Startup Societies Foundation
April 8, 2020
April 8, 2020

Adminstration Framework for Large Scale Startup Societies

A Startup Society aiming to become a World City – a Singapore or HongKong-scale community open to global talent – may achieve a high level of de-politicizationof civil and economic activity for businesses and residents. This can be donein cases where the host nation approves contractual mechanisms to handle manyfunctions that are normally left to government.

The approaches set forth below are capable of handling a full spectrum offunctions normally deemed to be in the domain of the public sector.  it is recognized that oversight of WorldCities will be retained by political authorities. After reviewing the nature of a fully private management system, accordingly, the framework outlined here explores ways through which such political overseers could productively interact with a privately developed and managed Startup Society.

Baseline Approach: A Self-AdministeringCommercial Code

The essence of the recommended World Cities management approach is not tochallenge the existing institutions of the state, but rather to create such acomprehensive and effective network of alternative private sector arrangements within the World City such that no ordinary circumstances would justifyinterventions by a public sector oversight body. In the event that arbitrary interventions were to be attempted, moreover, the management system specified below would encounter highly decentralized, rather than concentrated, no desconcentrations of decision-making power.

Recommended Framework

The fundamental approach recommended for a large-scale World City is that of a single developer-led venture which in turn gives rise to private universal membership, self-assessing associations at the local levels operating with in designated portions of the designated area. This approach is based upon themodel of successful private developer-initiated residential communities, office and  industrial parks, and resortcommunities.

Because of shortcomings in traditional public-sector delivery systems,there has been an enormous growth of covenant-based private community associations worldwide over the past 50 years. Private community associations overcome the free rider problems that normally attend private sector service provision, by contractually mandating from the start adherence by all participants in an area to defined norms ofbehavior and to mechanisms for self-financing of needed services.

Profit-maximizing developers have aggressively promoted these associationsbecause customers  are prepared to pay apremium price to have contractual mechanisms for arranging for shared amenitiesand for privately ensuring that norms of civil relationships are observed. As implemented today in more than300,000 homeowners' associations, condominium associations, and residential cooperatives (compared with fewer than 600 such U.S.-based associations in1964), owners of buildings as well as tenants who wish to live or do businessin covenanted area must agree in advance to substantive and proceduralconditions defined in covenants.

The developer- specified covenants typically obligate the holder ofproperty (or the lessee of property) within an area to abide by a code ofconduct that includes non-intrusive behavior towards one's neighbors, and payment of association-set fees for common infrastructure and services. (The development company normally reserves in the covenants a service provision rolefor itself when and where it wishes to play a continuing role.) Failure on the part of residents to maintain association membership in good standing – defined as observing the code of behavior and staying current with association fees –results in placement of liens on their property and can lead to association-induced sale of their assets.

In the early stages of development, the developer of a covenanted residential, commercial, or industrial area normally controls the affairs ofthe association(s) by exercising voting rights proportional to its majority share of the overall holdings. As the developer sells off properties or leasehold interests, the developer's voting power in the associations' general affairs can be  reduced accordingly. A properly drafted covenant, however, can ensure that the developer retains control overkey areas (or veto power over association decisions concerning strategic functions) for as long as desired. In large scale private developments, such asReston, Virginia, the principal developer has created two layers of community associations: neighborhood-level associations, responsible for operations atthe neighborhood scale, and an umbrella association, responsible for thosecommunity services with larger economies of scale.

The private community association approach has proven successful in low-income neighborhoods in developing countries as well as in affluent communities of the industrialized world. In Davao, a city located in The Philippines, a self-assessing property owners association in a lower-class neighborhood has made possible the provision of a range of services that were hitherto unavailable from municipal authorities. The "Building Together" project, in Bangkok, Thailand, similarly established contractualobligations on the part of settlers to assist in the construction of community infrastructure.

This fully private sector approach has proven capable of arranging foralmost the full spectrum of public infrastructure and services without recourseto taxation. It is relatively uncommon to find any given association financing the entire range of local services;normally, the associations seek to fill only the most glaring service deficitsof the surrounding public sector jurisdictions.

A major barrier discouraging private community associations from taking on a broader range of responsibilities is the "double taxation" problem. Members of associations are taxed once by the public sector for basic services, but also must pay again for the private service through contractually self-assessed fees. The World City, however, can offer complete tax freedom toresidents, thereby removing the most common barrier to wide-ranging community association service provision.

The following are examples of public sector functions now being privatelyprovided by means of covenanted associations in the United States:

●       Fire protection

●       Emergency medical services and clinics

●       Transportation

●       Water and sewerage

●       Street maintenance

●       Entry/exit monitoring and on-callsecurity services[1]

●       Park and recreational facilitiesmaintenance

●       Solid waste removal, and

●       Specialized learning activities anddaycare.

In North America and in developing countries alike, covenanted associations have also proven capable of successfully resolving virtually all types of landuse planning and zoning issues, without the inertia that often afflicts publicsector institutions charged with performing these tasks.

 

Through covenants, the developer can stipulate the range of permissible land uses, while leaving to association members (if desired) the ability to override some or all of the initial prohibitions by vote of a defined super-majority. Because association members are fundamentally driven by ashared desire to enhance property values in their area, they tend to be moresensitive than do public sector organizations to both positive and negative externalities of proposed activities.

Private community associations have yet to demonstrate capabilities inthree general areas: general education, "safety net"/relief services,and adjudication/enforcement systems. Even in these functions, however,opportunities exist for the World City to arrange for needed services. Each ofthese issues is examined below in tum.

Handling the Tough Cases: How the WorldCity Could Respond

Assuming that the Startup Society developer deems them to be priorities,effective action can be taken within the World City to ensure nongovernmental financing and provision of the following services:

Education

The right of every child to primary and secondary education is taken forgranted in virtually all nations (despite often being under-delivered inpractice). Accordingly, the World City should make arrangements for a highly inclusive, affordable, and effective educational system for residents. By being market driven rather than bureaucratically administered, moreover, the system could become an important drawing card for investors into the World City.

The educational needs of many affluent residents of the World City can bewell met by the creation of private schools similar to those now serving children of more affluent families in developed and many developing nations. The more difficult issue is how the World City can deal with the needs of familieswhose incomes do not provide necessary discretionary resources for traditionaltypes of private schooling.

A promising answer can be found in the once widely-utilized "LancasterSystem" of 19th Century United States and Great Britain, which has echoes today in the "each one teach one" approach to education. The Lancaster System was successful in teaching millions of American children to read and write prior to the creation of the public school system. In essence,it relied upon private initiative: a teacher would 20 to a poor urban or ruralarea, train 10 children as “monitors," and then oversee their education of hundreds of other students (who paid a penny a week in tuition). The system relied heavily on cross-age tutoring and on incentives for children to demonstrate their new-found skills to the satisfaction of the parents and teachers. Within the World City, a variety of adaptations of the Lancaster System could be applied, with far more substantial rewards (including scholarships for unusually successful monitors) than were feasible in theprevious century.

If the private developer of a World City so wished, the terms of thecovenants also could oblige private community associations to provide annualfinancial support to World City schools that were open to the general public. In addition, the World City could make special provision to escrow a portion ofthe general lease revenues, or of any "guest worker" visa fees, for the purpose of supporting educational initiatives of benefit to World City residents and/or nationals of the host country. These revenue sources should prove sufficient to ensure quality educational opportunities for all students meeting designated eligibility criteria. (Note: these eligibility criteria arediscussed in more depth under item 3 below, regarding dispute resolution systems and the problems of "undocumented" immigrants.)

Safety Net/Relief Services

The experience of many rapidly industrialized areas has shown that the influx of population can foster crime and self-destructive behavior, as newimmigrants find themselves cut off from traditional community values and safetynets. The World City may wish to reinforce the capabilities of religious andother voluntary social institutions adhering to a live-and- let-live ethos tomeet the needs of its residents, by stipulating that immigrants choose .onesuch social or religious organization as their primary point of affiliation (note: this would complement, rather than substitute for, each person's affiliation with a covenant-based community association). Each such recognized social/religious organization could receive an annual stipend from the WorldCity proportional to the number of residents who had freely chosen to become members (and who remained such in good standing. The World City would make no effort to either favor or disfavor any organization based on its religion or creed, provided that its tenets were peaceful and that it committed to offersupport to members in need.

Expanding the capabilities of indigenous voluntary institutions would helpmany immigrants deal more successfully with the disorientation often experienced when individuals move from an agricultural to an industrialized environment.The approach could also directly generate powerful, if informal, community pressures in favor of law-abiding behavior. By linking the revenue base ofauthentic (i.e. freely chosen) religious and community leaders directly to the success of their members in staying out of trouble with the World City adjudication and justice systems, the private organizations would beincentivized to anticipate problems with their "flocks" and to keep members from straying.

Adjudication/Enforcement Among PartiesWithin the World City

Another challenge confronting the World City will be the settlement ofdisputes among parties within the designated area, without recourse togovernmental courts, police, and prisons. The following approach sketches a possible means of resolving many of these problems on a nongovernmental basis,albeit with a "fallback" option allowing disputes to track into a conventional public sector system to the degree deemed necessary by the WorldCity and/or the sponsoring country.

On the likelihood that the new features of the World City (unprecedented job opportunities, innovative educational alternatives, and strengthened community safety nets) reduce rather than fully eliminate all crime, fall backmethods can be established for (a) efficiently resolving disputes and (b)imposing private sanctions that deter future acts of predatory behavior.

Independent commercial arbitration services have become commonplace ininternational  business, as a means ofavoiding the high costs and delays associated with governmental court systems.Within the World City, the first venue for dispute resolution in the event ofan alleged breach of contract (e.g. violation of covenant provisions ensuring the sanctity of life and property) could be for the parties to take their caseto the International Arbitration Association or a comparable body.

A unique element of the proposed dispute-resolution system for the World City would have each individual or firm belong to a community association that would be financially liable for the compliance of its member with theprevailing covenants. For example, upon detection by a World City Authority security agency of a violation, the suspect would be obliged to surrender under the terms of procedural justice guarantees deemed in the World City's master covenant. Failure to submit would expose the suspect to apprehension by meansof any non-lethal measures that the World City private developer (or the private neighborhood association at the site of the incident) had earlier contractually agreed to permit. The community association to which the alleged perpetrator belonged would be assessed (if the suspect was found guilty by thearbitrators) an amount proportional to the actual damages inflicted, the costsof apprehension, and the costs of arbitration proceedings, plus restitution or compensatory damages under specified circumstances. Much as "gruposolidario" mechanisms have been proven effective in preventing defaults byinformal sector debtors in Latin American economies, the prospect of suchfinancial sanctions  might make community associations highly effective in discouraging criminals.

Under the proposed dispute resolution approach, two critical innovationsshould be kept in mind. First, the World City covenants would specify financial sanctions for criminal behavior against any community association whenever oneof its members lost in the arbitration process (regardless of whether thatmember thereafter tried to appeal his or her case to a governmental court). Second, in the interests of direct punishment, the party found guilty in thearbitration process would be simply handed over to security forces associated with a Joint Oversight Commission controlled by World City Authority and by representatives earlier designated by the sponsoring Government (alternatively,the guilty party could be delivered directly to the sponsoring country'sauthorities) to be prosecuted under criminal laws. The party found guiltyhenceforth would be denied readmission under any circumstances, as a covenantviolator, to the World City.

This approach would create enormous incentives for community associationsto ensure law- abiding behavior on the part of their members, whilec ommunicating to the host country that the World City recognized the basic sovereignty of the sponsoring legal and criminal justice system.

A variation on the above mechanism could enable the World City to protect against illegal imports or exports of prohibited items (e.g. arms,non-pharmaceutical narcotics, radioactive wastes, etc.). In cases where theWorld City's designated Customs units identified suspicious activity, an investigation would begin, leading to arbitration proceedings if covenantviolations were indeed identified. In this case, the financial penalty wouldfall directly on the business enterprise(s) involved, and also on the shippingcompany(s) implicated in the delivery. Investigations could be initiated eitherby the World City's Customs units or by the JOC; in either case, however, tapedand/or videotaped evidence would be required to bring action on these grounds against a registered business within the World City.    

A more problematic issue could arise in the case of criminal actions perpetrated by squatters and other undocumented residents in the World City. Among the principal potentials for disruption is likely to be the growth of squatter settlements as economic opportunities draw a host of immigrants fromthe sponsoring country and from other nations. Although the World City would offer tangible benefits for immigrants to register with the developer-recognized community associations, (such as qualifying for schoolingand safety-net benefits) it is almost certain that some immigrants will preferto remain "underground." To the extent that such individuals engagein peaceful relationships, their presence is unlikely to create a problem. Criminal behavior on their part, however, could pose a substantial challenge.

The World City developer response in this case can be to hold other parties financially responsible for the damages done in such instances. In cases wherean undocumented resident was found to be living within the boundaries of anestablished community association, the association members would again become financially liable. In cases where squatters occupied undeveloped the developerlands (i.e. areas where no active associations had yet been formed), theresponse could be to deduct from the host government's annual rental income anamount equal to that which could have been generated by the same land ifproperly developed. A Joint Oversight Commission force could then forciblyevict the squatters from the World City as and when the parties desired.

Implications for Joint Commissions in theWorld City

Joint Oversight Commission

Under the approach summarized above, the functions of the Joint OversightCommission (JOC) can be seen in clearer focus. Three basic options appearpossible.

1.        Liaison scenario

At one end of the scale, the Joint Oversight Commission could functionprimarily as a liaison organization between the private developer (referred tohenceforth as the “World City Authority”) and its affiliated privateassociations in the designated area on the one hand, and the traditional publicsector institutions of the sponsoring country on the other. In this role, the Commission would coordinate information flows and logistical transfers (e.g. ofcriminal suspects) between the private associations/service providers and theirhost government counterparts outside of the World City. Under this liaison scenario, the JOC's ombudsman functions would be critical to ensure good faith and fair dealing among all key parties.

2.        Moderately active scenario

A more activist option would be for the JOC to directly administer a WorldCity-based police force and criminal justice system that operated as a backstop within the designated area to the World City Authority arbitration process. This is the option considered in Annex B, "Relationship Between the WorldCity Authority Arbitration System and the Joint Oversight Commission."Under this scenario, the World City Authority arbitration system has original and sole jurisdiction in resolving disputes concerning breach of covenant. Its decisions on such matters are final and absolute, including imposition ofeconomic penalties. The JOC, however, would have full authority to prosecute,adjudicate, and mete out physical punishment within the World City in cases ofsuspected criminal activity, especially where either the World City Authority arbitration systemor the defendant wished to carry the matter into the criminal court system following the breach-of-covenant settlement process.

The private system would routinely handle the (Covenant-related) day-to-doinfractions and misdemeanors that occurred in the World City. From the onset of any investigation and arbitration process, however, into a grave breach ofcovenant – that is, one which was also a crime of violence against persons orproperty under the laws of the host nation – the World City Authority forcewould be obliged to immediately apprise the JOC of the situation. In seeking to subdue an armed and dangerous person suspected of a grave breach of covenant, the World City Authority force would have a full mandate to employ non- lethal means of apprehending the person. It could also call upon the JOC to assist in apprehending such a person by means of lethal force if required in anexceptional case. In the event of such an emergency request, the JOC would be obliged to respond in a timely way with sufficient force to deal effectivelywith the threat at hand.

The JOC could initiate, as well as respond to, requests for its criminal justice services under two basic circumstances. First, when one of its policeofficers (rather than a World City Authority service employee) appeared firston the scene of a crime-in-progress, the JOC would be entitled to actively pursue and apprehend the suspects (while immediately notifying its World CityAuthority counterparts of a suspected covenant breach-in-progress). Second, if the World City Authority arbitration process within the World City failed to rectify a crime in the view of the JOC, and subsequent consultations betweenthe private system and the JOC brought no improvement, the JOC could unilaterally institute criminal investigations and proceedings against any party within the World City where probable cause warranted. Such an extraordinary step, however, should only be taken with the advance approval ofa supermajority – perhaps 75 percent – of the full Commission's board.

The above approach would ensure an optimal balance between the roles of the private community associations within the World City, and the oversight of apolitically-appointed body responsible for police and courts. Because the substance of community management would continue to rest heavily on community association-supported World City Authority services and on independentarbitration, the size of such a JOC presence within the World City under thisscenario could remain quite small.

3.        Maximum JOC scenario

A more powerful role for the Joint Oversight Commission would be to develop a comprehensive services capability in each of the main functions indicated. Given the uncertainties of business climates in most developing countries, the JOC might become a prototype for a multilateral services consortium, offering a"rule of law" where and when invited to assist economicallyliberalizing developing countries in creating improved business climates. Countries such as Costa Rica, Switzerland, and Singapore that enjoy international reputations for rule of law might be engaged contractually by the JOC forspecified services. Under this approach, the sponsoring government'srepresentatives within the first World City JOC could potentially participate also in JOCs in other countries designated as World Cities.

Under any of the above scenarios, it will be critically important toincentivize the JOC, by ensuring that its budget is dependent upon the economicsuccess of the World City. Hong Kong's government relies heavily upon annualauctions of land leases for its operations, and thus benefits to the degreethat a welcoming environment for business is sustained. Export- orientedparastatal bodies in Brazil, on the other hand, utilize performance-based budgets in several instances. Under this approach, spending levels rise or fall in proportion to export earnings of the industries that the parastatals oversee. Officials and staffers within such institutions, accordingly, operate in a business-like manner to promote the interests of their sector as a whole.

Security Commission

Roles for a Security Commission (SC) can be kept minimal by virtue offull-scale privatization of decision-making over local services, except to theextent that the host country remains concerned over the possible intrusion intothe World City by disruptive external forces (such as a possible insurgency,takeover attempts by organized drug traffickers, etc.). These contingencies canbest be dealt with by defining the SC's role as being national security-orientedin nature.

Under this approach, the Security Commission could assume more of a stand bythan an active role, and a substantial supermajority requirement (85 percent or more) should be specified to change in any way provisions of the World City arbitration and enforcement mechanisms. The recommended role for the SC isexamined in Annex C, "Relationship Between Private Community Associationsand the Security Commission."

Annex A - Conditions for Operating the World City

This annex reviews provisions that could be incorporated within the Master Covenant. It indicates how the responsibilities of subdivision developers, World City-based enterprises, community associations, social/religious organizations,and residents could be respectively defined.

In its master covenant with users, the World City developer should set out fundamental groundrules ensuring civil relationships among all persons, associations, and enterprises active in the World City. These fundamental ground rules would mandate respect for person, property, and contract, and establish general private dispute resolution and enforcement procedures. In addition to its general provisions, the master covenant could offer the following specific provisions for various categories of World City-based tenants.

Conditions for subdivision developers

The World City is likely to attract a number of residential, commercial,and industrial subdivision developers who would be prepared to sublease substantial tracts of land from the World City concessionaire, who would hold the master lease for development of the overall site. Stipulated within thesesubleasehold agreements could be requirements that each developer:

●       Demonstrate (in advance of signing) good standing withcourts and/or police of the subdivision developer's country of origin;

●       Agree to utilize the World City developer-designated service providers for specified infrastructure/ basiclocal services;

●       Agree to create universal membership associations based on covenants that meet minimum the World Citydeveloper-defined conditions (covering all who will be visiting, living in, ordoing business within the subdivision area);[2]

●       Agree to indemnify the World City developer for any breaches of covenant found by the arbitration system to have been caused by the subdivision developer and/or by one or more of the universal membership private community associations that had been formed by this developer within the subdivision; and

●       Agree to leave the World City and to relinquish claim to all property within the community if adequate steps in the view of the arbitration system are not undertaken to stop recurrent gravecovenant violations emanating from the subdivision.

Conditions for World City-basedbusinesses

Businesses operating within the World City should also be required toassume responsibility (in at least some measure) for the on-premises behaviorof their employees, customers, and suppliers. Stipulated within any leasehold agreements could be requirements that the business enterprise:

 

●       Agree, if a breach of covenant occurs onits premises, to bear (some) liability for fines should an employee, visitor, customer, or supplier be found responsible. This policy could be extended to transportation companies found knowingly or unknowingly to be carryingcontraband prohibited under terms of the master covenant;

●       Agree to cooperate with World City Authority and JOC forces in their on-premises investigations and to abide by the arbitration system findings; and

●       Agree to join a recognized universal membership association of businesses or tenants in the area (e.g. an industrialpark/office park association or neighborhood-level business association) and to remain a member of such in good standing.

Another possible feature of the covenants for each business would be a requirement that it observe a boycott against any person or entity within theWorld City identified by the arbitration system as being in breach of covenant.

Conditions for Private CommunityAssociations

Community associations within the World City, as discussed earlier, shouldbear some financial responsibility for the behavior of their members as well as of visitors (official or otherwise) to the area under the association's jurisdiction.

In the event that a grave covenant violation was found to have been perpetrated by a member/resident from a given area, all covenant signatories inthat area would be obliged to pay a special assessment proportional to the actual damages inflicted, the costs of apprehension, and the costs of arbitration proceedings, plus restitution or compensatory damages underspecified circumstances. Failure of association members to pay could result in placement of liens on their leaseholds, disconnection from World City utilities, and/or forced sale of their properties. In addition to the above stipulation, the Master covenant could also specify that each private community association must obtain written consent from all of its members that they will cooperate with private World City Authority and JOC forces in their investigations, and that they  will abide by the arbitration system’s decisions.

Conditions for (Recognized)Social/Religious Organizations

The Master Covenant could also establish a process whereby nonprofit voluntary groups, such as churches and relief organizations, could be assured more active and widespread memberships. A condition for immigrants andtemporary residents to enter the World City might be their declaration ofaffiliation with (and acceptance by) a primary World City-based social orreligious organization of their choosing. So long as an organization waspeaceful and dedicated by charter to helping members in need, and as long as the leaders of the organization remained observant of the World City master covenant, it would be recognized as eligible for a share of the annual ground leaserevenue stream of the Startup Society.

The amount of the financial support would be proportional to the percentageof World City residents who freely affiliated with the social/religiousorganization and who remained members  of it in good standing (i.e. who stayed current with their dues ortithes from the perspective of the social/religious organization, and whoremained personally observant of the World City covenants from the perspective of the private World City Authority arbitration system). The World City would make an annual disbursement to the leaders of each recognized institution froma pre-set portion  of the World City lease revenues dedicated for this purpose. The amount of the disbursement, however, would also be debited in proportion to the degree to which active (or inactive) members of the group were found responsible by the arbitration system forbreaches of covenant in the World  City. In this way, the social and religious organizations of the World City could play a much stronger role in anticipating potential disruptions and takingeffective measures to minimize problems with their members.

Conditions for Residents and Visitors

Residents of and visitors to the World City, under the above covenants, would find themselves held responsible for their behavior not only with theWorld City developer, but to the private community association with which they stayed, the business enterprises with which they worked, and thesocial/religious organizations which they joined. In essence, the Master covenant (and the other covenants it fostered at the subdivision level) could ensure the following actions on the part of residents/visitors:

●       Joining a recognized universal membership community association and remainng members in good standing;

●       Joining a recognized social and/orreligious organization and likewise remaining members in good standing; and

●       Cooperating with private World City Authority and arbitration forces, as well as the JOC police and courts, toensure that disputes are resolved m an honest and expeditious manner.

In return for observing these conditions, and for respecting the Master covenant provisions concerning respect for others' lives and property, residents and visitors would be assured of the benefits of an exceptionally free market society, of due process under a business-like World City Authority police and arbitration/court system, and of access to such education and "safety net" services as the World City chose to arrange.

Annex B - Relationships between the Private World City Arbitration Systemand the Joint Oversight Commission

This annex describes basic operational principles that could govern interactions between the comprehensive private World City Authority arbitration system of the World City and the Joint Oversight Commission under the"moderately activist" scenario for the JOC described in the main bodyof this paper.

●       The private World City Authority forces in the community normally would take initial responsibility for responding to incidents of suspected wrong doing. Community association-supported forceslikely would be the first to arrive on the scene of most suspected incidents of wrongdoing. The JOC police presence, however, would be notified immediately in such cases by electronic means of reports of wrongdoing, and at its option could send personnel to the scene of any incident (notifying the World City Authority coordinator of its intent to do so).

●       Only the Joint Oversight Commission could use lethal force in the World City. Although private World City Authority forces would be bound not to use lethal force in apprehending a suspected criminal, they could use any nonlethal means deemed appropriate by the World City’s lead private developer or the community association in which the suspectis located. Where a suspected criminal requires potentially lethal force to be subdued, the JOC police presence would be required to respond to community association summons for help.

●       The private arbitration process – while final concerning breaches of Covenant – would precede rather than preempt JOC administration ofcriminal justice. The private arbitration system would commit to rendering timely and final judgments regarding suspected breaches of covenant by World City residents and visitors, and have the right to impose any economic sanctions authorized by the Master covenant in such circumstances. If either the private arbitration system or the defendant wished to have a further hearing in the criminal courts, the case would then automatically be referred to the JOC. The JOC role in this case would be to determine whether a crime has been committed, and to incarcerate orotherwise physically confine the perpetrator(s). All evidence gathered by the World City Authority and arbitration system would be made available, at the request of the JOC, for use in the latter 's criminal justice proceedings. The JOC Commission members (or the Ombudsmen) could also authorize the JOC to conduct an independent criminal investigation for gathering such further facts as it deems may be necessary.

Several issues would remain to be resolved in negotiations with the host country over terms of the Convention. Differences might exist over the amountof time, if any, that the private World City Authority system would bepermitted to keep the suspects it apprehends in its own custody (as opposed toturning them over to the JOC). Reasonable disagreements might also arise overthe maximum period that the JOC would allow the private arbitration process torun before beginning its own criminal prosecutions.

Finally, by prior agreement with the host country, any prisons could belocated physically outside of the World City, to deflect concerns about potentialhuman rights abuses by World City administrative bodies against prisoners. Incertain instances, however, an agreement to locate JOC-affiliated prisonswithin the World City would be the best safeguard against any such abuses.

Annex C -  Relationships BetweenPrivate Community Associations and the Security Commission

This annex reviews the possible relationship between rulemaking by the World City Authority and its private developer-affiliated community associations and by the proposed Security Commission (SC). It assumes thatWorld City Authority, as the private developer (and the community associations that it generates), would use contractually-defined mechanisms for decision-making in economic and certain social realms, while the SC would reservepolicymaking power, in the event that the need arises, to protect the national interests of the host country within the World City.

●       Private community associations would have full decision-making responsibility for the financing and provision of local services. Voting at annual and special meetings of community associations (World City Authority and/or subdivision developers would hold majorities at these meetings in the early years) can determine such matters as the amount of self- assessments, the common infrastructure and services that they will fund, and the private contractors to be engaged. In addition, the associations would have rights – within limits established in advance by World City Authority – to create distinctive architectural standards, to define acceptable land useratios, to define maintenance standards for properties, and to set building codes to enhance the value oftheir respective areas.

●       Moral standards within the World City would be defined in the Foundation Agreement with the host country and incorporated in the master covenant. A list of proscribed activities could include human trafficking, dealing in narcotics, promoting obscenity,inflicting acts of sacrilege, and/or inciting to hatred. These could be includedin the Foundation Agreement establishing the World City. These provisions intum could be codified in the master covenant of the World City, requiring adherence by all subdivision developers, businesses, community associations, residents, and visitors. Breach of these covenant provisions would be groundsfor fines or expulsion of the violator from the World City.

●       Special powers to protect national interests would be reserved for the Security Commission. Because of the possibility that international terrorist groups, subversives, drug trafficking cartels, or other organized crime elements may seek to establish a foot hold in the World City, the Security Commission would have the right to establish special safeguards to ensure that the World City remains a peaceful haven forenterprise. By a supermajority of the Commission members, the Security Commission (SC) could adopt additional safeguards – beyond those initially specified by the host country in its Foundation Agreement with the private developer – to ensure that threatening individuals are denied access to or expelled from the World City. The SC could respond to an act of terrorism inthe World City, for example, initially by consultations with the developer to tighten inspection of visitors and/or goods entering or leaving the World City,or to expel troublemakers. If these proved insufficient to resolve the problem, the SC could by a supermajority of its members vote to move from a relativelydormant to an active status, and mandate new rules governing access/egress to the World City. These new safeguards would become obligatory for all private security personnel and Joint Oversight Committee police forces in the WorldCity, until the Security Commission determined that the emergency had passed.


[1]According to a study by the Community Associations Institute, the leadingorganization representing the interests of covenant-backed associations in theU.S., more than 25 percent of the private community associations as of 1990offered manned security services, and approximately 15 percent utilizeelectronic security services. Video surveillance of points of ingress andegress is increasingly used by such associations as an aid in the apprehensionof criminals, and as an objective record for later review by dispute resolutionservice providers.

[2]2 These minimum conditions could stipulate that all who visit, do business in,or reside in the subdivision will agree to cooperate with private World CityAuthority forces and the JOC police force investigating incidents. If suchcooperation is withheld, the covenant signatory would agree to allow theprivate community association and its designated WCA forces to subdue thesignatory by any nonlethal means, to detain him (or release him under bond)during the defined period needed for an arbitration hearing, and (assuming thearbitration system finds that the signatory has committed a breach of covenantafter he has exercised a right of appeal within the system) to attach assetsand/or expel him without recourse from the World City for a specified period orperpetually. The covenant provisions would preclude the arbitration system frommeting out physical punishment for crimes; for this purpose, the World Citydispute resolution/Joint Oversight Commission system would be obliged to conveythe offender to the JOC for criminal justice proceedings. Regardless of theoutcome of the JOC proceedings, however, decisions of the arbitration systemwould remain final regarding any economic penalties and expulsion penaltiesimposed.

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Startup Societies Foundation
370 South 300 East, Suite 201
Salt Lake City, UT 84111
United States