“Fortress ICANN” No Longer Able to Shield Itself from Accountability

In an important test of ICANN’s primary accountability mechanism, its Independent Review Process (IRP), the organization has been handed a stinging blow over its mishandling of the bid for the new generic Top-Level Domain (gTLD) .AFRICA.

At the crux of the issue are two competing applications for the .AFRICA new gTLD and the decision by ICANN’s Board to abdicate its responsibility to ensure that ICANN’s evaluation and subsequent rewarding of the domain was carried out fairly, transparently, and in accordance with the organization’s Bylaws, Articles of Organization, and established policies.

The unanimous IRP Panel of 3 distinguished adjudicators declared that both the actions and inactions of ICANN’s Board with respect to the application of DotConnect Africa Trust for the .AFRICA gTLD were inconsistent with ICANN’s Articles of Incorporation and Bylaws. The Panel found that both ICANN’s Board, and its constituent body, the GAC, breached their obligations to act transparently and in conformity with procedures that ensured fairness.

As a result, the Panel recommended that ICANN continue to refrain from delegating the .AFRICA gTLD and permit DCA Trust’s application to proceed through the remainder of the new gTLD application process. Although the award did not include reimbursing DCA Trust’s legal fees and expenses, ICANN was found to be liable for bearing all the costs of the IRP and the totality of the costs of the IRP provider, more than U.S. $400,000.

Several days after the Panel’s unanimous declaration, the ICANN Board of Directors met on 16 July 2015 and decided to accept the Panel’s finding and place DCA Trust’s application back in the evaluation process. Given the growing pressure on ICANN to accept meaningful accountability reform, including an independent IRP that is truly capable of correcting the organization’s mistakes, the Board had little choice but to accept the Panel’s recommendation.

The Panel noted that the IRP is the only independent third-party process that allows review of board actions to ensure their consistency with the Articles of Incorporation and Bylaws. Furthermore ICANN requires all new gTLD applicants to relinquish all their rights to seek redress against ICANN in courts of law for any harm caused by ICANN or any misconduct by ICANN.

Accountability requires that an organization explain or give reasons for its activities, accept responsibility for them, and disclose the results in a transparent manner. Not only did ICANN fail to provide a rationale for denying DCA Trust’s application, it did not even require that a reason be provided before killing the application that ICANN was paid $185,000 to evaluate fairly. Neither principles of equity nor ICANN’s corporate Bylaws and Articles would allow that decision to stand unchallenged.

ICANN’s Board Violated Its Obligations of Due Diligence and Fairness

After ICANN’s Governmental Advisory Committee (GAC) issued “consensus advice” objecting to DCA Trust’s application, ICANN’s Board summarily awarded the .AFRICA domain to the African Union Commission, DCA Trust’s competitor. When DCA Trust filed for a reconsideration of that Board decision based on irregularities and non-transparency of the GAC decision making process and also based on allegations of staff misconduct discriminating against DCA Trust, the reconsideration request was also dismissed out of hand by ICANN’s Board.

However ICANN’s Bylaws require the organization’s Board and its internal constituent bodies to operate to the maximum extent feasible in an open and transparent manner and consistent with procedures designed to ensure fairness.

Due diligence required a conversation with the GAC about its objection, even where the advice was consensus advice. But ICANN’s Board was found to give undue deference to the GAC objection and failed to investigate the basis for the decision, even though it is consensus advice.

This IRP declaration is important because it implies the board can no longer passively accept GAC consensus advice to object to a new gTLD application (or anything else) without conducting adequate diligence into the decision making process and exercising independent judgment of its own. ICANN’s Board cannot hide behind murky “GAC objections” to block applications given the Board’s affirmative duties of due diligence and fairness in carrying out its activities.

What this ruling reveals is that GAC has been granted too much autonomy in ICANN’s decision making process given the Board’s ultimate responsibility for GAC as a “constituent body” of ICANN. But ICANN’s Board has no involvement in, much less control over, whether the GAC grants to any party voting membership status; that decision remains within the sole discretion of the GAC. Thus, although the Board is legally responsible for the decisions, GAC holds a growing power over those decisions, but bears no legal responsibility for them.

ICANN’s board failed to conduct due diligence and investigate if the organization’s constituent bodies, the GAC in particular, were operating in a manner of openness, transparency, and fairness.

Because the board did not investigate allegations of inappropriate staff conduct after being put on notice of discriminatory actions, it was found to have violated the organization’s Bylaws’ obligation to exercise appropriate care and diligence in carrying out its duties and activities. By failing to apply ICANN procedures in a neutral and objective manner with procedural fairness, ICANN breached its Articles and Bylaws.

ICANN’s Board Gave Improper Deference to Unaccountable Government Advisory Committee

The Guidebook lists three specific reasons why GAC could issue a consensus objection to a gTLD application, yet upon investigation, the IRP Panel uncovered that GAC is not constrained in any manner, and in operation, it can object to a domain name application for any reason or for no reason at all.

The Panel noted that GAC’s own witness, its former Chair, Heather Dryden, admitted during the IRP hearing that GAC did not act with transparency nor in a manner designed to ensure fairness.

In her testimony, GAC’s former Chair explained that, “there isn’t GAC agreement about what the rights are” of the contending parties, and that “not all countries have a shared view about what those entities ... should be able to do.” Dryden went on to explain, “because that would only get clarified if there is a circumstance where that link is forced. In our business we talk about creative ambiguity. We leave things unclear so we don’t have conflict.”

Ms. Dryden also stated that the GAC made its decision without providing any rationale and primarily based on politics rather than on potential violations of national laws and sensitivities. Indeed she testified that GAC is not required to provide any rationale with its consensus objections.

Testimony from its former Chair at an IRP hearing was shockingly illuminating on how GAC reaches decisions:

Arbitrator Kessedjian:
So, basically you’re telling us that the GAC take a decision to object to an applicant, and no reasons, no rationale, no discussion of the concepts that are in the rules?

The Witness:
I’m telling you the GAC did not provide a rationale. And that was not a requirement for issuing a GAC—

Honorable Judge Cahill:
But you are also want to check to see if the countries are following the right—following the rules, if there are reasons for rejecting this or it falls within the three things that my colleague’s talking about.

The Witness:
The practice among governments is that governments can express their view, whatever it may be. And so there’s a[...] deference to that. That’s certainly the case here as well. The—if a country tells—tells the GAC or says it has a concern, that not really something that—that’s evaluated, in the sense you mean, by the other governments. That’s not the way governments work with each other.”

Honorable Judge Cahill:
So you don’t go into the reasons at all with them?

The Witness:
To the issue of consensus objection, no.

But the Panel was unimpressed with such a sloppy decision making process, particularly given ICANN’s duty to act the public interest and to obey its own Bylaws. According to the Panel:

“ICANN was bound by its Bylaws to conduct adequate diligence to ensure that it was applying its procedures fairly. Section 1 of Article III of ICANN’s Bylaws, require it and its constituent bodies to “operate to the maximum extent feasible in an open and transparent manner and consistent with procedures designed to ensure fairness. The Board must also as per Article IV, Section 3, Paragraph 4 exercise due diligence and care in having a reasonable amount of facts in front of it.”

Thus ICANN Board was legally required to conduct a meaningful review of its previous decision to accept the GAC objection advice and it did not. The Panel declared, “n light of the clear ‘Transparency’ obligation provisions found in ICANN’s Bylaws, the Panel would have expected the ICANN Board to, at a minimum, investigate the matter further before rejecting DCA Trust’s application.” The Panel said it would have had a similar expectation with respect to the Board’s response to the GAC consensus objection.