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Paragraph VII – Joint venture Agreements: Selecting of the technology reception strategy depends on technological capabilities of the receiving country. Different legal methods of commercial transfer and reception of the technology can be used in each of the different joint venture arrangements. Assigning the exclusive rights of a registered technology, an applied industrial model, or trademark by one of the partners can be considered as the amount of that partner's input in the joint venture company's capital. However, there is also the possibility for one of the partners to endow an exploitation license related to the registered invention or other subjects of the industrial property or technical knowledge supply as a part of his input to the joint venture company. But such license or technical knowledge supply in one or more forms will be the subject of one or more contracts signed after formation of the joint venture company as a result of which the company gains necessary tools for doing its tasks and can desirably satisfy the technological needs of the host country.
Paragraph VIII – Buy back: Among the traditional methods of transfer of technology, buy back contracts can be implied. The contracts are also widely used as a source to cover economic needs in developing countries. And, cause of severe weakness, the technological structure of such countries welcomes any types of technologies. In the buy back contracts, contractors usually remain produced technology in terms of utilized goods and tools of the project and mostly do not transfer the advanced up-dated technology (i.e. what introduces the technology as the factor of domination and important capital in international arena).
That is why in part of the legal works, the contract is not addressed as a way to transfer technology and considered suspiciously. Anyway, if transfer of technology is considered generally, we can also account the contract as a factor for transfer of technology.
Section III: Transfer of technology Methods Technology is transmitted in two ways:
Vertical Transfer of technology: in vertical transmission or research and development transmission, technical information and applied research findings are transmitted to the development and engineering design step. In this transmission, technical information and applied research findings are transmitted to the development and engineering design step, then enter production process by commercializing the technology.
Horizontal Transfer of technology: here, technology is transmitted from a potency level in a country to the same potency level in another place. In this transmission, technology from a potency level in a country to the same potency level in another place, now, the higher the level of the technology receiver, the lower the transmission cost and the more effective its absorption.
From another point of view, transfer of technology can be done in following forms:
International Transfer of technology: where the transmission act crosses over the national borders, like transfer of technology from industrial countries to developing countries.
Regional Transfer of technology: where technology (in a country) is transmitted from one region to another, like from Tehran to Mashhad in Iran.
Inter-Industrial Transfer of technology: where a technology is transmitted from an industry to another, like transfer of technology from a spatial plan to commercial applications.
Inter-Company Transfer of technology: where technology is transmitted from one company to another, like transmission of design expertise to computer assistance and production equipments to computer assistance from a company producing machine tools to a company active in the field of manufacturing domestic utensils.
Intra-Company Transfer of technology: where technology is transmitted from a place to another in a company. Role and effect of technology in new age and new period is crystal clear and it suffices that new period is introduced as the age of technology and it can be said that the main reason for underdevelopment of the developing countries in industrial social and economic and even cultural areas is cause of their inability in recognizing, transmitting, and developing technology.
Section IV: Regulations related to Transfer of technology in Oil Industry Contracts:
In the oil industry and specially regarding the international contracts of the field, normally a series of obligations are recurrently observed in transfer of technology; here is some of them:
Paragraph I – Employing Personnel of the Host Country:" in most oil contracts, there is an article based on which a foreign investor is required to employ residents of the host country, however, it must be remembered that normally the foreign company avoids executing the paragraph on an excuse of the lack of domestic specialized manpower. So, to fill the gap, some countries have legislated rules based on which to assign making final decision of employment to the host country. For instance, regarding Iran, the necessity of employment of domestic organ not only is anticipated, but also decision making in the field is assigned to the domestic organ. In the same regard, article 20 of Oil Law approved on 29.06.1974 not only considers the employment of local personnel as a priority, but also assigns the decision making on employing foreign personnel to Iran National Oil Co.
1- Employing foreign employee will be authorized only with occupations that no qualified and specialized Iranian employee is present.
2- Employing foreign employee will be done with consultation and permission of Iran National Oil Co. and Iran National Oil Co. is required to declare that employing the foreigners will be confined in any cases and it is done only if the equipments of training Iranians are provided for them to be able to replace the foreign employees on determined time.
Paragraph II – Training Domestic Personnel: In most oil contracts, the requirements of training domestic personnel are anticipated. The requirement is cause of the lack of specialized manpower in the host country. In this regard, education and experience practitioners have recognized three instructional programs as necessary: in-house instruction where the instructional course is administered in form of the classes in the organization and complementary period is administered out-house; the second where personnel training is carried out in the workplace in which learning is conducted under supervision of experienced staff and the employees get familiar with instruments, tools and machineries and how to operate, maintain and service them. The third type where dispatching local staff to abroad to enhance knowledge and do more specialized courses. Accordingly, paragraph II of Article 20, Iran Oil Law 1974 have not cited the necessity of providing training equipments of Iranians on the part of foreigner investor. No doubt, such detail and ambiguity create the possibility for avoiding the acceptance of such requirements on the part of the committed party.
Paragraph III – Being Obliged to Supply and Assign the Information Related to Oil Operation: Accessing the information and data related to excavation and expansion operation of oil is an important step in transmitting technology. For example, a country will be able to independently and by less relying on a foreign investor anticipate the probability of discovering oil and the cost of exploitation through accessing the information related to geology, seismic, drilling and engineering. Additionally, it will help the host country's residents to gain the skill required for daily operation. Sand, with an awareness of significant financial and organizational issues like planning, budgeting, barrowing, accounting, and marketing in developing countries, it will be able to enhance its managerial capability. It must be noted that accessing such information will not be fulfilled unless knowledge and information assignment related to installation and operating tools and machineries related to oil operation. Partially, all contracts oblige the foreign investor to regularly and occasionally provide the employer with necessary information regarding geology, seismic, drilling, production and engineering. Despite the importance of the transmission of such information for proceeding technical knowledge and technology of the local personnel, since such information does not include the technical knowledge and technology considering construction and building the tools, instruments and machineries of oil operation, its transfer of technology is very limited.
Paragraph IV – Using Domestic Goods and Services: Such requirement can act as an incentive in the growth of domestic industry. For instance, it not only encourages domestic production units, but also encourages them to enhance their technical knowledge and technology to increase the quality and value of the products. Obviously, the necessity of the existence of the figures is useful when firstly, the host country possesses required technology for supplying services and production; secondly, encourages the authority of detecting quality and cost-effectiveness of goods and services comparing to the goods and services of the host country domestic organ's rival. Because making decision in the regard cannot be assigned to the foreign company preferring to use its own goods and services. For the sake of this risk, come countries have determined the domestic organ as the righteous decision making authority as well as giving priority to the domestic goods and services. For instance, Article 24 of Iran Oil Law (29.06.1974) holds it that: "goods and services required for the operation of each contract will be provided and acquired from domestic resources. Using foreign goods and services will only be authorized when goods and services produced and supplied in Iran have not had appropriate quality (according to Iran National Oil Co.) required for operation and or required amounts are not available and or price f the goods and services supplied in Iran is more expensive than %20 of foreign goods and services price (according to Iran National Oil Co.) ".
Paragraph V – Assigning Accessories, Tools and Machineries Exploited in Oil Operation to the Host Country: Partially, in all oil contracts, the foreign party is required to assign the whole oil installations, accessories and tools used to the host country for free. In this regard, paragraph II of Article as "acquiring lands and import" puts it that: "complying with Article 24 of the Law and based on the legal charter regulations of Iran National Oil Co., the machineries and equipments and every kind of goods required for the operation will be imported by the name of that company". The effect made by such requirement in learning knowledge and technology cannot be denied, because – by owning the respective tool – it provides the chance for the host country to make its residents familiar with the assigned equipments and installations and instruct the how-to-use of them. However, it must be said that such assignment will have two limits: firstly, as demonstrated by the assessments done, most of the assigned equipments and tools become old; secondly, the respective equipments and tools are operation-specific, namely, they are of the type of produced technology rather than producer's technology.
Paragraph IX – Establishing and Installing Refinery: In this regard, many host countries have implied the necessity of establishing petrochemical refinery and manufacturing units in their contracts with foreign companies.
Nevertheless, the language used in the contract's text is formulated so general and