The 18th International Congress of Comparative Law--Workshop on Private Law Theory

This week individuals from all over the world participated in the 18th International Congress of Comparative Law. The program agenda is rich and varied. Equally interesting are the general and national reports produced for the Congress. These reports are available for download and are worth reading.  Of particular interest to some may be the general reports on international law in domestic legal systems, complexity of transnational sources, corporate governance, and  Religion and the Secular State - Interim Reports.pdf.

National reports mirror the major areas covered in the general reports, including complexity of transnational sources, the role and practice of legal education, consumer protection, recent private international law codifications,  corporate governance, age discrimination, protection of foreign investment, internet crimes and corporate criminal liability. The reports considering national approaches to the question of whether human rights are universal and binding are worth considering.  They include the following reports:

• Armenian National Report.pdf
• Belgian National Report.pdf
• Brazilian National Report.pdf
• British National Report.pdf
• Canadian National Report.pdf
• Croatian National Report.pdf
• Democratic Republic of the Congo - National Report.pdf
• German National Report.pdf
• Greek National Report.pdf
• Hungarian National Report.pdf
• Italian National Report.pdf
• Japanese National Report.pdf
• Norwegian National Report.pdf
• Polish National Report.pdf
• Portugese National Report.pdf
• Russian National Report.pdf
• Scottish National Report.pdf
• Slovak National Report.pdf
• Solomon Islands National Report.pdf
• Taiwanese National Report.pdf
• Ukrainian National Report.pdf
• United States National Report.pdf

 A very exciting portion of the Congress was the Workshop on Private Law Theory, organized by Ralf Michaels and Fernanda Nicola, which took place Wednesday July 28, 2010, The Workshop Program follows:

XVIIIth International Congress of Comparative Law
Private Law Theory - A Workshop
PROGRAM
Wednesday, July 28, 2010
9:00 am – 5:00 pm
American University Washington College of Law,
4801 Massachusetts Avenue, NW, Washington, DC 20016, Room 603

The current crisis of public law, and of the state, has reinvigorated interest in private law and its theory. Scholars from all over the world are invited to share their views and perspectives, so debates that have often been national or regional can be linked and a global perspective may be possible. We would like to thank participants to provide us with “scraps” to facilitate our conversations. Most of the participants will have a chance to briefly present their ideas in one of the various panels. Participation in the workshop is CLOSED and please note that you can participate in this event ONLY if you have been included in the program or received permission by the organizers. We envisage a maximum of 50 participants selected on the basis of the work submitted. The meeting will include breakfast, lunch and a small closing reception, please check the program online. For any other detail please contact Cleo Magwaro. . . . Organizers: Ralf Michaels, Duke University School of Law/ University of Pennsylvania, USA . . . ; and Fernanda Nicola, American University Washington College of Law, Washington D.C. . . .

8:30-9:00 am Registration and Continental Breakfast
9:00 am Opening Remarks
     Ralf Michaels (Duke University School of Law/ University of Pennsylvania, USA)
     Fernanda Nicola (American University Washington College of Law, USA)

9:10-10:20 am “Can there be private law?”
The realist and post-realist critique suggests that the idea of private law is incoherent. What then could still qualify as private law, as opposed to public law on the one hand, mere custom on the other?
Panelists:
     Aditi Bagchi (University of Pennsylvania Law School, USA)
     Bénédicte Fauvarque-Cosson (University Panthéon-Assas, Paris II, France)
     Bianca Gardella Tedeschi (University of Piemonte Oriental, Italy)
     Sylvia Kang’ara (University of Washington, Seattle, USA)
     Souichirou Kozuka (Gakushuin University, Japan)
     Luke Nottage (Sydney University, Australia)
     Chair: Dan Wielsch (University of Cologne, Germany)

10:20-11:30 am, “Private Law Reasoning”
Is there something specific about private law reasoning? And what is it? What are challenges for private law reasoning today?
Panelists:
     Jorge Esquirol (Florida International University College of Law, USA)
     Patricia Kameri Mbote (University of Nairobi, Kenya)
     Peter Oh (University of Pittsburg, School of Law)
     Sjef van Erp (Maastricht University, Netherlands)
     Richard Wright (Illinois Institute of Technology Chicago-Kent College of Law, USA)
     Chair: Daniela Caruso (Boston University Law School, USA)

11:30-11:50 Coffee Break

11:50-1:00 “Private Lawmaking”
Can private actors make law? What role do the rules play that they create? How do they relate to the official law of the state?
Panelists:
     Richard Buxbaum (UC Berkeley School of Law, USA)
     Amy Cohen (Ohio State University, Moritz College of Law, USA)
     Kathleen Gutman (Catholic University of Leuven, Belgium)
     Jeff Redding (Saint Louis University School of Law, USA)
     David Snyder (American University Washington College of Law, USA)
     Dan Wei (University of Macau, School of Law, Macau)
     Chair: Franz Werro (Georgetown University Law School, USA)

1:00 Lunch

1:20- 2:20 Keynote Speech
      Keynote speaker: Ernest Weinrib (University of Toronto, Canada)
     Commentators: Michele Graziadei (University of Turin, Italy)
     Isabel Jaramillo Sierra (Los Andes University, Colombia)

2:20-3:30 “Private Law and Globalization”
If all law was once public state law, does decline of the state signify the rise of private law? How does private law relate to globalization?
Panelists:
     Larry Catá Backer (Penn State University, USA)
     Anna Gelpern (American University Washington College of Law, Washington D.C.)
     Lukas Heckendorn Urscheler (Swiss Institute of Comparative Law, Lausanne, CH)
     Luca C.M. Melchionna (St. John’s School of Law)
     Florian Rödl (Frankfurt University, Germany)
     Dai Yokomizo (Nagoya University, Japan)
     Chair: Teemu Ruskola (Emory University School of Law, USA)

3:30- 3:50 Coffee Break

3:50-5:00 “Where do we go from here?”
Panelists:
     Yuki Asano (Gakushuin University Law School, Japan)
     Donald Earl Childress III (Pepperdine University, USA)
     Cally Jordan (Duke Law School, USA & University of Melbourne, Australia)
     Amr Shalakany (The American University in Cairo, Egypt)
     Markus Wagner (Miami University School of Law, USA)
     Dan Wielsch (University of Cologne, Germany)
     Chair: Susan Carle (American University, Washington College of Law, USA)

5:00 pm RECEPTION

The "scraps" produced for the Workshop provide a fascinating glimpse at the cutting edge of academic movements in private law theory.  They point to the likely scope and character of policy issues that will shape legal and political discourse for the coming decades.  It is not surprising that many scraps touched on integration and pluralism in private law.  For example, there was a suggestion of a double question built into pluralism and private law touching on the realization of plural values in people's lives and the activation and control of plural actors to private law making.   Another suggested the opposite movement in European codification of private law as it moved from an economic tool for the internal market to a method for constructing a European demos. Another looks to the ideological underpinnings of the standard definition of Islamic law as a disciplinary field and arguing that the traditional position  was based on a dominant historiography that was a modern invention--an argument that has substantial implications for the movements for return to indigenous law in Africa, among indigenous people and in Latin America. 

Another group of scraps focused on the public/private divide in law.  One suggested the difficulties of insulating private law from moral and policy objectives usually reserved for public law.  Another looked to the consequences of the privatization of public law in dispute resolution, and its impact on theoretical reformulations of the concept of private law.  Another focused on the revolution in legal harmonization as it moved from a  focus on simple horizontal harmonization among states, to consensus of norms among the community of states to its current phase of harmonization between public and non-state governance actors.  Another considered movements toward straddling the public/private divide through non-judicial dispute resolution mechanisms. Still another considered the "public" inherent in private law, suggesting private law as a place where conflicts of values are encountered.  Another suggested that the character of private law must be changing as public actors become more aggressively involved in private market activities as non-sovereigns, and that the increasing importance of public actors making private law raises a distinct set of challenges. Another looks at the public-private divide in the context of constitutional protection of property in Africa.  Another looks at internal legal pluralism within a domestic legal order by suggesting its scope in policy debates about law between legislature and courts in Japan.  Another argues that legal globalization, based on the comparative method, pits incentives toward convergence against national resistance to protect identity.  Another looks to the phenomenon of privatization of traditional government functions and its effects on the role of private law, the legitimacy of its use, problems of accountability and emerging institutional models that proceed from private law regimes.

Another group considered questions of theory. One suggested the death of private law theory in one of its great sources--judicial decisions--and the anemic effort to transpose private law theoretical foundations to non-judicial dispute resolution venues. Another looked at private law theory through the lens of the soft law-hard law debate, suggesting that some of the assumptions underlying soft law discourse undermine its usefulness, and looking back to the notion of law before the state.   Another looks to the under development of theory reflecting differences in the legal epistemologies of the self under the foundational norm structures of different legal and religious traditions.  Another approaches theory from the perspective of traditional categorical distinctions in law  among property, contract, torts and unjust enrichment, positing interdisciplinarity as a means of yielding superior functional results  for private law considered as an integrated set of related disciplines.  Another looks to the return of a pure private law as a formalist, non-political, and non-contextual enterprise, as a basis for the retention of the rationality of private law even as its contemporary moorings in the nation-state and democratic legitimacy are abandoned in favor of transnationalization.  Still another considers issues of legitimacy of private law making in the absence of the democratic legitimacy conferred by public law frameworks.  Another posits that the common private core of private international law theory is its trans cultural aspect of self organization, the common legal core of private international law theory is its reflection on legal forms and concepts, and its common theoretical core must necessary be meta-theoretical.  Another seeks the moral foundations of private law and an interactive justice that must necessarily animate both public and private law. 

Still another group considered private law in the context of development issues.  One suggested the difficulties for development where the ideologies of private law are carried over to developing states.  Another looked to the influence of Anglo-American legal thought on the doctrinal development in Africa and its effects on the constriction of an African private law. Another considers private law as a mechanism for corrective justice and a break on state power, illustrating its effects with a look to alternative dispute resolution in China.

Others looked at the implications of challenges to classical private law theory for specific substantive areas of law.  One focused on the Europeanization of contract law, its coherence, relation to private lawmaking and connection to globalization.  Another looked at the contract-tort divide in Western and non-Western legal traditions as a source for further development of private law theory. Another explores consumer law in Australia to suggest that the policy implications of public law have effectively expropriated significant portions of the private element in consumer law. Another looks to tax law as a basis for the position that law ought to be more collaborative as it becomes more hybrid in character.  Another looks to movements in European property law harmonization as a conflict point for common and civil law conceptions of property.  Another starts from the ideology of conflicts of law to suggest that the "law" element of private law must be emphasized in order to retain the internal coherence of the system of law unalterably tied to nation states; beyond law might be governance, but it ought not to be considered a welcome immigrant into the terrain of law.

These approaches suggest the extent of dynamism in private international law.  A complex interweaving of globalization, migration, and changes in patterns of human organization has produced a change in the foundations on which both law and the state have sat comfortably for a century or so.  The rise of contracts with regulatory effect--the transformation of the private relations of individuals from object of territorially based law systems to subject, that is, to governance system in its own right has played a large role in the production of this dynamic state.  So has the rise of neo-medievalism, a shift not seen in law for centuries, in whcih law (or governance) shifts out of the state and reacquires its autonomous character.  But that autonomous character is now polycentric--it exits quite vigorously in law-state systems and also now in social norm systems. What clearly emerges is that though the state is far from finished, and though private law--or its social norm cousins (governance residing outside of state based law systems)--is far from acquiring a definitive form and framework, the old established consensus of the nature and legitimacy of power, and the constitution of governance collectives, has been fatally destabilized.  What will emerge remains to be seen, but whatever its form it is likely to be far more fractured institutionally (that is, as formally constituted) than it was before, though perhaps far more likely to harmonize and converge within new "families", not of law  but of governance.   

The workshop also served as a  forum for the work of the private law theory initiative.

The PLT initiative aims to constitute a network of scholars reflecting the theoretical foundations and future developments of private law. The idea was born spontaneously in 2009 among a transnational group of scholars. PLT will build a forum for cross-cultural brainstorming what private law could mean in the 21st century. PLT embraces different theoretical backgrounds (liberal theory, social justice theory, deliberative theory, systems theory, economic analysis, critical theory, deconstruction, etc.) and different fields of law (contract law, property law, comparative law, competition law, corporate law, IP law, etc.).

Private Law Theory, What is PLT?

 

Corporate Social Responsibility and Charity--An American Law/Policy Connection Worth Reconsidering

A recent opinion piece published by the Washington Post reminds us that, for some important political-legal cultures, the connection between corporate social responsibility and charity is quite strong. Chrystia Freeland, What's BP's Social Responsibility?, The Washington Post, July 18, 2010.

As crude poured into the Gulf of Mexico and the world economy struggled to recover from the financial crisis, corporate social responsibility might seem a perverse target. Surely we need more corporate responsibility, not less. But many of the business disasters of the past 24 months have been facilitated by the mini-industry of corporate social responsibility -- known as CSR by those in the trade -- a fetish encouraged by the philanthropies that feed off it and funded by the corporate executives who have found that it serves their bottom line. Id.

Ms.Freeland focuses on the character of the problem: "But the gulf oil spill and the financial crisis have taught us, rather brutally, that the heart of the relationship between business and society doesn't lie with the charitable deeds that companies do in their off-hours but whether they are doing their day jobs in ways that help -- or hurt -- the rest of us."  Id.  The character of the problem suggests the solution. 

The problem with CSR is that it muddies the waters. Goldman's purpose isn't to educate women; BP's isn't to lead the green revolution. The job of business is to make money -- in BP's case by producing energy, particularly fossil fuels; in Goldman's case through finance. Even the most cuddly, caring chief executive is ultimately charged with a selfish central mission: to generate profit for her shareholders.  Id.

Thus, within a shareholder (or entity) welfare maximization model of corporate organization, corporate social responsibility presents an incompatible intrusion.  Worse, corporate CSR might be understood as necessarily subverted by the welfare maximization model itself.  Because welfare maximization is the principal task of business, CSR "and the communitarian philosophy behind it, asks us to believe that the interests of an individual company and those of the wider community are fully aligned. They aren't -- a truth too many regulators forgot in recent years." Id. Corporations should embrace the business of profit maximization, and government ought to shoulder its burden of providing for the public welfare, including the regulation of business. 

Freeland's views were criticized for suggesting an incompatibility between welfare maximization and CSR, for ignoring differences between long term and short term business decision making, and for confusing marketing with strategy. Alice Korngold, Freeland's Washington Post Op-Ed Is Wrong: CSR Does Maximize Corporate Profitability, Fast Company, July 19, 2010.  Another suggested that "the failings of Goldman Sachs and BP underscore the need for firms to take their engagement with society more seriously, and to put being on the right side of social progress at the core of their long-term profit-making strategy." Matthew Bishop,  Is CSR Evil?, Philanthrocapitalism, July 20, 2010 (short term welfare maximization a cause of failure). 

Freeland's point is a venerable one within American political and legal culture. Professor Milton Friedman argued that corporate shareholder benefit maximization is the only possible position consistent with American notions of democracy. (Milton Friedman, Capitalism and Freedom 133–36 (1962). Shareholder benefit theory is the most efficient manner for maximizing corporate utility and general wealth maximization (free markets and the invisible hand theory applied). If corporations were to be granted social or public policy obligations, then corporations would be acting in the place of the state. But corporations are not legitimate state actors; their directors were not elected by or accountable to the people. Conversely, if corporations with social policy functions would be legitimate only if fully accountable and responsible to the political community, they would have to be chosen by the political community and serve them. Essentially, corporations would become governmental units. To avoid this, regulation ought to facilitate the operation of the market and limit market inefficiencies and fraud. This position has proven very influential since the 1960s. For a more recent defense of these arguments see, for example, Stephen M. Bainbridge, "In Defense of the Shareholder Wealth Maximization Norm: A Reply to Professor Green," Wash. & Lee L. Rev. 50:1423 (1993).  This view reflected a longer conceptual tradition within American business and legal culture:

Early on, however, the American bench and Bar seemed to reach an uneasy stalemate about the contours of the debate regarding corporate social responsibility. . . . The most important points of agreement, at least among members of the American bench and Bar, were these: Corporations were understood as enterprises engaged solely in an economic role and the ultimate object of corporate existence was maximizing shareholder wealth. Corporate boards were permitted some flexibility with respect to compliance with this latter requirement. This flexibility took three principle forms. First, corporations were permitted to distribute corporate property for charitable or other eleemosynary purposes within certain clearly defined limits. Second, corporate boards of directors were given some flexibility when they sought to serve other constituencies, to the extent that such service was consonant with their primary missions. After the merger manias of the 1970s and 1980s, such flexibility was sometimes memorialized in so-called “other constituency” statutes. [e.g., Ohio Rev. Code Ann. § 1701.59(E) (West 2005) (allowing directors the discretion to consider, in determining the best interests of the corporation, factors such as employee interest, the state economy, and community considerations).] Third, boards of directors were accorded some flexibility in determining the factors, including time frame, which might be considered in maximizing shareholder value.

Backer, Larry Catá, Multinational Corporations, Transnational Law: The United Nation's Norms on the Responsibilities of Transnational Corporations as Harbinger of Corporate Responsibility in International Law. Columbia Human Rights Law Review, 37:287-389 (2006).

Corporate statutes usually empower corporations to “make donations for the public welfare or for charitable, scientific or educational purposes, and in time of war or other national emergency in aid thereof.” Del. Gen. Corp. L. tit. 8 § 122(9) (2005). Courts have developed standards for determining the validity of such giving in individual cases. See Theodora Holding Corp. v. Henderson, 257 A.2d 398 (Del. Ch. 1969); see also A.P. Smith Mfg. Co. v. Barlow, 98 A.2d 581 (N.J. 1953), appeal dismissed 346 U.S. 861 (1953) (upholding corporate gift to Princeton University because the gift arguably advanced the long run business interest of the company even in the absence of a statute permitting such gifts). Corporate charity has been both praised and criticized because of its character as advancing the corporate donor’s economic interests. See Hayden W. Smith, If Not Corporate Charity, Then What?, 41 N.Y.L. Sch. L. Rev. 757 (1997). It has also been criticized or as a front for the satisfaction of the directors’ personal interests. See Faith Stevelman Kahn, Pandora’s Box: Managerial Discretion and the Problem of Corporate Philanthropy, 44 U.C.L.A. L. Rev. 579 (1997). See generally Victor Brudney & Allen Ferrell, Corporate Charitable Giving, 69 U. Chi. L. Rev. 1191 (2002) (discussing different rationales for corporate charity).

As such, the real issue for American law and policy makers is not so much the fundamental character of CSR, but the division that American law and culture makes between two kinds of corporate expenditures--one is called charity and is deemed exogenous to corporate activity, and the other is deemed endogenous.  Part of what CSR theorists have been attempting over the last decade or so is to make the case that, like expenses for labor,  materials, advertising and investor relations, expenditures for the relationships between corporate actors and the communities within which it operates and from which the value of its economic activities are maximized, are also endogenous.  More importantly, perhaps, the insistence of American policymakers to continue to embrace the traditional conceptual model has tended to force the issue of corporate CSR both out of the field of corporate law--and into that of administrative or international law--and directed attention to transnational corporations rather than to all enterprises operating in corporate form.  In addition, the focus on the profit maximization premise as the foundation of the "problem" tends to blind policymakers to the realities that all bodies corporate have human rights and social responsibilities to people they affect.   Like the profit/charity binary, the profit/nonprofit division ignores commonalities and provides room for strategic behavior among corporate actors.

As a consequence, the great movements of constructing governance systems affecting the responsibilities of corporations have moved from the national to the international law,  with a focus, for the moment on soft law frameworks.  At the same time, law has increasingly assumed a secondary role in the construction and implementaiton of such governance systems. Backer, Larry Catá, On the Evolution of the United Nations’ 'Protect-Respect-Remedy' Project: The State, the Corporation and Human Rights in a Global Governance Context (June 3, 2010). Santa Clara Journal of International Law, Vol. 9, No.1, 2010.What Ms. Freeland really appears to suggest is that the current insistence on embracing a profit-charity model for CSR will make American law and policy increasingly irrelevant to the development of global CSR standards.  This is a not an area of leadership that Americans lawyers, judges, policymakers and academics ought to cede lightly. 

And Speaking of Labor Markets: Labor Market Equity for the Disabled in Hong Kong, Report of the Community Development Initiative

While free movement of capital tends to mark the approach to capital and capital markets within the emerging global economic architecture, the same does not hold true for labor markets.  Labor markets  have tended to remain mired in protectionism, paternalism, and management by a host of actors.  While capital has tended to see the elimination of borders and impediments to its use, labor has tended to be more tightly bound by  these very same borders.  Both Cuba and the United States, for example, tend to assert control over labor markets which, at least in the case of the United States, is substantially more restrictive than those applicable to capital. These restrictions might have human rights impacts for both states.  See Larry Catá Backer, States, Labor as a Market Commodity, and Human Rights Frameworks--Cuba's Grannacional Programs at the Intersection of Business and Human Rights, Law at the End of the Day, July 17, 2010 (Cuba); Inter-American Court of Human Rights, Advisory Opinion OC-18/03 Inter-Am. Ct. H.R. (Ser. A) No. 18 (2003) (Sept. 17, 2003) Requested by the United Mexican States against the United States of America  (Juridical Condition and rights of the Undocumented Migrants).  

But the micro picture within labor markets is no less troublesome.  Especially problematic remains the treatment of the disabled within labor markets.  This is as true in the developed as in the developing world.  See, e.g., Mor, Sagit,  "Between Hope and Evil: Reframing Disability Allowances" (Paper, 2009). One gets a good sense of the issues involved in the incorporation of the disabled within labor markets in Hong Kong from reports recently circulated by a Hong Kong NGO, the Community Development Initiative.

最低工資研 究調查發佈

最低工資立法在 即，為了使法案能夠更全面地真正地保障了所有勞動者尊嚴，使他們能夠透過勞力繼而得到合理的生活質素及報酬，社區發展動力培育特別開展了兩項研究調查： 《為殘疾人士創造就業機會及落實最低工資》及《2010年零售業薪酬調查報告》。研究已經完成並先後於 5月2日及7月12日作發佈，隨函 為上述之完整報告。


《為殘疾人士創造就業機會及落實最低工資》

簡介：經勞工界和基層團體多年的爭取，最低 工資已開始展開立法程序，但對於殘疾人士，政府最初之主張是不把他們納入保障範圍，結果在響應團體爭取後才改變初衷。但把殘疾僱員納入最低工資，卻要引入 對他們的生產力評估機制，若現在僱員被評為生產力低於「正常」，會根據其相應生產力的最低工資打折。我們認為此舉實違反最低工資的精神。



《2010年零售業薪酬調查報告》 (暫時只有中文版本)

簡介：是項調查是與民間爭取最低工資聯盟共同進行。是次調查的對象是本港 最具規模及有代表性的零售業連鎖店，包括︰7–11便利店、OK便利店、惠康超級市場、百佳超級市場、華潤超級市場、萬寧藥房和屈臣氏個 人護理商店。調查形式為工作人員假扮應徵者親身到店舖詢問，查詢內容包括工作的時薪及數額。結果發現，零售業工資仍然嚴重偏低，臨時最低工資委員會成員麥 瑞琼，其屬下的7-11更蟬聯「最刻薄僱主」。聯盟要求最低工資應訂於時薪33元，並要求連 鎖零售集團要負企業社會責任，給予員工合理的工資水平。

The CDI announced the release of a Minimum Wage Research Surveys in conjunction with the consideration by the Hing Kong government released of a labor bill.  The first study, "Creating Employment Opportunities & Realizing of Minimum Wage for Disabled," focused on employment opportunities and implementation of minimum wage regime for disabled workers.  The second is a " Pay Retail Survey 2010. " The first report attacks efforts to tie minimum wages to productivity--especially when productivity is measured against the disabled to their detriment. The second report reflected information gathering by CDI staff posing as job candidates and seeks to make a case to apply global principles of corporate social responsibility to support a "reasonable wages" regime. 

The Executive Summary of "Creating Employment Opportunities" is reproduced below:

I. After years of battle by the labour sector and grass-root groups, the issue of minimum wage is already in the process of legislation. However, if the capability assessment mechanism is introduced to the disabled employees, according to their below “normal” productivity, their wages will be discounted. We believe allowing the disabled to receive wages below the minimum wage violates the spirit of minimum wage.
 
II. Currently, among the 347,000 disabled (excluding the Intellectual Disabled) aged above 15, 45,800 (13.2%) disabled engage in paid employment. For the other 302,100 disabled who are unemployed, most of them are forced to retire due to the lack of work opportunities. Thus we can conclude that, the disabled are not widely accepted by the market.
 
III. Because of many different reasons, most of the employed disabled are currently employed in Non-Government Organizations (“NGOs”). A majority of them are working at sheltered workshops and social enterprises which could only provide comparatively lower salaries to maintain their competitiveness in the market. Hence, the income of the disabled is generally lower than the work force .Almost 30% of the employed disabled are making below $4,000 per month. Obviously, even the disabled could become self-reliant, they could not “rehabilitate their lives”.
 
IV. As the current mechanism cannot solve the disabled’s employment problems comprehensively, we would like to suggest the HKSAR government to impose a “Voluntary First, Mandatory Second” Disabled Employee Quota System to provide a larger and more user-friendly employment space for the disabled, our suggestions are as follow:

 Gradual enforcement of the disabled employment quotas system. At the beginning, only the government divisions, public sectors and subsidized organizations are required to employ 2% of disabled employees, and the results are reported every year. Departments which meet the target are rewarded financially.
 Encouraging the business sector and other organizations to impose their own voluntary quota system. Small and Medium Enterprises with less than 50 people are exempted
 Buying products and services from social enterprises to replace direct employment of the disabled is also allowed.
 May provide tax concessions and other support to reward the organizations that meet the target.
 Finally, institutionalizing the above measures through the legislative system when the society has a common consent on employing the disabled.
 
V. Apart from the above mentioned, for the improvement of livelihood of the disabled, it is not enough by simply providing them with employment opportunities alone. If the disabled could only make low incomes, they could not even support their own daily livings, and their difficulties are not resolved. Hence, both the legislation of minimum wages and the creation of employment opportunities for the disabled are indispensable and should be carried out at the same time.
 
VI. Nevertheless, the legislation of minimum wage is to guarantee each labour is paid with adequate income for making a living and to ensure he labour could lead a decent life. If the meaning of “labour” is those who contribute their effort in production, it is not justifiable that the disabled are to be exempted. In order to make sure the operational cost of enterprises will not soar, governments in different countries usually set the minimum wage at a comparatively low level. If the disabled are to be paid at a discount of the minimum wage according to their capability assessment, what is the ultimate meaning for protecting them in accordance with the minimum wages?
 
VII. The arrangement for the disabled to call for a voluntary capability assessment is an acceptable solution to protect the employment opportunities of the disabled from negative impact. In this case the employer will not need to bear the cost of the enforcement of minimum wage, but since there is no disability social security in Hong Kong, if the disabled take the discounted wage, they cannot even maintain their basic livings. Therefore the government is responsible to fill the gap between the discounted wage rate and the minimum wage. If the disabled are evaluated as possessing half of productivity of an able-bodied worker, that particular employer may give 50% of the minimum wages to that employee, while the remaining 50% should be paid by the government.

Estado de SATS: Creating a Space for the Confluence of Art and Thought in Cuba

Cuba continues to play a disproportionally large role in the development of arts and ideas.  Much of it remains confined to the Island.  But some of it is reaching out.  One such recent effort worth substantial consideration are the efforts of the Estado de SATS. Thier web site is worth visiting.  The organizers of this group are putting on a conference in Cuba that will seek to continue the exploration of the frontiers of the confluence of art and thought.  The preliminary program can be accessed here. Summaries of some of the very interesting work to be presented can be access here (all in Spanish): Programa del Encuentro "Estado de SATS".

The event was well attended. A record of the proceedings may be found at the website of Estado de SATS.  SATS: UN ESTADO DIFERENTE. TRES DIAS DE ARTE, PENSAMIENTO Y EXPRESIÓN LIBRES. EL ESTADO MÁS NECESARIO.23, 24 Y 25 DE JULIO DEL 2010.    Here is a taste:
 
LA IDEA
Un evento de tres días donde pudieran debatirse libremente a partir de conferencias, paneles, y presentaciones artísticas las cuestiones más acuciantes de nuestra sociedad, pero donde predominara la actitud y el espíritu del diálogo, sin jerarquía de modos de pensamientos políticos o filosóficos o religiosos o de modos de interpretar la sociedad civil real.



EL TEMA
Cuba presente-futuro.


Sats Sats Sats Sats Sats SatsSats Sats

UN DETALLE
Ha sido un evento organizado por jóvenes.
Se sumaron muchos a su realización, que luego no continuaron, y así especialmente la dirección artística general del evento fue a parar a manos de OMNI-ZONAFRANCA, especialmente a OMNI-EXPRESS: la parte de este grupo que está dedicada a la producción artística y a la creación de espectáculos.

El último encuentro en la Casa Templo OMNI del Arte Cubano en Alamar definió todo el diseño del evento, el cual marcó su espíritu y propició a los que asistimos un gran placer y la creencia de que estábamos en un evento de primer nivel. Como en efecto se demostró.


 

Hearings on U.S. Cuba Policy: Testimony of Michael Kelly on Property Claims and More on Labor and Human Rights

Yesterday I posted my conference paper on Cuba's engagement with global trade, and the repercussions in the context of business and human rights.  The focus was on one of the practices of Cuba's commercial activities--barter transactions in which the Cuban state trades labor for services or cash--and its potential incompatibility with global human rights norms.  Larry Catá Backer, States, Labor as a Market Commodity, and Human Rights Frameworks--Cuba's Grannacional Programs at the Intersection of Business and Human Rights, Law at the End of the Day, July 17, 2010.

For its own reasons, the Legislative organs of American federal government have also considered these issues in the context of its stormy political relations with  the Cuban state apparatus.     

HEARING ON UNITED STATES - CUBA POLICY

Thursday, April 29, 2010
U.S. House of Representatives
Subcommittee on Trade
Committee on Ways and Means
Washington, D.C.

The subcommittee met, pursuant to notice, at 10:04 a.m., in Room 1100 Longworth House Office Building, Hon. John S. Tanner [chairman of the subcommittee] presiding.

[The advisory of the hearing follows:]

*Chairman Tanner. Well, good morning and welcome. We'll get started. I understand that Secretary Block is caught in traffic, which comes as no surprise to those of us who fought the traffic here in the D.C. area.

So we'll get started and, if he appears by the time we get through with our opening statements, we can recognize him at that point, or when he gets here. But we'll go ahead.

Today's hearing is first to spotlight and emphasize our engagement in our hemisphere.

American business and job growth is, I think, in many respects dependent on our ability to export and to engage with countries.

And for some time now, I have watched with great interest our relationships in our own hemisphere. Cuba is a part of that. And as you know, there's a bill moving in the Agriculture Committee in this regard.

As I was thinking about Cuba, I got to thinking about what Coach Osborne said. You all remember Tom Osborne, a former football coach at Nebraska, who was here as a member one time. And he was asked what he thought about Cuba. And he said, "Well,'' -- and I'll paraphrase what he said -- he said, "I don't know much about Cuba, but if I call the same play in football 39 times in a row and it failed to gain, I'd try another play.''

This is about exploring the interest of this country, the United States of America, as it relates to our very complicated relationship with Cuba.

[The statement of Mr. Tanner follows:]

Before I recognize our Ranking Member, let me do some housekeeping here. Chris Van Hollen called me last night, and he's unable to be here today, because he's attending Dorothy Height's funeral, because she will be interred in his district. He wanted me to read this letter, and to put another letter in the record. And without objection, I'll do that.

It goes as follows: "Dear Chairman Tanner, Thank you and Ranking Member Brady for holding today's hearing on U.S./Cuba policy. I am attending the funeral of Civil Rights Leader, Dorothy Height and regret that I cannot be there in person.

As you know, a constituent of mine, Allen Gross, was arrested and imprisoned without charge by the Cuban government on December 3, 2009. For the last five months, Mr. Gross has only been permitted to communicate with his family a handful of times. He is 60 years old and suffers from chronic physical ailments and we are concerned about how the conditions of his confinement may be impacting his health. Additionally, his 86-year-old mother's health has begun to deteriorate in the wake of her son's incarceration.

Mr. Gross visited Cuba as part of a USAID contract to help Cuba's Jewish community improve its ability to communicate with other Jews - both in and outside of Cuba. He has worked on international development issues for over 25 years, and has devoted his career to helping thousands of people around the world.

Mr. Gross' incarceration is a matter of the greatest concern to the U.S. government, including Members of Congress. Attached is a letter from a bipartisan group of members to the Cuban government calling for his immediate and unconditional release. The letter further states that Mr. Gross' arrest has caused many to doubt the Cuban government's expressed desire to improve relations with the United States.

I welcome any suggestions of the witnesses, either on or off the record, as to the best way to resolve this urgent matter. I appreciate your assistance in this matter and ask that this letter, and the accompanying letter to the Cuban government, be entered into the record. [The information follows:]

And without objection, we'll so do.

I'm now pleased to recognize our Ranking Member, Mr. Brady, for his opening statement.

*Mr. Brady. Well, thank you.

I want to take this opportunity to publicly congratulate my friend and colleague, Mr. Tanner, on his becoming Chairman of the Trade Subcommittee. I look forward to working with you in your new capacity.

Today we're exploring the possibility of expanded trade with Cuba. I support sales of food, medicine to Cuba, as well as normal financing and travel arrangements to accommodate that. I suspect other members have different views, some willing to go farther, some unwilling to consider any liberalization whatsoever.

Where I think we all agree, however, is that we must resolve the other $6 billion in expropriation claims that our Federal Settlement Claim Commission certified before developing a more robust economic relationship with the post-Castro democratic government in Cuba. How these claims will be addressed is critical, not only because it makes policy sense, but because it is the law.

We're fortunate one of our witnesses today is a principal author or a USAID-funded report that analyzes the outstanding claims and proposes a mechanism for their resolution. I'm eagerly anticipating Professor Kelly's testimony.

More broadly, however, I admit I'm frustrated to be talking about Cuba, while we appear to be unable to have an open public discussion on exploring the possibility of expanding trade with democratic allies in the region, like Colombia.

President Obama and democratic leaders have argued the time is not right for the Colombia Trade Promotion Agreement, because Colombia's not made enough progress on labor and humans rights issues. They have said we need benchmarks. But here, after over a year in office, neither the Administration or the Congress, which has had even more time, has developed those benchmarks.

I would welcome an opportunity to focus on them, against which Colombia's progress on stamping out violence will be measured.

Let's look at the facts on the ground in both countries. The International Labor Organization has reported on Cuba's labor policies. In fact, several of the text witnesses today will talk about that. And it is not pretty.

Cuban labor law violates basic ILO principles with respect to the right to strike and bargain collectively. And Cuba has not even ratified the ILO core convention on the prohibition of the worst forms of child labor.

By contrast, Colombia has ratified all eight ILO core conventions. Moreover, the ILO recently commended Colombia for its progress in protecting labor rights. While U.S. trade policy should create incentives for countries to improve their policies, I worry about a possible double standard being promoted -- that trade with Cuba could be fine, but trade with Colombia is a problem. I'm concerned about the geopolitical signals we send, when we devote time and resources beyond food and medicine toward the consideration of overtures towards Chavez' ally, Cuba, while at the same time we continue to allow U.S. ally, Colombia, to twist in the wind.

Many say the increased trade with Cuba makes sense, because it represents a big market in our own back yard. It does. However, Cuba's economy is one-fourth that of Colombia's as well as the population.

Furthermore, the independent nonpartisan U.S. International Trade Commission found the United States is already Cuba's more competitive Ag supplier, in terms of price, quality, and delivery of items.

Finally -- and this may actually be the most important point -- at times it is hard not to question Cuba's interest in trading with us. Even in sectors in which America's allowed to trade, like agriculture, distortions abound as a result of politically motivated import practices of Cuba's estate-trading enterprise.

And although President Obama liberalized telecommunications trade with Cuba, our U.S. telecom companies haven't yet rushed in, because in their view, the costs and risks of dealing with the Cuban regime outweigh any marginal economic benefit.

The economic climate in Cuba is in many ways intolerant. In fact, Cuba is ranked virtually dead last in the 2010 Index of Economic Freedom.

And as our Secretary of State said earlier this month, the Castros "do not want to see an end to the embargo, do not want to see normalization with the United States, because they would then lose all their excuses for what hasn't happened in Cuba over the last 50 years.''

So it looks to me like we may be flirting with an unwilling dance partner. If we're looking for new customers, it would seem to me that beyond food and agriculture, in Cuba, that we should direct our attention to other, bigger, nearby markets with governments like Colombia, that have extended themselves to us.

That being said, Mr. Chairman, I appreciate you calling this hearing today. I think this is going to be interesting testimony.

Thank you, Chairman.

The ideas presented here suggest the extent to which the status quo remains intractable when it comes to relations between Cuba and the United States.  But it also suggests one of the consequences of Cuba's active efforts to challenge the conventional (and dominant) framework for global economic organization.  In this case, it is clear that the United States stands ready to use the arsenal of weapons developed to protect the rights of individuals and others within the ideological framework of dominant economic globalization to subvert efforts to undermine that system.  The reaction is not surprising.  The willingness of the United States to pay more attention to ALBA-zone economic activity, especially those pioneered by Cuba, suggests an acknowledgment of the importance of this challenge to the current global economic order.  

The proceedings were also notable for the testimony of Michael Kelly, Professor of Law and Associate Dean for Faculty Research and International Programs at Creighton University School of Law, a principal author or a USAID-funded report that analyzes the outstanding claims and proposes a mechanism for their resolution.  (The Resolution of Outstanding Property Claims Between Cuba & the United States (Creighton University Press 2007)).  Professor Kelly suggests  the complexities involved in any sort of settlement of property and damage claims between Cuba and the United States.  The discussion highlights the difficulties of applying a legal and judicial overlay to the remedial  issues between individuals, entities and states to this conflict.  It is true enough that the juridicficaiton of conflict has become increasingly established as a  method  of managing  conflict and legitimating the  political settlements that bring closure to these conflicts.  But Professor Kelly's discussion reminds us of the difficulties of using judicial process instrumentally.   Professor's Kelly's  formal testimony are worth reading and are reproduced below. 

COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON TRADE
HEARING ON U.S.-CUBA POLICY
WED., APRIL 28, 2010, 1100 LONGWORTH HOUSE OFFICE BLDG, 10AM
WRITTEN STATEMENT OF PROFESSOR MICHAEL J. KELLY, JD, LLM, CREIGHTON UNIVERSITY SCHOOL OF LAW

Mr. Chairman, thank you for the opportunity to provide testimony today regarding U.S.-Cuba Policy. This is an important concern for everyone on both sides of the strait and for generations to come. Normalizing relations between our two countries is a goal that we all share, but the path to achieving that goal remains in some dispute. On behalf of the academic team that studied the property claims issue with respect to Cuba, we would counsel against immediately and unconditionally lifting the embargo without first addressing the property claims that U.S. citizens have against the Cuban government stemming from the first nationalization actions of Fidel Castro in 1959. To do so would
be to invite the nationalization of other U.S. assets by other regimes if they perceive that the U.S. government is not willing to legally fight for the rights of its citizens abroad.

By way of background, on October 1, 2005, Creighton University was awarded a grant from USAID to develop a model for a property claims settlement mechanism between Cuba and the United States. Three law faculty were joined by three political science faculty to form a team of experts supported by graduate students at both schools to investigate and report on the best outcome for such a mechanism. The model provides a template to be utilized by the United States Government in future negotiations with a post-Castro democratic regime in Havana.
 

As a central feature in the U.S. Government’s proactive planning for Cuba’s transition to democracy, this model responds to the intent of Congress in the Cuban Liberty and Democratic Solidarity Act of 1996 (the “Libertad Act”), Pub. L. 104-11422, 110 Stat. 785, U.S.C. § 6021-6091, that property claims be resolved as a precondition to the USG lifting the economic embargo against Cuba. Lifting the embargo is required to normalize Cuba-U.S. relations. Consequently, resolving the property claims issue is one of the early criteria which must be met in that process, after the president has certified to Congress that a democratically elected government has achieved power in Cuba.
 

Our Report proposes creates a dual-track property claims settlement mechanism.1 The first track is a bilateral Cuba-U.S. Tribunal (the “Tribunal”) established by treaty or executive agreement between a new Cuban government and the U.S. The jurisdiction of the Tribunal would be over property claims of U.S. nationals which have been certified by the Federal Claims Settlement Commission. The second track is a Cuban Special Claims Court (the “Court”) constituted as an independent chamber of the Cuban national judiciary. The jurisdiction of this Special Court would be over property claims from the
Cuban-American exile community.
 

PROPERTY CLAIMANTS
 

The Cuban government has paid lump sum amounts to settle outstanding property claims to several foreign states, including Canada, France, Spain and Switzerland.  Consequently, the main universe of property claimants against the Cuban government consists largely of three groups:
 

1. U.S. National Claimants
2. Cuban Exile Community Claimants
3. Cuban Claimants Still in Cuba
 

There may also be some claims by Cubans against the U.S. Government for property such as frozen accounts or income proceeds. The Tribunal provides a forum for resolution of any cognizable property claims between the two respective governments.
 

U.S. NATIONAL CLAIMS
 

The first group of property claims are held by U.S. national claimants. These are American individuals and corporations who were Americans at the time of the unlawful expropriation (mostly in 1959 and the early 1960). They have certified their claims through the Federal Claims Settlement Commission (the “FCSC”). According to the FCSC estimates, their property claims with interest amount to approximately $6 billion. Their claims have not been satisfied with frozen Cuban assets in the United States. However, their claims are protected legislatively and are linked directly with the lifting of the U.S. embargo against Cuba. §207(d) of the Libertad Act states:

It is the sense of the Congress that the satisfactory resolution of property claims by a Cuban Government recognized by the United States remains an essential condition for the full resumption of economic and diplomatic relations between the United States and Cuba.

Moreover, international law generally recognizes the right of American claimants to be compensated. See, Shahin Shane Ebrahimi v. Government of the Islamic Republic of  Iran, Award 560-44/46/47-3, Iran-U.S. Claims Tribunal (Oct. 12, 1994). Consequently, a bilateral system to resolve property claims between foreign claimants and the government of Cuba would be supported by international law.
 

CUBAN EXILE COMMUNITY CLAIMS
 

The second group of property claims is held by Cuban-American exiles. Members of this group were Cuban at the time of the expropriation of their property. The exile community claimants were not part of the certification process undertaken by the Federal Claims Settlement Commission, and thus are not protected under U.S. law to the same extent as U.S. national claimants.
 

Although the Libertad Act allows them the right to proceed, §304 specifically excludes their property claims from the high level of legislative protection accorded to the FCSC certified claimants:

[N]either any national of the United States who was eligible to file a claim under section 503 but did not timely file such claim under that section, nor any national of the United States (on the date of the enactment of this section) who was not eligible to file a claim under that section, nor any national of Cuba, including any agency, instrumentality, subdivision, or enterprise of the Government of Cuba or any local government of Cuba in place on the date of the enactment of this section, nor any successor claim to, participate in, or otherwise have an interest in, the compensation proceeds or other nonmonetary compensation paid or allocated to a national of the United States by virtue of a claim certified by the Commission under section 507, nor shall any court of the United States or any State court have jurisdiction to adjudicate any such claim.

Moreover, because members of this claimant group were nationals of Cuba when their property was expropriated, international law generally does not recognize a right of recovery. Consequently, a bilateral system to resolve property claims between this group and the government of Cuba would not be supported by international law. Jurisdiction over their claims would reside within the Cuban judiciary.
 

While the claims by this group are not supported specifically by either domestic or international law, politically and economically their claims should not be ignored. Politically, their influence in Washington brought about the Libertad Act (codifying the U.S. embargo against Cuba), achieved special immigration status for Cubans leaving the island, sustained Radio Marti programming, and leveraged millions of dollars in federal money to support democracy programming for Cuba.
 

Economically, this group will be among the first investors in an open Cuban market. Even before direct foreign investment by multinational corporations, who may prove more cautious and wait to see how the markets emerge on the island, the enthusiasm and wealth of the Cuban-American community will help to jump-start the Cuban economy at the outset of regime change and could do much to spark the suppressed but ever-present entrepreneurial spirit of the Cuban people.
 

However, if the property claims of the Cuban-American exile community are left unresolved, their political and economic power could be turned against stabilizing a new government in Cuba, much to the detriment not only of the island, but also to potentially fruitful Cuba-U.S. relations. Thus, from the perspective of elemental justice and reason, the positive aspects of including this group in a broader property claims settlement policy far outweigh the general lack of domestic or international legal justification for doing so.
 

CLAIMS BY CUBANS IN CUBA
 

The third group of property claims is held by Cubans against the Cuban government. These claims are wholly an internal matter for Cuba to resolve. There is no international dimension to them. Nevertheless, an important principle of this property claims settlement mechanism is that it does not negatively impact the Cuban population. If Cubans in Cuba, who may have their own claims against the government, view the settlement process as a venue for capital flight from the island, then they will not support it.
 

Moreover, to the extent that Cubans in Cuba are innocent third party owners of property that is the subject of a claim by U.S. national or exile community claimants, their property interest must be protected. Essentially, to eject people from their homes would needlessly destabilize the island further, prove to the Cubans that Castro was right about the property issue when he warned that Cubans would be thrown out on the streets by foreign and exile claimants, and engender unnecessary anger toward the United States.
 

CROSS CLAIMS BY CUBA
 

The Castro government asserts that Cubans have over $100 billion in claims against the U.S. based on harm flowing from the American embargo. These claims are a mixture of economic losses and tort claims. It is difficult to distinguish between harm done by the embargo and that done by the Cuban government, and it is impossible to verify the claims and claim amounts. Nevertheless, a lawsuit went forward in Cuban court in May 1999 asserting massive tort claims against the U.S. for losses and hardships flowing from the embargo. The prosecution presented evidence for thirteen days. The U.S. did not respond. The court awarded damages of $181.1 billion and ordered the U.S. to apologize.
 

The judicial bodies sought to be established here should not be overrun by Cuban claimants seeking redress against the U.S. To the extent that Cuban claims are allowed, making the claim settlement process a two-way street, only valid property-based claims should be considered under the jurisdiction of the bilateral Tribunal. These could involve, for instance, the remaining frozen assets of the Cuban government. Other Cuban claims, including tort claims, should be undertaken within the domestic Cuban judicial system and treated as normal litigation. The instruments establishing the Tribunal and
the Special Cuban Court contain language only allowing for property-based claims. Cases alleging other bases for compensation fall outside the jurisdiction of the judicial bodies recommended for establishment.
 

CUBA-U.S. CLAIMS TRIBUNAL
 

The Cuba-U.S. Claims Tribunal will be established by bilateral treaty or executive agreement between a successor government to the Castro regime and the U.S. The Tribunal will have international legal capacity as an arbitral body; its sole purpose will be to resolve outstanding property dispute issues between Cuba and the United States and the respective nationals thereof.
 

 The Tribunal will consist of a minimum of nine members – one third appointed each by the governments of Cuba and the U.S. and the remaining third appointed by agreement among the two thirds who have been selected.
 

 The Tribunal will have interpretive jurisdiction necessary to accomplish its purpose,
      authority to promulgate rules of procedure,
      the power to order interim measures of relief,
      apply international law to resolve the claims before it.
 

 Valuation of claims certified by the FCSC are to be given due weight by the Tribunal.
      Small claims are to be compensated monetarily through a streamlined process.
      Medium and large claims may be compensated monetarily, by specific restitution (under limited circumstances), or by alternative remedy awarded by the Government against which the claim is brought in the form of development rights, tax credits, rights in Government-owned property, or other remedies designed to promote foreign investment if the claimant agrees. Large claims must undergo a period of mandatory good faith mediation prior to seeking resolution by the Tribunal.
 

 The Tribunal’s awards shall be final, binding and fully enforceable within Cuba and the United States.
 

 No claims may be filed more than one year after the Tribunal is established.
 

 The Tribunal’s expenses shall be borne equally by the two governments.
 

 The seat of the Tribunal shall be selected by the President of the Tribunal.
 

The U.S. may find it necessary to assist a new government in Cuba in meeting Cuban obligations in the form of a loan on favorable terms or assistance in obtaining loans from international financial institutions.
 

CUBAN SPECIAL CLAIMS COURT
 

The Cuban Special Claims Court will be established by bilateral treaty or executive agreement between a successor government to the Castro regime and the U.S. The Court will be an independent chamber with in the Cuban judicial system.
 

 The Court will consist of twelve judges appointed by the Cuban government in consultation with the U.S. No more than half of these judges may be of the same nationality.
 

 The sole purpose of the Court will be to resolve claims by Cuban-American exile claimants against Cuba.
 

 The Court shall have authority to promulgate its rules of procedure, and will conduct business according to the arbitration rules promulgated in 1976 by the United Nations Commission on International Trade Law.
 

 All cases shall be decided on the basis of civil law, particularly as derived by from the Spanish Civil Code of 1889.
 

 Small claims shall be compensated monetarily through a streamlined process.
 

 Medium and large claims may be compensated monetarily, by specific restitution (again under limited circumstances), or by alternative remedy offered by Cuba in the form of development rights, tax credits, rights in Government-owned property, or other remedies designed to promote foreign investment if the claimant agrees.
 

 Large claims must undergo a period of mandatory good faith mediation prior to seeking resolution by the Special Court.
 

 The Court’s awards shall be final, binding and fully enforceable within Cuba and the United States.
 

 No claims may be filed more than two years after the Court is established.
 

 The Court’s expenses shall be borne by Cuba.
 

 The seat of the Cuban Special Court shall be selected by the Chief Judge, but the location of the seat shall not prejudice the ability of the Court to sit at locations outside of Cuba if it so desires.
 

The U.S. may find it necessary to assist a new government in Cuba in meeting Cuban obligations in the form of a loan on favorable terms or assistance in obtaining loans from international financial institutions.
 

TRANSITIONAL CUBAN GOVERNMENT
 

The Libertad Act prohibits normalized relations between Cuba and the U.S. so long as the regimes of Fidel or Raul Castro remain in power. Moreover, sections 205 and 206 of the law contain a long list of criteria which must be met for a transitional government in Cuba to be considered democratic. Once those criteria are met, normalized relations are possible.
 

Cuba has undergone a succession. Fidel Castro ceded power to his brother Raul on August 1, 2006 to undergo surgery and has not returned to power. Raul Castro has been in control since that date. Consequently, while a succession has occurred in Cuba, a transition has not. Many experts believe that a slow transition is the most likely scenario for Cuba beginning toward the end of the Raul Castro regime and then moving cautiously forward under a new socialist regime. Thus, a quick transition to full-blown democracy, wherein most of the Libertad Act requirements are met, is not likely.

LEGISLATIVE ADJUSTMENTS
 

If the U.S. desires to enter into more normalized relations with Cuba, including resolving outstanding property claims issues between the two countries, before the criteria of the Libertad Act are met (especially those related to a democratic government), then legislative adjustments will be necessary. Congress must alter some or all of the criteria, thereby allowing the President to enter into negotiations with a new government in Cuba or the successor regime to Fidel Castro. This could take the form of specific amendments or entirely new legislation establishing a new framework for dealing with Cuba.
 

Moreover, the nature of the agreements establishing the Tribunal and the Court (i.e. whether they are treaties or executive agreements) would determine the degree of legislative adjustments required by the U.S. Subsequent Article II treaties effectively modify earlier statutes, and specifically so if implementing legislation is passed. The Libertad Act is the controlling legislation on Cuba-U.S. relations, and its provisions establish both process and substance governing what relations the U.S. has with the current and future Cuban governments and how those relations may be effectuated. However, if the instruments are adopted as executive agreements, then more extensive legislative adjustments would be necessary.
 

That said, it is not our recommendation that Congress seek to lift the embargo against Cuba before addressing the property claims issue. Indeed, the embargo is widely seen as the key point of pressure to move the Cuban government into negotiations over the property issues. If the U.S. is seen to walk away from forcefully asserting the internationally recognized legal rights of its citizens, the signal to other regimes would amount to a green light for confiscation of U.S. assets in their countries as well.
 

SOCIO-ECONOMIC CHALLENGES
 

Economically, while multinational corporations are not as likely to move as fast as Cuban-American investors in Cuba, they will want to get into Cuba fairly quickly as the government stabilizes and the market opens up. U.S. corporations will want to move in before foreign multinational corporations seeking to invest in Cuba, this reality will motivate them to take much less on their FCSC certified claims because their claims would be worth far less than the business opportunities that will present themselves. The mediation opportunity for medium and large claims within the Tribunal instrument seeks to meet this challenge.
 

Nevertheless, socially and politically, the racial disconnect between the populations in Cuban and the exile community could be problematic. The exile community is mainly Caucasian, contrasted with the population in Cuba which is 62% Afro-Cuban. This ethno-social disconnect has the potential to create friction between the two populations.  Under the Batista regime, Caucasian Cubans held power, but were also an ethnic majority on the island. Under the Raul Castro regime, Caucasian Cubans remain in power, but constitute a minority of the population on the island. The current system of political and economic power distribution in Cuba has been characterized as a quasi-Apartheid system.
 

The four major pillars of the Cuban economy are tourism, Venezuelan subsidies, Cuban health care to foreign patients, and nickel mining. Oil drilling has not yet beenexploited by the government as a fifth pillar of the economy, although significant reserves have been discovered in the Gulf of Mexico. Afro-Cubans are allowed to mine nickel and only participate in a limited way in the other sectors, but do not control them. Moreover, aid sent from the exile community goes to Caucasian Cubans, not Afro-
Cubans. Early members of the exile community were the wealthy Caucasian supporters of the corrupt land-regime under Batista which similarly held back Afro-Cubans. To the Afro-Cuban population on the island, then, a fight over property settlement is a fight amongst the Caucasians and the Afro-Cubans continue to lose either way.

If Afro-Cubans come to power in a democratic government (which by definition they might since they are the majority), the second instrument advocating a special Cuban court for exile claims could be seen as nothing more than a give-away to a wealthy Caucasian exile community that abandoned the struggle on the island and failed to support Afro-Cubans even during the Castro regime.
 

Consequently, several elements have been built into the instrument creating the Special Cuban Claims Court to mitigate this view. First, investment in the Cuban economy is encouraged instead of monetary compensation or property restitution. Second, innocent third parties currently occupying confiscated property are protected in their property rights – restitution will not occur in those instances. Third, financial assistance to the Cuban government specifically earmarked for this process is called for to come either directly from the USG or foreign financial institutions; thus, Cuban assets will not be diverted from assistance to the Cuban people to meeting property claim awards.
 

While predicting the exact course of any transition is impossible, we have tried to take into account the complex social and economic realities that will influence the course of a new Cuba.
 

USAID-CUBA TRANSITION GRANT TEAM
 

The team of scholars at Creighton University who were entrusted by USAID with the Cuba-U.S. property claims project are among the top experts in their respective fields. They brought unique qualifications to undertake this work, and have succeeded in producing a blueprint for property claims settlement between Cuba and the United States that will not only resolve the outstanding claims of Americans and Cuban-Americans, but also contribute to the economic recovery of the island.
 

The team was comprised of Patrick J. Borchers, Vice President for Academic Affairs and Professor of Law, Michael J. Kelly, Associate Dean for Faculty Research and Professor of Law, Erika Moreno, Assistant Professor of Political Science, Richard C. Witmer, Associate Professor of Political Science, James S. Wunsch, Professor and Chair of the Department of Political Science, Arthur B. Pearlstein, Professor of Law and Director of the Werner Institute for Negotiation and Dispute Resolution. Many groups and group members participated at several levels of formal and informal discussion and development of the claims settlement instruments, including the leadership of the Cuban American Bar Association (CABA), the leadership of the Association for the Study of the Cuban Economy (ASCE), United States Southern Command, the Cuba Study Group, and the Cuba Transition Project at the University of Miami.
 

CONCLUSION
 

The model for property claims settlement between Cuba and the United States that we devised is one in which the short-term interests of the Claimants are addressed  simultaneously with the long-term interests of normalized Cuba-U.S. relations, stabilized post-embargo circumstances in Cuba, sustainable foreign investment in the Cuban economy, and direct and indirect benefit to the Cuban people. Moreover, the interests of all Claimant classes are addressed in furtherance of decreasing cross-strait turmoil and mending Cuban-American/Cuban relations.
 

Additionally, property interests of Claimant parties are recognized and addressed with compensatory, restitution, or mediated investment awards while the property interests of innocent third parties in Cuba are also recognized and protected. Nobody on the island will be turned out of their homes. Yet nobody with a verifiable claim of property confiscation will come away empty-handed. Our models for property claims settlement are the best, most legitimate, and most

ENDNOTES:

1 The full Report is available at http://law.creighton.edu/cubareport/index.pdf. The Report fulfillsCreighton University’s commitment under its agreement with USAID’s Cuba Transition to Democracy Program, completed pursuant to the grant awarded in response to RFA# M/OAA/GRO/LMA-05-LAC/CUBA. The views expressed in the Report are those of the investigators, not USAID, Creighton University, nor the U.S. Government.

States, Labor as a Market Commodity, and Human Rights Frameworks--Cuba's Grannacional Programs at the Intersection of Business and Human Rights

The Association for the Study of the Cuban Economy (ASCE) will beholding its 20th annual meeting this coming July 28-Aug. 1, 2010 in Miami, Florida. As usual, the program is varied and informative, combining representatives from a broader spectrum of opinion than is common in meetings associated with the study of Cuba. "The main theme for the meeting will be “Cuba at the Crossroads in the 21st Century" focusing on Cuba's existing economic and social conditions, recent Cuban policies to address the impact of the world economic and financial crises, Cuban policy shortcomings, and needed structural reforms. " ASCE XXth Annual Meeting.

I have provided below a preliminary draft of the paper I will be presenting at the conference, as part of a panel discussing issues of Human Rights in Cuba.  The paper can also be downloaded by clicking  here.

Cuba's Grannacional Projects at the Intersection of Business and Human Rights (Preliminary Conference Draft)

Larry Catá Backer [i]

ABSTRACT: This paper considers recent to Cuban led efforts to develop new forms of state-owned multinational enterprises and the potential conflicts between these entities and the emerging rules for international business behavior, especially those touching on business and human rights. The paper starts by discussing the basic theory and objectives of the grannacional generally, as a new form of transnational public enterprise, one that is meant to provide a viable challenge to current conventional global systems of economic organization. These ideas have been articulated as the “concepto grannacional” being given effect through the inter-governmental arrangements of the Alternative Bolivariana Para los Pueblos de Nuestra América (ALBA). Grannacional economic activity, ideologically based, is divided into two categories. The first, proyectos grannacionales, are inter-governmental in character. These include enterprises targeting education, tourism and the provision of medical services. The second, empresas grannacionales, focus on the creation of entities controlled by ALBA states and geared to the production, sale and distribution of goods. It then focuses on a specific grannacional related project--the Misión Barrio Adentro (MBA), a socio-political barter project in which Cuba exchanged doctors and other health field related goods and services under its control for Venezuelan goods, principally petroleum. (Convenio 2000). For Cuba programs like MBA have served as a means of engaging in economic globalization and of leveraging its political intervention in the service of its ideological programs in receptive states like Venezuela. It has also provided a basis for expanding Cuba’s commercial power by permitting large scale state directed barter transactions. But when bartering involves labor as well as capital, the fundamental premises of the ALBA system—and Cuban ideological notions of the fungibility of labor and capital in the service of the state—may collide with emerging global frameworks for human rights and economic activity. That collision is examined against (1) recent litigation in which Cuba has been accused (directly or indirectly) of violating international law by operating enterprises based on forced labor, (2) the possibility of conforming to the OECD's Guidelines on Corporate Governance of State Owned Enterprises, and (3) the possibility that these enterprises will not be able to conform to the United Nation's developing business and Human Rights project. The paper concludes that these emerging forms of economic enterprises, like related public ventures into private markets pose substantial political and legal issues at the intersection of public, private, national and international law. Global human rights norms, then, might as effectively confine grannacional activity to the territory of the sponsoring states more effectively than any sort of politically motivated embargo.

I. Introduction.

Cuba is quickly learning one of the great lessons of global engagement. “Seven Cuban doctors and a nurse have accused their government of engaging in a “modern form of slavery” with Venezuela after bartering their services for cheap Venezuelan oil.” (Galliot 2010). This is what might happen when state operated enterprises that combine sovereign and private activity collide with emerging international human rights rules. This collision, and its particular potential effects on Cuba’s recent efforts to define a space for itself within global economic frameworks, is the subject of this paper.

Since the 1959 Revolution, Cuba has fought a number of wars on multiple fronts in the service of its national interests and internationally significant ideological campaigns. Virtually every lever of state power has been used in these efforts—including military, diplomatic, organizational, economic, media, cultural, religious and ideological efforts. Most of these have used the United States, and its socio-political, economic, cultural and ideological values as the great foil against which to battle. Over the course of the last half century, these efforts have had mixed results. But they have had one singular success—they have propelled Cuba to a level of influence on the world stage far beyond what its size, military and economic power might have suggested. Like the United States, Cuba has managed to use internationalism, and especially strategically deployed engagements in inter-governmental ventures, to leverage its influence and the strength of its attempted interventions in each of these fields. (e.g., Huish & Kirk 2007). For this reason, if for no other, any great effort by Cuba to influence behavior is work careful study.

Since the start of the 21st century, conventional economic globalization has been the object of one of the principal long term ideological wars waged by the Cuban state. (Castro 2003). The Cuban state has been active in its attacks on the organizational framework of global conventional economic organization, from sovereign debt (Backer 2006) and business organization (Backer 2004) to the basis of private power to effect trade between states. (Castro 2000). Among its many activities in this realm, the Cuban state has undertaken two significant efforts. The first seeks to develop an alternative basis for inter-governmental management of trade through the Alternative Bolivariana Para los Pueblos de Nuestra América (ALBA). (Backer & Molina 2010). The second, realized in large part within the ambit of the first, seeks an alternative basis of the organization of economic activity for the production of goods and provision of services.

The basic theory and objectives of the grannacional generally, is offered as a new form of transnational public enterprise, one that is meant to provide a viable challenge to current conventional global systems of economic organization. These ideas have been articulated as the “concepto grannacional” being given effect through the inter-governmental arrangements of the Alternative Bolivariana Para los Pueblos de Nuestra América (ALBA). Grannacional economic activity, ideologically based, is divided into two categories. The first, proyectos grannacionales (PGs), are inter-governmental in character. These include efforts to create alternatives to dollar denominated trade transactions grounded in the “sucre” (Venezuela July 9, 2010) but also embrace enterprises targeting education, tourism and the provision of medical services. The second, empresas grannacionales (EGs), focus on the creation of entities controlled by ALBA states and geared to the production, sale and distribution of goods. (Venezuela August 21, 2009).

These projects and enterprises are still at a very early stage in development. But all of them share certain characteristics founded on their organizational framework: control by the state, a conflation of labor and capital as components of production and a focus on state policy for the production and distribution of goods and services in the service of state determined economic welfare maximization. Yet, these enterprises, arguably created as a challenge to the conventional global economic framework still must operate within the general parameters of human rights and other norms with respect to which international consensus has been developing, many with Cuba’s approval. Among important new developments in the rules of business behavior, especially those touching on internationally recognized human rights, are soft law instruments developed through the Organization for Economic Cooperation and Development (OECD), and the principles of business and human rights being developed by the United Nations through the Secretary General’s Special Representative, John Ruggie—the Protect-Respect-Remedy framework. (Backer 2010). In particular, the relationship between enterprise, state, and worker appears to serve as a flash point for conflict between the grannacional conception of business and global consensus on the rights of workers—especially in areas of pay, and trafficking. There is already an indication of potential conflict in recent cases filed in the United States in which these issues have been raised. (Licea v. Curaçao Dry Dock Co. 2008). “For multinational corporations facing allegations of human rights abuses, the stakes have never been higher.” (Drimmer 2009). That applies, in equal measure, to economic enterprises sponsored, owned or controlled by Cuba. And this is an area in which state sovereignty will provide little protection to enterprises geared to projection within world markets.

This paper considers Cuba’s new efforts at global engagements through the device of the grannacional in its ALBA framework. The paper starts by examining the basic theory and objectives of the grannacional generally as articulated as the “concepto grannacional” being given effect through ALBA. It considers distinctions and implications for the division of grannacional efforts between proyectos grannacionales and empresas grannacionales. It then focuses on a specific grannacional related project--the Misión Barrio Adentro (MBA), a socio-political barter project in which Cuba exchanged doctors and other health field related goods and services under its control for Venezuelan goods, principally petroleum. (Convenio 2000). MBA is analyzed as an example of the application of Cuban-Venezuelan approach to economic and social organization through the state. The MBA is also useful as an illustration of the difficulties of translating that approach into forms that might conform with emerging global expectations of economic conduct by private and state actors. The recent litigation in which Cuba has been accused (directly or indirectly) of violating international law by operating enterprises based on forced labor by both laborers and doctors, and soft law systems of governing business conduct (Galliot 2010) serves as a backdrop against which this analysis is undertaken.

For Cuba programs like MBA have served as a means of engaging in economic globalization and of leveraging its political intervention in the service of its ideological programs in receptive states like Venezuela. (Bustamante & Sweig 2008; Kirk & Erisman 2009). It has also provided a basis for expanding Cuba’s commercial power by permitting large scale state directed barter transactions. But when bartering involves labor as well as capital, the fundamental premises of the ALBA system—and Cuban ideological notions of the fungibility of labor and capital in the service of the state—may collide with emerging global frameworks for human rights and economic activity. That collision is examined against (1) recent litigation in which Cuba has been accused (directly or indirectly) of violating international law by operating enterprises based on forced labor, (2) the possibility of conforming to the OECD's Guidelines on Corporate Governance of State Owned Enterprises, and (3) the possibility that these enterprises will not be able to conform to the United Nation's developing business and Human Rights project. MBA serves as a template both for understanding the character of the operationalization of social sector grannacionales and also as a means of illustrating the way in which these projects raise significant questions of international law compliance, especially the ability of these enterprises to comply with emerging standards of business conduct.

II. The Grannacional—Concept, Project, Enterprise.

To understand the grannacional project, one must start with the presumption that its contours are a construct of applied ideology. It serves as an application of the fundamental ideological premises of ALBA, grounded in opposition to what Castro has long derided as “neo-liberalism”. Those ideological premises include a deep suspicion of private sector globalization without strong state control and the understanding of the deployment of economic globalization as a means of deepening the dependence of developing states to the great national economic powers, headed by the United States. Castro has made that clear in speeches since the mid 1980s. (Backer 2006). ALBA is meant to provide an inter-governmental context within which these ideological confrontations with conventional globalization can be implemented.[ii]

The conception of grannacional projects is understood as essentially political. (ALBA Jan. 27, 2008). This political conception of the grannacional function is divided into three components. The first is historical and geopolitical. Its object is integration at the supra-national level, that is, to understand grannacionales as the formal expression of efforts to create a single nation (“la visión bolivariana de la unión de las repúblicas latinoamericanas y caribeñas para la conformación de una gran nación.” (ALBA Jan. 27, 2008)). Thus the derivation of the name gran-nacional, a national grouping cemented through its political-economic relations but which would also respect national peculiarities and sovereignty.[iii]

This vision of the grannacional as a means to integration of Latin American and Caribbean states is augmented by the use of the grannacional as a functional means to reach the political ends of integration. It is in this functional sense that the grannacionales are understood to have a socio-economic foundation. (ALBA Jan. 27, 2008). Grannacionales are meant to serve as the great vehicle for state directed development. They are the embodiment of an ideology that sees economic activity as a means to satisfy public policy rather than as an end in itself (that is as a vehicle to maximize individual welfare). This development is meant to maximize national and regional needs rather than aggregated global needs.[iv]

Taken together, the grannacional is understood first as an ideological vehicle advancing political and economic aims of the state. Specifically, the grannacional enterprise has as its objective the manifestation of a united front by generating a multi-national block for the structuring of sovereign regional politics. (ALBA Jan. 27, 2008).[v] This functional manifestation of a united front is best understood in its Marxist-Leninist form): “It is particularly important when using the united front tactic to achieve not just agitational but also organisational results. Every opportunity must be used to establish organisational footholds among the working masses themselves.”(Communist International 1922, ¶10). The grannacional enterprise contributes to united front tactics by contributing functionally to the structuring of a successful supra national trade system that counters the deleterious effects of the conventional global economic order, supports what ALBA states understand to be sustainable development that is socially just, preserves national sovereignty and self determination.[vi] That focus has consequences beyond the cultivation of old fashioned Marxist-Leninist internationalism. The most important, perhaps, is that efficiency is measured differently than in classical economics or under the framework of conventional economic globalization. It is understood only in relation to the aims of the state in meeting its political goals, measured to some extent on the state’s assessment of its ability to meet the needs of a majority of its people. Both the political and needs objectives are also constructs of state policy. This produces something of an inversion from concepts in classical economics.

As a consequence, the grannacional enterprise is understood as process of experimentation in the application of ALBA principles. (ALBA Jan. 27, 2008).[vii] It is the means through which the ideological framework of ALBA is to be manifested among its member states, with the objective of moving the ALBA states toward political union. That union is bound up in notions of Marxist economic determinism: union will be achieved as the inevitable consequence of global dynamics dominated for the moment by the great industrial powers and blocks of economically hegemonic states. (ALBA Jan. 27, 2008 (“hacia la cual nos empuja la dinámica del mundo actual dominado por las grandes potencias industrializadas y los bloques económicos hegemónicos.”)). “Now, more than ever, the strictest international discipline is necessary, both within the Communist International and in each of its separate sections, in order to carry out the united front tactic at the international level and in each individual country.” (Communist International 1922, ¶13). The grannacional enterprise is meant to provide a framework for that discipline.

This experimentation manifests in two concrete forms—“proyectos grannacionales” (PG) and “empresas grannacionales” (EG). PG programs are meant to organize integrated ALBA member state activity around key fields of activity, encompassing political, cultural, economic, scientific, and industrial activity. (ALBA Jan. 27, 2008). PG include all programs undertaken to benefit the greatest number under the ideological framework and goals of ALBA, approved by ALBA Member States, and whose execution requires the participation of two or more ALBA Member States. Since 2009, the ALBA Member States agreed to the creation of a permanent commission to oversee the development of PGs. (Venezuela Feb. 27, 2009).).

If PGs are meant to organize productive activities, EGs are meant to implement them in an orderly way. (ALBA Jan. 27, 2008).[viii] But the relationship between PG and EG is not strictly linear—though it is clear that every EG must derive from a PG, not every PG will require the establishment of an EG.[ix] This is especially the case with respect to political, social and cultural projects for which the apparatus of the state may be used directly to implement PG objectives. Nor are all PG and EG projects required to be established at the supra-national level—single state PGs and EGs may be created as long as they are consonant with ALBA principles and goals. (ALBA Jan. 27, 2008).

EGs are meant to embody an alternative to the model of the private multinational enterprise, which seeks to maximize the welfare of its shareholders and other important stakeholders. EGs are said to invert the traditional maximization model by seeking to maximize the welfare of the objects of economic (or other) activity, rather than those involved in the production or financing of that activity.[x] That effective inversion is what is meant by the ideological focus on “just commercial zone” within the ALBA region. EGs are all state owned enterprises, established a separate juridical persons, interest in which is measured through share ownership by participating ALBA Member States. (ALBA Jan. 27, 2008). But they might be organized in other ways. In any case, EGs will be established under special legislation, rather than under the incorporation rules of any one of the participating ALBA Member States, a supra-national sovereign joint venture operating in private form. (Telesur Jan. 29, 2010) EGs are understood to be autonomous and might enter into joint venture arrangements with private sector enterprises. (ALBA Jan. 27, 2008). The primary focus of activity is within the ALBA zone, directed toward economic development therein.[xi] Thus, in a sense, the EG presents a modified form of globalization—a regionalist model meant to construct a supra-national internal market established through the direction of economic power in private form by states asserting sovereign authority for that purpose. A recent example includes the effort to create a Food EG (ALBA-Alimentos) to control the market for agricultural products within the ALBA zone. (ALBA Aug. 25, 2008). This suggests a new face for traditional command economy activity, but it is unclear whether it also suggests a change in function.

To their ideological ends, EGs are subject to a number of general parameters. EGs should operate to maximize the use of the existing capacities of the economies of each ALBA state in they operate for the purpose of aiding economic development in each of the participating states.[xii] EG production should be directed to satisfy the needs of the ALBA zone first, excess production might be directed to international markets.[xiii] Though the EG maximization model posits a focus on the needs of consumers, EGs must arrange their internal operations to be self-sustaining, a task acknowledge to be difficult.[xiv] To this end, EGs must also ensure environmental sustainability, promote equitable labor conditions and an equitable distribution of wealth.[xv] It is understood, however, that EG earnings will be distributed to the ALBA Member States shareholders for their use for social ends, or retained by the EG. (ALBA Aug. 25, 2008). While the EGs are grounded in a rejection of the welfare maximization principles of multinational corporations, they embrace the form of organization and production of those entities, including supply and production chain principles, and resource procurement optimization. The notion of “fair price” is identified, though its definition is ambiguous. And with respect to the exploitation of natural resources, there is a suggestion of a melding of state and private function.[xvi]

PGs and EGs have been used increasingly to organize state sector economic activity within and across ALBA states. In states like Cuba with minimal private sector activity of any significance, the use of these vehicles merely suggests a rearranging of the economic sectors affected. In other ALBA states, especially Venezuela and Bolivia, the result has been to effect a nationalization of economic sectors by a process of public privatization—that is the use of private sector entities “owned” by the states that also regulate the enterprises operating in that sector. This is the sort of double-edged activity that has been rejected as inequitable under principles of market integration within the European Union, for the very reason that it tends to disadvantage non-state private competitors in these markets. (Backer 2008). Since ALBA’s inception, a number of PG and EG projects have been initiated or announced. (Regueiro Bello, Lourdes María. 2007). These include plans for a fisheries EG (Venezuela May 10, 2010), forestry EG (Venezuela July 3, 2008), a coffee EG between Venezuela and Dominica (Venezuela July 1, 2010), four energy related EG between Venezuela and Bolivia (Venezuela April 30, 3010), an ALBA zone Hotels EG (TeleSur January 30, 2010), a mining EG between Ecuador and Venezuela (Venezuela March 26, 2010); an import-export bank to facilitate trade (ALBAexim) (Los Tiempos Oct. 19, 2009), an energy EG among Cuba, Venezuela, Ecuador and Nicaragua (El Ciudadano Jan. 27, 2010), a number of mining and extractive minerals EGs (FM Bolivia Oct. 18, 2009), and a transport EG between Cuba and Venezuela to stimulate trade within the ALBA zone and internationally. (Ramírez Cruz et al. 2007, at 3.1.1.1. PGs predate EGs in many fields. They predominate in the social, cultural and political areas, though they also encompass important service sectors—principally the health and health care fields. Many of these were organized early on as “Missions” (Misones) and formed the basis of early bi-lateral arrangements in the service sector between Cuba and Venezuela leading up to ALBA. (Aponte Garcia 2009, 95). Among more recent PGs are projects for the provision of quality medicines (ALBA-MED) between Cuba, Venezuela, Bolivia, Ecuador, and Nicaragua (PL2009). A number of other PGs involve literacy cultural identity and diversity and genetic studies.[xvii]

Most of these remain in the planning stage. Many of them are only recently announced. A number of them seem to serve their greatest purpose for their ideological rather than their functional value, appearing in most concrete form on the media sites of ALBA organs. Virtually all of the PG and EG initiatives appear aimed at organizing an economic or social sector under state direction and them marshalling productive capacity within a state controlled entity or otherwise within a state ministry. What is new is that this fairly common form, with origins in commend economy practice, is within the grannacional context now practiced as a series of joint or multilateral ventures among states. The great innovation of the grannacional concept, then, lies in this internationalization of state-based central planning and control model within a regional trade zone. ALBA Member States now seek to create a web of economic arrangements, of state generated and controlled markets, that flow from state public policy based determinations of appropriate production, sale, distribution and development. The ultimate stakeholder in these enterprises thus shifts from the shareholder (and lender), to the national demoi of participating states, whose interests are represented by the state apparatus. Rather than maximizing shareholder value, the EG must now maximize national welfare, as those things are measured by the states who participate (and regulate those markets). ALBA Member States have sought to turn the conventional economic model from one that privileges private interests to one that adopts the forms of private organization, but in which the state acts as both regulator and shareholder. (Backer 2004). ALBA Member States have also sought to expand the utility of the grannacional form of sectoral organization by extending the use of these PG and EG projects to functions traditionally the province of religious and social organizations, or the state. Having conflated politics and economics, the grannacionales also merge the public and private. This amalgamation is then organized as state controlled enterprises, projects, missions, and the like. To date, PGs have sought to organize the following sectors: energy, finance, commerce, transport, telecommunications, education, culture, health, manufacturing, tourism, and mines. (Regueiro Bello, Lourdes María. 2007). Newer ventures include agriculture, fishing and other economic sectors.

Organizational form assumes less importance than the ideological framework and the functional objectives of these programs. Yet legal consequences follow organizational form. Those legal consequences may affect both the state as shareholder or as principle in the implementation and operation of these programs. As supra-national programs, the grannacionales will be subject to the rules (and protections) of the domestic legal orders of the ALBA Member States that have an interest in specific programs. But they may also incur obligations to critical stakeholders—workers, consumers, lenders, and others—under international law. Moreover, to the extent that these grannacionales operate outside the ALBA zone, they may also incur obligations under the domestic law of host states. Precisely because the grannacionales are meant to challenge the basis of conventional economic (and legal) organization, it is likely that some of its practices may be incompatible with legal norms outside the ALBA zone. That incompatibility may give rise to significant legal liability where grannacional activities are judged outside of the ALBA zone. Where this liability touches on issues of human rights, it may suggest implications well beyond the legal. It is especially in those area that ALBA’s ideology of “just commerce” may come in conflict with global human rights norms, especially with respect to the power of the state over individuals as citizens and as workers.

III. From Theory to Practice: Just Commerce, Grannacional Organization, and the Misiones Barrio Adentro.

PGs and EGs function on the basis of the principle of the fusion of political and economic objectives under the direction of the state in which the state, as shareholder, supplies both capital and labor. In functional terms, many PG and EG operations are accomplished on a barter system in which each state maximizes the value of transactions in organized sectors of activity by trading capital, goods or labor among themselves. These transactions are memorialized by the states directly through Conventions (Convenios Comerciales Compensados or CCC) memorializing the terms of the barter transactions.[xviii] A number of these projects were organized as misones (missions), an organizational term with origins in the revolutionary politics of Venezuela. Misiones were originally produced to privatize traditional state activity in Venezuela after the 1999 election of Hugo Chavez. “A “mission” was aimed at concentrating efforts of different sectors and public organizations in order to rapidly satisfy urgent social needs, increase community participation, circumvent bureaucratic obstacles, and to employ the organizational and logistic facilities of the Armed Forces in the development of civil social actions.” (Muntaner et al. 2008, 236).

The organization of the health sector ion Venezuela was particularly susceptible to this form of organization. The privatization was necessary as a means of subverting the opposition of the state sector to Chavez’s programs reforms. (Muntaner et al. 2008, 235). If the state apparatus opposed the reforms, and if these organs were within their rights in doing so, then it might be possible to reconstitute these activities in private form and proceed as a state based but private endeavor.[xix] Eventually these programs were brought back within the state administration but by then they had acquired their own distinctive form. (Aponte García 2009). Health care sector misiones were also particularly important to Cuba, Venezuela’s ally in this revolutionary transformation.[xx] It was a small step from conceptualizing a project for state organization of the medical treatment sector to the creation of a bi-lateral arrangement for the implementation of the program. The lubrication necessary to make this step possible was the ideological framework of ALBA, especially its notions of non-reciprocal trade as a basis of commercial activity between (or directed by) sovereigns. (Aponte García 20090).

In the health care sector, two misiones, Misión Milagros and Misión Barrio Adentro (MBA) were expanded as a vehicle for bi-lateral and multi-lateral exchanges among states, principally at first, between Cuba and Venezuela. Misión Milagros was conceived as a program to provide people of Latin America with certain eye care services.[xxi] These envisioned a set of programs, projects and cooperative arrangements, directed by the Cuban and Venezuelan states. To that end, both states would organize within joint ventures established in any number of formal and informally constituted entities, into which each state would contribute the appropriate mix of both public and private sector entities, universities, research organizations, and non-governmental organizations. (Convenio 2000, art. I). The more important effort, for purposes of this paper was in the organization of health care to the poor in Venezuela in the form of MBA. That effort was memorialized as part of a wide ranging Convenio (2000) between Cuba and Venezuela meant to establish a series of programs to aid in the development of both states in a variety of sectors—agriculture, tourism, medical products, education, transportation, and sports. (Convenio 2000, Annex I). To that end, each state would contribute in according with its economic strengths and state directed economic development objectives. Cuba agreed to “prestará los servicios y suministrará las tecnologías y productos que estén a su alcance para apoyar el amplio programa de desarrollo económico y social de la República Bolivariana de Venezuela.” (Convenio 2000, art. II). Venezuela agreed to provide petroleum among other goods and services. (Convenio 2000, Art. III). Importantly, Cuba also agreed to the provision, at no cost to Venezuela, of the services of doctors to serve in the health care sector in Venezuela.[xxii] (Convenio 2000,art. IV). Under the terms of the Convenio, Cuba was to supply these medical personnel to work in underserved areas of Venezuela, and bear the costs of their salaries. These medical personnel were to provide medical services and training of locals. Venezuela was obligated to pay only provide the costs of food, lodging and internal transportation of these medical personnel supplied by Cuba.[xxiii] These programs were to be administered at the state level through the establishment of a “Comisión Mixta” (Convenio 2000, art. V) headed jointly by representatives of the Venezuelan Production and Commerce Ministry and by MINVEC, the Cuban Ministry for Foreign Investment and Economic Collaboration. (Id.). The details of the programs undertaken, and their day to day running were to be delegated jointly within each of these ministries. (Id.).

The MBA started through a pilot program arrangement with the municipal government of Caracas. According to one source.

Based on the humanitarian support provided by Cuba during the Vargas tragedy, Caracas Mayor Freddy Bernal, with the support of President Chávez, agreed on a pilot project with the Cuban government. In April 2003, 58 Cuban doctors specializing in integral general medicine (a form of family medicine) were established in several peripheral neighborhoods (barrios) of Caracas, to provide primary health care. Health team personnel live in the same barrio in which they work . . . and an assistant known as a “Defensor de la Salud” (“Defender of Health”), is chosen from the community and trained by the Ministry of Health to provide basic support to the physicians. (Mutaner et al. 2008, 236).

Judged a success after a few months of operation, it was converted into a national program and given its name by Chavez in September 2003, and officially inaugurated in early 2004, despite substantial opposition by the Venezuelan medical establishment. (Mutaner et al., 2008, 236-237). It was administered through a special Venezuelan Presidential Commission, the Black Gold Civil Association (Oro Negro) that emphasized both the public character of the mission and the ideological objectives of the program.[xxiv] Cuban doctors enrolled for these programs signed up for two year tours of service. (Brouwer 2009). The principal purpose of the initial phase of MBA was to provide primary care and instruction. MBA I was followed by a second phase, that sought to provide secondary, hospital and extended care as well as more advanced training of locals. MBA III had a more ambitious agenda, the consolidation of a significant portion of the Venezuelan public hospital system within its ambit. (Muntaner et al. 2008, 240). The latest phase, MBA IV, focuses on the construction of specialized care hospitals. (Id.). “At its peak in 2006, the Cuban presence numbered about 14,000 physicians plus thousands of other medical personnel. By 2008, the number of Cuban doctors had declined as some moved on to work in Bolivia and other countries or returned home.” (Bouwer 2009). In addition, many of the facilities remain unbuilt, a number of other have had to be abandoned because of structural problems, and the programs have been criticized for the use of Cuban doctors for political purposes and the Programs’ effects on the wages and working conditions of Venezuelan health care workers. (Pérez & Haddad 2008, 333-34).

The MBA programs have been lauded as a great advance in compliance with international obligations with respect to health care. It is said to demonstrate the “validity of incorporating health as a universal right and confirms the relevance of principles contained in the Alma Ata and Ottawa Declarations.” (Mutaner et al. 2008, 242). However, the operations of the program, rather than its objectives, might measure differently under those standards. The issue relates to Cuba’s end of the MBA barter—the provision of doctors. Within the ideological parameters of ALBA, this construct, the Cuban doctor is also painted in heroic strokes. (Brouwer 2009). Cuba has been using its doctors as instruments of state policy since the early days of Che Guevara, who understood the use of medical personnel as weapons of revolutionary solidarity. (Id.). The MBA program was described as

the newest reflection of how Cuba, in concert with the people of many nations in Africa, Latin America, and the Caribbean, is transforming the training of doctors, nurses, and other health professionals while also delivering medical care to poor populations that in the past seldom received any attention at all. This dynamic notion, planted by Che and others at the beginning of the Revolution, has taken decades finally to develop, and now has come to fruition: thousands of doctors have been created who are capable of practicing and teaching revolutionary medicine, and they are putting this “weapon” to good use. (Id.).

The political nature of this economic enterprise was well recognized. (Saney 2009; Kirk & Erisman 2009). The political importance of these programs, solidarity through enterprise, was recognized by the Americans at the time. If “the brigades of Cuban doctors working abroad represented the front lines in a struggle to assert that alternatives to profit-centered human interactions were viable,” (id.) then it was also likely that the United States would respond politically. They instituted a program, the Cuban Medical Professional Parole Program, encouraging Cuban doctors abroad to defect to the United States. (Feinsilver 2008). The Americans have taken the position that these doctors have been conscripted by the Cuban government. “Under Cuban Resolution 54, these same Medical Professionals are often denied exit permission by the Cuban Government to come to the United States when they qualify under other established legal channels to migrate from Cuba. Doctors, nurses, paramedics, physical therapists, lab technicians and sports trainers are examples of groups that may qualify for the CMPP program.” (U.S. Dept. of State. Jam. 26, 2009). Though successful, the United States did not always grant asylum petitions from doctors. (El Universal March 2, 2007).

The Venezuelan medical community also mobilized against the importation of Cuban doctors as an instrument of the nationalization of a portion of the medical sector. “The Venezuelan Medical Federation, the largest association of medical doctors in Venezuela, has lobbied vigorously against the use of Cuban doctors in Mission Barrio Adentro, and was in a legal dispute with the Chavez administration over the legitimacy of the Cuban doctors' licensure and practice.” (Mundoandino.com 2009). Though the Venezuelan doctors succeeded in their court challenges, eventually a compromise was reached permitting MBA to be staffed with foreign (Cuban) doctors.

But these political movements would be of little interest for corporate or enterprise governance except that the issue of the employment of Cuban doctors by the Cuban state in Venezuela proved to be more ambiguous. The Cuban state never explained many of the conditions under which it recruited and maintained the doctors gathered for participation in MBA. It has not been transparent with respect to salaries work working conditions. But it is clear that while the MBA program is founded on political goals, it also is a business operated by the Cuban state.

International missions have allowed Cuba to fulfill dual goals of capitalizing on its highly educated population as a source of export income while pursuing its humanitarian goals of international solidarity. Cuba's model of charging below-market rates for professional health services has expanded exponentially since 2003 in a win-win situation for poor countries with insufficient medical care. Revenues for services earned from international missions (as well as the licensing and export of Cuban biotechnology and medical treatment to foreigners in Cuba) have become a major source of hard currency earnings, surpassing tourism earnings every year since 2005. (Blue 2010).

Thus, MBA functions at a variety of levels. It serves the ideological goals of the Cuban regime. It is an important means of advancing Cuban international relations. It serves as a template for Marxist Leninist development models. It provides a different basis for state-to-state relations and commerce, based on government directed, non-reciprocal trade in furtherance of divergent objectives. Yet it is also a business. (Pérez & Haddad 2008). For Venezuela, Cuban doctors serve as a valuable input in the business of creating a viable public health sector. For Cuba, it serves as the core of the business of hiring out labor. Cuba has a long history of hiring out labor to foreigners within the Island. But the business of hiring out workers to outsiders—whether to directly advance state objectives, like the MBA program, or merely to serve the economic interests of foreign partners—essentially treats individuals like factors in the production of national wealth. That wealth is produced by the profit generated in those transactions. That profit is related to the differences between the compensation paid by the Cuban state to its employees sent abroad, and the amounts it charges its “clients” for the services of these individuals. “Loaned” individuals do not participate in discussions over the pricing of their services to third parties, and they are required to accept state determined compensation for their services.

While many thousands of individuals employed by the Cuban state abroad in this program have complied with their obligations, a number of doctors have not.[xxv] “The need for hard currency and their inability to earn it legitimately is clearly a factor in individual health care workers' decisions to endure difficult two-year assignments abroad. When tens of thousands of health workers accepted temporary overseas posts, their absence was acutely felt at home. Though health indicators have not declined, Cubans who were used to the highest and most accessible doctor-to-patient ratios in the world are now adapting to a restructured health system that can accommodate an expanded medical presence abroad.” (Blue 2009, 43). And it was among those doctors dissatisfied with the terms of their service that the possibilities of collision between Cuban medical internationalism and international human rights norms were realized. The issue of compulsion is at the heart of the loan system. On the one hand, it appears that, as a formal matter, individuals are not formally coerced to serve the interests of the state’s business and political dealings abroad. On the other hand, some have argued that as a functional matter the state effectively coerces service, and then, once abroad, tightly controls the freedom of movement of bartered employees. Yet what might appear to the Cuban state as appropriate behavior to compel its citizens to do their duty within the substantive parameters of the domestic legal order might be characterized as compulsion under the substantive parameters of other systems. The characterization is important for its consequences under international law.

IV. Points of Conflict and Intersection between ALBA Just Commerce and International Human Rights Regimes.

Two recent cases highlight a new reality for the socialist construct within the broader context of emerging regimes of international human rights systems. They also point to the shape of the future with respect to these ALBA zone enterprises as they expand beyond and seek partners from outside the ALBA zone. Both cases suggest that the ways in which the ALBA model of social and economic organization, in which the state directs sovereign or market economic activity directly, or through an entity formed for that purpose, can arguably present a case of human rights violations in the way in which the state conducts its business. In addition, whether as sovereign or market based activity, the commercial activities of public actors may also constitute violations of soft law frameworks. Lastly, non-state foreign partners or other entities participating directly or indirectly in these activities might also face liability for complicity in the human rights violations of the state. There is irony here, of course. Especially in GPs like MBA, created in part as an ideologically pro-active response to human rights disparities within developing states may itself serve as a basis of violation of those human rights.

But both cases have been brought in the United States. From the Cuban perspective, the United States is in no position to neutrally judge the Cuban state’s compliance with international human rights norms. But as important, the United States does not have a strong reputation for adhering to or imposing internally international human rights norms. To use the U.S. courts for the purpose of determining compliance of the Cuban state with international norms with respect to activity that occurs within the territory of a third country suggests a political motive and reduces the authority of the cases, at least outside the United States. And yet, the United States has served as the best site for the vindication of international human rights within the court system of a state. As such, though the cases present a judgment about the character of Cuban state business activity in the context of its barter arrangements with third countries, those determinations should be understood as less authoritative outside the territorial borders of the United States. Still, each serves as a warning, harbinger and template of possible future actions against the Cuban state and others tied to the arrangements at issue—especially the bartering of individuals for other goods and services, not only for the state but also for its non-state partners.

The first case suggests the potential exposure of states with respect to their economic activities in the form of PGs or EGs. In February 2010, a group of Cuban doctors who had participated in MAP filed a lawsuit in the United States against Cuba, Venezuela and Venezuela’s state run petroleum corporation, Petróleos de Venezuela (PDVSA). (Galliot 2010).

The doctors told reporters at a press conference in a Miami suburb on Tuesday that they were forced to enrol in the programme with Venezuela due to dire economic circumstances and political pressure at home. According to several US and Venezuelan media sources, the plaintiffs described being held captive in crowded lodgings or with families affiliated with the Venezuelan regime, and forced to work seven days a week. “We were under strict surveillance at all times. We weren’t allowed to go out when we wanted to or interact with Venezuelans other than our guardians,” plaintiff Frank Vargas, a 33-year-old general practitioner from Havana, told reporters. His colleague Maria del Carmen Milanés, 34, added that interacting with known regime opponents was especially forbidden. . . . Had they protested, the doctors explained, they would have been forced to return to Cuba where they would have paid for their insubordination. (Id.).[xxvi]

The complaint painted a picture that served as a perverse reflection of the amalgamation of political and economic factors on which ALBA itself is based, suggesting, for example a tie between Venezuela and what it described as terrorist regimes in Cuba and Iran. (id.). The complaint also specified a number of legal violations grounded in the arrangements between Cuba and Venezuela for the management and control of Cuban medical personnel. [xxvii] The legal basis of this complaint, grounded in the Alien Tort Claims Act (ATCA), is similar to another complaint recently concluded in Miami. (Licea v. Curaçao Dry Dock 2008). The object is to draw on international norms applicable to non-U.S. citizens in American courts. Traditionally, these provisions have been applied against right wing dictatorial regimes, especially in developing states. (e.g., Filartiga v. Pena-Irala 1980) These cases represent a reversal of sorts, where they are applied to test the legal validity under international law as understood by American courts, to a Marxist-Leninist organization of economic activity.

More importantly, litigants have begun to seek to apply ATCA to the activities of corporations and other economic enterprises for violations of international law outside of the United States. (Presbyterian Church of Sudan v. Talisman Energy 2009). The MBA program, and the Convenio giving that program its Cuban labor component, provides both a basis for suit against a sovereign for direct violation of international law, and also for suit against the corporate instrumentalities of such sovereigns for their own violation (or complicity in violation) of those norms. Indeed, one of the great movements at the global level has been the search for means to police the conduct of economic enterprises, in whatever form economic activity takes, for breaches of international norms, especially those touching on human rights. (Taylor, et al. 2010). Systems that tend to barter labor, however consistent that transaction might be within the ideological framework from which it is derived, may not stand up to examination under international standards applied from outside the state system that sustains it. And it appears that business conduct is increasingly open as a basis for testing the legal sufficiency of rules that support such conduct under national or bi-lateral governance arrangements (for example through the Convenio (2000).[xxviii]

The second case suggests the potential exposure of non-PG or EG entities for complicity. The Curaçao Dry Dock Company learned that lesson the hard way. (Licea v. Curaçao Dry Dock 2008). That case involved a number of Cuban workers who, having emigrated to the United States, brought suit against the Curaçao Dry Dock Company for complicity in the Cuban government’s business of bartering labor for goods and services.[xxix] The court determined that the agreement between Curacao Dry Dock and Cuba to barter Cuban workers to pay off the debt owed by Cuba amounted to forced labor under international law norms. (Id., at 1359-63).[xxx] The court summarily dismissed the bartering arrangement as inherently violative of an individual’s human and labor rights on the basis of its characterization of the Cuban political and labor system.

Cuba is a totalitarian state that abuses human rights; that Cuba has a long historyof forced labor and routinely compels labor under threat of imprisonment in violation of international law; that any Cuban who resists performing work is subject to persecution; that Cuba imposes prosecutions or “therapy and reeducation” at police discretion for the crime of “potential dangerousness” on those who refuse to work for the socialist cause; that Cuba imprisons those who refuse to work at worksites in prisons that are particularly inhumane and dangerous; that Cuba employs outrageous means to persecute those who resist the will of the state; that the Cuban state was particularly concerned with the laborers it was deploying to Curaçao because they generated hard currency; that the punishment workers would receive if they refused to work in its forced labor program would be particularly harsh because the program generated foreign currency that allowed the state to survive economic sanctions on it; and that the laborers provided by Cuba were not free individuals. (Id., 1359-61).

The basis of these conclusions were drawn from a report prepared by the U.S. State Department (United States Department of State 2008), which the court took as uncontroverted because of the procedural posture of the case. Although the violations of international law were committed by the Cuban state, the company was exposed to liability on a complicity theory.

The Defendant in this case, one of the largest drydock companies in the Western Hemisphere, with tens of millions if not hundreds of millions of dollars in annual revenues, conspired with the Republic of Cuba to force Cuban citizens to travel to facilities the Defendant owns in Curaçao, to hold them in captivity there, and to force them to work repairing ships and oil platforms. (Id., at 1360).

Despite its result, even in the United States, the precedential value of the case may be limited. The court initially entered a default judgment against defendant (id., at note 3), because the Curaçao Dray Dock Company refused to defend the matter. Critical facts leading to the conclusion were never controverted or effectively put at issue either by the Cuban state or by Curaçao Dry Dock. The company eventually offered evidence was only produced during the more limited damages phase of the proceedings (id., at 1357-58).[xxxi]

Yet, despite these caveats, the sweeping language of the court does suggest the potential difficulties of exporting a labor barter system grannacional concept outside of the ALBA zone in a way that would minimize exposure to risk, for Cuba or its trading partners, for lawsuits and claims of this type. This is especially the case for non-ALBA trading partners, or entities involved in GP or EG production or supply chains. Three factors are especially important in this regard. First, Licea increases incentives to bring additional cases of this kind before U.S. courts. While future cases are likely to see more aggressive defenses, the fact of litigation exposure itself may serve to chill economic activity involving ALBA Member States under GP and EG arrangements. Because of the extensive jurisdictional reach of U.S. courts, a large number of enterprises, especially those that produce assets resident in or subject to the reach of the American government, will be sensitive to these issues.

Second, liability for violations of human rights under a complicity theory has become more important as a mechanism for enforcing human rights norms, especially against businesses. (Clapham & Jerbi 2001; Ramasastry 2002). The legal basis of complicity remains unsettled as a matter of transnational law. But this basis for liability extends beyond U.S. law in the form of aiding and abetting the violation of human rights or humanitarian law.[xxxii]

“Corporate complicity" is a relatively new concept. Although it has echoes in the law of accomplices in criminal law, those active in the area of business and human rights are seeking to describe what "corporate complicity" means in terms of legal policy, good business practices, as well as in different branches of the law. But there remains considerable confusion and uncertainty about when a company should be considered to be complicit in human rights violations committed by others. (Backer 2010).

Despite its recent emergence, notions of corporate complicity are likely to become more important. They play a significant role in the liability framework under emerging corporate governance soft law frameworks at the international level. The issue of complicity will tend to revolve around a number of factual determinations: whether through action or inaction, a company enabled, exacerbated or facilitated the specific abuses, intent or reckless disregard, and proximity. (Clapham & Jerbi 2001).

Third, emerging international hard and soft law systems are likely to increase the scope of exposure of states, their controlled enterprises and trading partners to liability for violations of international human rights norms. Cuba’s EGs and PGs are likely to play a role in the development of these bases for liability. Consider a recent complaint filed by the Unitary Council of Cuban Workers to the International Labor Organization related to the Licea case (Unitary Council of Cuban Workers 2009). The object was to use the standards of the international agreements to which Cuba is a party, against it. (Id.). The complainant argued that the basis of Cuban state labor policy, and its implementation in its economic regulations and commercial activities, violates ILO Convention Article 29 on forced labor ratified by Cuba in 1958. (Id.) The complainants echoed language from ILO documents that assert that the “prohibition of the use of forced or compulsory labor in all its forms is considered now a preemptory norm of modern international law on human rights.” (Id.). The complaint suggested that the Cuban barter system, grounded in a state power to command behavior coupled with the use of that power to engage in economic and commercial transactions in which workers are contributed to the enterprises by Cuba in exchange for goods, money or services, amounted to forced labor of the kind prohibited under international law. (Id.).

Similar claims might be asserted under the Organization for Economic Cooperation and Development (OECD) principles and the United Nations business and human rights framework—“Protect-Respect-Remedy” principles. The OECD is an intergovernmental organization representing most developed states. (OECD nd, About OECD). It has developed three principle sets of norms for corporations that might be understood usefully in their constitutive role. These have become “an international benchmark for policy makers, investors, corporations and other stakeholders worldwide. (OECD 2004, at 3 (Forward)). The three include the Principles of Corporate Governance (OECD 2004), the Guidelines for Multinational Enterprises (OECD 2000), and the Guidelines on Corporate Governance of State-Owned Enterprises. (OECD 2005).[xxxiii] Under these rule frameworks, corporations, including state owned enterprises are obligated to conform to international norms. Though the OECD framework applies only to signatory states and their enterprises, recent decision shave evidenced an expanding willingness to apply these frameworks to the worldwide operations of multinational corporations without regard to corporate organization and to aggressively apply notions of complicity. (Backer 2009). In addition, the OECD framework can reach economic activities that have been deemed to comply with the law of the state in which the activities occurred. (U.K. National Contact Point Sept. 2009). Though this soft law framework does not have strong sanctions elements, its potential to expose companies to media scrutiny might substantially affect its consumer and investor relations sufficiently to make avoidance of liability important.

The United Nations’ Three Pillar “framework rests on three pillars: the State duty to protect against human rights abuses by third parties, including business, through appropriate policies, regulation, and adjudication; the corporate responsibility to respect human rights, which in essence means to act with due diligence to avoid infringing on the rights of others; and greater access by victims to effective remedy, judicial and non-judicial.” (Ruggie 2009, ¶2). Like the OECD framework, liability is grounded in breaches of international norms, includes an expansive understanding of complicity liability, extends liability up and down the supplier and consumption chains and is not limited to private enterprises. (Backer 2010). The remedial framework looks with approval to the remedial framework provided under the ATCA in the United States and suggests it as a useful template for the enforcement of the Three Pillar framework against either states ort corporations for human rights violations. (United Nations 2008). This framework, unlike that of the OECD, would require all states and enterprises to provide adequate venues for the determination of claims, and is not limited to certain groups of states, but applies to all actors. These provisions are not yet effective. They are likely to come into effect sometime in the next several years. It is important, though, to remember that Cuba has been an active and willing supporter of the work of John Ruggie in the formulation of this framework within the Human Rights Council. Yet, if read broadly enough, Cuba’s barter system and notions of just trade, might contribute to a violation of the (Cuban) state’s duty to protect and the state sponsored enterprises responsibility to respect human rights. To the extent that remedies are not available for complaints, both may also breach their obligations to provide a remedial framework for complaints.

These emerging frameworks point to a more global future for Cuba as people seek to test the legitimacy of its singular and ideologically driven establishment of trade and commercial relationships and methods. A globally engaged Cuba will not be able to expand on its own terms. It will inevitably have to confront global standards that it may not share. In the area of human rights, that may pose significant difficulties for the program of economic engagement conceived through ALBA. The result is potentially significant for Cuba. This is not to suggest that Cuba’s system of bartering its labor force for goods and cash is in fact a violation of international norms. But it is to suggest that Cuba’s economic activity—whether undertaken in its sovereign capacity or through enterprises—will be increasingly subject to attack on the bases of these norms. Those attacks will become more potent as Cuba emerges more vigorously within networks of global trade. Cuba’s efforts within ALBA provide a substantial exposure point. Cuba’s efforts to engage in joint ventures with private and public trading and commercial partners from non-ALBA states will provide a basis for expanding liability through notions of complicity. Some of Cuba’s ALBA partners, particularly Venezuela, might have a substantial exposure to suit in the United States through its U.S. oil subsidiary, Chevron. (Mend 2010). Though some of these engagements will be politically motivated, especially by those who would see a fundamental change in Cuba’s political, social and economic regime, it is important to note that the Cuban labor barter system might well present an important instance of conflict between conventional notions of labor rights and conceptualization of labor under Marxist Leninist regimes. Moreover, such an amalgamation of the ideological with law is, ironically enough, the essential notion underlying both the organization of the Cuban state and the implementation of ALBA’s economic activity. That such amalgamations are applied against the Cuban state and its enterprises reminds us that international law, and its substantive norms, is not captive to any one state, but may reflect a foundational ideology inconsistent with some of the implementary applications of ALBA ideology through PGs and EGs. To that extent, Cuba’s exposure to liability provides a window on the ideological basis of international law norms as well.

V. Conclusion.

It is one thing to describe the ideological and functional framework for the grannacional project. It is quite another matter to consider the way these enterprises might operate on a day-to-day basis. And more importantly, it is necessary to consider the implications of such operation of these supra-national corporations under standards of international soft and hard law. This paper has suggested the contours of the violation exposure of grannacional projects under these international norms. The very ideological foundation of the grannacional projects serves as the basis for conflict with normative standards in effect elsewhere. In a command economy in which there is no distinction between the political and economic sphere and where the line between obligations of citizens and of workers is blurred, the difference between a citizen’s duty to the state and involuntary servitude can be quite thin. It is unlikely that international standards will bend to accommodate substantial deviations where the functional effect of state action appears to substantially impede recognized human rights, as those are generally understood. It suggests that while Cuba and the ALBA states may avoid the consequences of breach within their own territories, their assets elsewhere may be exposed to actions based on those breaches. And, perhaps more importantly, private and public enterprises of other states will also be exposed to liability for complicity in the violations of grannacional enterprises with which they might partner. That can have significant effects on the ability of grannacional enterprises to forge significant business relationships outside the ALBA area. Global human rights norms, then, might as effectively confine grannacional activity to the territory of the sponsoring states more effectively than any sort of politically motivated embargo.

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Unitary Council of Cuban Workers. 2009. Complaint Filed With the ILO by the Unitary Council of Cuban Workers to the ILO (March 2009). Available http://www.freetradeunionism.org/LinkClick.aspx?fileticket=W61rG%2btaCDE%3d&tabid=59. 

U.K. National Contact Point. Sept.2009. Final Statement by the UK National Contact Point for the OECD Guidelines for Multinational Enterprises: Complaint from Survival International against Vedanta Resources plc, 25 Sept. 2009. Available http://www.business-humanrights.org/Links/Repository/266990/jump.

United Nations. 2008. Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises. 2008. Protect, Respect and Remedy: a Framework for Business and Human Rights, U.N. Doc. A/HRC/8/5 (April 7, 2008). Available http://www.business-humanrights.org/SpecialRepPortal/Home/ReportstoUNHumanRightsCouncil/2008.

----------. 2009. John Ruggie, Promotion of All Human Rights, Civil, Political, Economic, Social and Cultural Rights, Including the Right to Development: Business and Human Rights: Towards Operationalizing the “protect, respect, and remedy” Framework, Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, A/HRC/11/13 (April 22, 2009).

United States Department of State. 2008. Bureau of Democracy, Human Rights, and Labor, Country Reports for Human Rights Practices, 2005, Cuba (2006), http://www.state.gov/g/drl/rls/hrrpt/2005/61723.htm.

----------. Jan. 26, 2009. Cuban Medical Professional Program. Available http://www.state.gov/p/wha/rls/fs/2009/115414.htm.

Venezuela. Nd. Ministerio de Poder Popular para la Cominicación y la Información, Comisión de Enlace para la internacionalización de las Misiones Sociales, ¿Qué es la Misión Milagro?. Available http://ceims.mre.gob.ve/index.php?Itemid=28&id=13&option=com_content&view=article.

----------. July 3, 2008. Ministerio de Poder Popular para la Cominicación y la Información, Avanzan esfuerzos para conformar Empresa Grannacional Forestal del ALBA. Available http://www.mibam.gob.ve/portal/index.php?option=com_content&view=article&id=106:avanzan-esfuerzos-para-conformar-empresa-grannacional-forestal-del-alba&catid=14:generales&Itemid=96.

----------. February 27, 2009. Ministerio de Poder Popular para la Cominicación y la Información, YVKE Mundial Radio, Creación de la Comisión Permanente de ALBA que evaluará proyectos grannacionales. Available http://www.radiomundial.com.ve/yvke/noticia.php?20447.

----------. August 21, 2009. Ministerio de Poder Popular para la Cominicación y la Información, Consejo Social de la ALBA impulsa la creación de empresas grannacionales. Available http://www.minci.gob.ve/noticias/1/191289/consejo_social_de.html.

----------. March 26, 2010. Ministerio de Poder Popular para la Cominicación y la Información, Nace la Empresa Grannacional Minera Mariscal Sucre. Available http://www.recursosnorenovables.gov.ec/es/inicio/destacados/853-nace-la-empresa-grannacional-minera-mariscal-sucre.html.

----------. April 30, 2010. Ministerio de Poder Popular para la Cominicación y la Información, Four “Grannacional” companies are constitute in the energy field. Available http://www.pdvsa.com/index.php?tpl=interface.en/design/salaprensa/readnew.tpl.html&newsid_obj_id=8611&newsid_temas=1.

----------. May 10, 2010. Ministerio de Poder Popular para la Cominicación y la Información, Empresa Grannacional pesquera ALBA amplía flota con llegada a Venezuela de Buque Simón Bolívar. Available http://www.vtv.gob.ve/noticias-econ%C3%B3micas/35435.

---------. July 1, 2010. Ministerio de Poder Popular para la Cominicación y la Información, Parlamento aprobó creación de empresa grannacional de café con Dominica. Available http://www.vtv.gov.ve/noticias-econ%C3%B3micas/38764.

----------. July 9, 2010. Ministerio de Poder Popular para la Cominicación y la Información, Venezuela, Cuba y Ecuadorconsolidan integración commercial con el Sucre. Available http://www.minci.gob.ve/noticias/1/201080/venezuelacuba_y_ecuador.html.

ENDNOTES

[i]  W. Richard and Mary Eshelman Faculty Scholar & Professor of Law, Professor, School of International Affairs, Pennsylvania State University, 239 Lewis Katz Building, University Park, PA 16802 . 1.814.863.3640 (direct), lcb11@psu.edu.

[ii] “En este sentido, constituye una ruptura con la visión economicista clásica de la integración y la cooperación internacional. El ALBA, en tanto que alianza política estratégica tiene el propósito histórico fundamental de unir las capacidades y fortalezas de los países que la integran, en la perspectiva de producir las transformaciones estructurales y el sistema de relaciones necesarias para alcanzar el desarrollo integral requerido para la continuidad de nuestra existencia como naciones soberanas y justas.” (ALBA Jan. 27, 2008).

[iii] “El concepto grannacional puede asimilarse al de mega estado, en el sentido de la definición conjunta de grandes líneas de acción política común entre estados que comparten una misma visión del ejercicio de la soberanía nacional y regional, desarrollando y desplegando cada uno su propia identidad social y política, sin que ello implique en el momento actual la construcción de estructuras supranacionales.” (ALBA Jan. 27, 2008).

[iv] Thus understood, development is “basado en la constatación de que la estrategia de desarrollo de las economías de nuestros países hasta el grado de producir la satisfacción de las necesidades sociales de las grandes mayorías, no puede limitarse al ámbito local.” (ALBA Jan. 27, 2008).

[v] Thus the grannacional is to generate “bloque en la perspectiva de estructurar políticas regionales soberanas.” (ALBA Jan. 27, 2008).

[vi] These specific aspects of this granncional objectives echoes language from the Fourth Congress of the Communist International (Communist International 1922). “One of the most important tasks of the Communist Parties is to organise resistance to international fascism. . . . The united front tactic is simply an initiative whereby the Communists propose to join with all workers belonging to other parties and groups and all unaligned workers in a common struggle to defend the immediate, basic interests of the working class against the bourgeoisie.” (Id., ¶5).

[vii] “En consequencia, lo grannacional es el proceso que experimentamos hoy bajo los principios del ALBA.” (ALBA Jan. 27, 2008).

[viii] “En resumen, tenemos que un proyecto grannacional es todo programa de acción dirigido a cumplir con los principios y fines del ALBA, que haya sido validado por los países integrantes y cuya ejecución involucre a dos o más países, para beneficio de las grandes mayorías sociales.” (ALBA Jan. 27, 2008).

[ix] Thus, “grannacional projects and enterprises that are materializing the social and economic projects of integration. Not every grannacional project will become a grannacional enterprise, but every grannacional enterprise has to respond to a grannacional project, which must guide its development.” (Diaz 2009).

[x] “El concepto de empresas grannacionales surge en oposición al de las empresas transnacionales, por tanto, su dinámica económica se orientará a privilegiar la producción de bienes y servicios para la satisfacción de las necesidades humanas garantizando su continuidad y rompiendo con la lógica de la reproducción y acumulación del capital.” (ALBA Jan. 27, 2008).

[xi] “Así tenemos que empresas grannacionales serán aquellas empresas de los países del ALBA integradas productivamente, cuya producción se destinará fundamentalmente al mercado intra-alba (zona de comercio justo), y cuya operación se realizará de forma eficiente.” (ALBA Jan. 27, 2008).

[xii] “[D]eben partir de la noción de integración productiva y tener en cuenta las necesidades de complementación económica entre la naciones que la integran, en áreas fundamentales para el desarrollo económico – social. Esto supone utilizar al máximo las capacidades de cada país: recursos energéticos, disponibilidad financiera, disposición de materias primas, recurso humano calificado, desarrollo científico y tecnológico.” (ALBA Jan. 27, 2008).

[xiii] “La producción de estas empresas debe destinarse prioritariamente a satisfacer el consumo final o industrial del mercado intra-alba, a objeto de conformar la zona de comercio justo. Sus excedentes podrán colocarse en el mercado internacional.” (ALBA Jan. 27, 2008).

[xiv] “Las empresas grannacionales deben basar su existencia en la eficiencia productiva, inscribiéndola en los principios del ALBA. Esta no es una tarea fácil, pero tampoco imposible de lograr. Las empresas grannacionales tienen que ser autosostenibles.” (ALBA Jan. 27, 2008).

[xv] “Las empresas grannacionales operarán bajo los principios de complementariedad, solidaridad, cooperación, reciprocidad y convivencia armoniosa del hombre con la naturaleza explotando racionalmente los recursos naturales y ejecutando proyectos ambientalmente sustentables, promoviendo condiciones de trabajo digno y redistribución equitativa de las riquezas.” (ALBA Jan. 27, 2008).

[xvi] “Del control de las fuentes de materia prima: afortunadamente ésta es una ventaja real en nuestros países, en virtud de que el estado controla dichas fuentes.” (ALBA Jan. 27, 2008).

[xvii] “Asimismo, los 9 países de la Alianza prevén impulsar la constitución de varios proyectos “grannacionales”, como la empresa de comunicaciones Albatel y el Fondo Cultural de la ALBA, destinado al desarrollo y defensa de la identidad y la diversidad cultural. Otros proyectos son el de alfabetización y postalfabetización, el ALBA-Educación, y la realización de un estudio clínico genético y psicosocial de personas con discapacidades, que ya se ha realizado en países como Cuba y Bolivia.” (Noticia al Dia Dec. 14, 2009).

[xviii] “Mediante los CCC, cada república propone acciones propias donde expone lo que necesita y lo que otorga. Los convenios compensan bienes y servicios según las necesidades y capacidades de cada cual.” (Regueiro Bello, Lourdes María 2007, 95).

[xix] Aponte García noted:

Aunque su juramentación como Presidente de la República en febrero de 1999 le daba el control de las instituciones estatales y la mayoría en la Asamblea Nacional, los Ministerios y las demás instituciones del Estado resultaban ser organismos muy pesados, lentos y con un enorme lastre de burocratismo. El Gobierno opta entonces por llevar a cabo sus reformas mediante estructuras paralelas, más ágiles, vinculadas directamente a los sectores populares que se quería impactar.

(Aponte García 2009, 96).

[xx] Cuba had demonstrated the capacity to on the supply side with its response to Vargas mudslides of 1999. (Muntaner et al. 2008, 236).

[xxi] “Es un programa social humanitario creado el 08 de julio de 2004 y diseñado por los gobiernos de Venezuela y Cuba, para atender de manera gratuita, la enorme población de escasos recursos que presenta problemas de salud visual. La internacionalización de ésta misión se inició el 06 de diciembre de 2005, cuando llegó a Venezuela el primer grupo de pacientes latinoamericanos, procedente de Santo Domingo de Los Colorados, Ecuador. ” (Venezuela nd “¿Qué es la Misión Milagro?”).

[xxii] The Convenio made it clear that such doctors were to be provided to work in underserved areas of Venezuela,and that the costs of their salaries would be paid by the Cuban state. Venezuela was obligated to pay only provide

[xxiii] The Convenio provided:

La República de Cuba ofrece gratuitamente a la República Bolivariana de Venezuela los servicios médicos, especialistas y técnicos de la salud para prestar servicios en lugares donde no se disponga de ese personal. Los médicos especialistas y técnicos cubanos en la prestación de sus servicios en la República Bolivariana de Venezuela ofrecerán gratuitamente entrenamiento al personal venezolano de diversos niveles que las autoridades soliciten. La parte venezolana cubrirá los gastos de alojamiento, alimentación, transportación interna. El gobierno de Cuba garantizará a todos los galenos y demás técnicos sus salarios y la atención adecuada a los respectivos familiares en la Isla.

(Convenio 2000, art. IV). The actual working conditions and compensation of Cuban doctors in Venezuela are described in Pérez & Haddad 2008, 336-38).

[xxiv] Oro Negro included “participation by the ministries of Health, Labor, Energy, Defense, the president of PDVSA6 and Frente Francisco de Miranda (an organization of defenders of social rights) and the mayors of two Caracas municipalities, Sucre and Libertador.” (Mutaner et al. 2008, 237).

[xxv] Sarah Blue has noted that since 2000 Cuban health care workers have lost their place as the highest paid professionals. But they have not been able to access the informal “favor economy” to the extent of other professionals because of their social role as “model revolutionaries”. Blue notes that the salary incentives paid to doctors working overseas helps bridge the gap. “The fact that licensed self-employment is strictly forbidden in the health sector further limits the earning potential of health workers, as the moonlighting dentist's case illustrates.” (Blue 2009, 42).

[xxvi] "Nos mantenían bajo vigilancia total, no nos permitían salir ni a un restaurante ni tener amistadaes, y hasta me privaron de alimentos'', dijo Frank Vargas, un especialista de Medicina General de 33 años, nativo de La Habana.” (Ocando 2010).

[xxvii] “Además de los testimonios, la demanda incluirá una selección de las violaciones legales cometidas por los gobiernos de Cuba y Venezuela, y aspectos inéditos de la presencia cubana en Venezuela como los reglamentos internos sobre lo que los médicos podían o no podían hacer, y el nombre de los funcionarios de inteligencia cubana implicados en las areas de vigilancia, dijo Pablo De Cuba, asesor de la demanda.” (Ocando 2010).

[xxviii] As Taylor et al. (2010) note: “The problem becomes greater when a state weighs in on behalf of business. This is especially common where a state has a pecuniary interest in the success of a particular business operation, wherther as equity power or as the recipient of royalties or taxes form a project.” Taylor et al. 2010, 27).

[xxix] The allegations, along with assertions that those allegations amount to a violation of the International Labor Organization Convention on Forced Labor can be found at Unitary Council of Cuban Workers 2009.

[xxx] These international norms were incorporated through the Alien Tort Claims Act, 28 U.S.C. § 1350 (2000), and the Racketeer Influenced and Corrupt Organizations Act 18 U.S.C. § 1962(b) (2000) under which the case was asserted.

[xxxi] However, “Because all of Defendant's pleadings had been stricken and the Defendant chose not to defend this matter at trial, this Court accepts as true Plaintiffs' uncontroverted factual allegations from the Amended Complaint” (Licea v. Curaçao Dry Dock Co. 2008, 1357-58).

[xxxii] It has been most clearly spelled out in the field of international criminal law, in the context of knowingly providing practical assistance or encouragement that has a substantial effect on the commission of a crime. (United Nations Special Representative of the Secretary-General on business & human rights 2008, ¶¶ 73-81).

[xxxiii] The Principles of Corporate Governance have assumed an important role as a model for state legislation on the internal constitution of corporations. The Guidelines provide voluntary principles of business behavior covering virtually every aspect of the operations of an economic enterprise. “Although many business codes of conduct are now available, the Guidelines are the only multilaterally endorsed and comprehensive code that governments are committed to promoting.” (OECD Policy Brief 2001).