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Posts Tagged ‘law

“Those who live by the sea can hardly form a single thought of which the sea would not be part”*…

If only. All of us on this interconnected planet are deeply beholden to our oceans; but all too few of us, all too infrequently, pay them heed. Surabhi Ranganathan explores one too-seldom considered dimension in which we need to address that deficit: the “Law of the Sea.” As she explains, the growing international competition for reclamation, navigation, cabling, and undersea resource rights, against the backdrop of climate change, demand a radically-revised approach…

I write this essay in an office in Singapore, where I have just learned an arresting fact. The legal historians Antony Anghie and Kevin Tan have informed me that in the course of my arrival, via Terminal 3 of Singapore’s Changi Airport, I must have crossed – on foot – the probable spot where, more than 400 years ago, the Dutch East India Company (VOC) Captain Jacob van Heemskerk captured the Santa Catarina, a Portuguese ship. This makes sense: in Martine van Ittersum’s rich description of the incident, she notes that it took place at the entrance of the Singapore Straits. Heemskerk, the story goes, made a wild dash to Johor from Tioman Island upon receiving news that two Portuguese carracks laden with spices, silks, and porcelain, would be moving through the Straits. Having missed the first, he awoke on the morning of February 25, 1603, to find the second, the Catarina, right before his eyes. He swiftly captured the ship just off Singapore’s eastern shoals. In the time since that event, projects of reclamation have increased Singapore’s total land area by 25 percent, and Changi airport occupies one such reclaimed part, sitting where the shoals used to be.

The Catarina’s capture occupies an important place in the history of international law. The incident was part of an imperial struggle between European states over access to trade with the East Indies. Such trade promised fabulous wealth: the goods recovered from this event alone sold for over three million guilders in the markets of Amsterdam, an amount that was roughly double the capital of the English East India Company. Portugal was outraged by the loss, while the VOC was keen to defend its actions. On retainer from the company, the jurist Hugo Grotius—then just in his early twenties!—wrote a brief that is now regarded as a foundational text,  Mare Liberum, or The Free Sea.  

Grotius argued that the sea was entirely unlike land. Land, being fixed, cultivable and, most importantly, exhausted by its use, could be regarded as divisible, subject to public and private ownership, and demarcated by national boundaries. The sea was fluid and constantly in movement; it was indivisible, unoccupiable, inexhaustible, indeed unalterable for better or worse via human activity. As such, it was irreducible to private ownership or state sovereignty. That being the case, it was Portugal that had acted wrongfully in claiming exclusive rights of maritime navigation and commerce with the Indies.

The Grotian imaginary of the sea persisted for centuries. The principle of the freedom of the seas came to define oceanic activities from navigation to fishing. Indeed, modern international law continues to express a principle of maritime freedom, though it is a far narrower form of freedom than Grotius initially claimed.

Today, international treaties, states, institutions, corporations, and courts all recognize that the ocean is divisible and, in parts even appropriable, in the same way as land. Oceanic resources are exhaustible and can also be enhanced by human endeavor: cultivation through new methods like aquaculture is increasingly seen as essential to assure the global supply of fish. In the decades since the Second World War, a dense network of legal rules on access, use-rights, and responsibilities have developed to regulate the crowding conglomerations of interests and territorial claims upon the oceans.

Moreover, international law has been increasingly called upon not only to articulate the ways land and sea resemble each other, but also to address the mutability of those very categories. Thanks to legal and technological innovations, what was once sea might become land: the reclamation projects that have accounted for the site of Changi Airport are but one example. In the other direction, rising sea levels and intensifying critical weather events can quickly turn what was once land into sea. Down in the deep, the binary between land and sea is confounded by formations which appear as neither fully one nor quite the other.

The shifting relation between land and sea reflects the scale of human impact on the environment. This unstable relation forces us to confront the consequences of climate change, as the fixed certainties — soil, resources, infrastructure – that have for so long governed our imagination of land begin to fall apart.  As a result, we must contend with new expectations of, and investments in, the sea…       

Down in the deep, the legal distinction between land and sea no longer holds– and that’s a problem: “The Law of the Sea,” from @SurabhiRanganat in @thedialmag.

* Hermann Broch


As we go deep, we might recall that it was on this date in 1911 that RMS Titanic was launched from the boatyard in Belfast in which it was built, the largest passenger ship of its day. A state-of-the-art steamship, it set sail from Southampton on its maiden voyage on march 10th of the following year, bound for New York City.  Four days later, after calls at Cherbourg in France and Queenstown (now Cobh) in Ireland, the “unsinkable” Titanic collided with the iceberg that sent it under in the North Atlantic, 375 miles south of Newfoundland.

When the location of the wreck of Titanic was discovered in 1985, there was fear that extant Admiralty law would allow for the “looting” of what its discoverer believed should be “a monument.” In an example that the Law of the Sea can in fact be revised, the RMS Titanic Maritime Memorial Act was passed in 1986. (After the Act’s passing, the Department of State proposed an agreement with the United Kingdom, Canada and France (as well as other interested countries) to enact the policies from the 1986 Act on an international scale… the U.K. ratified it briskly, but the U.S. didn’t get around to it until 2019. France and Canada are pending. In the meantime, the wreck of Titanic has been revisited on numerous occasions by explorers, scientists, filmmakers, tourists and salvagers, who have recovered thousands of items from the debris field for conservation, public display… and sale.

(For perspective on scale)


Written by (Roughly) Daily

May 31, 2023 at 1:00 am

“The opposite of knowledge is not ignorance, but deceit and fraud”*…

In follow-on to our last look at corporate fraud, a provocative piece by Byrne Hobart

This paper has been getting some attention lately for its eye-catching estimates: 11% of publicly traded companies are committing securities fraud every year, with an annual cost of over $700bn…

[There follows an illuminating discussion of lessons that can be drawn for the follow-on to Arthur Andersen’s collapse after the implosion of Enron, the rules/regulations developed then to prevent similar public company frauds, and a consideration of whether corporate fraud has waned– at least among publicly-traded companies– and is perhaps a little less wide-spread than the paper argues…]

But since fraud is a human problem, and not purely a matter of better accounting standards, it’s not likely to have just gone away. But if the rate of accounting problems among big publicly-traded companies is lower than the 11% number cited in the paper, the question isn’t “why did it disappear?” but rather “where did it go?” And we can take our list of trends against fraud and invert them:

• Sarbanes-Oxley does apply to private companies, but only on the penalty side, not the disclosure side. But accounting frauds in private companies are often less visible; many investments go to zero, anyway, and it’s less embarrassing for everyone involved not to say why.

• There are no short-sellers in private markets. There have been efforts here, but they don’t work out because the market doesn’t clear (“everyone wanted to short Theranos, Dropbox and WeWork”). The closest you can get to shorting is to pass on a round and then brag about it later. Big deal: I didn’t invest in FTX, either.

• There’s less data available on private companies, though the rise of alternative data tools means it’s easier to get decent proxies.

• Startups are not expected to return capital. It’s a bad sign if they do. They’re often valued either based on strategic considerations or starting with a multiple of sales—a dollar of sales is much easier to fake than a dollar of earnings or cash flow, so the incentive to do so is strong.

• The idea market in startups is liquid when it comes to successes, but it would be pretty tacky for a VC to write a long blog post explaining why they passed on a live deal. (That memo may exist internally, but to the extent that it’s shared it’s in the form of a quick summary over Twitter DM or Signal.)

JPMorgan Chase’s writedown of their fintech acquisition Frank is a great case study in all of these forces. The NYT has a good story digging into the details: Frank’s founder is a serial exaggerator whose self-promotion veered into fraud (once again, if the rate of continuous improvement in public perception to be maintained exceeds what the fundamentals can deliver, compound interest works its ruthless magic). The company was valued at a high multiple of what turned out to be a flexible metric, total email addresses captured. And there were alternative datasets that could have pointed to problems: given the likely number of student aid applicants in the US, Frank’s numbers implied that it had reached near-dominant market share in the category with little marketing. Meanwhile, its monthly site traffic was not enough to have acquired that sizable a customer list over Frank’s entire existence. So it could have been caught, if the buyer had been looking for fraud. But one paradox of frauds and cheats in general is that lying is less than half the work—most of the effort is in appearing not to need to lie. The more impressive a company looks, the more embarrassing the basic due diligence questions are.

A down market and a series of high-profile failures might give private markets the same kind of natural experiment that Arthur Andersen’s failure did for public markets. Due diligence checklists will get longer and more thorough, and new funding rounds will feel more like a cross-examination and less like a party. One reason for a high base rate of fraud is that at least some of it stems from inattention rather than malice—the Arthur Andersen study finds that most of the frauds were fairly minor, and could be more the result of poor internal metrics than of intent to mislead. But either way, standards will get higher, and private companies will need to step up their efforts accordingly…

Has the primary locus of corporate fraud moved from public to private companies? “Where Fraud Lives and Why,” from @ByrneHobart.

[Image above: source]

* Jean Baudrillard


As we do due diligence, we might recall that it was on this date in 2016 that the Centers for Medicare and Medicaid Services (CMS) sent a letter to Theranos after an inspection of its Newark, California, lab. The investigation, which took place in the fall of 2015, had found that the facility did not “comply with certificate requirements and performance standards” and caused “immediate jeopardy to patient health and safety.” This followed on three exposes on Theranos in the Wall Street Journal (in October [here and here] and December of 2015) and a critical FDA report. Things unraveled from there: in March, 2018, Thearnos, CEO Elizabeth Holmes, and President Sunny Balwani were charged by the FCC with fraud. Three month later, a federal grand jury indicted both Holmes and Balwani on two counts of conspiracy and nine counts of wire fraud, finding that the pair had “engaged in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients.” Theranos closed in 2018. Holmes was convicted and sentenced to 11 years in prison for her crimes (a sentence she is appealing); Balwani, to 13 years.

Theranos was a private company, funded by investors including Henry Kissinger, Betsy DeVos, Carlos Slim, and Rupert Murdoch.

Elizabeth Holmes found guilty (source)

“Two obsessions are the hallmarks of Nature’s artistic style: Symmetry- a love of harmony, balance, and proportion [and] Economy- satisfaction in producing an abundance of effects from very limited means”*…

Life is built of symmetrical structures. But why? Sachin Rawat explores…

Life comes in a variety of shapes and sizes, but all organisms generally have at least one feature in common: symmetry.

Notice how your left half mirrors the right or the radial arrangement of the petals of a flower or a starfish’s arms. Such symmetry persists even at the microscopic level, too, in the near-spherical shape of many microbes or in the identical sub-units of different proteins.

The abundance of symmetry in biological forms begs the question of whether symmetric designs provide an advantage. Any engineer would tell you that they do. Symmetry is crucial to designing modular, robust parts that can be combined together to create more complex structures. Think of Lego blocks and how they can be assembled easily to create just about anything.

However, unlike an engineer, evolution doesn’t have the gift of foresight. Some biologists suggest that symmetry must provide an immediate selective advantage. But any adaptive advantage that symmetry may provide isn’t by itself sufficient to explain its pervasiveness in biology across scales both great and small.

Now, based on insights from algorithmic information theory, a study published in Proceedings of the Natural Academy of Sciences suggests that there could be a non-adaptive explanation…

Symmetrical objects are less complex than non-symmetrical ones. Perhaps evolution acts as an algorithm with a bias toward simplicity: “Simple is beautiful: Why evolution repeatedly selects symmetrical structures,” from @sachinxr in @bigthink.

Frank Wilczek (@FrankWilczek)


As we celebrate symmetry, we might recall (speaking of symmetry) that it was on this date in 1963 that the Equal Pay Act of 1963 was signed into law by president John F. Kennedy. Aimed at abolishing wage disparity based on sex, it provided that “[n]o employer having employees subject to any provisions of this section [section 206 of title 29 of the United States Code] shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs[,] the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex […].

Those exceptions (and lax enforcement) have meant that, 60 years later, women in the U.S. are still paid less than men in comparable positions in nearly all occupations, earning on average 83 cents for every dollar earned by a man in a similar role.


“Fondling their weapons, feeling suddenly so young and good they are reminded that guns are more than decoration, intimidation, or comfort. They are meant.”*…

Micah Harris (31) – Oxnard, California Since he was a boy, Micah Harris has had just one wish—to surround himself with the same guns he’s seen in Hollywood movies. He would dream about them at night, first and foremost among them, “Bruce Willis’s Beretta from Die Hard. It’s a legend.” However, surrounding oneself with firearms is no simple thing in California, and not well looked upon either. When he decided to buy his first rifle, a Remington 700, the bureaucratic hoops he had to jump through were so many and so complex that he decided to set up a YouTube channel, posting updates on his progress and sharing what he learned along the way. The channel garnered moderate success. Today, Micah knows all the rules and advises others on how to buy the firearms they want. He manages a gun shop that he founded with a friend, and he’s also a member of the NRA. Losing some friends in a mass shooting only strengthened his convictions about the importance of knowing how to defend oneself. “Shootings are a tragic way to use a tool that was never conceived for that purpose. If I could speak to the victims, I’d tell them I offer them all of my help and understanding, and that I’d be happy to teach them how to use guns, so that they could defend themselves in the future.” Choosing a favorite gun is kind of like choosing a favorite child. If I really had to, I’d say an Mk 12 Mod 1
Torrell Jasper, a.k.a. Black Rambo (35) – Schiever, Louisiana (in the background, Allen Craff, Tyrone Gathen, James J. Herbert) Every day, nearly six hundred thousand people wait for Torrell Jasper to make his appearance on Instagram and show off one of his guns. To find him, just type in “Black Rambo,” a nickname he’s extremely proud of, and make sure you don’t end up on his son’s account by mistake (at 13, he’s already trying to make a name for himself on social media). Torrell, now 35, learned to shoot from his father as a child. A former Marine, he spent a few years in war zones, “where pulling the trigger and hitting the target was a question of life or death.” Now, back in civilian life and working as an A/C systems installer, Torrell, a.k.a. Black Rambo, mostly just has fun with his guns. People have fun watching him, too. About a hundred different manufacturers of firearms and related paraphernalia have, over the years, asked him to use and promote their products, and he loves being the center of attention at least as much as he loves owning a flamethrower. “There are no weapons I would ban ordinary citizens from owning, but if I had to name one, well, a bazooka isn’t really something you need,” he admits. That said, he has no fear that an item in his arsenal might be dangerous for his young children or for any of his many followers. “It’s not guns that hurt people, it’s the people holding the guns.” I couldn’t say which weapon is my favorite. I can’t choose just one. I love them all. That’s why I buy so many. The first gun I ever bought was an AK-47.

Two of the arresting portraits in Gabriele Galimberti‘s striking series “The Ameriguns,” @GabrieleGalimba.

* Toni Morrison, Paradise


As we pine for ploughshares, we might recall that it was on this date in 2021 that U.S. District Judge Roger T. Benitez of the Southern District of California ruled that sections of the 1989 California state ban on assault weapons– military-style rifles like the AR-15, so prominently featured in the photos above– was unconstitutional. In his opinion, Benitez opined, “like the Swiss Army knife, the popular AR-15 rifle is a perfect combination of home defense weapon and homeland defense equipment.” Later that month, the U.S. Court of Appeals for the 9th Circuit blocked his ruling.

For a different set of Pictures: “America’s gun culture – in seven charts.”


Written by (Roughly) Daily

June 4, 2022 at 1:00 am

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