Draft Proposal for a Electronic Data Interchange And E-Commerce Policy

Draft Proposal for a Electronic Data Interchange And E-Commerce Policy

Draft Proposal for a Electronic Data Interchange And E-Commerce Policy.

Sri Lanka


In Sri Lanka, EDI was first initiated by the Computer and Information Technology Council of Sri Lanka (CINTEC) and the Sri Lanka Export Development Board (EDB) in the mid eighties. CINTEC and the EDB held several seminars at that stage, to promote EDI. The Sri Lanka Ports Authority commenced developing EDI activities in 1986 with a MARITIME Information network – MARINET, which was finally implemented in 1989/90. The Container Handling Shipping Lines were linked with the computer systems of the Ports’ Authority, which helped improve communications considerably.

All shipping agents involved in Container Handling activities (approx. 30) are connected electronically with the SLPA computer through the MARINET system.

In May 1995, CINTEC established a Working Group with representation from over 20 organizations, to function as a forum on EDI.

In August 1995 CINTEC established a National EDI/EC Committee, with representation from CINTEC, EDB, Sri Lanka Ports’ Authority, Sri Lanka Customs, Sri Lanka Telecom, Airlanka, Sri Lanka Freight Forwarders Association and the Ceylon Association of Ships’ Agents.

The Committee has now been expanded and includes representatives from

Sri Lanka Standards Institution

CINTEC Committee on Law and Computers

EAN- Sri Lanka (EAN: European Article Numbering)

In January 1996, CINTEC obtained Cabinet approval through the Ministry of Science, Technology and Human Resources Development, for several recommendations contained in Cabinet Memorandum 96/0053/104/003.

In accordance with the Cabinet decisions, the National EDI/EC Committee was recognized as the National body/focal point for EDI in Sri Lanka, with technical, administrative and financial support from CINTEC. The Secretariat in Sri Lanka in respect of the AFACT is based at CINTEC.

Cabinet approval was also granted to establish a limited liability company to initiate and manage the creation of value added networks. The National EDI Committee worked towards the establishment Sri Lanka EDI Network Services (Private) Limited,. The Company was incorporated on 5th March 1997.

Sri Lanka became a member of Asia EDIFACT Board (ASEB), now designated as the Asia Pacific Council for the Facilitation of Procedures and Practices for Administration, Commerce, and Transport (AFACT) in June 1995, at the 10th ASEB meeting held in Bangkok, and since then has taken an interest in all its activities, and has participated in all ASEB meetings. (the principle focus of AFACT is to facilitate international transactions, through the simplification and harmonization of procedures and information flows, and so contribute to the growth of global commerce).

The 15th ASEB Meeting of the its related meetings were held in November 1997, in Colombo, Sri Lanka, and this was organized by the National EDI/EC Committee. . 136 participants from 19 countries participated at this meeting. Sri Lanka’s proposal to establish a new Working Group on Legal Issues under the ASEB, was agreed on by the meeting.Subsequently the National EDI Committee, agreed at its 26th meeting to that it should be the body responsible for policy on EDI/EC in Sri Lanka.

The need for an EDI/E-commerce Policy

A definition capturing most of the qualities normally associated with Electronic Data Interchange (EDI) is “Electronic exchange of predefined messages, structured according to agreed standards between independent computer applications without manual intervention. Electronic Commerce may be defined as the process of conducting all forms of business activity between entities using appropriate electronic methodologies and procedures in order to achieve the organization’s objectives. Electronic Commerce technologies include all forms of electronic trading, electronic messaging, EDI, electronic funds transfer, shared databases and directories, electronic news and information services, online access to services via the Internet and any other form of electronic data transmission for business purposes”

Although the development of EDI was originally in the trade sector, there is now a growing interest from other areas as well. Therefore advances in EDI and electronic commerce will soon, perhaps over the next decade, have an impact on every aspect of life: business, education, health, travel and leisure.

Businesses and consumers would interact with each other directly without the involvement of traditional middle persons

EDI and Electronic Commerce being adopted by organizations would also necessitate re-engineering of internal systems. Also when Government agencies and large firms adopt EDI and/or electronic commerce this would have an impact on SMEs with which the larger institution conducts business. Thus, over the long term it would be necessary for SMEs too, to re-engineer their systems and the way in which they conduct their businesses.

As the use of EDI and electronic commerce increases there is also an increase in a variety of threats, so that it is necessary for transactions to be technically and legally secure and safe. Issues such as ease of reproduction, difficulty of detecting alteration, absence of originality, and anonymity of source, will have a particular impact upon an electronic commerce transaction as opposed to a paper based trade transaction Cryptography will play a particularly important role in ensuring security. However the use of strong cryptography to conceal data related to illegal activities raises a number of law enforcement issues for governments

Existing consumer protection laws also may need amendment, as the laws that protect a consumer in his/her jurisdiction may not apply in the seller’s country.

Thus, almost every aspect of commerce and business is changing very rapidly and the range of its impact is also wide, so that there may soon be a significant economic impact through the advent of e-commerce.

Therefore, rather than letting the dissemination of EDI/E-Commerce to market forces, government intervention in the economy is necessary in order to act upon the process of technological innovation. A policy is necessary to ensure equity and access

Therefore planning and monitoring by the various sectors would become a necessity, new legal issues that arise would have to addressed, and also the sectors and the organizations involved may have to make significant investments in the future, and therefore, a carefully drawn out policy that is consistent with the global stance and policies on EDI and e-commerce would be necessary for Sri Lanka.

Policy Issues

The private sector to be governed by market forces

The private sector would be governed by market forces and will not be hindered by unnecessary regulations and controls. This is consistent with global trends.

Standards and technical security

Standards are important to facilitate inter-operability between different systems, but technical standards should be adopted carefully so that outdated technology is not locked-in as standards.

The National EDI/EC Committee should have the authority to recommend the adoption and use of EDI/EC standards to the Council of Sri Lanka Standards Institution for authorization as Sri Lanka Standards.

Privacy, data protection

Article 25 of the European Union Directive on Data Protection stipulates that member States may allow transfer of personal data to a foreign country only if that foreign country ensures an adequate level of data protection. Adequacy in this context depends on whether the foreign country conforms to the Directive standards.

The effect of this Directive on Sri Lanka is that Sri Lanka may not be able to import or export personal data from and to Europe unless Sri Lanka has an adequate level of protection as set out in a legislative instrument or a contract enforcing contractual obligation for confidentiality.

Taking into account the powerful nature of the European Union, and to prevent a negative effect on investment and trans-border services with Europe as well as other countries influenced by the above Directive, Sri Lanka should draft and adopt legislation on data protection.

Recognition and acceptance of electronic signatures

A legal framework that facilitates electronic transactions should be introduced and electronic signatures and other forms of authentication should be regarded as functionally equivalent to hand-written signatures and acceptable for legal purposes.

Consumer protection

The level of consumer protection when using EDI/e-commerce should be on par with the protection available with other forms of commerce. The Consumer Protection Act No. 1 of 1979, (an Act to make provisions for the regulation of internal trade, for the protection of the consumer, for the establishment of fair trade practices) the consumer Credit Act No. 29 of 1982 (an Act to define and regulate the duties of Parties to hire Purchase Agreements and to provide for matters connected therewith or incidental), the Unfair Contracts Act, and other such relevant Acts should be amended as relevant to EDI/E-Commerce transactions.

Copyright and neighboring rights

Adequate protection of copyright and neighboring rights should be provided in all EDI and e-commerce transactions.


The flow and dissemination of unbiased, accurate and up to date information on the world wide web is supported. The above principles extend to sites created by commercial enterprises, such as virtual shopping malls. Restrictions on content should not be greater than any legal restrictions or regulations that may be there in the tangible world. If there is regulation on advertising then it will be on par with and will not exceed the regulations imposed by the Government on advertisements using other media (newspapers, TV)

Domain names

The domain names under the .lk domain will be registered on a first come first served basis, and the applicant should provide a clear justification for the reason for selecting the domain name. The name of Sri Lanka in any form and the names of provinces, towns, and names which may be offensive to any accepted race, culture, or tradition in Sri Lanka will not be registered.


Widely accepted tax principles should apply to the taxation of electronic commerce. The taxation framework for electronic commerce should encourage the growth of EDI/E-Commerce.


Levies should encourage and not discourage the growth of EDI/E-Commerce.

Communication infrastructure

The communications infrastructure, should be improved, data transmission speeded up, while costs should be kept low.


Links should be developed, and sustained with regional & global bodies such as the Asia Pacific Council for the facilitation of Procedures and Practices for Administration, Commerce and Transport (AFACT) and the Center for the facilitation of Procedures and Practices for Administration, Commerce and Transport (CEFACT).

Promotion and awareness

The level of awareness among users and stakeholders and the general public about EDI and E-commerce related issues should be enhanced


Recommendations and Action Plan

Promotion and awareness

Prepare a promotion program on EDI/E-Commerce annually and implement it in Colombo and the provinces on various media. Plan and conduct seminars on the area of EDI/E-Commerce.

Standards and technical security

The National EDI/E-Commerce Committee would keep abreast of development on standards relevant to EDI/E-Commerce, and recommend the adoption of such standards, to the Sri Lanka Standards Institutions, taking into the account the views of organizations, institutions, and bodies on which such standards would have an impact.

A certification authority would be set up in Sri Lanka, in order to safeguard our national interests. This issue being addressed by the CINTEC Committee on Electronic Security would be expedited. The issue of the legislative regime that should be adopted for electronic signatures is presently being addressed.

Privacy, data protection

A first draft of the proposals for legislation on Data Protection for Sri Lanka has been completed. This would be scrutinized further and amendments made if necessary, and steps would be taken to recommend it to be introduced as a law in Sir Lanka

Legislation to facilitate electronic commerce

Proposals for legislation to facilitate electronic commerce would be finalized and implemented.

Consumer protection

The existing laws listed under issues should be amended in order to properly accommodate and protect consumers engaging in Electronic Commerce transactions.

Copyright and neighboring rights

Where necessary laws should be amended or new laws should be introduced and properly enforced in order to provide meaningful protection.


1.EFTA Trader’s ABC -Guide to the use of EDI based on UN/EDIFACT.

2.OECD Policy Brief No. 1 of 1997

3.Minutes of the National EDI/EC Committee 26th meeting, and 28th meeting

4.Draft proposal for an IT Policy 1999 – Sri Lanka

5.Rapporteur’s report at the 17th AFACT meeting. (Plenary)