Article 11102 of Polish Civil Procedure Code: Domestic jurisdiction in cases adjudicated in non-contentious proceedings is exclusive insofar as adjudication concerns property rights in immovable property or possession of immovable property located in the Republic of Poland (non-litigation cases). 2 Resolution of Polish Supreme Court of 2nd April 1982, III CZP 8/82, OSNC 1982, No 10, item 14; The Order of Polish Supreme Court of 14 February 2013, II CSK 294/12, « http://www.sn.pl/sites/orzecznictwo/Orzeczenia2/II%20CSK%20294-12-1.pdf» [access: 2019.06.01]. 3 1.Ownership and other rights in rem shall be governed by the law of the State in which their object is located. 2. The acquisition and loss of property, as well as the acquisition and loss and alteration of the content or priority of othe rights in rem, shall be governed by the law of the country in which the object of those rights was situated when the event giving rise to the aforementioned legal effects occurred.

158 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) exclude the particular asset, or the wider scope of them, if it is a chance that the rule would not be recognized by third State1.

Conclusions

Connection between international private law with the International Civil Procedure was underlined by doctrine which indicated that Polish jurisdiction provisions determine the scope of the conflict-of-laws rules (Czeplak, 2008, p. 164; M. Pazdan, 1972, p. 191). Consequently, the introduction of Regulation no. 650/2012 polarises the institution of jurisdiction determination by making the application of national rules subject to the absence of any circumstances giving rise to the application of the European Union law (Wysocka-Bar, 2017, p. 90 - 109; Pazdan, 2015). Additionally, Polish Civil Procedure Law provides situations where the jurisdiction of Polish courts is only partial, giving the other State the jurisdiction to rule on the rest of the assets. Undoubtedly, the discrepancy between Polish national regulation and the European Union laws is easily to see and it has the real impact on succession proceedings concluded in Member States, of which also in Poland. As the result, The Succession Regulation offers more favourable solutions than Polish Civil Procedure Code. The main reason is, implicated by Succession Regulation, the principle of unity of forum which, in principle, ensures that proceedings take place in only one State, irrespective of the character of the inheritance assets2. Furthermore, the application of national law may give rise to a conflict of jurisdiction resulting application of different law to certain assets (mostly real estates). In consequence, the authorities of the State, in which proceedings are pending, will apply their domestic material law on those assets. In result, it is difficult to determine to what extent the Polish and European rules apply. The importance of this problem is even greater taking under consideration the fact that it has a practical dimension for the application of the law in Poland. Nevertheless, the Succession Regulation still does not pertain to all succession cases, but only to that one, where the death of testator took place after 17th August of 2015. In that case, the national law is needful in various cases where there is no connection with EU law, or the object of succession does not apply to the Regulation no. 650/2102. In the view of the above, it is considered that at the time of the entry into force of the Succession Regulation, the Polish jurisdiction rules, concluded in Civil Procedure Code, have been marginalised and currently only address situations which are not covered by the Regulation.

References

Act of 17 November 1964 – Civil Procedure Law, Journal of Laws of 2018, item 1360 as amended Act of 23 April 1964 - Polish Civil Law; Journal of Laws of 2019, item 1145 as amended; Act of 4th February 2011 - Private International Law, Journal of Laws of 2015, item 1792 as amended. Act of 5 December 2008 amending the Act – Civil Procedure Code and certain other acts, Journal of Laws of 2008, No. 234, item 1571); Bonomi, P. Wautelet, 2016, Le droit européen des successions. Commentaire du Règlement (UE) no 650/2012 du 12 julliet 2012, Brussels. Contaldi G, 2016, The EU Succession Regulation. A Commentary, A.-L. Calvo Caravaca (eds.), A. Davi (eds.), H.-P. Mansel (eds.), Cambridge, .

1 Article 12 of Succession Regulation. 2 With the exception established in Article 12 of the Succession Regulation.

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Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (OJL EU 338, 28.12.2003, p. 1-29), Czeplak M.,2008, Umowa międzynarodowa jako źródło prawa prywatnego międzynarodowego, Warsaw. Czubik P., 2017, Krytyczna analiza postanowienia Sądu Najwyższego z dnia 11 marca 2016 r., I CSK 64/15, “Problemy Współczesnego Prawa Międzynarodowego, Europejskiegi i Porównawczego”, no.15/2017, p. 168-175 Fallon M., Kruger T., 2013, The special scope of the EU’s rules on jurisdiction and enforcement of judgments: from bilateral modus to unilateral universality, Yearbook of Private International Law 2012-2013, p. 21. Ferid, Murad, Boston 1972,“Le rattachement autonome de la transmission succesorale en droit international privé, Collected Courses of the Hague Academy of International Law. The Hague Academy of International Law, « http://dx.doi.org/10.1163/1875-8096_pplrdc_ej.9789028605350.071_202» Haladová H., Habitual Residence in Brussels II, «https://www.law.muni.cz/sborniky/cofola2011/files/normotvorba/Haladova_Hana_6294.pdf », Judgement of European Court of Justice, 21 June 2018, Vincet Pierre Oberle, C-20/17. Judgment of European Court of Justice, 13 October 2016, Mikołajczak, C-294/15, Judgment of European Court of Justice, 16 July 2009, Hadadi, C-168/08, Judgment of European Court of Justice, 2 April 2009, Kokein hallintooikeus,C-523/07, Lein E., 2009, A further step towards a European code of private international law. The Commission proposal for regulation on succession, YPIL , vol. 11, p. 107 -141. Macierzyńska-Franaszczyk E., 2015, Prawo właściwe dla odpowiedzialności za długi spadkowe, Nowe europejskie prawi spadkowe, M. Pazdan (eds.), J. Górski (eds.), Warsaw. Max Planck Institute for Comparative and International Private Law, Comments on the European Commission’s Proposal for a regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession, Rabel Journal of Comparative and International Private Law (RabelsZ, Vol. 74, No.3). Pazdan M., 1972, Zasięg jurysdykcji krajowej w sprawach spadkowych, „Studia Cywilistyczne”, Cracow, p. 191 Pazdan M. (red.), J. Górecki (red.), Nowe europejskie prawo spadkowe, Warsaw 2015. Rath-Bosca L.D, Barmos L.M., Stanescu I.A., 2016, The need to harmonize the laws of the European Union regarding the succession law, “Agora International Journal of Economical Sciences” vol. 10, p. 36. Rebel E., 1958, The conflicts of laws. A comparative study. Volume four. Property Bills and Notes: Inheritance: Trusts: Application of Foreign Law: Intertemporal Relations, Michigan, p. 251, «https://pdfs.semanticscholar.org/df7f/e1aa2d75afca7f1cfaebf40a3c3edbdb14de.pdf». Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decision and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (OJL EU L 2012, No. 201, p.107). Resolution of Polish Supreme Court of 2nd April 1982, III CZP 8/82, Rodríguez-Uría Suárez I. ,2013, La ley aplicable a las successiones mortis cause en el Reglamento (UE) 650/2012, “InDret”, No. 2, p. 2-58. Rzewuski M., 2018, Komentarz do art. 4, Unijne Rozporządzenie spadkowe Nr 650/2012. Komentarz, M. Załucki (eds.), E/Legalis, Warsaw. The Order of Polish Supreme Court of 11 April 2014, I CSK 325/13 The order of Polish Supreme Court of 11 March 2016 r., I CSK 64/15, The Order of Polish Supreme Court of 14 February 2013, II CSK 294/12, The Order of Polish Supreme Court of 19 June 2012, I CSK 159/13, The order of Polish Supreme Court of 9 August 2000, I CKN 804/00, The order of the Polish Supreme Court of 30 June 2017, I CSK 668/16. The Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community (implemented in Poland in Journal of Laws of 2009, No 203, item 1569), Trocha B., 2019, Komentarz do art.1108, Kodeks postępowania cywilnego. Tom II. Komentarz. Art. 730- 1217, J. Jankowski (red.), Warsaw, p.1593-1594. Weitz K., 2015, Jurysdykcja ogólna w sprawach spadkowych, Nowe europejskie prawo spadkowe, M. Pazdan (red.), J. Górecki (red.) Warsaw. Weitz K., 2007, Jurysdykcja krajowa w sprawach małżeńskich oraz sprawach dotyczących odpowiedzialności rodzicielskiej w prawie wspólnotowym, „Kwartalnik Prawa Prywatnego”, p. 96-97

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Wysocka-Bar A., 2016, Jurysdykcja krajowa sądów polskich a kolizyjna jednolitość spadku, “Problemy Współczesnego Prawa Międzynarodowego Europejskiego i Porównawczego” no. 14, p. 90-109. Załucki M., 2015, Adaptacja prawa polskiego do wymogów unijnego rozporządzenia spadkowego (Nr 650/212), “Studia Prawnicze” , No 2, p. 5-18. Załucki M., Adaptacja prawa polskiego do wymogów unijnego rozporządzenia spadkowego (Nr 650/212), [in:] “Studia Prawnicze” 2015, No 2, .

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161 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online)

NATIONALISM IN THE CONTEXT OF POLITICS OF CHANGE IN SPAIN

Vigilija Žiūraitė

Vytautas Magnus University, Lithuania, [email protected]

Abstract

Purpose – to discuss and disclose the role of nationalism in Spanish politics of change. Design/methodology/approach – The main research objective and tasks have influenced the selection of qualitative methods, firstly explaining the sociocultural situation in Spain as well as historical context. The theoretical background of nationalism and a comparative approach are used to discover and explain certain types of nationalism in Spanish politics of change. Finding – Podemos, Spain’s second-largest political party on the left, is a representative of the politics of change, clearly expressing the intention to cherish the country’s multicultural and multilingual reality in the socio-political situation after the 15-M movement. The phrase ‘Spain is a nation of nations’ was made popular by the leader of Podemos, Pablo Iglesias. Analysis of the recent socio-political situation in Spain reveals that Podemos intended to agree with Socialists (the PSOE party) to develop a plural national state, in which each national region could develop its government in an equal and cooperative manner. However, the far-right party Vox brought a completely opposite nationalist approach, which bans the Catalan independence movement and any thoughts of cultural diversity. Therefore, nationalism is now beginning to occupy a central position in Spanish politics of change. Research limitations/implications – This study only pretends to begin investigations into the given topic and it must be broadened in the future, examining the growing nationalistic sentiment among the Spanish people – fuelled by such factors as rising economic inequality, increasing scepticism about globalization, and fears of economic, cultural and security impacts of immigration. Originality/Value – This article analyzes the newest political issues in Spain through a particular approach to political changes in the country. The research results can be a significant addition to future investigations of recent political changes in Spain. Keywords: nationalism, regional nationalism, politics of change, Spanish politics Research type: research paper

Introduction

Since the Great Recession of 2008, Spain has faced a dynamic political reality, full of uncertainty, changes, and unexpected turns; these are referred to as ‘politics of change’ in this paper. This year, ahead of national elections in April, the nationalist Vox party surged as a strong opponent to Spanish political parties on both the left and right. The Podemos party emerged in 2014 as the main political expression of the 15-M movement, basing its ideology on deeper participatory democracy, feminization of politics, defence of public goods, and human rights. Podemos also seemed to be a promising ally for Spain’s Catalonia region because the party supported the principle of Catalan self-determination, agreeing on the region’s right to decide whether to remain a part of Spain. However, the newest wave of nationalism in Spain, incited by Vox, is completely anti-separatist. Therefore, it is of interest

162 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) to investigate the role that nationalism has in this political period in Spain. Recent events clearly indicate that Spanish nationalism and the Catalan independence movement are key problems remaining from the 2008 economic crisis (e.g., unemployment, public debt, declining gross domestic product, and political corruption). While analyzing the newest investigations in related fields and concrete examples from Spanish socio-political life, the main questions to be answered in this research paper are: What are the main features of politics of change? Why is regional nationalism so strong in Spain? How are new political formations reacting and participating in nationalism-based problems?

Recent Political Changes in Spain as ‘Politics of Change’

The term ‘politics of change’ is used in this research paper to describe the recent political reality in Spain. However, this term is not clear on its own and requires a broader explanation and understanding of the special socio-political context of the country. Therefore, the first part of this research paper is dedicated to the theoretical and practical approaches to the new politics and political change. First, it is important to explain why the term ‘politics of change’ and not ‘new politics’ is used in this work. Spain has undergone important changes in its socio-political life during the past 30 years. This period of transitioning to democracy can be more related to the ‘new politics’, because it lasted several years and converted Spain into democratic welfare state. As Kendall L. Baker, Russell J. Dalton, and Kai Hildebrandt (1981) state, it takes time, typically one generation, to pass from ‘old’ to ‘new’ politics. By comparison, recent political changes in Spain began in 2008, coinciding with the global financial crisis. Therefore, the ‘new’ politics in Spain are still in their infancy, when even small changes are highly important. The word ‘change’ comes from the 15-M movement, when in 2011 Spaniards on the streets were asking for changes, especially political ones. Massive demonstrations occupied the streets and squares of 58 Spanish cities because citizens were dissatisfied with the current situation and made it clear that the ‘old politics’ no longer represented them. Even though it was a movement without a clear ideology, the anti-capitalist political agenda had significant importance and ‘a leftist inclination was also preferential among the activists’ (Martínez Lopez and Domingo San Juan, 2014, p. 2). It is worth mentioning that surveys at that time revealed that 70% of Spaniards positively valued the 15-M movement (Wert, 2012). According to Manuel Castells (2009), social movements are the primary drivers of social change and have the power to transform the way people are thinking. The 15-M can be a useful example of this concept because, in a peaceful manner, the movement successfully forced politicians to re-think their actions. It also opened a window for new political formations that could better understand the necessities of the Spanish society in crisis. In March of 2014 a new political party known as Podemos was officially registered in Spain.1 Podemos members introduced the party to the public with a document titled ‘Make a Move: Convert the Indignation into Political Change’.2 The party represented itself as ‘in favour of a deeper participatory democracy, a defence of public goods, human rights, equality, and social control of economic powers’ (Martínez López and Domingo San Juan, 2014, p. 24). According to political theorist Chantal Mouffe (2015), if not for the Podemos party, the efforts of the 15-M Movement would have come to nothing. Therefore, Podemos has played an

1 Podemos formaliza su inscripción como partido político. Retrieved March 3, 2019 from http://www.eldiario.es/politica/Podemos-Pablo-Iglesias-Ministerio-Interior_0_238326919.html 2 Document ‘Mover ficha: convertir la indignación en cambio político’, Retrieved May 3, 2019 from www.vilaweb.cat/media/continguts/000/075/425/425.pdf.

163 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) important role in the recent Spanish socio-political changes. This party hegemonized the word ‘change’ while using it from the beginning. Led by university professor Pablo Iglesias, Podemos had been in existence only two months when it participated in the 2014 European Parliament elections and won 1.2 million votes and five seats (Lopez Garcia and Boix Palop, 2014). It was a significant surprise for the two largest Spanish political parties Partido Popular (People’s Party, PP) and Partido Socialista Obrero Español (Spanish Socialist Workers’ Party, PSOE), and it represented the first threat to the two-party system in Spain. It is important to understand when the politics of change began in Spain. It is well- known that the Spanish people started to feel the negative effects of the economic crisis in 2008. However, until the beginning of the 15-M movement in 2011, the position of the society was not so significant. With the 15-M movement, people joined together to resist the negative effects of the economic crisis, and, most importantly, criticized Spain’s anti-democratic policies. Here, the insight of Martínez López and Domingo San Juan (2014, p. 30) stresses the importance of the movement: ‘15-M has impacted the Spanish political life in such a profound manner that it can be regarded as having inaugurated a new political cycle in which the movement, with all its different manifestations, has played a crucial role’. Therefore, when we talk about politics of change in Spain, its beginning can be related to the 15-M Movement. Finally, to summarize the previously mentioned political changes in Spain, now it is possible to highlight the main features of the politics of change in Spain:  Started after the 15-M (2011) as a response to economic crisis and austerity;  Irruption of new political formations (e.g., Podemos and Ciudadanos);  End of the two-party system;  Different way of doing politics (feminization of politics);  Participatory politics/democracy (politics by the people); and  Attention to the most vulnerable groups (e.g., unemployed people). The next chapters of this article will explain nationalism in the politics of change.

Theoretical Background of Nationalism

To explain nationalism in the context of the politics of change in Spain, it is first important to have a broader understanding of nationalism itself and its peculiarities in Spain. Explaining nationalism is not a simple task because it differs in each country and depends on its contexts as well as the understanding of what is ‘national’. To Jiménez Sánchez (2006), the nation-state model for liberal democracies is now facing a crisis. There are two reasons for this crisis: The globalization process not only has had an impact on nationalism but there are now nationalisms in the nation-states (MacCormick, 1999). Therefore, it becomes even more difficult to arrange the system when nations are multicultural, multireligious, and multinational. To explain this situation considering Spanish nationalism, it is also necessary to discuss regionalism and the reality of a plurinational country. Ernest Gellner’s theory of nationalism explains that ‘nationalism is primarily a political principle that holds that the political and the national unit should be congruent’ (Gellner, 1983, p. 2). To unite the state with its culture, the nation is necessary, but that does not mean it is a pre-existing or natural phenomenon. Gellner (1983) states that nationalism is a must for the process of modernization. Furthermore, according to another nationalism theorist, Eric Hobsbawm, ‘Nations as a natural, God-given way of classifying men, as an inherent ... political destiny, are a myth; nationalism, which sometimes takes pre-existing cultures and turns them into nations,

164 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) sometimes invents them, and often obliterates pre-existing cultures: That is a reality’ (Hobsbawm, 1991). Hobsbawm sees nations from the bottom up and has ‘portrayed the nation and nationalism as lacking uniformity in society and being susceptible to change’ (Finkel, 2016). Hobsbawm (1991) also describes the development of nationalism step by step, dividing it into three different phases. First is a preliminary phase, when the idea of the nation is mostly cultural and folkloric. The middle phase is called ‘pioneering’ because political actors attempt to mobilize the nation and raise awareness among people. The third and last phase describes the events that can succeed before the birth of state or after it. In this phase, the national movement begins to acquire more support throughout the nation. In addition to Gellner and Hobsbawm’s ideas, sociologist Anthony Giddens adds political control as one of the primary contributors to the growth of a nation. Giddens (1990) argues that ‘political defence of borders and territories unifies administrations, thus bringing a unity from the leadership down throughout the population’ (Sabanadze, 2010). Another important perspective for Giddens is globalization, because nationalism is mostly seen as a response to this process. Giddens summarizes, ‘Globalization is the reason for the revival of local cultural identities in different parts of the world. […] Local nationalisms spring up as a response to globalizing tendencies, as the hold of older nation-states weakens’ (Giddens, 1990). Manuel Castells (1997) agrees with the idea that nationalism is fostered by globalization processes. Therefore, today’s nationalism is rather cultural and not political. Nationalism movements are more likely to defend an institutionalized culture rather than attempt to create a new state. When culture replaces structure, the search for identity is predominantly important, because, for Castells (1996), identity is the main source of meaning. Castells also puts great importance on the role of a language in nationalism. Language helps nations self- recognize and is a significant part of identity.

Regional Nationalism in Spain

After revising some of the most significant theoretical interpretations of nationalism, it is possible now to discuss nationalism and politics in such a plural and diverse country as Spain. Many scholars have analyzed Spanish nationalism (e.g., Villar, 1998; Muro, 2005; Alonso- González, 2015) and even more are interested in the Catalan nationalist movement (e.g., Guibernau, 2012; Castells, 2014; Iveson, 2017). Therefore, there are plenty of resources to describe nationalism in Spain and attempt to explain why its regional nationalism is so strong. Spain has four official languages (Spanish, Catalan, Galician, and Euskera) and 17 autonomous regions. Some of the regions have a clear desire to separate from Spain – Catalonia and Basque Country in particular – and become independent nations. These two cases are better-known but each region in Spain actually boasts its own culture, customs, dialects, and therefore, regionalism-based identities. The Spanish Constitution (1978) accepts diversity of the country and states that the Spanish nation is composed of nationalities and regions, each of which have a right to self-governance.1 Previously, in 1898, nationalism began to emerge in Catalonia and Basque Country ‘as alternative sources of national identity and threatened the hegemonic position of Spanish nationalism’ (Muro and Quiroga, 2005). At that point, Catalan and Basque political nationalisms were a response to the restoration process, ‘when Spanish political elites failed to incorporate all sectors of society into the national ideal’ (Muro and Quiroga, 2005).

1 Spanish Constitution, 1978. Retrieved June10, 2018 from http://www.congreso.es/portal/page/portal/Congreso/Congreso/Hist_Normas/Norm/const_espa_texto_ingles_ 0.pdf

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After the Spanish Civil War (1936-1939), Francisco Franco’s regime took the central stage and his dictatorship left the country divided regionally and ideologically. During Franco’s regime, nationalism (based on national Catholicism), one language, and military principles appeared. After the victory in the Spanish Civil War in 1939, Franco imposed ‘a military, proto-fascist, and ultra-montane canon of Spain, representing Catholicism as the essence of Spain, and emphasizing Castile as the “ethnic core” of the nation’ (Muro and Quiroga, 2005). Castells (1996) emphasized the importance of identity search in nationalism. For Franco’s regime, Spanish identity was something hyperbolized through various symbols and customs. However, it had no particular logic for what was ‘Spanish’ and what was ‘anti- Spanish’, keeping in mind that some regional traditions were ignored or forbidden, and some were chosen as the ‘right ones’. For example, corrida de toros (bull fight) and flamenco dance were part of the national identity, even though both traditions came only from the Andalusia region and had nothing to do with the remainder of Spain, especially the northern part of the country. In the given case, other nationalities in Spain, such as Catalans or Basques, and their languages were not acceptable any longer. The regime forbade the use of Catalan language in public, and literature, movies, and other material in Catalan were no longer produced. Additionally, all symbols (flags, anthems, posters, and signs) were not only banned but also persecuted. Catalonia and Basque Country lost their autonomous statutes, because in Franco’s regime the state was ‘built on legal, administrative, and territorial centralism’ (Muro and Quiroga, 2005). Moreover, Francoist ideology was based on the intention to purify Spain and condemn what is ‘anti-Spanish’. The use of violence, which was called ‘creative and purifying’ by Franco’s followers, became a necessity for Spanish nationalists. This also provoked a negative and violent response from regional nationalists, such as Basques. In 1959, a terrorist group known as Euskadi ta Askatasuna (ETA) was established in Basque Country. The group based its ideology on Basque nationalism and fought against Franco and Spain for ‘national liberation’. ETA’s actions and ideology unified Basque nationalists and Spanish leftists, democrats, and Catalan nationalists (Muro and Quiroga, 2005). To summarize, the Francoist form of nationalism can be described as Catholic-traditionalist, which defended the ethnic concept of Spain (based on unification of religion and language) and employed centralist and authority-based policies. Denying Basque and Catalan identities, while forbidding the use of their own languages or symbols, sparked regional nationalism movements and led to a contrary effect: Spain was more divided when united. Today, Spanish politics cannot be discussed without remembering its starting point, the period of transitioning to democracy (1975-1982) after Franco’s death, which marked the end of the dictatorship. After passing through significant changes in the past 30 years, Spain ‘has become an international example of a successful transition to democracy’ (Bryne, 2011, p. 9). The country’s economy was growing quickly, the government of socialists took care of public healthcare and education systems, a welfare state was created, and therefore people were satisfied with the new democratic regime (Bryne, 2011). As Franco abolished all possible forms of regional autonomy during his regime, it was important to decentralize power and provide more freedom to each region. Spain was divided into 17 regions and in each region, there were approximately 40 to 50 provinces. Each region began to function as an autonomous community. However, various regions exhibited different levels of regional identity and ‘claimed their own political power within a decentralized state’ (Muro and Quiroga, 2005). Catalonia and the Basque Country claimed more political autonomy and the Socialists were ready to discuss and accept their requests. In general, PSOE supported the idea of a plural Spain and its autonomous regions with their own financial and political systems and cultural identities, as long as they did not contradict the Spanish Constitution. During the

166 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) transition-to-democracy period, PSOE and other political entities agreed that Spain would combine parliamentary democracy and regional autonomy. In 1996, PSOE lost to Partido Popular in the general election. It is interesting that the PP received the majority in the government with the help of regional nationalists: the Basque Nationalist Party, Catalan Convergence, and the Canarian Coalition. PP’s discourse was pro- Spanish and did not even mention cultural diversity of the country; it also reinforced centralism. Montserrat Guibernau (2012) explains that Catalan secessionism and the ‘right to decide’ movement (whether to be a part of Spain) originated from second PP victory in the general election. After the election, ‘sympathy and understanding towards Catalan demands for further autonomy and recognition were replaced by hostility embedded in a neo- centralist, conservative, and neo-liberal political discourse’ (Guibernau, 2012). The PP ignored claims for more autonomy from Catalonia, Galicia, and Basque Country, and ‘adopted an arrogant attitude towards former political allies’ (Guibernau, 2012). PSOE returned to power and won the general election in 2004 with a new leader, J.L. Rodriguez Zapatero, who became the prime minister. Zapatero supported Catalans and their wish for more autonomy; he backed the new statute of autonomy, which was projected in Catalonia by the local PSOE branch. Despite that, PSOE could not convince the PP to support Catalans’ claims. The new statute of autonomy for Catalonia was challenged by PP, and it was not approved by the Spanish High Court. Massive strikes were held in Catalonia under the slogan, ‘We are a nation. We decide’.1 At the same time, Spain was mired in economic crisis. According to Casero-Ripollès and Feenstra (2012), several reasons encapsulated people’s disgust for the current socio-political situation in Spain. First, public spending cuts left some social groups less well-protected. Second, high rates of unemployment that in 2011 had topped 24% affected the overall welfare of the state.2 Third, political corruption scandals and the two-party system, which did not allow success for smaller parties due to Spain’s electoral order, also encouraged people to strive for change. In the 2011 general election, PP again celebrated victory together with a new leader, Mariano Rajoy. The new prime minister had a clear position on Catalonia’s question; in 2005 he had stated, ‘There is only one nation in Spain and it’s the Spanish nation’.3 The rejection of Spain’s diversity provoked even more rage in Catalonia as well as in other communities. The PP again adopted its position of ignorance, which clearly reveals that regional nationalism in Spain is related to political ideologies and the tradition of centralist rule. With this said, it is necessary to move to consider Spain today and explain how nationalism is changing in the context of politics of change triggered in 2011 by the 15-M movement.

Nationalism and Political Changes in Spain

The period of politics of change in Spain starts with the 15-M movement, which can be characterized as a ‘plural, horizontal, non-party movement, with a broadly middle and working-class base’ (Casero-Ripollès and Feenstra, 2012, p. 5). It is necessary to mention that the 15-M movement and its protests were mainly peaceful, without an intention to ‘overthrow

1 ‘Somos una nación, nosotros decidimos’ Retrieved January 14, 2019 from http://www.rtve.es/alacarta/videos/programa/manifestacion-barcelona-somos-nacion-nosotros- decidimos/825631/ 2 Spain‘s unemployment rate. Retrieved April 7, 2019 from http://www.tradingeconomics.com/spain/unemployment-rate 3 Rajoy: ‘Sólo hay una nación, la española’. Retrieved April 7, 2019 from http://www.inquiriesjournal.com/articles/1460/theories-of-nationalism-a-brief-comparison-of-realist-and- constructivist-ideas-of-the-nation

167 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) or take control of the established political power’ (Casero-Ripollès and Feenstra, 2012, p. 5). The Spaniards were more likely attempting to start a dialogue with politicians to achieve the change they sought. Consequently, this allowed the movement to gain wide social support, recognition, and legitimacy as a result of its nonviolent means of protest (Martínez Lopez and Domingo San Juan, 2014). Even though the 15-M movement appears to lack a clear ideology, Rube n Dı ez Garcıa (2014) puts it into a question. Most of the 15-M activists de ined themselves politically as socialists (20%) and liberals (16%), or lacking any type of political ideology (15%) (Dı ez Garcı a, 2014). What is more, 15-M had nationalists among participants (6%). The variety of political descriptions also reveal that 15-M was not a singular movement but rather had a diverse character. It is not possible to say that 15-M has nothing to do with nationalism, because it softened regional nationalism in Spain as a uniting and complex ideology for a significant part of the nation. At the start of 2015, a survey conducted by the Centre for Sociological Research of Spain stated that Podemos could be the second political force in the next election. In the spring of 2015, Spain celebrated local and regional elections. In these elections, Podemos decided to participate not directly but together with small local parties or other political formations in various regions and cities. This means that Podemos joined small political groups (such as En Marea in Galicia, En Comu Podem in Catalonia, and Compromis in Valencia) that had a particular regional ideology. Scholars admit that it was a highly smart move for a young party (Podemos had been in existence for less than one year), because the party did not have enough time to mobilize in every region and gain support (Martínez López and Domingo San Juan, 2014). From the beginning, Podemos was a strong competitor to nationalist parties in different Spanish regions. Podemos supported the principle of Catalan self-determination and agreed to the region’s right to vote and decide whether to remain a part of Spain. However, Podemos opposed Catalonia’s secession from Spain, believing that in a hypothetical referendum Catalans would vote to stay. After the European election of 2014 and the regional elections of 2015, two main changes in Spanish politics can be seen. First, Podemos and its partners won the election in Spain’s two largest Spanish cities, Madrid and Barcelona, where Manuela Carmena and Ada Colau, two representatives of the ideas of the 15-M and political changes, are in power now. Second is the rising popularity of the centre-right party Ciudadanos, which was created in 2005 in Catalonia, but now can be called the main competitor for Podemos. These two parties are usually compared but the issues of economy or equality always separate them. In Ciudadanos’ case, the party is also ‘breaking walls’ as it transitions from the regional to the national level. Its first party message in 2006 emphasized a position against Catalan nationalism and attracted individuals from both the left and right. According to Rodríguez Teruel and Astrid Barrio (2015, p. 603), ‘Ciudadanos stands out as a peculiar case of a peripheral actor that is successfully challenging national parties. To some extent, one might ask whether the success of C’s entails a new way of driving the nationalization of the Spanish party system at the expense of the traditional parties’. Therefore, Ciudadanos later moderated its discourse and still was more appealing for Spanish-speaking and anti-independence Catalans than local nationalist parties were. Manuel Castells (1997) indicated that language helps nations to self-recognize as well as unite its members. Even though in Francoist Spain there was an attempt to increase the dominance of Spanish language over other minority languages, the country has a long tradition of linguistic diversity. As a result, the government of Spain has implemented a variety of language policies to tone down the pressure and confusion between languages in Spain. Nevertheless, in some autonomic regions such as Catalonia, the problem of dominant

168 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) language as well as cultural identity is still a vivid question. It can be said that Podemos is the first Spanish party interested in language variety in Spain. In the programme for the general election of 2016, Podemos suggested that students in schools should have an opportunity not only to study foreign languages but also all four official languages of Spain no matter which region they call home. It was a completely new approach towards plurilingualism in Spain; until then, Catalan, Galician, and Basque languages were studied only in particular regions. Additional proof of Podemos’ approach to Spanish diversity and ethnicity was its intention to establish a Ministry for Plural Nationalities. After the general election on 10 December 2016, Podemos and PSOE had the opportunity to form a governing majority. However, Catalonia’s referendum remained a barrier to forming their government. As the Catalan crisis grew deeper, Podemos suggested that PSOE agree to the formation of ‘a plural national state, where all the national regions can develop their government under an equal and cooperative manner without any restrictions’. Podemos added that it ‘is an obligation for our own identity as a country’. The idea was to organize a referendum on Catalonia’s independence through a new Ministry for Plural Nationalities. However, the parties did not agree and the government was not formed in 2016. The newest wave of nationalism in Spain was ignited last year by the far-right party Vox. Even though the party was established in 2013, it was recognized only after the elections in the Andalusia region on 2 December 2018, when instead of one seat in the regional parliament, it surprisingly won 12 seats. Vox completely rejects the idea of the Catalan independence movement and touts an ‘all Spanish’ agenda. The Vox manifesto ‘100 medidas para la Espa a viva’,1 includes topics such as the banning of political and civil society organizations and a guarantee of education in the Spanish language everywhere in Spain (with an optional co-official language). Basically, the ideas of the Vox party are the opposite of what was proposed by Podemos. Vox fosters the idea of a united Spain but this does not include any comprehension of cultural diversity. In general, the growing popularity of Vox and the radical far right has created significant tension in the Spanish political arena.

Conclusions

Since the Great Recession of 2008, Spain has undergone many important political changes, explained as the ‘politics of change’ in this article. Most of today’s political changes stem from the 15-M movement, which brought Spanish people together to achieve better social and economic conditions when these were considered anti-democratic during the economic crisis. The 15-M movement launched new political formations that sought to address the necessities of a Spanish society in crisis. One of these formations, the Podemos political party, a representative of the politics of change, became a strong competitor to nationalist parties. This was mainly because the party supports the idea of a multicultural and multilingual reality in Spain and has agreed to organize a referendum for Catalonia. Regional nationalism in Spain has its roots in the Francoist regime, when the main ideology was based on the intention to purify the Spanish nation; therefore, the country was left regionally and ideologically divided. Today, Spain continues to struggle to manage its cultural diversity. As the Catalan independence movement is growing stronger and there is no overall political consensus about cherishing the country’s multicultural and multilingual heritage, nationalism in the context of politics of change remains a significant issue in Spain.

1 VOX manifesto 100 medidas para la Espan a. Retrieved April 30, 2019 from https://www.voxespana.es/noticias/100-medidas-urgentes-de-vox-para-espana-20181006

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DAMAGE CLAIMS FOR IMPROPER PRISON CONDITIONS: THE JURISPRUDENCE OF THE SUPREME ADMINISTRATIVE COURT OF LITHUANIA FROM THE PERSPECTIVE OF THE CONVENTION FOR THE PROTECTION OF HUMAN RIGHTS AND FUNDAMENTAL FREEDOMS

Monika Dumbrytė-Ožiūnienė

Mykolas Romeris University, Lithuania [email protected]

Abstract

Purpose - article aims to analyse the case-law of the Supreme administrative court of Lithuania (hereinafter - Supreme administrative court) concerning claims of improper detention conditions from the perspective of Convention for the Protection of Human Rights and Fundamental Freedoms (hereinafter - ECHR). Thus, this article provides an analysis of criteria applied by the European Court of Human Rights (hereinafter - ECtHR) for determining the existence of an infringement of article 3 of the ECHR, prohibiting torture and inhuman or degrading treatment and case-law of the Supreme administrative court concerning improper detention conditions in light of the case-law of ECtHR. Finally, the author of this article studies criteria for awarding effective remedy. Design/methodology/approach - Analytic, systematic, generalisation, analogy and comparative methods are used in this article. Systematic and analytical methods are used to analyse the standards of sufficient detention conditions. Comparative and analogy methods are employed for distinguishing the similarities and differences between the practice of Lithuanian administrative courts and case-law of the ECtHR. Based on the generalisation method, conclusions are drawn. Findings - While the Supreme administrative court extensively relies on the case-law of the ECtHR, usually such judicial review is of limited scope, concerning only infringements of national legal regulation and not infringements of the ECHR. Like the ECtHR, the Supreme administrative court constitutes an infringement on a case-by-case basis, taking into account the cumulative effect of detention conditions. In cases of an infringement, the Supreme administrative court may award monetary compensation or constitute that finding of infringement is in itself a just satisfaction. The Supreme administrative court considers a time the victim spent subjected to improper conditions, the entirety of infringements, the level of suffering, the intention for harm of the institution, the economic situation in the country relevant criteria for determining an effective remedy. The Supreme administrative court usually concludes that finding of an infringement is just satisfaction in cases of minor infringements. Nevertheless, the case-law regarding lack of privacy using sanitary facilities is still not consistent as in some cases the Supreme administrative court awards monetary compensation while in other cases refuses to award monetary compensation considering that finding of an infringement is just satisfaction. However, analysis of the jurisprudence of the ECtHR reveals that even though administrative courts of Lithuania find that detention conditions were not adequate and thus infringe rights protected by the ECHR or national law, remedies granted by the courts are not always sufficient. On some occasions, remedies granted by the ECtHR for the same infringements are far higher than those granted by national courts. The ECtHR stipulates that under the principle of subsidiarity states parties of the ECHR are primarily responsible for ensuring the ECHR rights. Nevertheless, institutions or national courts in case of an infringement of the ECHR should award a remedy, which would be

171 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) similar to one awarded by the ECtHR in a similar case. Nonetheless, the ECtHR already numerous times concluded that remedies granted by the Supreme administrative court are not sufficient. On the other hand, for the remedy itself, it is difficult to provide a clear standard, what could be considered an adequate award in an individual case. Research limitations/implications - research is limited to the analysis of the jurisprudence of the Supreme administrative court and the ECtHR. Thus, the practice of other courts and bodies of other human rights treaties is not analysed. This research is not intended to be an in-depth analysis of Lithuanian legal regulation of detention conditions since the aim of this article is to examine jurisprudence of the Supreme administrative court from the perspective of the ECtHR case-law and provide analysis in what cases remedies granted by the Supreme administrative court are not sufficient. Practical implications - the results of the research reveal the criteria applicable in the jurisprudence of the Supreme administrative court for finding infringement of article 3 of ECHR and standards for awarding effective remedy. Originality/Value - researchers of the Law institute of Lithuania researched detention conditions (Bieliūnienė, 2014; Wolfgan, 2017; Sakalauskas, 2015). However, the research of the Law institute of Lithuania was limited to the national and international standards for conditions of detention. Thus, researchers did not analyse jurisprudence regarding the awards in cases of improper detention conditions. Since there is no research concerning the alignment between remedies granted by ECtHR and the Supreme administrative court, this article would be valuable for both legal practitioners and victims of infringement. Keywords: detention conditions, torture, inhuman or degrading treatment or punishment, European Convention on Human Rights, subsidiarity, effective remedy, non-pecuniary damage, principle of subsidiarity. Research type: general review.

Introduction

It is a universal concept that every detained person has a right to detention conditions which are in accordance not just with national law but international human rights law standards as well. The Supreme administrative court and the ECtHR numerous times expressed that every detained person must be treated in accordance with human rights law. For example, the ECtHR has highlighted on many occasions that every state has an obligation to ensure that detainees should be held in “conditions that are compatible with respect for their human dignity, that the manner and method of the execution of the measure do not subject them to distress or hardship of an intensity exceeding the unavoidable level of suffering inherent in detention and that, given the practical demands of imprisonment, their health and well-being are adequately secured”1. National authorities have a responsibility to ensure effective compliance with the ECHR. Under the Law of administrative procedures of the Republic of Lithuania2, administrative courts are responsible for hearing cases concerning damage caused by unlawful acts of public authorities, including improper detention conditions. Since Valašinas v Lithuania3 - the first case against Lithuania, where the ECtHR found an infringement of article 3 due to improper conduct of authorities in detention facilities, the case-law of the Supreme administrative court has evolved. In Valašinas v Lithuania the ECtHR considered that Lithuanian legal system could not provide a sufficient remedy for a person who was subjected to improper conditions in

1 Kalashnikov v Russia (App no 47095/99) ECHR 2003, 34. 2 Law of administrative procedures of the Republic of Lithuania. Official Gazette. 1999, No. 13-308. 3 Valašinas v Lithuania (App no 44558/98) ECHR 2001, 8.

172 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) detention facilities. However, recent case-law of the ECtHR demonstrates that in principle administrative courts in Lithuania may effectively ensure compliance with the ECHR standards. Nonetheless, issues remain as on some occasions remedies granted by Lithuanian administrative courts are still considered as not satisfactory from the perspective of the ECHR. From 2011 Lithuania continues to have the largest prisoner population in the European Union. In 2017 Lithuania had 235 prisoners per 100 000 population, which is several times higher number than the European Union average (Human rights monitoring institute, 2018). Correspondingly, the Supreme administrative court in its annual report indicated that nearly half of all the cases heard by the Supreme administrative court are related to the damage claims while most of them are related to inadequate detention conditions (Report of the Supreme administrative court, 2019). While a lot of steps were taken to improve detention conditions since numerous infringements were found by the Supreme administrative court, detention conditions in Lithuania still raise concerns. In 2018 European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (hereinafter – CPT) published a report concerning CPT visits to Lithuanian police establishments, prisons, psychiatric establishments, and social care establishments. CPT raised concerns1 about partially screened in-cell toilets, limited access to shower2, insufficient living space, inadequate ventilation (CPT report on its periodic visit to Lithuania, 2018). The Human rights committee also expressed concerns regarding overcrowding and poor living conditions in detention facilities, in particular concerning inadequate hygiene, nutrition, health services, limited time outside cells and overcrowded facilities (Concluding observations on the fourth periodic report of Lithuania to Human rights committee, 2018). Therefore, it is evident that issues raised by improper detention conditions are still a significant issue for the Lithuanian legal system. Consequently, this article addresses relevant criteria for finding infringement of article 3 of the ECHR, prohibiting torture or inhuman and degrading treatment or punishment, and provides analysis of case law of both the ECtHR and the Supreme administrative court, concerning non-pecuniary damage claims arising out of improper detention conditions.

Prohibition of torture, inhuman or degrading treatment or punishment under the case-law of the ECtHR

Even though there is no formal hierarchy in the ECHR, right not be subjected to torture or inhuman or degrading treatment or punishment is given a privileged position because it is the second right in the list of all the rights protected by the ECHR (Schabas, 2017). Furthermore, the ECHR defines prohibition of torture or cruel, inhuman and degrading treatment in absolute terms, and no exceptions are allowed from the prohibition of torture or inhuman and degrading treatment or punishment (Rehman, 2010). What is more, derogations from article 3 of the ECHR cannot be made in time public emergencies3. Under article 3 of the ECHR, no one shall be subjected to torture or inhuman or degrading treatment or punishment. Linguistic analysis of this provision reveals that there are three different forms of treatment, which constitutes an infringement of article 3 of the ECHR:

1 Only those problems raised by CPT, which are directly related to this article, are mentioned. 2 Most of the detainees are allowed to use shower only once per week. 3 Convention for the Protection of Human rights and Fundamental Freedoms (adopted 4 November 1950, entered into force 3 September 1953). ETS5; 213 UNTS 221 (ECHR).

173 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) torture, inhuman treatment or punishment and degrading treatment or punishment. Although there is no need to make a clear distinction between the forms of ill-treatment, which constitute an infringement of article 3 of the ECHR, the boundary between these forms is relevant for the issue of compensation to the victim of an infringement (Harris, 2009). The ECtHR clarified that ill-treatment must attain a minimum level of severity to fall within the scope of article 3 of the ECHR1. Under the case-law of the ECtHR, the assessment of the minimum level of severity is relative since it depends on all the circumstances of the case, subsequently the ECtHR takes into account following factors for the assessment of an infringement: duration of treatment, physical and mental effects of the treatment, sex, age and state of health of the victim2. The ECtHR specified that for evaluation if article 3 was infringed purpose and intention for the treatment should be considered3. Ill-treatment that attains such a minimum level of severity involves actual physical injury or intense physical or mental suffering4. The ECtHR distinguished inhuman and degrading treatment from torture, explaining that torture means deliberate inhuman treatment causing severe and cruel suffering. The ECtHR specified that ill-treatment should be considered as torture if deliberate treatment causes very serious and cruel suffering and highlighted that purpose of that treatment, as is defined in the United Nations Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, which defines torture as an intentional infliction of severe pain or suffering with the aim, inter alia, of obtaining information, inflicting punishment or intimidating5. The ECtHR in its case-law distinguished torture from inhuman treatment explaining that for finding that a person was subjected to inhuman treatment there is no need to find an intention to cause suffering6 or suffering does not necessarily be inflicted in order it to be inhumane. However, the most crucial difference is the degree of suffering caused. While in most of the cases distinction from torture and inhuman or degrading treatment is clear, the difference between inhuman and degrading treatment is less comprehensible. The ECtHR described the treatment as degrading if the object of this treatment is to humiliate and debase the detainee. Nevertheless, an absence of the purpose does not rule out a finding of a violation7. Recent case-law of the ECtHR demonstrates that most of the cases concerning insufficient detention conditions are considered as degrading8 although in some cases the ECtHR may conclude that treatment is inhuman9 or both inhuman and degrading10. Still, in some cases, the ECtHR does not specify if detention amounted to inhuman or degrading treatment and constitutes an infringement of article 3 of the ECHR11.

1 Ireland v. the United Kingdom (App no 5310/71) ECHR 1978, 1. 2 Idalov v Russia (App no 5826/03) ECHR 2012, 145. 3 Krastanov v. Bulgaria (App no 50222/99) ECHR 30 September 2004. 4 Ireland v. the United Kingdom (App no 5310/71) ECHR 1978, 1. 5 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (Adopted on 10 December 1984, entered into force on 26 June 1987). United Nations, Treaty Series, vol. 1465; Abu Zubaydah v. Poland (App no 7511/13) ECHR 24 July 2014. 6 Ireland v. the United Kingdom (App no 5310/71) ECHR 1978, 1. 7 Branduse v Romania (App no 6568/03) ECHR 7 April 2009. 8 Peers v Greece (App no 28524/95) ECHR 19 April 2001; Kalashnikov v Russia (App no 47095/99) ECHR 2003, 34. 9 Arutyunyan v Russia (App no 48977/09) ECHR 10 January 2012. 10 Ananyev v Russia (App no 42525/07 and 60800/08) ECHR 10 January 2012. 11 Modarca v. Moldova (App no 14437/05) ECHR 10 May 2007.

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When considering claims related to insufficient detention conditions, the ECtHR highlighted that detention of a person itself is related to suffering and humiliation. However, under article 3 of the ECHR “to fall under Article 3, the suffering and humiliation involved must, in any event, go beyond that inevitable element of suffering and humiliation connected with detention”. Therefore, every state party has a responsibility to ensure that every detained person is detained in detention facilities which are compatible with human dignity, detainee’s health is secured and he is not exposed to a hardship which exceeds the unavoidable level of suffering inherent to detention1. It is clear from the case-law of the ECtHR that it adopted a threshold approach rather than a clear rule-based test. The ECtHR evaluates the cumulative effect of detention conditions and assesses other circumstances such as duration of treatment, physical and mental effects of the treatment, sex, age, and state of health of the victim2. Nevertheless, recent judgment in Muršić v Croatia gave more clarity on prison overcrowding. The ECtHR elaborated that a strong presumption of a violation of article 3 of the ECHR arises when the personal space available to a detainee falls below 3 sq. m in multi- occupancy accommodation3. The ECtHR highlighted that this presumption is rebuttable by other cumulative effects of detention conditions, for example time and extent of restriction; freedom of movement and adequacy of out-of-cell activities; and the general appropriateness of the detention facility4. The ECtHR distinguished latter situation from others, where overcrowding is not so severe. The ECtHR explained that in cases where a prison cell, measuring in the range of 3 to 4 sq. m of personal space per inmate, a violation of article 3 of the ECHR might be found if the space factor is coupled with other aspects of inappropriate physical conditions of detention related to, in particular, access to outdoor exercise, natural light or air, availability of ventilation, adequacy of room temperature, the possibility of using the toilet in private, and compliance with basic sanitary and hygienic requirements. The ECtHR also stated that infringement of article 3 of the ECHR might also be found in a case where a detainee has more than 4 sq. m of personal space in multi-occupancy accommodation, other aspects of physical conditions of detention referred may determine the existence of infringement5. While it is clear that the ECtHR considers that 3 sq. m allocated to a prisoner is not sufficient from the perspective of article 3 of the ECHR, other situations distinguished by the ECtHR in Muršić v Croatia are less clear since the ECtHR evaluates the cumulative effect of detention conditions. Therefore, there is a strong indication for national courts that they should find an infringement of article 3 of the ECHR when there less than 3 sq. m allocated to a prisoner. However, in other cases national court lacks guidance, which may later result in finding that national court did not award effective remedy. In cases where treatment does not reach the threshold to fall under article 3 of the ECHR, the ECtHR may still find an infringement of other provisions of the ECHR. For example, the ECtHR in Szafranski v Poland declared that article 3 was not infringed. The ECtHR however, decided that article 8 of the ECHR, protecting the right to privacy, was infringed. In this case detainee for more than one year did not have privacy while using sanitary facilities. Nevertheless, the ECtHR emphasized that in all other aspects detention conditions were satisfactory6.

1 Ananyev v Russia (App no 42525/07 and 60800/08) ECHR 10 January 2012. 2 Mironovas and others v Lithuania (App no 40828/12, 29292/12, 69598/12, 40163/13, 66281/13, 70048/13 and 70065/13) ECHR 8 December 2015. 3 Muršić v Croatia (App no 7334/13) ECHR 20 October 2016. 4 Muršić v Croatia (App no 7334/13) ECHR 20 October 2016. 5 Muršić v Croatia (App no 7334/13) ECHR 20 October 2016. 6 Szafranski v Poland (App no 17249/12) ECHR, 15 December 2015.

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Liability for the damage caused by unlawful actions of institutions of public authority regarding improper detention conditions under the case-law of the Supreme administrative court

The ECtHR detailed that states parties have a margin of appreciation in determining how they fulfil obligations, arising out of the ECHR concerning detention conditions. Nevertheless, the ECtHR highlighted that the chosen standard must follow standards of human dignity1. Article 17 of the Law on Administrative Proceedings of the Republic of Lithuania stipulates that administrative courts have jurisdiction to adjudicate in cases concerning liability for damage caused by unlawful actions of institutions of public authority. Under article 6.271 of the Civil code of the Republic of Lithuania damage caused by unlawful acts of institutions of public authority must be compensated by the state from the state budget, irrespective of the fault of a concrete public servant or other employees of public authority institutions2. Liability arises under three conditions: unlawful acts (omissions), damage and causal relationship between unlawful acts (omissions) and damage. According to Article 6.250 of the Civil Code, non-pecuniary damage is a person's physical pain, spiritual survival, inconvenience, spiritual shock, emotional depression, humiliation, deterioration of reputation, loss of communication capability, and other consideration by the court in money. Under article 21 of Constitution of the Republic of Lithuania, human dignity shall be protected by law. It is prohibited to torture or injure a human being, degrade his dignity, subject him to cruel treatment, or to establish such punishments3. The primary legal sources that regulate detention conditions are Law on custody execution of the Republic of Lithuania and Code for the execution of sentences of the Republic of Lithuania. There are also many delegated legislation which set specific standards for detention conditions, for example - hygiene norms, which set specific standards for ventilation, heating, lighting measurements of space which should be allocated to every detainee. Nevertheless, detention institutions are also bound by international human rights standards, setting standards for detention conditions. The Supreme administrative court directly applies article 3 of the ECHR in its case-law and bases its decisions on the arguments made by the ECtHR (Jočienė, 2012). The Supreme administrative court emphasized that the ECHR is an integral part of the Lithuanian legal system, and its violation can be found not only by the ECtHR but also by Lithuanian courts. Thus, a violation of the ECHR by the authorities of state may also serve as a basis for state civil liability, because unlawful conduct within the meaning of article 6.271 may occur not only in violation of national legislation but also in violation of international law4. It is evidenced from the abundant case-law of the Supreme administrative court that liability for damage caused by unlawful actions of institutions of public authority for improper detention conditions usually arises if the Supreme administrative court constitutes an infringement of national legal regulation5. The Supreme administrative court made a

1 Aleksanyan v Russia (App no 46468/06) ECHR 22 December 2008; Vasyukov v. Russia (App no 2974/05) ECHR 5 April 2011. 2 Civil code of the Republic of Lithuania. Official Gazette. 2000, No. 74-2262. 3 Constitution of the Republic of Lithuania. Official Gazette. 1992, No. 220-0. 4 G. G. v Šiauliai remand prison (case No. A444-619/2008) Supreme administrative court 16 April 2008. 5 O. K. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A822- 1500/2013) Supreme administrative court, 7 November 2013; L. B. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A822-1477/2013) Supreme administrative court

176 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) distinction between cases where it found infringement of national legal regulation and infringement of both national legal regulation and the ECHR. The Supreme administrative court explained that refusal to apply article 3 of the ECHR does not eliminate responsibility of authorities because article 3 of the ECHR is applicable when there is a cumulative effect of various infringements. The court also specified that under national law, there is no requirement for a cumulative effect of infringements for liability to arise and mere infringement of a single national norm is sufficient to constitute that authorities are liable under the Civil Code of the Republic of Lithuania for improper detention conditions1. It should be noted, that even though the national court does not explicitly find an infringement of article 3 of the ECHR, the ECtHR may still consider that argumentation of national court is sufficient. For example, in Mironovas and others v Lithuania the ECtHR elaborated that the applicant retains the status of a victim if a national court does not find an infringement of the ECHR and does not award sufficient redress. On the other hand, in the same judgment the ECtHR explained that even though national court explicitly did not find an infringement of article 3 and restricted itself to a finding of a breach only of domestic law, finding of the Supreme administrative court in substance was so close to a finding of an Article 3 violation that the ECtHR accepted it as sufficient2. The Supreme administrative court usually finds an infringement due to overcrowded facilities in conjunction with other infringements such as inadequate ventilation, lighting, and sanitary facilities. It is seen from the case-law of the Supreme administrative court that the cumulative effect of detention conditions is evaluated3. When determining if detention facilities were overcrowded, the Supreme administrative court evaluates national legal regulation, which establishes specific measurements, which must be allocated to every detainee, depending on detention facility, on condition that national legal regulation is consistent with the case-law of the ECtHR4. However, even though under the case-law of the ECtHR sanitary facilities should be excluded from living space allocated to a detainee, the Supreme administrative court explained that under national legal regulation there is no requirement to exclude space occupied by sanitary facilities5. Furthermore, case-law reveals that the Supreme administrative court considers that in cases where an applicant was not subjected to overcrowded detention facilities, and only was not able to use sanitary facilities privately, it finds that a right to privacy was infringed.

Effective remedies for victims of improper detention conditions

The ECtHR reiterates that infringement of article 3 can be remedied in two ways. The ECtHR highlighted that in cases where a person is still detained, the most effective remedy is the termination of an infringement. In connection with this remedy, the ECtHR stated that under Lithuanian law transfer of detainees to another detention facility is discretionary and is

24 October 2013; R. K. v State of the Republic of Lithuania, represented by Kaunas remand prison (case No. A143- 2810/2011) Supreme administrative court 3 November 2011. 1 V. K. v State of the Republic of Lithuania, represented by Klaipėdos city police headquarter (case No. A-1517- 143/2016) Supreme administrative court 4 October 2016. 2 Mironovas and others v Lithuania (App no 40828/12, 29292/12, 69598/12, 40163/13, 66281/13, 70048/13 and 70065/13) ECHR 8 December 2015. 3 T. Č. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-1765- 556/2016) Supreme administrative court 8 November 2016. 4 D. A. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-3124- 756/2019) Supreme administrative court 27 March 2019. 5 K. Ž. v State of the Republic of Lithuania, represented by Vilnius correction home (case No. A-1672-261/2019) Supreme administrative court 27 March 2019.

177 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) not practical in cases of insufficient detention conditions. Furthermore, the ECtHR noted that requests to improve detention conditions might not be successful due to financial difficulties. The ECtHR also emphasized that even though the request to be transferred to another facility would be granted, detention conditions would be improved at the expense of another detained person1. However, in situations where a person is no longer detained, monetary compensation is one of the forms of redress. The ECtHR holds that in case if detention conditions are so deplorable that it amounts to the infringement of article 3, it cannot be compensated by a mere finding of a violation, so the victim should be awarded monetary compensation. Therefore, national court should provide compelling reasons for not granting monetary compensation or award lower compensation2. Under the principle of subsidiarity, authorities of states parties have the primary responsibility to ensure compliance with the ECHR (Interlaken follow-up. Principle of subsidiarity, note by the jurisconsult). Therefore, the ECtHR should intervene just in these cases where national authorities failed in that task (Caligiuri, Napoletano, 2011). Article 13 of the ECHR guarantees the availability at a national level a remedy to enforce the substance of the ECHR rights and freedoms. Under this article, a domestic remedy should deal with the substance of an arguable complaint under the ECHR and grant appropriate relief, which is effective both in law and in practice3. The ECtHR elaborated that domestic remedy in respect of conditions of detention may be considered as effective if national court deals with a case under the relevant principles established in the case-law of the ECtHR and awards compensation which is comparable to those awarded by the ECtHR in similar situations4. The ECtHR on many occasions came to a conclusion that even though Lithuanian administrative courts found infringement and granted monetary compensation for the damage suffered, the remedy was not sufficient, thus the applicant retained the status of a victim. In the most recent case, Miliukas v Lithuania the ECtHR elaborated that the Supreme administrative court found an infringement of both national law and the ECHR and awarded 579 Eur, however “[…] this amount, whilst apparently consistent with Lithuanian case-law at that time, is significantly lower than the amounts the Court awards in similar cases”5. The ECtHR does not provide specific criteria for adequate compensation. Nevertheless, on many occasions, the ECtHR took into account time spent in improper detention conditions as the crucial factor for determining just satisfaction6. Under the case-law of the Supreme administrative court, the applicant must provide a comprehensive description of detention conditions. If applicant's complaints are not consistent, detailed or respondent provides evidence, which negates applicant's claims, the Supreme administrative court considers that infringement was not substantiated7. However, after the applicant provides a detailed description of detention conditions, the burden of proof shifts to the respondent. The respondent then must provide all relevant documents

1 Mironovas and others v Lithuania (App no 40828/12, 29292/12, 69598/12, 40163/13, 66281/13, 70048/13 and 70065/13) ECHR 8 December 2015. 2 Ananyev v Russia (App no 42525/07 and 60800) ECHR 10 January 2012. 3 M.S.S. v. Belgium and Greece (App no 30696/09) ECHR 2011, 108. 4 Scordino v. Italy (App no 36813/97) ECHR 29 July 2004. 5 Miliukas v Lithuania (App no 10992/14) ECHR 16 April 2019. 6 Ananyev v Russia (App no 42525/07 and 60800/08) ECHR 10 January 2012; Torreggiani and others v Italy (App no 43517/09) ECHR, 8 January 2013. 7 R. T. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-2481- 624/2016) Supreme administrative court 8 March 2016.

178 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) concerning the applicant's detention conditions1. Once an infringement has been proved, the applicant is not obliged to provide evidence demonstrating that he or she suffered because of the infringement since suffering is presumed2. Under the case-law of the Supreme administrative court, administrative courts must also evaluate economic situation of the state, intent of a defendant to treat applicant inhumanely, and effects of a treatment to applicant’s health3, type of detention facility, nature and intensity of the infringement, case law of the Supreme administrative court in similar cases, general principles of law4, as well as time spent in improper detention conditions5. While some of the above-mentioned criteria, namely, type of the detention facility, nature, and intensity of the infringement, consistency of the case law, general principles of law, time spent in improper detention conditions, do not raise concerns from the perspective of the ECHR, other criteria are problematic. First of all, it is somewhat unclear from the case-law of the Supreme administrative court if criteria such as effects to applicant’s health or a lack of intent to treat applicant inhumanely, could be considered as relevant criteria at all, which mitigate the damage suffered or just demonstrate that there is no basis for considering a particular case as extraordinary and accordingly awarding more significant monetary compensation than in other cases. Under the case-law of the ECtHR, intention to subject the person to conditions which amount to the infringement of article 3 of the ECHR may result in finding that person suffered torture. Nevertheless, even in the context of detention conditions the ECtHR emphasizes that in that particular case there is no evidence that victim was subjected to improper detention conditions on purpose. However, it does not eliminate finding that detention conditions amount to the infringement of article 3 of the ECHR6. Therefore, it is clear that intention or purpose of treatment is relevant for finding an infringement of article 3 of the ECHR but not for assessment for just satisfaction. Furthermore, under the case-law of the ECtHR circumstance that violation of article 3 of the ECHR does not result in a long-term health problems, does not preclude the ECtHR from finding that infringement occurred. What is more, long-term health problems may even lead to a conclusion that victim should be awarded far higher monetary compensation or may raise the issue of pecuniary damage. The Supreme administrative court extensively relies on the economic situation of the state. Judge Danutė Jočienė in her partly dissenting opinion in Kasperovičius v Lithuania expressed support for this criterion, claiming that that the ECtHR should take into account economic situation or standard of living in the country. The judge highlighted that the ECtHR awarded monetary compensation for treatment which lasted for seven days yet equals to twelve months’ average salary in Lithuania. Recently the ECtHR acknowledged that the economic situation of the country is also relevant. However, this conclusion was made in a case against Italy, which introduced other measures to remedy detainees who suffered an infringement of article 3 of the ECHR such as reducing the sentence for victims of an

1 T. Č. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A442- 1251/2013) Supreme administrative court 23 September 2013. 2 D. S. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-1714- 492/2019) Supreme administrative court 27 March 2019. 3 A. Š. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-683- 624/2019) Supreme administrative court 10 April 2019. 4 I. Š. v State of the Republic of Lithuania, represented by Alytus city police headquarters (case No. A-621- 756/2017) Supreme administrative court 19 April 2017. 5 A. Š. v State of the Republic of Lithuania, represented by Pravieniškės colony (case No. A-1460-602/2019) Supreme administrative court 27 March 2019. 6 Kasperovičius v Lithuania (App no 54872/08) ECHR 20 November 2012.

179 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) infringement of article 3 of the ECHR1. Therefore, this line of argumentation might not be appropriate in Lithuanian cases since the only other remedy available to detainees is just satisfaction awarded by administrative courts. The Supreme administrative court considers that monetary compensation for improper detention conditions should not be awarded if an infringement is a minor, short-term, one- time infringement2. For example, the Supreme administrative court did not award monetary compensation when the right to privacy was not ensured while using sanitary facilities3; right to privacy while taking a shower was infringed4; applicant’s right to proper feeding was infringed5. Nonetheless, it should be taken into account that on many occasions the Supreme administrative court also ruled that infringement of a right to privacy while using sanitary facilities, may not be compensated by the mere constitution of infringement and victim should be compensated by monetary compensation6. Furthermore, the Supreme administrative court in its case-law relies on the ECtHR jurisprudence7, namely Daktaras v Lithuania8 and L. L. v France9, to substantiate its position that finding of infringement might be just satisfaction. Even though the ECtHR considers that on some occasions finding an infringement might be sufficient just satisfaction, it noted that in cases of infringement of article 3 of the ECHR finding of infringement may not be sufficient and the national court should provide compelling reasons to substantiate that remedy. Furthermore, it should be taken into account that Daktaras v Lithuania concerned infringement of article 6 of the ECHR while L. L. v France concerned infringement regarding custody issues. Thus, even though finding of an infringement may be just satisfaction in some cases, the Supreme administrative court's argumentation based on the ECtHR case law may not be convincing.

Conclusions

1. The ECtHR constitutes an infringement on a case-by-case basis, taking into account the cumulative effect of detention conditions. While the threshold approach adopted by the ECtHR is flexible and provides article 3 with a wide scope, it also lacks clarity, since it is not based on a clear

1 Scordino v. Italy (App no 36813/97) ECHR 29 July 2004. 2 J. D. v State of the Republic of Lithuania, represented by Šiauliai remand prison (case No. A-1279-492/2018) Supreme administrative court 9 May 2018. 3 J. J. v state of the Republic of Lithuania, represented by Šiauliai remand prison (case No. A-2061-438/2019) Supreme administrative court 27 March 2019; S. K. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-1386-261/2019) Supreme administrative court 21 February 2019. 4 J. S. v State of the Republic of Lithuania, represented by Vilnius correction home (case No. A-1396-602/2019) Supreme administrative court 27 March 2019. 5 E. M. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-2298- 629/2019) Supreme administrative court 27 March 2019. 6 E. S. v state of the Republic of Lithuania, represented by Šiauliai remand prison (case No. A-895-442/2019) Supreme administrative court 27 March 2019; M. M. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-3500-525/2019) Supreme administrative court 6 March 2019. 7 J. S. v State of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-163- 552/2019) Supreme administrative court 27 March 2019; G. D. v state of the Republic of Lithuania, represented by Lukiškės remand prison and prison (case No. A-1652-575/2019) Supreme administrative court 20 March 2019; V. V. v State of the Republic of Lithuania, represented by Šiauliai remand prison and prison (case No. A-1768- 525/2018) Supreme administrative court 26 September 2018; L. Ž. v State of the Republic of Lithuania, represented by Telšiai city police headquarters (case No. A-3285-520/2016) Supreme administrative court 2 November 2016. 8 Daktaras v Lithuania (App no 42095/98) ECHR 10 October 2000. 9 L. L. v France (App no 7508/02) ECHR 10 October 2006.

180 Social Transformations in Contemporary Society, 2019 (7) ISSN 2345-0126 (online) rule-based approach. Such an approach is problematic since national courts are not given sufficient guidance and maybe the reason why Lithuanian administrative courts while extensively relying on the case-law of the ECtHR, usually find that only national legal regulation was infringed and do not constitute an infringement of the ECHR. 2. While Lithuanian administrative courts generally successfully apply the criteria set by the ECtHR regarding violations of article 3 of the ECHR, the ECtHR does not always consider remedies granted by the courts as sufficient. While this is an outstanding issue for national courts, there are no straightforward solutions for it, since the ECtHR declines to provide any clear criteria for determining if a remedy is effective. Thus, national courts are left with only one option – to recourse to the case-law of the ECtHR and evaluate whether a particular remedy would be in line with the one granted by the ECtHR in similar circumstances. Comparison of the case-law of the ECtHR gives rise to the argument that time spent in improper detention conditions is usually a dominant factor for determining just satisfaction. 3. The Supreme administrative court applies a more elaborate criteria for effective remedy, such as time the victim spent subjected to improper conditions, the entirety of infringements, the level of suffering, the intention for harm of the institution, the economic situation. The Supreme administrative court also considers that finding an infringement is just satisfaction if infringement is minor. These criteria fill the void left by the ECtHR and provide much-needed guidance to national courts. Whether or not they result in an effective remedy is yet to be seen as there are still inconsistencies, for example – in cases when detention facilities fail to ensure privacy.

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Social Transformations in Contemporary Society (STICS), Proceedings of International Scientific Conference for Young Researchers, 6-7 June, 2019, Vilnius-Net, p. 184.

ISSN 2345-0126 (online)

Is world really changing as fast as we think? Or is it event changing at all? Social transformations is a delicate topic for researchers. We invited young researchers to look at processes which cause social transformations (or prove the static of societal tradition) in their country and share it with us.

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Prepared for publishing – Dalia Karlaitė

Published by – Mykolas Romeris Universitety, Ateities g. 20, LT-08303 Vilnius

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