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The IAFOR Journal of Politics, Economics and Law
Volume I – Issue I – Fall 2014

IAFOR Publications
Executive Editor:
Joseph Haldane
The International Academic ForumThe IAFOR Journal of Politics, Economics and Law
Editor:Craig Mark, Kwansei Gakuin University, Japan
Assistant Editor:
Shazia Lateef, Macquarie University, Australia
Editorial Board:
Jesse Olsen, University of Melbourne, Australia
Mateja Kovacic, Hong Kong Baptist University
Prajakta Khare, Kwansei Gakuin University, Japan
Published by The International Academic Forum (IAFOR), Japan
Executive Editor: Joseph Haldane
Editorial Assistance: Lindsay Lafreniere
IAFOR Publications. Sakae 1-16-26-201, Naka-ward, Aichi, Japan 460-0008
Journal of Politics, Economics and Law
Volume I – Issue I – Fall 2014
IAFOR Publications © Copyright 2014
ISSN: 2188-9562
Online: http://iafor.org/iafor/publications/iafor-journals/iafor-journal-of-politicseconomics-and-law/
Cover image by Kim Ahlström/Flickr
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The IAFOR Journal of Politics, Economics and Law
Volume I – Issue I – Fall 2014
Edited by Craig MarkTable of Contents
	
  
	
  

Notes on Contributors

1

	
  
	
  

Introduction
Craig Mark

3
	
  
	
  

Statelessness Matters 10 Years on from Al-Kateb:
Statelessness in the Australian Context
Susan Kennedy

5

	
  
	
  

Outsourcing in the Banking Sector(The Polish Banking Sector Case)
Jerzy Kaźmierczyk
Przemysław Macholak

15

	
  
	
  

Legalizing Community Resources —Experiences Learned from Implementing the Indigenous
Traditional Intellectual Creations Protection Act (ITICPA)
Chu-Cheng Huang

29

	
  
	
  

How Much Do Student Loan Sizes Affect Returns on
Tertiary Education for Thai Persons with Disabilities?
Kiatanantha Lounkaew
	
  
	
  

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Notes on Contributors
Susan Kennedy is a doctoral candidate in the School of Education, at the Universityof Adelaide. She has been a lecturer to indigenous Australian students, a generalistclassroom teacher, and a specialist English teacher for humanitarian refugee programs
and new arrivals to Australia. She has worked in education across Asia and Australia
in the public and private school systems, and has published previously in education,
film, theatre and studies of Asia. She is also a Juris Doctor (postgraduate law) student,
and has carried out field work in Kuwait.
Dr Jerzy Kaźmierczyk is an Assistant Professor at the Poznan University of
Economics, Poland. His research concentrates on developments in the banking andfinance sector, with publications including: Technological and socio-economic
determinants of employment in the banking sector in Poland; and ‘Informationtechonology systems and their impact on the employment level (in the Polish banking
sector)’, in the Journal of Security and Sustainability Issues. His co-author
Przemysław Macholak is an economist and member of the Polish Economic
Association.
Dr Chu-Cheng Huang is an Associate Professor in the Institute of Law for Scienceand Technology, at National Tsing Hua University, Taiwan. He is also a principal
investigator of the Indigenous Traditional Intellectual Creation Protection Project, amember of the Board of Directors of the Millet Foundation, the Commissioner of theInternational Law Commission of the Taiwan Law Society, and the President of The
Association of Canadian Study in Taiwan. In 2012, Dr. Huang was a recipient of theDistinguished Professor Award for Research from National Tsing Hua University, for
his achievements in teaching and research. He has published over 50 articles inleading journals in the field of International Law and Indigenous Peoples and theLaw.
Dr Kiatanantha Lounkaew is an Australian Research Council’s Linkage Research
Fellow in the Crawford School of Public Policy, at the Australian National University.
He is also Director of the Dhurakij Pundit University Research Center, Thailand. His
research focuses on labour market adjustment, education and labour market outcomes,
student loans, higher education financing, education reform, school quality andcompetiveness of small and medium enterprises. He has published in: Economics of
Education Review, Journal of Population Research, Economic Papers and Australian
Journal of Labour Economics. He has worked with several Australian, Thai and

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international agencies, including: the Bank of Thailand, Ministry of Labor, Ministryof Education, Bank for Agriculture and Agricultural Co-Operatives, Health System
Research Institute, the World Bank, and the International Labour Organization.

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Introduction
It is a pleasure and privilege indeed to introduce the first issue of the IAFOR Journalof Politics, Economics & Law, joining its stable-mates of the peer-reviewed academic
journals published by the International Academic Forum (IAFOR). Politics,
economics and law are highly interdependent disciplines at the essential core of thesocial sciences, addressing issues central to determining the stability and welfare of
the world.
In both contemporary international, and domestic politics in many countries, continualcrises are being confronted. In economics, the uncertainty wrought in the wake of the
Global Financial Crisis of 2008, and the challenges and opportunities presented inemerging markets are still unfolding. In law, various debates in domestic andinternational jurisprudence demonstrate the complexities of reflecting and pursuingjustice. The IAFOR Journal of Politics, Economics & Law will thus provide
opportunities for scholars around the globe to contribute their expertise, throughoriginal research to these vital debates.
Reflecting the interdisciplinary approach of IAFOR, this journal aims to display arepresentative sample of distinguished papers selected mainly, but not exclusively,from the already impressive submissions to the proceedings of IAFOR’s series of
Politics, Economics & Law conferences, plus papers submitted externally. This issue
is the first modest presentation of these endeavors, which will be built upon in futurevolumes. The selection of articles for this first journal aims to reflect this interactive
cross-over, displaying how the three fields are inevitably interdependent in theirresearch and analysis.
The four papers which have been subject to a peer review process and selected forinclusion in this first issue reflect these ambitions; as well as their academic insights,
one can detect in these valuable pieces of original research a firm sense of social
justice motivating the authors:
Susan Kennedy critiques the treatment and status of stateless peoples undercontemporary Australian law concerning asylum seekers and refugees;
Jerzy Kaźmierczyk, with co-author Przemysław Macholak, utilize their original
survey-based research to assess the effect of outsourcing on the Polish banking sector;

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Chu-cheng Huang’s article examines the complexities and difficulties in applying
Taiwanese copyright law to protect the intellectual property of its various indigenous
peoples;and Kiatanantha Lounkaew applies econometric analysis towards the impact of theThai student loans system on health and economic outcomes for disabled people.
Sincere thanks goes to the contributors, the reviewers, the advisory Board members,
Assistant Editor Dr Shazia Lateef; and also deep appreciation for the invaluableadvice and support of the IAFOR publication staff, and the confidence and support of
the IAFOR Board. I hope all readers find some provocative enlightenment in thisinaugural issue, and in future volumes to come.

Craig Mark
Editor4

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Statelessness matters 10 Years on from Al-Kateb:
Statelessness in the Australian Context

Susan Kennedy
Abstract
This year is the tenth anniversary of the final decision on al al Kateb v Godwin (2004)
HCA 37), a landmark case in Australian migration law. The Australian government
sought to indefinitely detain al Kateb, a stateless Kuwaiti, after refusing his
application for asylum. The High Court ruled in favour of al Kateb on the basis thatindefinite detention of a stateless person is unlawful. Since then, Australian law onstatelessness has failed to develop to the extent that the Australian government has notlegislated on a determination procedure for stateless people. Australia does notprovide protections under United Nations Convention on the Status of Stateless
Persons (1954) to which Australia is a signatory. This paper discusses sources
Australian Country Advice KWT39495 to describe how concepts about statelesscommunities might develop within the Refugee and Migration Review Tribunals. It
challenges the veracity of the Country Advice information based on its use of sources.
It explains the reasoning behind American and UK positions on statelessness in
Kuwait in the Country Advice, which influences determinations on asylum claims, inthe absence of a procedure to determine and resolve statelessness. It concludes that
not only are the Australian Country Advices in need of update, there is also a need forthe quality of evidence sourced and the interpretation of that evidence, to be reviewed
Keywords: Statelessness, human rights law, refugee law

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Introduction: Why Statelessness Matters
I will discuss why statelessness matters in the Australian context of the Australian
Department of Immigration and Citizenship’s sources of advice on Statelessness, thetwo main sources of the advice, and the two trends emerging that are positioning thestateless population claims. There are approximately 22 million stateless people
worldwide (UNHCR 2013). Most of these people are not displaced refugees, but
remain in their countries of origin for generations (Refugee Appeal No. 72635/01,
2002). One of the reasons for this is that if they cross a border from their homecountry, they will not be allowed back in. The systematic exclusion of stateless people
from legal frameworks in their own nations leads to some stateless people taking therisk of travelling, and this manifests as asylum flows to adjacent nations and also
further afield. Stateless, they cannot leave the second country, since they have nonation to be exited to. Under Australia’s new offshore processing procedures for
Irregular Maritime Arrivals, stateless persons who do not make successful claims as
refugees are left on Manus Island or Nauru.
However, as at 15 May 2012, there were 555 people in detention centres in Australia
who identified as being stateless, 114 of whom had been detained for over a year anda half (Australian Human Rights Commission 2012 at 6.4), ten years after the al
Kateb case (al Kateb v Godwin (2004) HCA 37) had decided that stateless asylum
applicants should not be left in indefinite detention.
When his case first came to the attention of the Australian media, Ahmed al Kateb
was a stateless Kuwaiti of Palestinian descent languishing in indefinite detention inSouth Australia (Zagor 2006). The Kuwaiti Bidoun Jinsiya provide a particularlycompelling example of statelessness as, until 1986, this group were treated as citizens
in Kuwait, while their claims to human rights and citizenship-like benefits are today
made in competition with more recent arrivals from other regions of the Arab world(‘Kuwait issues 80,000 identification cards to stateless Arabs’, Arabian Business, 20
January 2013). A discussion on how the problem developed is beyond the scope of
this article, suffice to say that the Kuwaiti government has called on the international
community to treat this problem as an international issue, rather than a purely Kuwaiti
one (Kuwait Government Response to Human Rights Watch, 2011).
Stateless Kuwaitis seek asylum in nations such as Britain, Canada, New Zealand andAustralia (Statement of Changes in Immigration Rules, UK Border Agency, 2013;
Research Directorate, Immigration and Refugee Board of Canada, 1999 and 2001;
DZABG v MIAC (2012) FMCA 36; MRT Case 1218580 (2012); Refugee Appeal No.
72635/01, 2002). The international flow of stateless populations changes thecomplexion of statelessness in Kuwait from a domestic problem into an international
issue. The current Australian approach to the Convention on the Status of Stateless
Persons (1954) has seen Australia fail to implement the Convention, despite being asignatory to it. The failure of the Australian government to implement a procedure to
determine statelessness is the most significant problem for stateless asylum applicantsin Australia, as they cannot have their stateless status resolved under Australian law.
This failure means that stateless people have only the Convention Relating to the
Status of Refugees (1951) under which to apply for protection. The means ofprotection for stateless persons under international law for those who do not qualify
for refugee status remains denied to stateless people who apply for asylum inAustralia. This creates a situation where stateless people and their legal counsel are

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left to ‘fit’ their circumstances into a case for refugee status, although according totheir circumstances, they are eligible for protection from Australia under theConvention on the Status of Stateless Persons (1954).
This leads to the second reason for the failure of stateless people to have their cases
resolved under Australian law. While stateless people’s asylum claims can only beprocessed as applications for refugee status, these are often rejected. This leaves theircases unresolved if they cannot be returned to their home country (the al Kateb case al
Kateb v Godwin & Ors [2004] HCA 37 established that the return of stateless
Kuwaitis and others is usually refused by the home country from which they came).
The decisions of the Australian Migration Review Tribunal and the Australian
Refugee Tribunal, including the rejection of refugee claims by stateless people, can be
related to evidence from documents issued by the Australian Department of
Immigration and Citizenship (now known as the Australian Department of
Immigration and Border Control). As discussed above, because Australia has not
implemented a statelessness determination procedure, the Refugee Convention is the
only convention under which asylum seekers can apply for asylum. In Britain, asylum
seekers can now apply for refugee or statelessness status according to either theConvention on the Status of Refugees (1951), or the Convention on the Status ofStateless Persons (1954) respectively. Asylum claimants in Australia must
demonstrate that they are being persecuted in a particular way, according to the ‘wellfounded fear’ test, to ‘fit’ their case to the definition of the Convention on the Status
of Refugees (1951) (refer to the Australian government’s Guide to Refugee Law:
Chapter 3: Well-Founded Fear, September, 2013; Refugee Appeal 72635/01, 6
September 2002 provides a judicial analysis of how the test was applied regarding astateless Kuwaiti).
If a claim for refugee status is based on membership of a particular group, claimants
must demonstrate that they are members of that group, and that this group has been
subjected to persecution, having experienced prejudice or discrimination. This meansthat their cases put forward by solicitors rely on proof of difference of race, religion oraffiliation upon which claims of persecution are constructed. Where the status of aperson’s membership of a group subject to persecution cannot be decided, or if theexistence of that group is not accepted, the claimant’s case is unlikely to be deemed tosatisfy the definition of a ‘well-founded fear’ of persecution. Where Country Advice
documents issued by the Australian Department of Immigration and Citizenshipquestions or denies the status of stateless groups, which are subject to persecution,according to the group members’ ‘sameness’ or ‘difference’, this has the potential tonegatively influence determinations on cases brought before the tribunals. Suchclaims about the group identity of stateless Kuwaitis were found in AustralianCountry Advice KWT39495.
This article analyses sources Australian Country Advice KWT39495 to describe how
concepts about belonging and the identity of stateless communities subject topersecution have developed. It explains the reasoning behind what appears to be two
conflicting positions on statelessness expressed in Kuwait in the Country Advice. The
positions relate to stateless Kuwaitis’ claims to belong to a group that is discriminatedagainst or persecuted. I challenge the veracity, quality and context of informationfrom American sources used in the Country Advice, used to assert that the statelesspeople of Kuwait are the same as Kuwaiti citizens, and that stateless people have no7

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distinct identity or culture. On the other hand, information in the Country Advice
based on British sources supported assertions that stateless people of Kuwait have a
distinct identity, and a rightful claim to refugee status. The UK information was
downplayed, despite its better quality and contextual fit. This raises questions about
the sources and the interpretation of sources in the Advice. The Country Advices
influence determinations on stateless person’s asylum claims in Australia the absenceof a procedure to determine and resolve statelessness, where stateless applicants are
expected to prove refugee status in order to be granted protection.
The Department of Immigration’s Sources of Advice on Statelessness
Australia has had so many stateless asylum applicants from Kuwait that it began
issuing summaries to migration department staff via the Australian Country Advice,
regarding the ‘Bidoun Jinisya,’ people without nationality. Numbers of statelesspeople arriving or staying in Australia from particular countries of origin are notpublished by the Department of Immigration and Migration Australia (now known as
the Department of Immigration and Border Protection) or the Australian Bureau of
Statistics. Therefore, I am unable to suggest just how many Kuwaiti statelessapplicants for asylum in Australia there have been. However, as at mid-2013, there
were four advices listed on the Australian Migration and Refugee Review Tribunal
website, including Australian Country Advice: Kuwait KWT37495 (2010),
KWT37848 (2010), KWT38627 (2011) and KWT38642 (2011). The Advices describedvarious issues arising in appeal cases relating to identity, culture, society and politics.
Country Advice KWT39495 was particularly significant, because it discussed at
length claims to identity made by stateless asylum applicants. The two main pieces ofevidence used in the Advice were:• About Being Without: Stories of Statelessness in Kuwait by Refugees
International 2007;• UK Home Office Operational Guidance Note – Kuwait, March, 2009 (hereafterreferred to as OGN 2009).
About Being Without: Stories of Stateless in Kuwait, Refugees International, 2007
Regarding the abovementioned Refugees International (2007) source information,
Refugees International is a Washington-based advocacy organisation that has
produced a number of field reports on the Stateless in Kuwait (see Refugees
International 25 July 2007, 2 September 2009, 12 September 2009, 17 October 2011,
5 March 2012 and 12 May 2012). Ironically, the publication referenced in the Country
Advice is probably the least rigorous research publication on Kuwait that theorganisation ever produced. The document did not even claim to be a fact based
report. It was a monograph of six ‘stories’, over just fifteen pages, with large
photographs filling the pages, constructed by a field worker who flew into the site foraround two weeks.
While the research method used to produce About Being Without: Stories ofStatelessness in Kuwait (Refugees International 2007) included interviews toconstruct a life history of participants, a method used frequently in the qualitativesocial sciences, the manner in which the author used this data to analyse and construct‘results’ was creative (in a creative writing sense) rather than rigorous (in an academicor humanitarian advocacy sense). The interview data was pieced together to create

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general biographical life stories, including life stories of individuals and life stories offamilies. The family research comprised interviews with only certain individuals in
the group, which were presented as providing a portrait of sorts, of the entire group.
The first story, ‘A Family Destroyed’ concluded with: “Mohammad remembers thathe lay awake all night, repeating the word ‘bidun’and wondering what it meant.”(About Being Without: Stories of Statelessness in Kuwait, Refugees International 2007pp.5).
Principles of beneficence were adhered to by the researcher so loosely in interpreting
and reporting the results, that I believe readers would likely come away from reading
the work with a somewhat tainted or negative impression of stateless people. For
example, in the first story quote above, the married couple’s divorce for the purposeof obtaining free schooling for their five children was described by the researcher
while the couple’s daughter tried to put forward an argument about the discrimination
she had experienced that prevented her education. I believe that application anddisclosure of research methods is a significant concern in humanitarian research onstatelessness in the Middle East. In Stateless Aesthetics, Feminist Human Rights
Discourse on the Stateless in Kuwait (Kennedy 2013), I explored the use of feminist
methodology to produce results and make recommendations that run counter to theprinciples of beneficence in the research carried out on stateless people in Kuwait. In
About Being Without: Stories of Statelessness in Kuwait (Refugees International2007), the author relied on sensational language and unverified data to craft his stories
on statelessness.
UK Home Office Operational Guidance Note – Kuwait, March, 2009
Regarding the British source of information for the Country Advice on Kuwait, theOGN (2009) issued by the UK Home Office was compiled by the British Asylum
Policy Directorate. It drew on information from the British Foreign andCommonwealth Office (citing humanitarian and diplomatic efforts in the Middle
East), Freedom House (another Washington-based rights group, whose mandate issimilar to Refugees International), the US State Department, The National News
service (a Middle East daily news source), the World Health Organisation, and caselaw from three British law cases on stateless asylum claims. The sources of
information were authoritative and well spread across a number of genres.
Two trends emerge positioning the stateless population claims
Emerging from the Country Advice are two apparent positions: a British position andan American position on Kuwaiti statelessness. The Washington-based Refugees
International (2007) work was held out to be comparable with the OGN (2009), in
terms of the evidence from each publication being used to weigh up claims about thestateless Kuwaitis’ cultural identity. I explained in the textual analysis why the stories
by Refugees International (2007) was not of a comparable quality to the GuidanceNote, and nor did it seem intended for the purpose of helping a Tribunal to decide on
an asylum claims. A field report by Refugees International (2008) was quoted out ofcontext, and used to support the ‘sameness’ argument, while in fact it argued thestateless were treated with discrimination based on their status of statelessness.
On the other hand, the US Department of State (2010) information was used tosupport a claim of ‘difference,’ but it did so by claiming that the Kuwaiti stateless

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community is Iraqi. If this line of argument was developed fully, it would substantiatethat the stateless in Kuwait are culturally distinct, but are nevertheless unwelcome
foreigners. Even the Kuwait government acknowledges that there are statelesspopulations in Kuwait of Kuwaiti descent (Kuwait Government Response to Human
Rights Watch 2011). It is also well-established that many stateless Kuwaitis were left
trapped in Iraq and unable to return to Kuwait as a result of the Iraqi invasion of 1990
(al Najjar 2001).
The authors of Country Advice KWT39495, having elaborated on the Refugees
International evidence (2007), but not the UK OGN (2009) evidence, appeared tofavour the American viewpoint that would lead to a negative decision on asylum
claims. Had the authors of the Country Advice checked with the sources for the UK
Home Office Operational Guidance Note (2009) (that is said did not elaborate
further), it would have found there was ample evidence available to counter theAmerican views expressed in the Country Advice. In BA and others UKIAT [2004]
00256 CG, expert witness Dr Abbas Shiblak addressed in detail the issue of statelesspeople in Kuwait being Iraqis. He soundly refuted the claim, making reference to thechange in composition and numbers of stateless Kuwaitis in the population over time,
which he argued justifies the diverse cultural heritage that is shared by Kuwaiti
citizens with others across the Gulf and the Middle East.
It is not known how the Country Advices are constructed, or how evidence isevaluated and selected for inclusion. One wonders then, why the opinion of the UK
Home Office (OGN 2009) was not explored more thoroughly when it supported theclaims of stateless Kuwaitis to asylum. Ten years on from al-Kateb v Godwin and Ors[2004] HCA 37, it appears little has been learned in Australia about the protections
that all stateless people are provided under International Law, whoever they are, andwherever they are from. After an update on Country Advices was recommended
during the 2013 Australian federal election campaign, in order to reduce the numberof positive Iranian refugee determinations (Hawley, S and Norman, J, 2013), theAustralian Country Advices on Kuwait were removed from the Australian Migration
Review and the Australian Refugee Review Tribunal website. There was a message
on the website requesting inquiries about the Advices to be emailed to the Tribunal.
The Tribunal did not respond to my email requesting a copy of the previous advices,
and a copy of any new advices being used by the Tribunal.
Conclusion
Despite the success of the al Kateb case (al-Kateb v Godwin and Ors (2004) HCA37), which remains a landmark case in Australian immigration law, Australia has
failed to develop law on statelessness and asylum seekers who continue to languish in
detention or in the community with unresolved cases. There are two main reasons
why cases are not being resolved. The first is due to the lack of a statelessness
implementation procedure with which Australia can apply protections under theConvention Relating to the Status of Stateless Persons (1954). The second reason isthat stateless persons’ claims for asylum are often unsuccessful under the ‘wellfounded fear’ test, according to the definition in the Convention Relating to the Status
of Refugees (1951). The Convention Relating to the Status of Stateless Persons(1954) is designed to address the special context of stateless persons underinternational law. Where stateless persons cannot access this Convention (as iscurrently the case under Australian law), the applicant and legal counsel are made to10

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‘fit’ their case into the alternate Convention. Australian Country Advices provide
information for the Migration Review Tribunal and the Refugee Review Tribunal,
which is used to determine refugee claims for all applicants, stateless, refugees orboth.
A close reading of a Country Advice KWT39495 on Kuwaiti statelessness found thattwo different arguments emerged from the sources that could influence decision
making on asylum claims, where stateless applicants apply for protection as refugees
on appeal. It was found that not only is there is an urgent need for Australianauthorities to update and publish new Country Advices, but there is also a need for thequality of evidence used in the advices to be reviewed. Since writing this paper, theAustralian Country Advices have been removed from the Australian Migration
Review and Refugee Review Tribunal website. As yet, they have not been replaced.
One wonders what new Advices are being used by the Tribunal, if any. This is anunsatisfactory situation ten years after the success of Al-Kateb v Godwin and Ors(2004) HCA 37.
Acknowledgements:
Marina Lever for assistance in initial editing for this work.
For M. M. al Anezi.

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Washington DC, Refugees International, accessed 20 June 2013 at:
http://www.refugeesinternational.org/wherewework/country/reports/field_report/Kuwait
Refugees International, 5 March 2012. Kuwait: Bidoon Nationality Demands Can’t
Be Silenced, Washington DC, Refugees International, accessed 20 June 2013at http://www.refugeesinternational.org/wherewework/country/reports/field_report/Kuwait
Refugees International, 17 October 2011, Kuwait: Gender Discrimination Creates
Statelessness and Endangers Families, Washington DC: Refugees
International, accessed 20 June 2013 at:
http://www.refugeesinternational.org/where-wework/country/reports/field_report/Kuwait
Refugees International, 2 September 2009, Statelessness: International Blind Spot
Linked to Global Concerns, Washington DC, Refugees International,
accessed 20, June 2013 at: http://www.refugeesinternational.org/wherewework/ country/reports/field_report/Kuwait
Refugees International, 12 September 2009, Kuwait: Honour Nationality Rights of the
Bidun, Washington DC: Refugees International, accessed 20 June 2013 at:
http://www.refugeesinternational.org/where-wework/country/reports/field_report/Kuwait
Refugees International, 25 July 2007, Kuwait: State of Exclusion, Washington DC:

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Refugees International, accessed 20 June 2013 at:
http://www.refugeesinternational.org/where-wework/country/reports/field_report/Kuwait
Refugees International (2007), About Being Without: Stories of Statelessness in
Kuwait. Retrieved April 20, 2013 from:http://www.refugeesinternational.org/
Research Directorate, Immigration and Refugee Board, Canada (1999), Kuwait:
Update to KWT19839E of March 31, 1995, KWT30890, 1 January 1999,
accessed 4 June 2013 at: http://www.refworld.org/docid/3ae6abf130.html
Research Directorate, Immigration and Refugee Board, Canada Immigration andRefugee Board of Canada (2001), Kuwait: Information on Article 17
Passports. 11 June 2001, KWT37021.E., accessed 4 June 2013 at:
http://www.refworld.org/docid/3df4be5914.html
Statement of Changes in Immigration Rules (Presented to Parliament Pursuant to
Section 3(2) of the Immigration Act 1971). UK Border Agency (2013).
Accessed 20 September 2013 at:
http://www.ukba.homeoffice.gov.uk/sitecontent/documents/policyandlaw/statementsofchanges/2013/hc1039.pdf?view=Binary
Tetreault, M.A., and al Mughni, H. (1995), ‘Gender, Citizenship and Nationalism in
Kuwait,’ British Journal of Middle Eastern Studies, vol. 22, iss. 1-2, p.64-80
UNHCR (2013), Stateless People: Searching for Citizenship, accessed 12 September
2013, at: http://www.unhcr.org/pages/49c3646c155.html
Universal Declaration of Human Rights (adopted 10 December 1948) UNGA res
217A (III), accessed 12 July 2013, at: http://www.un.org/en/documents/udhr/
Zagor, M. (2006), Uncertainty and Exclusions: Detention of Aliens and the High
Court, Federal Law Review, 127

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Outsourcing in the Banking Sector(The Polish Banking Sector Case)

Jerzy Kaźmierczyk
Przemysław Macholak
Abstract
The last few years have brought significant changes to the functioning of banks. Oneof the most important ways of adaptation to the changing economic environment that
reduces operational costs is outsourcing. In this paper, we describe changes in theinstitutional shape of the Polish banking system after the Global Financial Crisis, andthe role of outsourcing processes in it. We examine the literature concerning
outsourcing; reasons for implementation of outsourcing, and the factors influencing
the success of outsourcing will be defined and discussed. The paper also explains themost important risks and challenges of outsourcing. Furthermore, based on theobjective data from reports, strategies and other documents of banking sector
institutions, and on the results of a pilot study questionnaire for banking professionals,
we discuss the role of outsourcing in Poland in several aspects, and from different
perspectives. Finally, we assess the place of Poland in the web of global banking
outsourcing, and postulate deeper analysis of ethics and morality in outsourcing
processes.
Keywords: Banking, outsourcing, human resources

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Introduction
The last few years have brought significant changes to the functioning of banks.
Doctrinal concepts such as "too big to fail" have lost their crucial significance. Someinternationally well-known banks failed, but the Polish banking sector has avoided
bankruptcies. As a result of the global economic crisis, many foreign customers havelost their mortgages and residencies. Mortgage-based loans are the best payoff credits
in Poland. Banks have adapted to changes in the environment, quickly cutting thecosts of their activities. Since staff costs are a very important part of the operating
costs of banks, during the crisis, these reductions were popular. Another way to
reduce operational costs is outsourcing. For some banks, outsourcing has become ameans to reduce costs, whereas for others it was used to improve management. The
first mention of outsourcing dates back to the turn of the 1970s and 1980s, but its
actual popularity occurred in the first 90 years of the twentieth century - especially in
the Polish economy, which was a centrally planned economy up to 1990. Interestingly,
in contrast to many other management tools coming from the West, the growth ofoutsourcing was simultaneously popular in Poland and in the West. This reflects therelatively short history of outsourcing used in practice.
This article examines the literature concerning outsourcing. Reasons for
implementation of outsourcing, and factors influencing the success of outsourcing
will be defined. Furthermore, the methodology of research presented and final
empirical research results will be analyzed.
The need for outsourcing and factors of success – a literature review
Outsourcing, most often, is understood as the contracting out of a business process toa third-party, with participation in a separate organizational unit, or without
participation. There have been many reasons for outsourcing selected in the literature,
but the first position extends to striving to reduce operating costs. When a range ofactivities are outsourced, organizational problems can be gotten rid, and the corebusiness can be concentrated on. It is significant that, at least in some jurisdictions,like in Poland, when business is outsourced, the vendor is commissioned, and also thelegal services, and there is no interest in social issues in the outsourced spheres. Using
outsourcing, additional labor costs can be reduced, such as social services. Cost
savings are made in some cases by reducing both direct and indirect remuneration of
persons who ultimately perform outsourced tasks. Furthermore, the vendor assumes
much of the risk associated with the ongoing maintenance and management of
employees. The principal act of payment and possible consequences of problems withthe staff, etc. focus on the vendor. Sometimes an outsourcing vendor is a big player
with special equipment or experience that cannot be afforded by a small client,possessing a technological advantage. A. A. Gokhale asses that: "…offshore providers,
who are at work while U.S. workers are sleeping, enable faster turnarounds during
crunch time, quicker than most firms can deliver internally" [A. A. Gokhale, p. 11]. It
can be concluded that the main reasons for outsourcing are: cost reduction, risk
reduction, striving for elasticity of resources, growing of the quality of resources, andaccess to resources.
According to A. M. Porter’s studies, the tasks assigned to outsourcing concentrated on
three areas: information technology (30%), human resources (16%), and marketing &sales (14%) [A. M. Porter, p. 47]. Many factors influence using outsourcing –encouragement, or dealing with some trouble. Outsourcing can be contracted-out to16

The IAFOR Journal of Politics, Economics and Law

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entities operating in the same country, or entities operating in another country. India is
one of the most notable countries that has established vendors of outsourcing. The
increased interest in Indian outsourcing services results not only from the lower costof providing such services, but also from satisfactory quality of services, which is
directly related to the increasing level of education in the local society. Another,perhaps less well-known, but still growing, Business Process Outsourcing (BPO)
center is Central and Eastern Europe, including Poland. Polish scholar ratios are oneof the highest in the world, and Polish people, especially the young, are generally welleducated (although the quality of education is influenced by demographic depression– a reduction in the population growth rate).
Table 1. The reasons for implementation of outsourcing 1
No.
1.

Author
S. Chatterjee, R. Chaudhuri

2.

J. Harasim

3.
4.

Z. Shi et al.
J. T. C. Teng et al.

5.

A. Vashista, A. Vashista

Reasons
Internal organizational stability andflexibility inobtaining improved satisfaction and better
service with the outsourcing projectWillingness to get rid of burdensome
administrative tasks
Assemble knowledge from suppliers
Lack of resources
Resource gaps
Acquiring resources from outside the firmboundaries by souring arrangement
Lower labour costs
Technological advances

Table 2. Factors influencing success of outsourcing 2
No.
1.

Author
P. Babcock

Factors
Growth of education in the developing

1

Source: S. Chatterjee, R. Chaudhuri, A System Theoretic Analysis of IT/IS Outsourcing: A Case
Based Approach, Journal of Modelling and Simulation of Systems (Vol. 1-2010, Issue 2), p. 132; J.
Harasim, Bankowość detaliczna w Polsce, CeDeWu, Warszawa 2005, p. 264; Z. Shi, A. S. Kunnathurb,
T. S. Ragu-Nathan, Is outsourcing management competence dimensions: Instrument development andrelationship exploration. Information & Management 42, 2005, p. 901-919; J. T. C. Teng, M. J. Cheon,
V. Grover, Decisions to outsourcing information system function: Testing a strategy-theoretic
discrepancy model. Decision Science, 26(1), 1995, p. 75-103; A. Vashista, A. Vashista, The Offshore
Nation, New York, McGraw-Hill, 2006, from S. Kumar, E. C. Aquino, E. Anderson, Application of aprocess methodology and a strategic decision model for business process outsourcing, Information
Knowledge Systems Management 6 (2007), p. 325.
2
Source: P. Babcock, America's newest export: white-collar jobs. HR Magazine, 49(4), 2004, p. 6; S.
Chatterjee, R. Chaudhuri, A System Theoretic Analysis of IT/IS. Outsourcing: A Case Based Approach,
Journal of Modelling and Simulation of Systems, Vol. 1-2010, Issue 2, p. 142; A. Gurung, E. Prater, A
Research Framework for the Impact of Cultural Differences on IT Outsourcing, Impact of Culture on
IT Outsourcing, Journal of Global Information Technology Management, 2006, Vol. 9, Issue 1, p. 24; J.
N. Lee, The impact of knowledge sharing, organizational capability and partnership quality on is
outsourcing success. Information & Management, 38(5), 2001, p. 323-335.

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The IAFOR Journal of Politics, Economics and Law

2.
3.
4.

S. Chatterjee, R. Chaudhuri
A. Gurung, E. Prater
J. N. Lee

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countries
Flexibility
Cultural factors
Knowledge sharing by client and supplier

However, while the history of outsourcing is short, this management tool is stillchanging. As mentioned by A. Gurung, E. Prater, "…managing outsourcing
relationships is becoming increasingly complex. Contracts have moved from a focus
on cost savings to include value-based outsourcing, equity-based outsourcing, andbusiness process outsourcing" [A. Gurung, E. Prater, p. 29]. Both outsourcing vendors
and commissioners learn how to cooperate. The length of term of cooperation is at ahigh level, dependent on the quality of that relationship [T. Kem].
The same characteristics, mentioned as an advantage of outsourcing, could be adisadvantage, if they are not satisfactory. For example, growing educational levels inthe developing countries conducive to outsourcing implementation can be anadvantage, but when the same outsourcing vendor is not ready to anticipate newtechnological changes, it can be a reason for a collapse in vendor and principal
cooperation. The same problems can occur in the field of language, with
communication barriers [T. Nolle]. All of them are connected to risk.

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Table 3. Risks and challenges in outsourcing 3
No.
1.
2.

AuthorR. Aron, E. Clemons, S. Reddi
B. A. Aubert, M. Patry, S. Rivard

3.
4.
5.

R. Click, T. Duening
M. J. Earl
T. Herath, R. Kishore

6.

N. Kakabadse, A. Kakabadse

RiskLong-term intrinsic risks of atrophy
Cultural dissimilarity
Delayed delivery of data
Slow implementation
Human capital risk
Not enough edge expertise of providers
Knowledge hoarding
Loss of core group
Loss of core capability
Disparity between what it negotiated andwhat is delivered
Cost escalation
Vendors providing legacy technology
Operational risks due to vendor locations
Risks due to environmental, cultural, legal
differences
Deliberate underperformance by vendor
Reverse engineering of critical businessprocesses, stealing and/or using proprietary
information for secondary purposes
Lock-in situations
Loss of bargaining power leading todisputes and litigations
Antiquated communication infrastructure
Complexity in codes
Conflicting standards
Poorly articulated requirements
Incompatible development tools
Forgoing the development of theknowledge base
Underestimation of the time and skills

3

Source: R. Aron, E. Clemons, S. Reddi, Just right outsourcing: Understanding and managing risk.
Paper presented at the Proceedings of the 38th Hawaii International Conference of System Sciences(HICSS), January 3-6, 2005, Hawaii; B. A. Aubert, M. Patry, S. Rivard, Assessing the Risk of IT
Outsourcing, IEEE Proceedings 31st Annual Hawaii International Conference on System Sciences, 6,
1998, p. 685-692; R. Click, T. Duening, Business Process Outsourcing, The Competitive Advantage,
New Jersey, John Wiley & Sons, Inc., 2005; M. J. Earl, The risks of outsourcing it. Sloan Management
Review, 37(3), 1996, p. 26-32; T. Herath, R. Kishore, Offshore Outsourcing: Risks, Challenges, andPotential Solutions, Information Systems Management, 26, p. 316; N. Kakabadse, A. Kakabadse,
Critical Review-Outsourcing: A Paradigm Shift, The Journal of Management Development 19(8),2000, p. 670-728; N. V. Oza, T. Hall, A. Rainer, S. Grey, Trust in software outsourcing relationships:
An empirical investigation of Indian software companies, Information and Software Technology,
48(5), 2006, p. 345-354; W. E. Sullivan, O. K. Ngwenyama, How are public sector organizations
managing is outsourcing risks? An analysis of outsourcing guidelines from three jurisdictions, Journalof Computer Information Systems, Spring 2005, p. 74; A. Vashista, A. Vashista, The Offshore Nation,
New York, McGraw-Hill 2006.

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The IAFOR Journal of Politics, Economics and Law

7.
8.

9.

N. V. Oza, T. Hall, A. Rainer, S.
Grey
W. E. Sullivan,
O. K. Ngwenyama

A. Vashista, A. Vashista

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The degradation of service
Opportunistic behaviour by the vendor
Vendor's lack of experience
Vendor's financial instability
Vendor performance monitoring
Contract horizon and technology
discontinuity
Loss of proprietary information
Country risk
Intellectual property protection

Outsourcing risk factors may be classified into four groups: vendor attitude problems,
vendor competence problems, vendor coordination problems, and in-housecompetence problems [N. Gorla, M. B. Lau, p. 91]. It seems, however, that division
does not cover all types of risk, with lack of reference to the employee. Benefits andcosts of outsourcing implementation appear on both on the employers’ side - theentity that has decided to outsource some of the tasks outside the organization, as wellas on the staff side. Employees who expect their employer intends to subcontract partsof tasks beyond the organization, often expect that it will cause a reduction in
employees. As with any other redundancies, it can cause a series of negative
consequences. Employees are likely to increase competition among themselves; they
will use more or less ethical moves designed to keep their jobs. Some of them(including those more productive) will decide to anticipate the movement of theemployer and they may begin to look for another job. Certainly, a reduction period is
also characterized by increased stress and anxiety about the future, which is notconducive to building a culture of trust and cooperation.
Methodology
The article uses objective data from reports, strategies, prospectuses and otherdocuments of banks, the Polish central bank, the Polish banking supervisor (KNF –Komisja Nadzoru Finansowego – Financial Supervision Commission) and near-bankinstitutions from Poland. All publicly available documents were analyzed regarding
outsourcing. Other methods were also used: a questionnaire survey of employees inbanks in the Wielkopolska region, and the results of in-depth standardized interviews
with seven randomly selected HR managers and staff members of the boards of banks
operating in the Wielkopolska region4. Interviews conducted in 2010 were used tointerpret the results of the survey.
The 2010 survey examined the opinions of bank employees on employment in the
sector. Each survey question was analyzed using several criteria. The questionnaire
consisted of three essential parts, relating respectively to the economic, social andtechnological determinants of employment. A pilot study (130 questioned) was
conducted among the employees of the banks. It was not possible to determine thetotal number of employees in banks in the Wielkopolska region, and the structure of
employment in the banking sector in Wielkopolska. In view of the above problems,
4

Additional results of research on determinants of employment in the banks were presented in: J.
Kaźmierczyk, Technologiczne i społeczno-ekonomiczne determinanty zatrudnienia w sektorzebankowym w Polsce, CeDeWu, Warszawa 2011.

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the author decided finally to use a non-random sample selection. A ‘snowball’technique was used in the main study – participants were asked to fill out thequestionnaire, and to ask other bank employees to take part in the questionnaire. A
very effective source for obtaining respondents turned out to be the goldenline.pl
portal, bringing together staff economists. Among those registered on the portal,
which were proposed to take part in the survey, 8.79% expressed their willingness tofulfill the survey. Two different questionnaires - for managerial employees and nonmanagerial employees, were used. More than 9,000 inquiries were sent to banking
employees in the Wielkopolska region (using goldenline.pl, e-mails, etc.). Two seriesof reminders about the study via e-mail were organized. Responses were received
from 342 employees of banks (of which 17 questionnaires were rejected, due to their
low accuracy and reliability). It should be noted that the banks which were surveyed
control more than 90% of the assets of the entire banking sector in Poland, andemploy more than 74% of all employees in the Polish banking sector [The reportabout the banking system situation in 2009, p. 20-23]. The analysis excludes thecentral bank – the National Bank of Poland, because of its superior character incomparison to other banks, and its specific functions.
Outsourcing in the Polish banking sector
Outsourcing is commonly used by many Polish banks (see Table 4). The vast majorityof managerial employees (77.97%) and non-managerial employees (76.32%)
recognized that outsourcing is used in their bank. There were no significant
differences between responses of the managerial and non-managerial employees. The
same applied generally to all the survey questions concerning outsourcing. Answers
confirming the use of outsourcing were dominated by almost all of the analyzed
criteria. It was often the result of the engagement of foreign capital, which wastransferring know-how to Polish banks.
Table 4. Using outsourcing in banks 5Allrespondents

A. Yes, outsourcing is
used

B. No, outsourcing is
not used

C. It isdifficult to
state

No
response

1

Managerial employees
266

203

76.32%

36

13.53%

26

9.77%

59

46

Non-managerial employees
77.97%
12
20.34%

1

1.69%

0.38
%
0

From the foundations of the literature analysis, it can be concluded that areas such as:
security, safety, transport, legal services, and social and technical IT issues were oftentransferred beyond the organization [W. Baka, p. 250]. What we should emphasize isthat every Polish bank must obtain permission from the Polish Financial Supervision
Authority for outsourcing business [W. Wielanek, p. 17]. Employees who had been'kicked-out' of the organization were then often at the beginning of the outsourcing
process implementation employed in so-called 'near-bank' companies, usually owned
5

Source: J. Kaźmierczyk, Technologiczne i społeczno-ekonomiczne determinanty zatrudnienia w
sektorze bankowym w Polsce, CeDeWu, Warszawa 2011, p. 150.

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by that bank [A. Janc, Współczesny…., p. 16-17; A. Janc, Bank…, p. 79-90]. In somecases, banks legally and organizationally separated a narrow range of tasks (e.g.
security), in order to sell the separated company. Moreover, as noted by J. Harasim, ebanks outsource some part of their activities to reduce costs [J. Harasim, p. 148, 152].
Sometimes, outsourcing is a result of a merger or acquisition of banks. For example,
closing the transaction between PKO BP SA and Nordea was dependent on theclosing terms and conditions specified in the agreement; these included providing IT
services by the Nordea Group under an outsourcing agreement, so as to ensure thesafe operation of Nordea Bank Polska SA in the period preceding migration to IT
systems of PKO Bank Polski SA. The same bank used outsourcing to limit its
exposure to operational risk [The PKO Bank Polski SA Group Directors’ Report for
the Year 2013, p. 77]. Outsourcing also plays the important role in organizations ofrisk management within banks. As we can read from a report of the PKO – the biggest
Polish bank – "The first line of defence is being performed particularly in theorganizational units of the Bank, the organizational units of the Head Office and theexternal entities to which the Bank outsourced other banking activities and concerns
the activities of those units’, cells and entities which may generate risk. The units andentities are responsible for identifying risks, designing and implementing appropriate
controls, including in the external entities, unless controls have been implemented aspart of the measures taken in the second line of defence" [Financial Statements of
PKO Bank Polski SA for the Year Ended 31 December 2013 (In PLN Thousand), p.
96].
The same applies to Bank Handlowy:"The Group intends to use the possibility of outsourcing activities relating tobanking activity, particularly in areas of information technology and in cases
where outsourcing is justified by business needs and at the same time does notendanger secure operation of the Group. As outsourcing involves not only
benefits but also increased risk, which the Group can be exposed to in its
operation, the Group takes measures aimed at mitigating that type of risk,
particularly by ensuring compliance with legal requirements and internal
regulations, operating an effective system of internal control, and monitoring
co-operation with third parties, security of processed information andprivileged banking information" [Annual Consolidated Financial Statements of
the Capital Group of Bank Handlowy w Warszawie S.A., for the financial year
ended 31 December 2013, p. 98].
While some banks are part of a bigger international group, such as the case of BPH(GE Capital Group), one of the fundamental rules claims that: "the Bank does notoutsource any risk management processes" [Annual Consolidated Financial
Statements of the Bank BPH SA Capital Group for 2013, p. 88]. WBK has outsourced
call centers, contact centers, and HR management to Holicon Group SA[Consolidated financial statements of BZ WBK Group for 2012, p. 65]. WBKexpanded outsourcing of IT services, and application development raised IT usage
costs. One of the features of the target telephone banking model of the Bank Zachodni
WBK will be outsourcing of the selective executive structures [Management Board
Report on Bank Zachodni WBK Performance in 2012, p. 48, 60]. ING pinpointed that
one of the main areas of interest of corporate banking operations within ING in 2014

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will be extending relationships with international entities acting as business process
outsources [Management Board Report on Operations in 2013, ING Bank Śląski S.A.,
p. 64].
Reorganization of outsourcing services was an important part of overall gains frominvestment security in mBank. Demand from outsourcing centers for office space in
Poland drives growth in smaller cities such as Olsztyn and Bydgoszcz, and leads tochanges in the property market. The office space market remains a tenant’s market,
while the retail space market shows symptoms of saturation in the segment of largeformat properties [IFRS Consolidated Financial Statements 2013, mBank S.A. Group,
p. 13, 97]. Postal Bank has entered into an agency agreement with the Polish Post SA,
and a number of outsourcing contracts with subsidiaries of the Bank; ie Operations
Center Ltd., and Postbank Distribution Company Ltd. [Sprawozdanie finansowe za
rok zakończony 31 grudnia 2013 roku, Bank Pocztowy S.A., p. 134].
These surveyed managerial employees, who recognized outsourcing in their bank,mostly indicated that their bank outsources a narrow range of activities (52.17%), andactivity requiring technical knowledge (47.83%). Simultaneously, the difference
between answers 'A' and 'B' was not significant (Diagram 1). Security, legal services,and training systems were indicated as the most outsourced functions (Diagram 2).
Diagram 1. The spheres outsourced by banks (according to the opinion ofmanagerial employees, in %) 6
60
50

52,17

47,83
39,13

40
30
20

6,52

6

Non response0

D. Covering a narrowsection of bank' activities

C. Covering a wide sectionof bank' activities

B. Non-complicated0

A. Requiring specializing
knowledge

10Note: 46 managerial employees answered the question.
Source: J. Kaźmierczyk, Technologiczne i społeczno-ekonomiczne determinanty zatrudnienia w
sektorze bankowym w Polsce, CeDeWu, Warszawa 2011, p. 151.

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72,91

Diagram 2. The functions outsourced by banks (in %) 7
80

60

40

30,05
32,61
24,63

34,98
34,78

50

10

0
0

2,46
4,35
9,36
4,35
3,45
6,52

13,04
3,94
2,17

10,34

30
20

58,70

50,25
56,52

60,87

70

Non managerial employees

Non response

J. Legal services

I. Transportation

H. Security

G. IT

F. Social issues

E. Staff legal services

D. Incentives system

C. Training system

B. Remuneration system

A. Recruitment

0

M anagerial employees

In the theoretical part of the article, we raised the aspect of incentives which
determine the use of outsourcing in banks. Some researchers have pointed out that
there is a fundamental importance in striving to increase quality of services. However,surveys and interviews with bank recruiters shows that the main factor of outsourcing
in Poland is still striving to reduce costs (82.61%; Table 5). This applies to most of
the analyzed criteria. Only higher level managerial employees, and the managers ofcooperative banks pointed out that the most important factor was striving to increaseof the quality of services (respectively 88.89% and 60%). As previously stated, somebanks separated certain operational areas (function, range of tasks), to allow to
operate as a separate company in the future (e.g. security). This process was more
popular in banks with a predominance of foreign capital (54.05%) than national
capital (6.67%) (Table 6).

7Note: 203 non-managerial employees and 46 managerial employees answered the question.
Source: J. Kaźmierczyk, Technologiczne i społeczno-ekonomiczne determinanty zatrudnienia w
sektorze bankowym w Polsce, CeDeWu, Warszawa 2011, p. 152.

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Table 5. Factors of using outsourcing in banks (according to the opinions ofmanagerial employees) 8
CriterionAll
respondents

All banks

46

38

82.61%

16

34.78%

37

34

91.89%

11

29.73%

0

0

5

1

20%

3

60%

1

20%

9

4

44.44%

8

88.89%

00Commercial
banks
Cooperative
banks
Higher level
managerial
employees

A. Striving to reducecosts

B. Striving to increase of
the quality of services

No
response
2.17
1%

Table 6. Separation of the operations area from a bank (in the opinion ofmanagerial employees) 9
A. Yes, an area wasseparated

Criterion

All respondents

All banks

5923

38.98%

29

49.15
%

7

11.86
%

15

1

6.67%

13

86.67
%

1

6.67%

37

20

54.05%

11

29.73
%

6

16.22
%

Banks withdomestic
capitalBanks withforeign capital

B. No

No response

Summary
The results should be considered a starting point for further in-depth analyses. Due tothe reluctance of banks to provide information about their activities, and also becauseof current Polish law, one problem is how to implement the research, as representative
for all the Polish banking sector. Moreover, there is not enough official data
concerning the structure of employment in the Polish banking sector.
Analysis shows that the main reason for the application of outsourcing by Polishbanks was striving to reduce operational costs. The first phase of outsourcing in
Poland was to reduce employment, and outsource some tasks beyond the organization.
That is why outsourcing is associated by employees with dismissal. The demand foroutsourcing in banks in Poland has been influenced by many factors. Apart from thefocus on cost reduction, there was a significant increase in the level of education
among employees, which allowed for the employment by vendors of new staff withthe right skills.

8

Source: J. Kaźmierczyk, Technologiczne i społeczno-ekonomiczne determinanty zatrudnienia w
sektorze bankowym w Polsce, CeDeWu, Warszawa 2011, p. 152.
9
Source: J. Kaźmierczyk, Technologiczne i społeczno-ekonomiczne determinanty zatrudnienia w
sektorze bankowym w Polsce, CeDeWu, Warszawa 2011, p. 153.

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We also see potential growth in the significance of Poland in the web of global
banking outsourcing. This assumption is based on the analysis of comparativeadvantage of the country, often mentioned in World Bank reports, such as: wellqualified workers (high level of schooling, high learning ability, easy access to capitalfrom European Union funds on entrepreneurship-supporting programs); politicalstability; benefits for foreign investors (i.e. Special Economic Zones); the developingof infrastructure; and overall development of the banking sector. This was done on asecure and sound basis, accurately supervised by the Polish Financial Supervision
Authority. However, there is still much to do in cases like: easing the taxation system,
running business procedures, and getting access to building permits.
Another issue that very clearly appears when we consider outsourcing, is the ethics
and morality of its customers and outsourcing vendors. Many questioned bank
employees pointed out that the theoretical reasons for outsourcing implementation
were different from the outsourcing they have seen in their banking branches. It
requires further analysis in the future. The differences between the responses of the
managerial and non-managerial employees were not significant. The question about
the differences between the above-mentioned groups need additional study.

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References
Annual Consolidated Financial Statements of the Bank BPH SA Capital Group for
2013
Annual Consolidated Financial Statements of the Capital Group of Bank Handlowy w
Warszawie S.A. for financial year ended 31 December 2013
Aron, R., Clemons, E., & Reddi, S. (2005),‘Just right outsourcing: Understanding andmanaging risk’, proceedings of the 38th Hawaii International Conference ofSystem Sciences (HICSS), January 3-6, Hawaii, USA
Babcock, P. (2004), ‘America's newest export: white-collar jobs’, HR Magazine,
Vol.49, No.4
Baka, W. (2005),‘Bankowość europejska’, Wydawnictwo Naukowe PWN, Warszawa
Chatterjee, S., & Chaudhuri, R. (2010), ‘A System Theoretic Analysis of IT/IS
Outsourcing: A Case Based Approach’, Journal of Modelling and Simulation of
Systems, Vol. 1, Issue 2
Click, R., & Duening, T. (2005), Business Process Outsourcing, the Competitive
Advantage, New Jersey, John Wiley & Sons, Inc.
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Earl, M. J. (1996), ‘The risks of outsourcing it’, Sloan Management Review, 37(3)Financial Statements of PKO Bank Polski SA for the Year Ended 31 December 2013
(in PLN Thousand)
Gokhale, A. A. (2007), ‘Offshore Outsourcing: A Delphi Study’, JITCAR, Vol. 9,
Number 3
Gorla, N., & Lau, M. B. (2010), ‘Will Negative Experiences Impact Future IT
Outsourcing?’, Journal of Computer Information Systems, Spring
Gurung, A., Prater, E. (2006), ‘A Research Framework for the Impact of Cultural
Differences on IT Outsourcing, Impact of Culture on IT Outsourcing’, Journalof Global Information Technology Management, Vol. 9, Issue 1
Harasim, J. (2005), ‘Bankowość detaliczna w Polsce’, CeDeWu, Warszawa
Herath, T., Kishore, R. (2009),‘Offshore Outsourcing: Risks, Challenges, andPotential Solutions’, Information Systems Management, No. 26
IFRS Consolidated Financial Statements, mBank S.A. Group, 2013
Janc, A. (2004), ‘Bank i jego miejsce w pośrednictwie finansowym okresu
transformacji’ (bilans zamknięcia okresu przedakcesyjnego w państwach
Europy Środkowej i Wschodniej), Twigger, Warszawa
Janc, A. (2004), ‘Współczesny bank i jego otoczenie w dobie rewolucji
informatycznej’, in A. Janc & G. Kotliński (eds), Nowe technologie wewspółczesnym banku, AEP, Bonami, Poznań
Kakabadse, N., & Kakabadse, A. (2000), ‘Critical Review-Outsourcing: A Paradigm
Shift’, The Journal of Management Development, Vol.19, No. 8
Kaźmierczyk, J. (2011), ‘Technologiczne i społeczno-ekonomiczne determinanty
zatrudnienia w sektorze bankowym w Polsce’, CeDeWu, Warszawa
Kem, T. (1997), ‘The Gestalt of an Information Technology Outsourcing
Relationship: An Exploratory Analysis’, proceedings of the eighteenthinternational conference on Information Systems, Atlanta, USA
Komentarz Zarządu z działalności Fortis Bank Polska w roku, 2001
Kumar, S., Aquino, E. C., & Anderson, E. (2007), ‘Application of a process
methodology and a strategic decision model for business process outsourcing’,
Information Knowledge Systems Management No. 6

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Lee, J. N. (2001), ‘The impact of knowledge sharing, organizational capability andpartnership quality on is outsourcing success’, Information & Management,
Vol.38, No.5
Management Board Report on Bank Zachodni WBK Performance, 2012Management Board Report on Operations, ING Bank, Śląski S.A, 2013
Nolle T. (2004), ‘Does cheap bandwidth lead to offshoring?’, Network World, No.21
Oza, N. V., Hall, T., Rainer, A., & Grey, S. (2006), ‘Trust in software outsourcing
relationships: An empirical investigation of Indian software companies’,
Information and Software Technology, Vol.48, No.5
Porter, A. M. (2000), ‘The Virtual Corporation: Where is It?’, Purchasing, Vol.128,
No.4
Shi, Z., Kunnathurb, A. S., & Ragu-Nathan, T. S. (2005), ‘Is outsourcing managementcompetence dimensions: Instrument development and relationship exploration’,Information & Management, No. 42
Sprawozdanie finansowe za rok zakończony 31 grudnia 2013 roku, Bank Pocztowy
S.A, 2013
Sullivan, W. E., & Ngwenyama, O. K. (2005), ‘How are public sector organizations
managing is outsourcing risks? An analysis of outsourcing guidelines fromthree jurisdictions’, Journal of Computer Information Systems, Spring
Teng, J. T. C., Cheon, M. J., & Grover, V. (1995), ‘Decisions to outsourcing
information system function: Testing a strategy-theoretic discrepancy model’,Decision Science, Vol.26, No.1
The PKO Bank Polski SA Group Directors’ Report for the Year 2013
The report about the banking system situation in 2009 [Raport o sytuacji
banków w 2009 roku], KNF, Warszawa, 2010
Vashista ,A.(2006), The Offshore Nation, New York, McGraw-Hill
Wawrzewska, B., & Wiśniewska, M. (2003), ‘Sceny z życia bankowego’, Prószyński
i S-ka, Warszawa
Wielanek, W. (2008), ‘Outsourcing w bankowości: szanse i zagrożenia’, Bank
wspólnych sił, Pismo Zrzeszenia Banku Polskiej Spółdzielczości, nr 1 (91),maj28The IAFOR Journal of Politics, Economics and Law

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Legalizing Community Resources —Experiences Learned from Implementing the Indigenous
Traditional Intellectual Creations Protection Act (ITICPA)

Chu-Cheng Huang
Abstract
The indigenous societies in Taiwan have passed through the era which used to assert
them as barbaric and uncivilized ‘Others', and were officially de-colonized withpromulgation of certain legislation such as the Indigenous Fundamental Law.
However, they can still not formalize their customary laws, which are prerequisite totheir entitlement of community resources, such as indigenous traditional knowledge
and cultural expression. In December 2007, a sui generis regime to the civil law
intellectual property regulations, the Indigenous Traditional Cultural Expression
Protection Act (ITCEPA), was promulgated. ITCEPA was the very first law in
Taiwan to substantiate diversified modes of indigenous cultural expression, such as
songs, dance, weaving, dyeing, ceremonies, and even witchcraft as community
resources entitled to the tribal unit. When certified and registered, these collective
rights will be legalized retrospectively. Any established acquisition and exploitationof the resources by non-indigenous peoples will be revoked, no matter in what form
(copyright, or trade mark). Yet to implement the ITCEPA, a tribal units’ based
decision making process and management plan are needed, since the sui generis rights
are entitled to the community only. But with extended prewar Japanese colonial rule,and the consequent encroachment of Christian missionaries and mainstream politicalinstitutions over their communities, primitive tribal leadership barely survived. This
article will show how twelve indigenous Taiwanese tribes have attempted toreestablish and re-integrate their political organizations and decision making
processes.

Keywords: Indigenous rights, intellectual property, copyright law

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The indigenous community in Taiwan and the protection of their resources
Taiwan is an inherent multi-ethnic nation-state, yet it did not adopt formal
multiculturalism until the year 2000, when the 1949 Constitution was amended.
Assimilating the indigenous peoples into mainstream society has constantly been
followed by successive rulers over the island before then. Japanese authority and thepost-War Kuomintang (KMT) regime stuck with the same strategy. Aside from fierce
suppression waging armed force, academic disciplines such as anthropology ormuseology are also employed to officially characterize aboriginality as a symbol ofunder-civilization and subordination. Since aboriginality was de-contextualized as
exotic and deviant social behavior carried on by a group of marginal ‘Others’ (Hu,
2004; 2005), compulsory assimilation became requisite. Police powers then wereheavily used to civilize the savage compatriots through education and sanitization,and finally large scale migration and isolation was applied. The result is, with nosurprise, the dissolution of indigenous polity and, most important, their community
resources.
The waking of indigenous rights in Taiwan was at about the same time as thedemocratization movement of the 1980’s. Through the process of liberation from the
KMT’s dictatorship, re-habitation of oppressed sectors such as the domestic pettybourgeoisie stimulated that of the indigenous communities. Blocs of indigenous
representatives were elected to public office, and strived to congregate a new
constitutional moment. In 2000, an Amendment to the Constitution which symbolized
an epoch of indigenous renaissance was inaugurated. Article 10(10) avows Taiwan asa multicultural nation-State: “the State affirms multiculturalism, and positively
assures the development of language and culture of the indigenous peoples.” Then, an
innovative, ground-breaking Indigenous Fundamental Act was later adopted to
substantiate the above Amendment in 2005.1
One can perceive the Fundamental Act as a semi-treaty based constitutional rewrite(Huang, 2009). Pursuant to the act, the central government is obliged to respect thewill of indigenous peoples in terms of their status and future development, while
coordinating with civil society, and eventually lead to an autonomous entity (Article
4).2 The substantive aspects reflecting these prospects will be to regain control overtheir traditional knowledge and intellectual cultural creations. Under Article 133 andArticle 204 of the Fundamental Act, the central government is commissioned to adopt
laws to protect the indigenous entitlement of their land and natural resources, together
with traditional bio-diversity knowledge and intellectual creations, and to promote
1 The Indigenous Fundamental Act was promulgated on February 05, 2005, and includes 35 articles.
2 The Indigenous Fundamental Act, Article 4:”The government shall guarantee the equal status anddevelopment of self-governance of indigenous peoples and implement indigenous peoples’ autonomy
in accordance with the will of indigenous peoples. The relevant issues shall be stipulated by laws.”
3 The Indigenous Fundamental Act, Article 13: “The government shall protect indigenous peoples’
traditional biological diversity knowledge and intellectual creations, and promote the development
thereof. The related issues shall be provided for by the laws.”
4 The Indigenous Fundamental Act, Article 20:”(1)The government recognizes indigenous peoples’ rights to land and natural resources.
(2)The government shall establish an indigenous peoples’ land investigation andmanagement committee to investigate and manage indigenous peoples’ land. The organization andother related matters of the committee shall be stipulated by law.
(3)The restoration, acquisition, disposal, plan, management and utilization of the land andsea area owned or occupied by indigenous peoples or indigenous persons shall be regulated by laws.”

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their future development. Furthermore, while conducting research in the areas subject
to indigenous title, the government or private parties are obliged to consult indigenous
peoples and obtain their consent or participation, and share with them benefits
generated from land development, resource utilization, ecology conservation andacademic research derived from Article 21(1)5.
The above articles have provided themselves as a guideline for the exploitation ofindigenous cultural heritage and nature resources, though specific and workable
regulations are still needed to provide a due course of actions, either in transactions orin the courts, which, however, proves to be a difficult task. According to theFundamental Act, nominally at least six laws covering different aspects are requisite
to substantiate the admitted rights. Only half of them have been enacted.
The ITICPA and its major features: The aim of the ITICPA
The traditional cultural creations of indigenous peoples, including their music, dance,
songs, graphics and folk art and other objective cultural expressions, had long been
regarded as res nullius due to their incompatibility with the necessary conditions forIntellectual Property (IP) protection (Lucas-Schloetter, 2008: 383-393; UNESCO &WIPO, 1985:par.3). Copyrightable expression, for example, is required to fulfill thecondition of containing the minimum creativity or originality (Farley, 1997: 9-11;
Gervais, 2003). Yet most of the indigenous traditional cultural expressions are boundto fully replicate the traditional elements inherited from generation to generation, even
if the sheer creativity or deviant could not, or in most cases, is not allowed to begenerated.
The individual nature of private property is another hurdle to recognize indigenous IP.
Under Article 18 of the Copyright Act of Taiwan:“[t]he protection of moral rights of an author who has died or been
extinguished shall be deemed to be the same as when the author was living orin existence and shall not be infringed upon by any person.”
The author needs to be an individual person endowed with moral rights. Authors suchas a group or community, such as indigenous tribes, cannot enjoy their moral rightover traditional intellectual creations as a whole, yet for them the individual member
is not allowed to claim the rights.
The limited duration of civil law IP also casts doubt on its applicability overindigenous intellectual creations. Article 30 of the Copyright Act of Taiwan indicatesthat the IP:“[e] ndure for the life of the author and fifty years after the author's death.
Where a work is first publicly released between the fortieth and fiftieth years
after the author's death, the economic rights shall endure for a term of ten
years beginning from the time of the first public release.”
Since most of the indigenous traditional intellectual works have no traceable date of
5 The Indigenous Fundamental Act, Article 21(1):” The government or private party shall consult
indigenous peoples and obtain their consent or participation, and share with indigenous peoples
benefits generated from land development, resource utilization, ecology conservation and academic
research in indigenous people’s regions.”

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public release, or have to trace back to time immemorial, their duration of protection
will instantly expire if applied. Not to mention a common essence of current living,
the indigenous traditional intellectual creations can never expire unless all of thepeoples are extinguished.
On 7th December 2007, the Indigenous Traditional Intellectual Creations Protection
Act (hereinafter ITICPA) made its way through the Legislative Yuan (the House ofCongress) as an answer to the above Article 13 of the Indigenous Fundamental Act.
With the ITICPA as a formal law of the State, the indigenous traditional intellectual
creations are no longer left in the plight of no protection (Huang, 2010).
The subjects protected under the ITICPA
The traditional intellectual creations protected under the ITICPA include subject
matter such as traditional religious ceremony, music, dance, songs, sculptures, weave
and dye, graphics, wardrobes, and folk art. An open-end, catch-all clause is also
introduced to the Article so all other expressions of cultural activities of theindigenous peoples can be protected once they are certified and registered (Article 3).
Unlike the copyright laws, to receive protection from the ITICPA, the creations need
to be certified and registered through the administrative agency, i.e., the Indigenous
Peoples Council of the Executive Yuan (Article 46, 57, 68). Once the certification
process is completed, the indigenous peoples and tribes registered will be entitled toproclaim the exclusive right over the registered creations (Article 7), i.e., a uniqueform of community resources. The exclusive rights include the right to stop andprevent any false attribution, distorting, mutilating, modifying, or otherwise changing
the content, form, or name of the work that damages the author's reputation, and tolitigate against any above activities that infringe the registered context (Article 10).
All the sui generis rights protected under the ITICPA shall take effect retrospectively,
which means there will be no vested rights for the current civil law IP which may
contain indigenous intellectual creations registered. Trademarks or copyrightprotected works exploiting the sui generis rights without lawful licensing will bedeclared void, notwithstanding its legality while admitted. This is a typical applicationof general theory of inter-temporal law, i.e., a necessary result of transformative
justice (Huang, 2010). Current practice adopted by the IP Bureau of the Ministry of
Economy actually complies with the above reasoning. A consultation process will bea prerequisite before issuing any indigenous related trade-mark.
6 ITICPA, Article 4:”Intellectual creations shall be recognized by and registered with the competentauthority so as to be protected by the Act. The criteria for recognizing intellectual creations mentioned
in the previous paragraph shall be determined by the competent authority.”
7 ITICPA, Article 5:”The competent authority shall recruit (assign) personnel of related institutions,specialists, scholars and aboriginal representatives to undertake the recognition of intellectual creationsin addition to any matters stipulated in other regulations. At least 50% of these personnel shall bedrawn from aboriginal representatives.”
8 ITICPA, Article 6:”(1)The applicant for any intellectual creation shall provide a written application, a
specification, necessary graphics, images and related documents or provide audio-visual creations inorder to apply for registration with the competent authority.(2)The applicant mentioned in the previous
paragraph is limited to aboriginal groups or tribes and a representative shall be elected to take care of
all matters arising. The regulations of electing representatives shall be determined by the competentauthority.”

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The rights entitled to the indigenous peoples under the ITICPA is not individual
property, but collective in nature (Huang, 2010:24-26). Therefore, they are rights
parallel to civil law IP (copyrights, patents and trade-marks). The latter may still beentitled to individual members of the tribe or ethnic unit registering the sui generis
rights. Such a special character of the community resources is also evidenced by
Article 22 of the ITICPA: “The provision of ITICPA shall not affect the rights of the
exclusive right owner of the intellectual creation and the third party derived fromother laws.”
The applicant of this sui generis right, according to the ITICPA, will be limited to the(official) indigenous ethnic groups or tribes (Article 6(2)) 9, although they may
eventually be found not as the proprietor, or have to be co-entitled with other nonapplicant ethnic groups or tribes, which is a decision made by the reviewing board.
Experience learned from mooting shows no such surprises have ever happened, since
it is a consensus-oriented community property.
The entitlement of rights under the ITICPA
Provided under scrutiny no specific ethnic group or tribe is the legitimate proprietor,
then the right shall be entitled to the indigenous peoples of Taiwan as a whole, andtake effect immediately after the date of registration (Article 7(3)). I.e., no subject
matter will be characterized as res nullius or public domain, even if it cannot be foundattached to any ethnic group or tribe, and the proprietors entitled will include theapplicants, non-applicant indigenous ethnic groups or tribes, and the indigenous
peoples of Taiwan as a whole. When pursuing the rights through the courts, an official
representative of the proprietor, instead of an individual member, will have theexclusive locus standi.
Given its nature as collective rights, the rights entitled under the ITICPA can only be
exercised, unless provided by laws or contracts otherwise, by the registeredindigenous ethnic groups or tribes, or indigenous peoples as a whole exclusively. The
rights include to exploit and usufruct the propriety rights, and moral rights to a due
attribution (Article 14 (3)). An individual member of the proprietor, however, is free
to exploit and usufruct the registered intellectual creations (Article 14 (4)), whichmakes the collective rights subject solely to the customary rules applied by the
proprietor, and eventually legalize the community resources. One may therefore
conclude that the ITICPA is a leverage to prevent the false exploitation of indigenous
traditional intellectual creations by non-indigenous users. With the compulsory
discourse10, the proprietors can assure that all the utilization will be conducted
through authentic cultural discourses.
Implementation of the ITICPA - the prerequisites
Though it substantiates the sui generis rights recognized by the Indigenous
Fundamental Act, the ITICPA per se can only provide minimum and very general
9 According to Taiwan’s indigenous ethic policy, only the indigenous peoples or tribes officiallyrecognized by the government have official status. There are many tribes still struggling for recognition
from the government. See Shieh (2008).
10 According to Article 1 of the ITICPA, the legislative purpose of the Act is: “In order to protect thetraditional intellectual creations of indigenous peoples, and to promote the cultural development ofindigenous peoples, this Act is set forth according to Article 13 of the Indigenous Fundamental Act.”

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conditions to the processing and certification of them. Since there are 14 indigenous
ethnic groups officially recognized in Taiwan, the abundance of their cultural
diversity and ethnic significance make it barely possible to provide regulations foreach of them respectively. Yet while implementing the rights, these generalregulations need to be translated into some workable models. Noting this technicalrequirement, four articles of the ITICPA authorize its administrative agency to
promulgate bylaws, which covers the process of electing the representative of theapplicant and proprietor to be (bylaws No.1), the procedure for the certification,
registration and revocation of the sui generis rights (bylaws No.3), the standard ofcertification (bylaws No.2) and the management of funds generated from licensing(bylaws No.4) (Huang, 2010).
Taking the aforementioned open-ended and catch-all clause covering “all otherexpression of cultural activities of the indigenous peoples” in Article 3 of the ITICPA
as an example, there is no rigid definition over the indigenous traditional intellectual
creations in any article of the ITICAP. The certification committee needs a guideline
to follow before it can admit any right and entitle it to the legitimate proprietor, suchas for how long shall the intellectual creation exist and be possessed by the applicant,and with what conditions shall it be recognized and certified.
As a group right, the applicant of certification and its proprietor will be limited to the(official) indigenous ethnic groups or tribes. Yet before the ethnic groups or tribes canbe recognized as legal persons, a natural person representative of the applicant or
proprietor is needed to file application and litigation. Then who shall be eligible, andthrough which process who is to be elected as the representative? The bylaw is
supposed to provide an answer.
Currently the second and refined drafts of the four bylaws are completed and being
withheld by the Indigenous Peoples Council for further review. The following is abrief introduction of its drafting principles. On the process of electing therepresentative of the applicant and proprietor to be, the draft bylaw chooses not toprovide respective conditions for each indigenous ethnic groups or tribe, of which thegoverning structure of polity may be highly different, instead leaving it to be
regulated by the customary laws the polity has long applied. The only compulsory
restriction is the representative must be the member of the applicant, so to prevent theintervention from outsiders such as IP brokers (bylaws No.1).
As to the definition of the protected intellectual creations, the draft defines theindigenous peoples as a group of people who identify themselves as an organizedsingle polity with inner coherence. The shared common languages and customs which
form an indivisible foundation to such coherence could be traced back to time
immemorial, but within a lineal timeframe. Therefore, any rights entitled to the polity
as a whole is of the nature of continuity. The right protected under the ITICPA thenmust be an existing right blended with such a significance carried and applied by theapplicant. Its context is allowed to evolve along with the technical development,
provided the above indigenous significance is not extinguished (bylaws No.2). With
this definition, subjects used to be conceived as public domain could be protectedunder the ITICPA, such as linguistic structure and grammar, names of certain
indigenous ethnic groups or tribes, and common symbols which possess the above
characteristics.

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The authentication of cultural representation: lessons learned from the mooting
program
To accelerate the preparation period psychologically, the Indigenous Peoples Council
has launched a semi-experimental program as the “Demonstrative Application
Program on the Exclusive Rights of Indigenous Traditional Intellectual Creations”
since 2012, so to further assure (to itself and other Authorities) the feasibility andpracticability of the draft bylaws and the overall infrastructure which may in the near
future undertake the true operation of the ITICPA.11
The demonstrative program allows 14 local indigenous NGOs to voluntarily represent
indigenous ethnic groups, tribes or sub-sections within their jurisdiction to undergo amoot application procedure. The chosen NGOs represent 12 official indigenous ethnic
groups, including the Sakizaya, the Seediq (two teams), the Truku, the Tsao, the Shao,
the Bunun, the Kavalan, the Dayan, the Tao, the Amis, the Rukei and the Paiwan (twoteams).
Under the program, the NGOs will undertake the responsibility, under traditionalcustomary law or current legal procedure, to re-assemble the tribal congress orassembly and obtain their consensus over issues such as choosing the traditional
intellectual creations recognized as the most representative, yet severely-threatened or
exploited. In the meantime, a historic and cultural review over the origin andpreservation of the targets, namely the history, exploitation taboos, and cultural
implication of the expressions, together with field investigation such as procurementof oral evidence from elders, will all be conducted by the NGOs. At the final stage,the 14 NGOs will follow the application procedures under bylaw No.3 to file forcertification and registration with the gathered references. Since it is a mootapplication procedure, the sui generis rights will not be entitled with any tribes, yet
the applications and the registered propriety under the moot program will be officiallyacknowledged by the Indigenous Peoples Council retrospectively, once the bylaws areapproved.
Throughout the program, certain authenticity issues never conceived either bymainstream anthropologists or regulation drafters are revealed. Taking the ITICPA
itself as an example, the Act provides that only the (official) indigenous ethnic groups
and tribes can be the legitimate applicants and proprietors. However, the mootpractice proves that to certain indigenous polity, this is not a true statement. Amongthe moot application team, one NGO from the official Paiwanian indigenous ethnic
group vowed to represent not the official ethnic group or tribe as a whole, but theirown noble-caste family (the Pakedjavai Family). The 12 glass beads (theMuljimuljidan, the Luseqnaqadaw, the Kurakurau, etc.), traditional home and thesacred songs they applied for protection belong solely to the noble family and thetribal head due to this unique Paiwanian caste system, which is largely followed by
the ethnic group nowadays. Only the entitled caste families can legitimately utilize(including, if necessary, licensing out) those creations.
A similar situation could be found with another moot team from the Tsao ethnic group
11 The author and the co-author are currently the Project Manager and Chief Investigator of this semiexperimental program. See the program website at: http://ctm-indigenous.vm.nthu.edu.tw/.

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in Chia Yi County. The applicant applied for protection over their famous tribal
worship rituals Mayasvi and Miyapo. Both rituals are popularly known anddocumented by anthropologists as enjoined by all of the tribal members. Yet throughthe consensus assembly, it is decided that only the two major tribes (Hosa) possess thelegitimacy to their narrations and representations, including interpreting the meanings,
taboos and due process of the ritual. Therefore, if certified, the objects will be entitledto the tribes only, not the whole official tribe.
Notwithstanding the impact of the ITICPA over the reconstruction of indigenous
cultural integrity, and even the prospect of political autonomy through the above mootapplications, or eventually if the Indigenous Peoples Council will continue tosubsidize such a sui generis rights management, the process allows, for the first timein history, for indigenous peoples to actively participate as a subject with theestablishment of a practical set of authentic cultural representation, which is a core to
the community resources. In the meantime, the collection and construction of thehistory, taboos, and cultural implication of the target expressions motivated by theindigenous polities themselves also help to pave ways for a more equal and balanced
discourse between the indigenous peoples and non-indigenous community.
A Tentative Conclusion: authentication of indigenousness in research andarchive disciplines as a necessary consequence of legalizing the community
resources
Before the introduction of the ITICPA, the Copyrights Act of Taiwan and its bylaws
were the only applicable regime, creating certain legal difficulties for the archive
program. To prevent itself from the risks of infringement of rights, the program tends
to archive objects whose copyright protection has expired, or have fallen into the
public domain before any due diligence could be completed. Many indigenous related
objects were among these preferable targets, since the dates of their creation are since
time unmemorable, or the proprietor is unknown.
However, the above strategy was forced to change after the adoption of the ITICPA.
According to its Article 3, the protected indigenous intellectual creations are very
comprehensive, which include the traditional religious ceremonies, music, dance,
songs, sculptures, weaving, patterns, clothing, folk crafts or any other expression of
the cultural achievements of indigenous peoples. Fulfillment of the authentication andregistration process under Article 4 with the competent authority are the conditions tovindicate the rights. The official ethnic groups, tribes, the sub-sections of them, e.g.,family groups as mentioned above, and the whole indigenous people then will become
the proprietor of the moral right, which includes the right to publicly release the work,
to be nominated, and to prohibit others from distorting, mutilating, modifying, orotherwise changing the content, form, or name of the work12. Property rights are also
granted to exclusively use and profit from the registered objects13. The above rights
12 ITICPA, Article 10(2):”The owner of an exclusive right to use intellectual creations enjoys thefollowing moral rights of intellectual creations:
1. the moral right to publicly release the work.
2. the moral right to indicate the name of the exclusive user.
3. the moral right to prohibit others from distorting, mutilating, modifying, or otherwisechanging the content, form, or name of the work, thereby violating the author's reputation.”
13 ITICPA, Article 10 (3):”The owner of the exclusive right to use intellectual creations shall

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are neither transferrable nor subject to any pledge or taking and will be protected forgoods. At the first glance most of the archived indigenous contents are candidates tothe sui generis regime.
Propriety under the ITICPA is collective in nature (Huang, 2005:32-37), i.e., aninherent community resource. Proprietors are ethnic groups, tribes, family groups, orthe whole indigenous people instead. Therefore, the legitimate means of procurement
such as acquiring prior informed consents from their individual member who
physically possess the objects, or through a sales transfer, will no longer validate theassessment. Authorization is needed from the registered legitimate proprietors if thearchives would be publicly released, either through exhibition in museums or virtual
libraries. There is no specific formality requirement for the necessary authorization,
yet one can imagine a prior informed consent obtained through comprehensive anddiligent discourse will be the bottom-line before any bylaws or model form is issued
by the Authority.
An instant example of the above turnover could be found in its business application.
In 2009, glamorous female indigenous singer Chang Hui-mei (Amei) issued a new
album titled ‘Amit’. The album tagged itself as a unique charm because it includes
three songs derived and modified from traditional Puyumen rhythms. Even though the
ITICPA was implemented at the time, the record company still managed to seek for asemi-collective authorization from the council of the tribe in which the singer grew up(Chen,Wei-Jen, 2009). There was no information about the terms and conditions of
the authorization though.
The above incident evidences the intrinsic difference between copyright and the sui
generis rights under the ITICPA. A prior consent to access is requisite not only fromthe individual possessor, but the community unit the former belongs to. Certainly, it is
not very clear with which unit the archivists will negotiate the consent, since thepolitical institutions of these potential proprietors vary all the time, due to current
indigenous self-government policy.
Workable data collections and a user-friendly interface both symbol the versatility ofan archive. A competent archivist needs to retain the ability to design a resilient
metadata, which incorporate both original context and historical lineage. However,when applying the said qualifications to the indigenous related archive, one may
encounter two major issues. The first one is to provide a publicly accessible interface
to equally publicly release the contents, which requires authorizations from the sui
generis moral rights proprietors. The second is to categorize and make functional thearchived indigenous contents, which could have touched the thin red line as“distorting, mutilating, modifying, or otherwise changing the content, form, or nameof the work, thereby violating the author's reputation (ITICPA, Article 10)”. A “noticeto the website viewers” standard-clause containing key languages of the ITICPA, e.g.
the moral and property rights are entitled exclusively with certain ethnic groups ortribes, and authorization is requisite in case of utilization, is designed as a dialogue
box located at the front page of the archive site, so to substitute every individual
licensing (Huang, 2011:60-64). Only when the viewer reads through and clicks the
exclusively use and profit from the property rights of such intellectual creations on behalf of specificethnic groups, tribes or the entire indigenous peoples, unless otherwise stipulated by law or agreement,
and shall exercise the rights mentioned in the previous paragraph.”

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The IAFOR Journal of Politics, Economics and Law

Volume I - Issue I - Fall 2014agreement below can they access the archive contents14. Viewers’ IP will at the sametime be located by the webmaster, so to monitor any possible infringement.
As to the relief for the second concern, the archivists are advised to consult with
proprietors over the adequate ways of handling any culturally sensitive contents,
before constructing the metadata. If a taboo or restricted ritual or lyric is archived, acomprehensive discourse over the adequacy and formality of public release should be
conducted beforehand (Huang, 2011:66-68). The proprietor will have the right torequest instant removal of any content from the site if they found the exhibition posesa threat to their cultural integration.
As mentioned above, social application of the archive contents is a planned andindivisible phase of the program. Licensing and transferal of the archive contents arealways conceived as the necessary means to implement the application. However,under the ITICPA, the archiving institutions are not proprietors of the possessedindigenous archive contents, which are not transferable, even if the transferred portionis only an edited copy, or images which might still be part of the exclusive rights ofthe entitled ethnic groups or tribes. Currently, archivists have started to prepare arevised version of model licensing clauses to cope with the challenge (Huang,
2011:64-66). In the meantime, they are urged to actively consult with related ethnic
groups, tribes and experts, and to initiate a comprehensive discourse over issues suchas public release, ways of nomination, mode of application and benefit sharing
schemes, although sometimes the tribes may not be the proprietor, or a collective
consensus is not obtainable through established mechanisms.

14 See the website of the Digital Music Archive Project for Taiwanese Indigenous People:
http://archive.music.ntnu.edu.tw/abmusic/index.html. (Project investigator: Prof. Chien Shan-Hua(錢善華), college of music, National Taiwan Normal University)

38The IAFOR Journal of Politics, Economics and Law

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References
Chen. S. J. (2011), ‘The practice of indigenous group consent toward genetic
researches in Taiwan--In cases of Kavalan and Siraya’, Taiwan Journal ofIndigenous Studies, 4(3), 33-59.
Chiou, W. T., & Chuang, H. K. (2010), ‘Towards a management infrastructure formodern human research ethics: A reflective gazing moment’, Humanities andSocial Sciences Newsletter Quarterly, 12(1), 33-39.
Farley, C. H. (1997), ‘Protecting folklore of indigenous peoples: Is intellectual
property the answer?’, Connecticut Law Review, 31(1), 1-57.
Gervais, D. J. (2003), ‘Spiritual but not intellectual? The protection of sacredintangible traditional knowledge’, Cardozo Journal of International andComparative Law, 11, 467-496.
Hu, C. Y. (2004), ‘Great exhibitions and the Taiwan indigenous peoples: The politics
of representation and the images of Others in the colonial period’, Bulletin of
Department of Anthropology, 62, 3-39.
------ (2006), ‘Museums, anthropology, and exhibitions on Taiwan indigenous
peoples--The historical transformation on settings of cultural representation’,
Bulletin of Department of Anthropology, 66, 94-124
Huang, C. C. (2005), ‘Time, labour and ecology--Essential elements to the aboriginal
property’, Tsing Hua Journal of Law and Technology Policy, 2(1), 5-48.
------ (2009), ‘Interpreting the rights of indigenous peoples under the constitutional
scheme’, Constitutional Interpretation: Theory and Practice, 6, 429-465.
------ (2010), ‘Indigenous intellectual creations and sui generis: a criticalinterpretation of the new protection act for the traditional intellectual creations ofindigenous peoples’, Taiwan Journal of Indigenous Studies, 3(4), 11-46.
------ (2011), ‘Regulating the digital archives of indigenous cultural expressionfocusing on the practice of museums and memory banks’, Indigenous Culture
Communication Review, 1, 48-75.
Lucas-Schloetter, A. (2008), ‚Folklore‘, in S. von Lewinski (Ed.), Indigenous heritageand intellectual property: Genetic resources, traditional knowledge and folklore(pp. 339-505), The Hague, Netherlands: Kluwer Law International.
Shieh, M. Y., Jaw, Y. L., & Chen H. H (2008), ‘A study on the protections andlicensing related legal issues concerning the digital archives’, Research in Arts
Education, 16, 77-108.
UNESCO & WIPO (1985), Model provisions for national laws on the protection of
expressions of folklore against illicit exploitation and other prejudicial actions.
Retrieved from http://www.wipo.int/wipolex/en/details.jsp?id=6714

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How Much Do Student Loan Sizes Affect Returns on
Tertiary Education for Thai Persons With Disabilities?

Kiatanantha Lounkaew
Abstract
This paper is motivated by the fact that there were about 1.5 million disabled persons
in Thailand in 2011. A year later, 234,390 of them had died; many of the deaths werepremature. The major causes of their deaths could be traced back to deprived socioeconomic conditions. At present, registered disabled persons are entitled to a monthly
payment of 500 Baht (17 USD), and have access to low cost medical services. It is
inevitable that a new initiative is needed to promote better quality of life. Access totertiary education is one of the viable options. Disabled persons are usually credit
constrained; access to sufficient student loans is, therefore, a pre-requisite to accesstertiary education. Using a unique health literacy data set of Thai persons withdisabilities, this paper examines how different student loan sizes affect returns on
tertiary education. Propensity Score Matching is used to estimate the differences in
the log of earnings between disabled persons with tertiary degrees, and disabled
persons with basic education qualifications. A subsequent exercise on the effects ofdifferent loan sizes is conducted using the Thai Student Loans Fund (SLF)
arrangement. The exercise reveals that rates of returns do not vary significantly withloan sizes. These findings suggest that promoting greater access to tertiary education
for disabled persons will be beneficial to individuals, as well as the society at large.
Supplementary in-depth interviews highlight the importance of post-graduation
placement services.
Keywords: Disabled rights, education policy, student loans

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Introduction
Based on the National Office for Empowerment of Persons with Disability figures(NOEPD), in 2011 there were about 1.5 million disabled persons in Thailand. A year
later, 234,390 of them had died. Many of them died prematurely due to lack of propercare and severe poverty. At the time of writing, disabled persons are entitled to amonthly allowance of 500 Baht (17 USD)1. By and large, disabled persons’educational attainments rarely go beyond basic education. They are either
unemployed or only marginally attached to the labor market, with typical jobs being
lottery sellers, basic handicraft makers or massagers (National Office for
Empowerment of Persons with Disability, 2013).
The above overview raises two interesting issues. The first relates to the insufficiencyof the monthly allowance, which precludes them from acquiring proper health careand nutritional food to sustain their health. Raising payments requires that additional
public resources must be diverted from elsewhere. Such a diversion often comes with
opportunity costs. The second issue is the low level of educational attainment.
Researches in the field of education and labor market outcomes have consistently
found that more education allows individuals to be more productive; as a result, they
will also enjoy higher earnings throughout their working lives (Psacaropoulos andPatrinos, 2004). The second issue also implies that education can be a powerful
instrument to help disabled individuals who are able and willing to undertake such aninvestment, to achieve a better living standard. Being able to support themselves also
helps to free up public resources, which can be made available to other disabled
persons.
Such an initiative, however, has to be supported by hard empirical evidence on
whether such investment will yield positive returns. Another related empirical issue
stems from the fact that many disabled persons are in poverty. They do not havesufficient resources to undertake such an investment. In addition, without proper
collateral, they are denied access to commercial loans. One of the promising avenues
for the disabled in Thailand is to undertake this investment by borrowing from apublic student loans scheme, called the Student Loans Fund (SLF). Again, theempirical question is whether borrowing from the SLF to cover their tuition fees andrelated expenditures is an economically sound decision. This paper attempts toaddress these two empirical issues.
The remaining sections are organized as follows: Section 2 provides the historicalbackground and payment arrangements of the SLF; Section 3 lays out a conceptual
framework relating education to health outcome and potential earning; the researchmethodology will be discussed in section 4; data and results are offered in section 5;
section 6 concludes the study.
History of the SLF and Its Arrangement2
The idea of making student loans available to the poor was formed in 1995, while the
Democratic Party was leading the Thai government. The Student Loans Fund (SLF)
was set up in 1996, while the Chart Thai Party was the leading party of thegovernment. The main objective of the SLF is to foster access to upper secondary and
12

The exchange rate is approximately 30 baht to 1 US dollar.
This section is based on Chapman and Lounkaew (2009) and Chapman et al (2010).

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higher education for students from low-income families. It is believed that greater
access will eventually reduce inequality in education opportunities between the richand the poor. An increased stock of graduates will also increase the country’s
competitiveness, and hence sustain economic growth in the long-run. To accomplish
the above objective, the SLF provides loans for upper secondary, vocational andundergraduate education to students whose family income does not exceed 200,000
baht per annum. The average public fund allocated to the scheme is around of 27,000
million baht per annum (Office of Student Loans Fund, 2007).
Essentially, the SLF is a mortgage-type loan, with a maximum repayment period of
15 years. Annual repayment is an increasing proportion of the loan size, ranging from
1.5 per cent in the first year of repayment, to 13 per cent in the last repayment period.
The nominal interest rate charged on the loan is one per cent. There are two types ofgrace period built into the SLF. The first interest rate grace period is before theinterest rate begins to accrue two years after graduation, or termination from theprogram enrolled. Therefore, for a four-year program, the interest rate grace period is
six years. Second, there is also a two-year repayment grace period after graduation, or
termination from the program enrolled.
The loans cover tuition fees as well as living expenses. The loan ceilings for tuition
fees differ depending on the field of study; the loan ceilings for tuition fees vary from60,000 Baht per year for social sciences and humanities, to 150,000 Baht per year for
selected science and medical programs. Loans for living allowances are limited to
26,400 Baht per year.3 Figure 1 illustrates a repayment pattern for a loan size of
200,000 Baht, or about US$6,450.
Figure 1: SLF Repayments for the Debt of 200,000 Baht (about US$6,450)
Annual	  repayment	
  (Baht)
30,00025,00020,00015,00010,000
5,000
0
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Year	
  of	
  repayment

Conceptual Framework
The production of health will be measured to illustrate these points: under theassumption that health can be measured in unit terms, where a higher value of health3

See Office of Student Loans Fund (2007) for details.

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corresponds to better health condition, two inputs are used to produce health. The firstis food intake per week; the second input is time spent on exercising per week. An
increase in either input will increase health outputs. Figure 2 depicts the production
function of health, using time spent on exercising per week as an argument on thehorizontal axis. The more time is spent exercising, the higher are the health outputs.
However, the production function is concave, to reflect the fact that the improved
health outcomes gained from the first few hours spent on exercising are greater than
the gains from the 22nd hour spent exercising.
Figure 2: Health Production Function
HealthHealth=f(T,Food)

80

A(4,17)

Time spent on exercising(Hours per week)4

The positive relationship between schooling and health is empirically welldocumented (see for example, Donald, 1991; Cheolsung and Kang, 2008; Mary,2009). By and large, schooling can improve the health capital of an individual directly
and indirectly. The direct influence of better schooling channels through individuals’
health-related behavior, such as smoking, drinking, eating habits, amount of time
devoted to exercise, ability to observe one’s health, and the ability to find access toappropriate health care services. Indirect channels come in the form of a betterworking environment, better peer group, higher income, and hence, a better standardof living.
Conceptually, if more schooling leads to better productive efficiency, then thisadditional schooling shifts the production function upward; consequently, a similar
mix of inputs corresponds to a higher output lying at the frontier of the new
production function. This is shown in Figure 3. Prior to attaining more education, 4hours of exercising and 17 units of food per week produces 80 units of health outputs.
More schooling shifts the production function upward. With the new production
function, a similar mix of inputs now produces 100 units of health outputs.
Figure 4 demonstrates the situation in which more schooling leads to better allocative
efficiency. Prior to attaining more education, 3 hours of exercising and 20 units offood were used to produce 80 units of health outputs. New insights are gained from
more education results in the new input mix of 4 hours of exercising and 17 units of

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food; the new health output is 100 units. This is the maximum attainable level of
output.
An econometric model to test productive efficiency involves the use of a simultaneous
equation to approximate the production function. The model predicts that, holding allother inputs constant, the schooling coefficient is positive. Alternatively, theallocative efficiency model predicts that there is no direct effect of schooling on
health output, if all other inputs relevant to the production of health are included. It
should be noted, however, that both approaches predict positive relationships between
schooling and health outcome in the reduced form health equation (Grossman, 2006).
Figure 3: Illustrating Productive Efficiency
HealthHealth=f(T,Food)

100

B(4,17)80

A(4,17)

Time spent on exercising(Hours per week)

4

Figure 4: Illustrating Allocative Efficiency
HealthHealth=f(T,Food)

100

B(4,17)80
A(3,20)3Time spent on exercising(Hours per week)

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In the context of this study, the positive contribution of schooling on health outcome
enables a disabled individual to be more productive, and be valued more highly in thelabor market. In addition, better education empowers them to take better care ofthemselves; this also increases their health capital. To formalize this, let Z be the levelof non-health human capital; H is the level of health capital. Then, annual wage
increases can be accounted for by changes in human capital and changes in healthcapital, as shown in the equation:
Δ%w (t ) = αΔ%Z (t ) + βΔ%H (t )The Data and Methodology
This section begins with a discussion on the basic information of the Thai healthliteracy data; the most recent and most comprehensive data set available for a study ofthis nature. Then the empirical method - Propensity Score Matching (PSM) employed to estimate the percentage differences in annual income, will be elaborated.
Data
Data on persons with a disability are scarce. In Thailand, the Thai Health System
Research Institute (HSRI)’s health literacy4data set is the most recent and mostcomprehensive data on persons with disability - blind, deaf and otherwise
handicapped. The data, collected in early 2013, contained 1,600 samples of persons
with a disability nation-wide. The challenge of this exercise was that there was nounified record of disabled persons in Thailand. HSRI contacted major disability
associations to request access to their records. These records were then combined;
whenever a name was repeated, only one would be kept. Participants in this survey
were then randomly selected from this unified list containing 12,245 names. The key
information relevant to this study are: types of disability, gender, age, educational
attainment, total personal income, self-rated health condition and health literacy.
Table A1 in the appendix provides the details of the variables used in this study.
Figure 5 and 6 provide an overview of the data. It can be seen that only about 15
percent of persons with a disability surveyed have tertiary qualifications. A weighted
average of the annual income of a tertiary degree holder is about 2.3 times higher thanthose with basic education.

4

According to the U.S.’s Centers for Disease Control and Prevention (CDCP), Health Literacy is thecapacity to obtain, process, and understand basic health information and services to make appropriate
health decisions (CDCP, 2013).

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Figure 5: Distribution by Education16	
  years7%18	
  years14	
  years1%
7%

12	
  years
14%

6	
  years53%

9	
  years
18%

Figure 6: Weighted Average of Annual Income
Baht

250,000

229,982

200,000

150,000

100,000

99,95450,0000Weighted
averagebasic
education

Weighted
averagetertiary
education

Empirical Method
A typical approach to estimate returns on education relies on the Mincerian earning
function. Years of schooling is used as a one of the regressors to capture the effect ofadditional years of education on earnings. It is a well-known fact in economic labor
literature that the schooling coefficient is contaminated by bias introduced by omitting
certain variables such as individual ability and attitude towards learning (Griliches,
1977; Berger and Leigh, 1989; Card 2000). Attempts have been made to address theseissues; yet none of them has been satisfactory.
Another approach which allows us to address such bias is to frame the exercise in thecontext of a treatment-control research design. In an ideal setting, we can randomly
assign disabled persons with access to tertiary education into treatment and control
groups. In such a randomized control exercise, the difference in average earnings is

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caused by the treatment. Unfortunately, it is not possible to conduct such an exercise.
The second-best approach is to carry out a quasi-experimental design which mimics
as closely as possible the characteristics of a randomized control experiment. PSM is
one such approach (Morgan and Winship, 2007; Brand and Xie, 2010). This approachis now discussed.
In essence, PSM creates a statistical comparison group based on a propensity score the probability to participate in a treatment. The probability estimate is based on theobserved characteristics of participants. Participants and nonparticipants are thenmatched by their propensity scores. The average treatment effect of the program canbe estimated by the differences in the mean values of outcomes between these twogroups. It should be noted that, in practice, PSM is most useful when observed
characteristics have sufficient influence on the program participation decision.
Sufficient characteristic information also helps to minimize bias inherent in the
program (Rosenbaum and Rubin, 1984; Dehejia and Wahba, 2002)
In the context of this study, omitted variable bias is more pronounced because of thedesign of the health literacy survey. The primary purpose of this survey was to collectdata on health literacy, without much attention paid to collecting socio-economic
background information. Consequentially, Mincerian estimates will suffer fromomitted variable bias, possibly to a greater degree than typical estimates using labor
force survey data. The question is whether PSM would help to mitigate such bias.
The answer to the above question is positive. The health literacy data contain somebasic characteristics; in addition, the data also contains disabled persons’ self-rated
health status, as well as health literacy scores. Conceptually, health literacy helps tomake appropriate health decisions. Persons who score higher in health literacy are
more likely to be capable of looking after themselves. Unobserved characteristics that
influence one’s decision to undertake tertiary education correlate with health literacy
scores. Including health literacy scores into the estimate of propensity scores will,
therefore, increase the accuracy in matching characteristically identical individuals in
the two groups.
To obtain returns on tertiary education – defined as percentage differences in annual
income- between tertiary degree holders, and those with basic education, a log of
annual incomes is used as the dependent variable. The key to this exercise is bestviewed in a quasi-experimental context. The first step is to make use of data on
individual characteristics, geographical information and health-related data, toconstruct an overall propensity score for each individual. These scores are then used
to match individuals with similar overall characteristics whose only differences are
educational attainments. The matching process artificially assigns educational
attainment as the treatment. If tertiary education leads to higher earnings, then on
average, a person with such qualification should earn more than a person with asimilar propensity score with basic education.
The effect of student loan sizes on returns on education is estimated by deducting theannual payment required to service the loans from the annual income of tertiary
degree holders, prior to commencing the PSM exercise. The amounts to be deducted
are based on the repayment schedule of the SLF. Three loan sizes are used in the48

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estimate: 200,000 baht, 300,000 baht, and 400,000 baht. The estimate is also restricted
to include only those aged between 25 and 50.
Results
The result from the PSM estimate of the average treatment effect of having a tertiary
degree is shown in Table 1. It can be seen that a person with a disability with tertiary
education enjoys about a 29.5 percent higher annual income, compared to a person
without such a qualification. The difference is statistically significant. This confirms
the argument developed in section 3 that education, after controlling for health andother characteristics, determines one’s total human capital, and hence one’s income.
Table 2 compares the results obtained from this study with two previous findings by
Lamichhane and Sawada (2013), and Mori and Yamagata (2009). It can be seen that
the Thai estimate in this study is consistent with the two previous findings; theestimates of the returns on tertiary education are in the order of 30 percent.
The effects of student loan sizes on returns on tertiary education are calculated aspreviously described. The results in Figure 7 show the effect of borrowing from the
SLF to finance their education. The baseline estimate for the debt size of 200,000
baht, which is a typical debt size for a normal person borrowing from the SLF,
reduces the return to 22; further increases in debt to 300,000 and 400,000 baht reduce
the returns further to 18 and 14 percent respectively. Thus it can be concluded thatwhile higher loan size does affect returns on education for persons with disability,
they can still enjoy considerable returns on such investment; investment in tertiary
education is a worthy investment and will surely help to improve the quality of livesof those who have successfully undertaken it.
Table 1: Propensity Score Matching Estimates
Variable

Mean value
Tertiary
Basiceducation
education

Log of annual
income9.240

Difference

8.945

0.295

S.E.

T-stat0.142

2.09**** Statistically significant at 𝛼 = 0.05
Table 2: Comparisons to Previous Studies
Author (s)Country

Returns to education

Lamichhane and Sawada(2013)

Nepal

30.4%-33.2%

Mori and Yamagata (2009)

Philippines

24.7%-30.1%

This study

Thailand

29.5%

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Figure 7: Effects of Student Loans Sizes on Returns on tertiary Education
Annual returns to tertiary education

40%

30%

22%
20%

18%
14%

10%

0%
Loan size = 200,000 baht

Loan size = 300,000 baht

Loan size = 400,000 baht

Conclusion
This paper is motivated by the fact that there were about 1.5 million disabled persons
in Thailand in 2011. A year later 234,390 of them had died; many of the deaths werepremature. Education seems to be one of the candidates that can help some of themore able disabled persons to come out of deprived situations. Such an initiative,
however, has to be supported by hard empirical facts as to whether such aninvestment will yield positive returns. This paper addresses this question by providing
estimates of the returns on tertiary education for persons with disabilities.
The Thai health literacy data is used to undertake this exercise. As dictated by thenature of the data, PSM is used to estimate the returns on education. It has been foundthat returns on education for tertiary education are at about 29.5 percent. When taking
into account the fact that disabled persons have to rely on student loans to commencesuch an endeavor, returns on education fall to around 14 to 22 percent, depending on
the loan size. The results confirm that tertiary education is a worthy investment, andwill surely help to improve the quality of lives of those who have successfully
undertaken it.
There are two other critical challenges that must be addressed in conjunction withpromoting access to tertiary education. The first stems from the fact that disabled
graduates cannot compete with typical graduates in the labor market; policies topromote hiring disabled graduates will greatly improve their success in the labormarket. The second challenge is the perception toward persons with disability. They
have long been stigmatized as having to constantly rely on public support. Such anegative perception may hinder their progress in the workplace, and climbing social
ladders. A new fact-based perception that disabled persons are valuable members of
our society must be promoted. By addressing these two challenges appropriately,
education will be the key to ensure that they can contribute productively to society.

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Acknowledgements
The author gratefully acknowledges financial support from the Australian ResearchCouncil’s Linkage Grant and Dhurakij Pundit University. The author would like tothank the Thai Health System Research Institute (HSRI) for permission to use thehealth literacy data in this study.

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The IAFOR Journal of Politics, Economics and Law

Volume I - Issue I - Fall 2014

Appendix
Table A1: Summary of Variables
Variable
Individual characteristics
Age
Sex
Numbers of household members
Occupations

Description
Measured in years
Male = 0 Female = 1
Numbers of persons
1 = Unemployed
2 = Employee
3 = Business owner
4 = Agriculture
5 = Government or public enterprise
officials
6 = Others
Personal income from work only,
measured in Baht per annum.
Basic education = 0
Tertiary education = 1

IncomeEducation
Geographical variables
Urban
Regions

Rural = 0 Urban = 1
1 = Central
2 = East
3 = South
4 = North
5 = North east

Health-related variables
Self-rated health
Health literacy
Types of disability

1 to 10
1 to 10
1 = Chronic
2 = Blind
3 = Handicapped
4 = Deaf

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