This essay takes a close look at the issue of the human rights duties of states as owners of SOEs, and of the responsibilities of SOEs for their own human rights related conduct. It offers a set of ten (10) challenges and recommendations for further development. These recommendations and challenges suggest that issues of corporate personality, of sovereign immunity, of asset partition, and of the mania for compartmentalization that marks certain approaches to global economic and financial regulation may well hobble the work of embedding human rights within the operation of states as owners and SOEs as public enterprises. To embed human rights more effectively in accordance with evolving international standards, it may be necessary to substantially change contemporary and backwards looking legal frameworks within which SOEs now operate. More importantly it suggests the difficulty of the current strongly held consensus that the focus of regulatory governance must be grounded in and through a formally constituted enterprise, the SOE, rather than focusing regulation on economic activity irrespective of the form in which it is undertaken. Until these conceptual issues are considered the regulation of economic activates—SOEs, supply chains, multinational corporations, will remain elusive.
The final version is expected to be published with the Vanderbilt Journal of Transnational Law whose staff I look forward to working with. In the meantime, comments, engagement and the like deeply appreciated. The abstract and introduction follow.
The Human Rights Obligations of State Owned Enterprises (SOEs): Emerging Conceptual Structures and Principles in National and International Law and Policy
Larry Catá Backer[*]Abstract: The distinction between the obligations of public and private entities, and their relation to law, is well known in classical political and legal theory. States have a duty which is undertaken through law; enterprises have a responsibility which is embedded in their governance. These fundamental divisions form part of the current international efforts to institutionalize human rights related norms on and through states and enterprises, and most notably through the U.N. Guiding Principles for Business and Human Rights (UNGP). The problems of conforming to evolving norms becomes more difficult where states project their authority through commercial enterprises. These state owned enterprises (SOEs) operate where state duty and enterprise responsibility meet. This essay takes a close look at the issue of the human rights duties of states as owners of SOEs, and of the responsibilities of SOEs for their own human rights related conduct. The form and substance of these duties and responsibilities are considered in light of two recent developments. The first is the substantial change in the direction of U.S. policy in trade and globalization. The other is the maturation of Chinese outbound economic and investment policy, where its construction of an outbound nationalist globalization—the One Belt One Road policy--relies to some extent on the projection of commercial power through Chinese SOEs. After and Introduction, Part II, “Challenging Engagement and Engagement Challenges,” closely examines the emerging structures and principles of the debate through a deep analysis of the 2016 Report of the U.N. Working Group on the Issue of Human Rights and Transnational Corporations and other Business Enterprises, interrogating its conceptual framework and its implementation programs. Part III then briefly considers the consequences of these approaches and work left to be done: from conceptual lacunae to implementation. It offers a set of ten (10) challenges and recommendations for further development. These recommendations and challenges suggest that issues of corporate personality, of sovereign immunity, of asset partition, and of the mania for compartmentalization that marks certain approaches to global economic and financial regulation may well hobble the work of embedding human rights within the operation of states as owners and SOEs as public enterprises. To embed human rights more effectively in accordance with evolving international standards, it may be necessary to substantially change contemporary and backwards looking legal frameworks within which SOEs now operate. More importantly it suggests the difficulty of the current strongly held consensus that the focus of regulatory governance must be grounded in and through a formally constituted enterprise, the SOE, rather than focusing regulation on economic activity irrespective of the form in which it is undertaken. Until these conceptual issues are considered the regulation of economic activates—SOEs, supply chains, multinational corporations, will remain elusive.
Sovereign conduct at the margins of the law, the title of the Symposium for which this essay was produced, is perhaps no better manifested than in the commercial activities of states. And it is most fully formed when states—the fundamental political body corporate—reconstitute parts of itself as an economic body corporate to engage in activities in national and transnational markets. The conduct of economic activities through state owned enterprises (SOEs) function in the space where public duty and private obligation meet, that is, where the legal duties of the state merge with the governance responsibilities of the private organization. The SOE does not easily fit within the classical division of obligation, expressed in political and legal theory, between public and private entities, and their respective relationship to law. States have a duty which is undertaken through law; enterprises have a responsibility which is embedded in their governance. These fundamental divisions form part of the current international efforts to institutionalize human rights related norms on and through states and enterprises, and most notably through the U.N. Guiding Principles for Business and Human Rights (UNGP). The problems of conforming to evolving norms becomes more difficult where states project their authority through commercial enterprises, that is where the societal (and economic) governance order of the enterprise is conflated with the political and legal order of the state.
SOEs have undergone tremendous change in both operation and framework ideology since 1945. The contemporary faces of state owned enterprises (SOEs) has been changing dramatically since the end of the Second World War in 1945. Within globalization, consensus about the role and operation of SOEs, like that of sovereign wealth funds, have moved toward a commercial and private model. For all that change, SOEs remain an important element of national macro-economic policies and its operationalization; they continue to serve quite important public purposes. Its importance and utility is in part the product of the malleability of the SOE concept itself that has made the device a useful tool for states. That malleability has also permitted SOEs to become an increasingly important factor in globalized economic activity, shaping its patterns and approaches with a reference to the national policy and politics of the owner-state. But their use by states has also been criticized for inhibiting the construction of robust internal and global markets, in part because of their inefficiency, and in part where such open and robust markets serve as the foundation of economic activity within and beyond states. The difficulty stems from their relationship to the entity that both owns them and regulates them. That produces asymmetries in market power that might challenge the efficacy of the emerging markets driven regulatory structures of globalization and its so-called neo-liberal order. The asymmetries run beyond the usual problem of state subsidies to that of states being tempted to tilt markets in favor of SOEs (producing a sort of systemic corruption in markets driven systems) to issues of interference with sovereignty when SOEs serve as the apex enterprise in global production chains.
The legal status of SOEs varies from being a part of government to stock companies with a state as a regular stockholder. But its purpose has remained constant—national development and the projection of economic power abroad—though with quite distinct differences in emphasis and application among states inclined to use them. The regional variations are quite contextually rooted and historically driven. European Models from the 1980s were driven both by the principles of free movement basic to the European Union Treaties within the context of de-socialization from the 1980s. The contemporary approaches of European states represent a long dialogue (sometimes quite strident) between markets driven states and the brand of markets-rejecting European Marxist Leninism that characterized the old Soviet Empire and its satellites in Europe. The apex of this European flirtation with robust SOE driven economies occurred through the 1970s with substantially different approaches to “socialism” and state management of economic activities across democratic Europe, in contradistinction to the central planning economies of the Soviet Union with a negligible private sector. By the end of the 1990s that system was in the advanced stages of dismantling. The dismantling of SOE driven economies was propelled both by the fall of the Soviet Union and by the rise of a level and unsubsidized markets ideology within the jurisprudence of the European Court of Justice and reflected in the policies of the institutions of the European Union. The emerging rules constraining state aids reduced the value of state ownership and its relevance, and economic integration made the consequences less drastic.
A current driving force in European SOEs are the Nordic states under the so-called policy of Nordic Capitalism. It is guided by principles of profitability and exemplary responsibility; profits rendered to the state and the state directing the form and effect of the responsibilities it meant to impose. Sweden provides a good example of the model with respect to the operation of Swedish SOEs, in which the state “has a major responsibility to be an active and professional owner. The Government's overall objectives are for the companies to generate value and, where applicable, to ensure that specially commissioned public policy assignments are well performed.” Other European states also maintain state enterprises. In contrast, developing states find SOEs useful as instruments of internal development, usually through its use as an instrument for the control and exploitation of national resources. Despite substantial pressure to privatize SOEs at the end of the 20th century, developing state SOEs might again be thought to serve as a mechanism for state planning and macro-economic policies.
Since the 1980s, The People’s Republic of China has been the site of the most vibrant contemporary development of Marxist Leninist frameworks for SOEs. It has developed a markets-based socialism grounded in strong markets and state ownership of substantial sectors of the economy. This approach—socialist modernization is grounded in the notion that all of the productive forces of society must be available to the state—through regulatory governance or direct command structures, to help the Chinese vanguard party fulfill its core obligation to move society along toward the establishment of a communist society. Through its Go-Out Policies 走出去战略, and its policies on internationalism, Chinese SOEs have become more and more important in global economic activity. They have also become an important element in the socialization of Chinese approaches to Marxist state planning. These might also become more influential as a form of economic productivity in developing states in which China has invested heavily. Yet, even Chinese SOEs are subject to the inefficiencies of operational objectives that include goals beyond pure financial wealth maximization.
For developing states, SOEs are both a legacy of the ideologically driven post-colonial policies of its first generation of leaders, and of the then fashionable policies that sought to convince developing states that the future lay in export substitution policies and in economic development that would produce a self-sufficient state. Globalization has substantially softened these ideologies, and in the process also reduced the vigor with which developing states have sought to build up and deploy SOEs. Yet especially in resource rich states, SOEs remain an important part of macro-economic and production management. SOEs are also important stabilizers of labor markets, and thus indirectly of political stability. Increasingly, these efforts have been tied to stabilization strategies that are advanced by international financial institutions (IFIs) and in conjunction with state sovereign wealth funds, as the basis of development efforts, including development finance. Not inconsequential is the use of SOEs (and SWFs) as a means of reducing corruption in state where corruption is systemic. Producing autonomous enterprises that may be managed or made accountable through mechanism not under the control of state officials may sometimes serve to protect those resources. Yet issues of productivity and economic viability continue to weaken these enterprises, even as they continue to be viewed as essential to developing states.
Globalization has also had a profound effect on SOEs. Once understood (like their private counterparts) and targeted toward national markets, the possibilities of cross border economic activities, and the development of complex and strong production chains has pushed SOEs beyond their borders. SOEs now compete with their private counterparts for global business and are deeply embedded at all levels in global production chains. This produces substantial issues around concepts of competitive neutrality, grounded in fears that states could use their political power to support the economic activities of their SOEs especially abroad. To that extent they represent not merely the willingness of SOEs to access growth potential beyond the state, but also the willingness of states to leverage their power through its projection in private markets.
While SOEs have entered the world of global economic activities, there has been little successful effort to manage their behaviors in the international sphere. That is, there is little by way of law to govern those governance gaps that exist when SOEs (like other economic enterprises) operate between states in a way that makes it impossible for a single state to assert effective regulatory oversight to the enterprise and its transactions. There has been some multilateral efforts that have produced soft law, the most important of which has been the OECD’s Guidelines on Corporate Governance of SOEs. These have sought to develop principles of conduct touching on seven areas of governance. The thrust of these is to ensure that SOEs operate like their private counterparts, that is, to mitigate the public character of these enterprises. The reasons are obvious—SOEs that are more public than private in character may be viewed as political institutions and barred from entry into foreign states. And the sovereign immunity regimes of most states distinguish between public regulatory actions and activities and commercial activities.
Even as the character and use of SOEs has been changing, and adjusting to the potentials and risks of global activity, the international community has also sought to develop ever stronger mechanisms for the management of the character of such activity with respect to human rights, sustainability, and a fidelity to the numerous international instruments that have sought to develop global consensus norms about economic behavior. They have also become important elements in the construction and implementation of bilateral trade agreements, as well as multilateral agreements. While these efforts have yet to produce legally binding instruments, they have produced increasingly influential systems of soft law. And irrespective of these soft law instruments, global enterprises have sought to manage their global operations through governance mechanisms that span their production chains, drawing in substantial part on these international instruments.
Among the international frameworks that have been most influential, two stand out. The first is the framework for managing behaviors that touch on human rights impacts of economic activity. These are bound up in the UN Guiding Principles on Business and Human Rights (UNGP) endorsed unanimously by the U.S. Human Rights Council in 2011. The UNGP are structured along three “pillars”: a first Pillar is the state duty to protect human rights, a second Pillar is the responsibility of corporations to respect human rights, and a third Pillar touches on the remedial mechanism that must be established to implement the state duty and corporate responsibility. SOEs occupy a dual place within the UNGP. They are to some extant an instrumentality of the state and thus potentially subject to the state duty to protect. At the same time they function as commercial ventures and are thus subject to the less legalized provisions of the corporate responsibility to respect. Yet their owners have a duty in exercising their ownership responsibilities that may also be constrained by the state duty to protect human rights. In the context of SOEs, UNGP ¶ 4 has proven most relevant. The provisions of the UNGP have been substantially incorporated into the OECD framework through its Guidelines for Multinational Enterprises. These are also non-binding but they incorporate a remedial mechanism in the form of “special instances” (complaints) that may be lodged by individuals and others against enterprises alleging violation of the Guidelines before a “National Contact Point”, an administrative office maintained by states to comply with their OECD member state obligations.
Since its endorsement in 2011, formal international engagement with the UNGP have been undertaken through a Working Group on Business and Human Rights that was established at the time of that enforcement. The Working Group and the OECD have recently been considering application of multilateral soft law frameworks to hybrid entities—SWFs and SOEs. The object is to extend the scope of the UNGP and the Guidelines for Multinational Enterprises, but also to make the application of those instruments more coherent. At the same time, they have been following a policy of encouraging states to “lead by example”, supported in this endeavor by supporting Nordic States especially in the context of their efforts touching on SOEs and human rights. This was made clear in the theme of the 5th UN Forum on Business and Human Rights, November 14-16, 2016.
During the summer of 2016, the Working Group On The Issue Of Human Rights And Transnational Corporations And Other Business Enterprises delivered its Report to the U.N. Human Rights Council: Report of the Working Group on the issue of human rights and transnational corporations and other business enterprises (the "2016 WG Report"). The focus of the 2016 WG Report was particularly compelling--State Owned Enterprises (SOEs) and the UNGP project. In the "Note by the Secretariat," the reason for the centrality of this theme was explained:In the report, the Working Group examines the duty of States to protect against human rights abuses involving those business enterprises that they own or control, which are generally referred to as State-owned enterprises. . . . The report calls attention to and clarifies what States are expected to do in their role as owners of enterprises and why. . . . In the present report, the Working Group suggests a range of measures that States could take to operationalize the call to take additional steps with regard to State-owned enterprises, by building on existing international guidance and national practices related to the corporate governance of those enterprises.The Press Release announcing the 2016 WG Report explained the focus and scope of the effort. It started with a reminder of an important premise—that states are also economic actors in their own right. Those economic activities, the management of which has been refined over the course of the last century, under conditions of globalization and the emerging normative structures of international human rights norms, now require states and their SOEs to lead by example. But currently SOEs appear to lag behind the private sector in embedding human rights sensibilities in their operations. And this is important as the state economic sector is now quite large.“Governments are currently sending an incoherent message to businesses,” said human rights expert Dante Pesce, who chairs the UN Working Group on Business and Human Rights, during the presentation of the group’s latest report* to the UN Human Rights Council. “On the one hand, they ask private businesses to respect human rights, and increasingly set out such expectations in law and policy,” Mr. Pesce noted. “On the other hand – barring notable exceptions – they show no great desire to use the means at their disposal to ensure that those enterprises they own or control respect human rights.”The 2016 WG Report gives itself an ambitious goal: “’It is high time for States to show concrete leadership, and require the enterprises they own or control to be role models on human rights,” the expert stressed. “Doing so is part of States’ international legal obligations, and it will only reinforce the legitimacy of States’ expectations towards private businesses.’”
This essay examines the emerging issues of the human rights duties of states as owners of SOEs, and of the responsibilities of SOEs for their own human rights related conduct, through the lens of the 2016 WG Report for the purpose of engaging with its premises and suggestions. The 2016 WG Report represents a very needed focus on one of the more difficult challenges for the UNGP. The state duty to protect differs from the corporate responsibility to respect human rights. The differences present some complexity when it is the state itself that operates the enterprise, directly or indirectly. It is to those issues that the 2016 WG Report, and the analysis that follow, are directed. The analysis is also informed by the proceedings of the Working Group led discussions on SOEs held at the annual UN Forum on Business and Human Rights, which took place at the UN headquarters in Geneva (Palais des Nations) from November 14 to 16, 2016. These are considered in light of recent developments. Two in particular are important. The first is the substantial change in the direction of U.S. policy in trade and globalization. Its abdication of a retreat from robust multilateralism and the cultivation of a project of nationalist bilateralism has changed the dynamic within which policy globally may develop. The other is China, where its project of outbound nationalism—the One Belt One Road policy, relies to some extent on the projection of commercial power through Chinese SOEs.
After this Introduction Part II, “Challenging Engagement and Engagement Challenges,” develops a deep analysis of the 2016 WG Report, interrogating its conceptual framework and its implementation programs. Part III then briefly considers the work left to be done: from conceptual lacunae to implementation. It consists of a set of ten(10) challenges and recommendations for further development. These recommendations and challenges suggest that issues of corporate personality, of sovereign immunity, of asset partition, and of the mania for compartmentalization that marks certain approaches to global economic and financial regulation may well hobble the work of embedding human rights within the operation of states as owners and SOEs as public enterprises. More importantly it suggests the difficulty of the current strongly held consensus that the focus of regulatory governance must be grounded in and through a formally constituted enterprise, the SOE, rather than focusing regulation on economic activity irrespective of the form in which it is undertaken. Until these conceptual issues are considered the regulation of economic activates—SOEs, supply chains, multinational corporations, will remain elusive. Like the antique automobile rusting in a shop, beautiful but now incapable of being driven anywhere but awaiting repair, conventional approaches to the state and SOE engagement appear might be understood as yet another effort to bring life back to a conceptual model of economic activity the foundation for which effectively disappeared for the most part by the beginning of this century. One can repair the auto, and perhaps one can drive it. But it remains obsolete, relates poorly to the modern highway and the objectives of driving and have become less relevant to everyday life. Global elites will devote tremendous energy to the repair and maintenance of this old auto, but they might consider the value of that work for the purposes to which it is being deployed.
[*] Principal, Coalition for Peace & Ethics; W. Richard and Mary Eshelman Faculty Scholar, Professor of Law and International Affairs, Pennsylvania State University. This paper was Prepared for Symposium: Sovereign Conduct on the Margins of the Law: Default, Terrorism, Cybercrime, Tax Evasion and State Owned Enterprises Organized by the Vanderbilt Journal of Transnational Law, Vanderbilt Law School, Nashville, TN, 17 February 2017. Many thanks to my research assistant Angelo Mancini (Penn State Law 2017) for his usual exemplary work.
 Symposium: Sovereign Conduct on the Margins of the Law: Default, Terrorism, Cybercrime, Tax Evasion and State Owned Enterprises Organized by the Vanderbilt Journal of Transnational Law, Vanderbilt Law School, Nashville, TN, 17 February 2017. A brief synopsis of the symposium can be found here: https://perma.cc/XRE6-72BS.
 Jan M. Broekman, Larry Catà Backer, Lawyers Making Meaning: The Semiotics of Law in Legal Education II 176-178 (Springer, 2013).
 See, e.g., José Alvarez, Are Corporations ‘Subjects’ of International Law?, 9 Santa Clara J. Int'l L. 1 (2011); A. Claire Cutler, Critical reflections on the Westphalian assumptions of international law and organization: a crisis of legitimacy, 27(2) Review of International Studies 133-150 (2001). See generally, José Alvarez, International Organizations as Law Makers 45-65 (Oxford, 2005).
 See, e.g., Thomas M. Franck, Fairness in International Law and Institutions 351-476 (Clarendon Press, 1995).
 See, e.g., David Kinley and Junko Tadaki, From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations at International Law, 44 Va. J. Int'l L. 931 (2003-2004) (critical examination of the division of power); Larry Catá Backer, From Moral Obligation to International Law: Disclosure Systems, Markets and the Regulation of Multinational Corporations, 39 Geo. J. Int'l L. 591 (2007-2008) (suggestion for measures that conform to the classical division of authority).
 United Nations, U.N. Guiding Principles for Business and Human Rights (New York and Geneva, United Nations HR/PUB/11/04, 2011). Available http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.
 See, e.g., John G. Ruggie, Business and Human Rights: The Evolving International Agenda, 101(4) The American Journal of International Law 819 (2007). The interstices of that conflation have produced some interesting conceptual scholarship. See, e.g., Eric Posner, Do States Have a Moral Obligation to Obey International Law, 55(5) Stanford L. Rev. 1901-1919 (2003).
 For a discussion of SOEs before 1945, see, e.g., The Rise and Fall of State-Owned Enterprise in the Western World (Pierangelo Maria Toninelli, ed., 1983). For a discussion of SOEs in Soviet dominated Europe through the 1980s, see Philippe Aghion, Olivier Blanchard. & Robin Burgess, The behaviour of state firms in eastern Europe, pre-privatisation, 38 European Economic Rev. 1327 (1994). For Western European SOEs, see The Rise and Fall of State-Owned Enterprise in the Western World 103-253 (Pierangelo Maria Toninelli, ed., 1983).
 For a discussion of European SOEs within the European Union see Angela Huyue Zhang, The Single-Entity Theory: An Antitrust Time Bomb for Chinese State-Owned Enterprises?, 8 J. Competition L. & Economics 805 (2012) (discussing anti-trust treatment of European SOEs). For a discussion of the operation and principles of Chinese SOE operation, see Fan Gang & Nicholas C. Hope, The Role of State-Owned Enterprises in the Chinese Economy, in US-China Economic Relations in the Next Ten Years (2013), available at www.chinausfocus.com/2022/wp-content/uploads/Part+02-Chapter+16.pdf. Many developing states have created SOEs through which to manage their natural resources, especially in the extractive sector. For a discussion, see, e.g., Michael L. Ross, The Political Economy of the Resource Curse, 51 World Politics 297 (1999).
 See, e.g., Int’l Working Group of Sovereign Wealth Funds [IWG], Generally Accepted Principles and Practices “Santiago Principles,” (Oct. 2008), available at http://www.ifswf.org/sites/default/files/santiagoprinciples_0_0.pdf; See generally, Larry Catá Backer, Sovereign Wealth Funds, Capacity Building, Development, and Governance, Wake Forest L. Rev. (forthcoming 2017).
 See, e.g., OECD, Guidelines on Corporate Governance of State-Owned Enterprises (2015 ed.), available at http://www.oecd-ilibrary.org/docserver/download/2615061e.pdf?expires=1493181688&id=id&accname=guest&checksum=0613E3D8DE30A7861776806095099811 [hereinafter OECD, Guidelines].
 See, e.g., A. Erin Bass, Subrata Chakrabarty, Resource security: Competition for global resources, strategic intent, and governments as owners. 45(8) Journal of International Business Studies 961-979 (2014); Francisco Flores-Macias, The return of state-owned enterprises, Harvard International Review (April 4, 2009), available http://hir.harvard.edu/article/?a=1854.
 See, e.g., Jing-Lin Duanmu, State-owned MNCs and host country expropriation risk: The role of home state soft power and economic gunboat diplomacy, 45(8) Journal of International Business Studies 1044-1060 (2014); James S. Ang and David K. Ding, Government ownership and the performance of government-linked companies: The case of Singapore, 16(1) Journal of Multinational Financial Management 64-88 (2006).
 See, e.g., Aldo Musacchio & Sergio G. Lazzarini, Leviathan in Business: Varieties of State Capitalism and Their Implications for Economic Performance, Harvard Business School Working Paper 12-101 (June 2012), available https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2070942.
 Alvaro Cuervo-Cazurra, Andrew Inkpen, Aldo Musacchio, & Kannan Ramaswamy, Governments as owners: State-owned multinational companies. 45(8) Journal of International Business Studies, 45(8), 919-942 (2014); Lin Cui, & Fuming Jiang, State ownership effect on firms' FDI ownership decisions under institutional pressure: A study of Chinese outward-investing firms, 43(3) Journal of International Business Studies 264-284 (2012).
 See, e.g., Gabriel Wildrau, China’s state-owned zombie economy, Financial Times (Feb 29, 2016)), available https://www.ft.com/content/253d7eb0-ca6c-11e5-84df-70594b99fc47; Julia Ya Qin, TO Regulation of Subsidies to State-Owned Enterprises (SOEs)-A Critical Appraisal of the China Accession Protocol, 7 J. Int´l Econ L. 863 (2004); but see Aldo Musacchio & Sergio G. Lazzarini, Leviathan in Business, supra.
 For an early version, see, Douglas F. Lamont, Foreign State-owned Enterprises: Threat to American business (Basic Books, 1976). For contemporary consideration of the issue, see, e.g., Ian Bremmer, The End of the Free Market: Who Wins the War Between States and Corporations? (New York: Portfolio, 2010): Fernanda Ribeiro Cahen, Internationalization of State-Owned Enterprises Through Foreign Direct Investment, 55(6) Rev. adm. empres. (São Paulo Nov./Dec. 2015) available http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0034-75902015000600645;
 For the OECD position, see, OECD, Competitive Neutrality: Maintaining a Level Playing Field Between Public and Private Business (OECD Publishing, Paris 2012).
 See Wei Cui, Taxing State-Owned Enterprises: Understanding a Basic Institution of State Capitalism, 52 Osgoode Hall L.J. 1, 15-16 (2015).
 See, e.g., H. Christiansen, The Size and Composition of the SOE Sector in OECD Countries (OECD Corporate Governance Working Papers, No. 5, 2011), available at http://dx.doi.org/10.1787/5kg54cwps0s3-en.
 See, e.g., Nicola Bellini, The Decline of State Owned Enterprise and the New Foundations of the State-Industry Relationship, in The Rise and Fall of State-Owned Enterprise in the Western World 25-48 (Pierangelo Maria Toninelli, ed., 2000); Carles Boix, Privatizing the Public Business Sector in the 1980s: Economic Performance, Partisan Responses, and Divided Governments, 27(4) British Journal of Political Science 473-496 (1997).
 “Until the Thatcher government came to power in1979, the answer to this debate in the U.K and elsewhere was that the government should at least own the telecommunications and postal services, electric and gas utilities, and most forms of non-road transportation (especially airlines and railroads). Many politicians also believed the state should control certain “strategic” manufacturing industries, such as steel and defense production. In many countries, state-owned banks were also given either monopoly or protected positions.” William L. Megginson and Jeffrey M. Netter, From State to Market: A Survey of Empirical Studies on Privatization, 39(2) Journal of Economic Literature 321-389 (2001). See also, Ulrich Wengenroth, The Rise and Fall of the State Owned Enterprise in Germany, in The Rise and Fall of State-Owned Enterprise in the Western World 103-253 (Pierangelo Maria Toninelli, ed., 2000).
 See, e.g., Richard E. Ericson, The Classical Soviet-Type Economy: Nature of the System and Implications for Reform, 5(4) The Journal of Economic Perspectives 11-27 (1991). .
 See, e.g., the “Golden Share” cases: See Commission v. Portuguese Republic, Case C-367/98, 4 June 2002; Commission v. French Republic, Case C-483/99, 4 June 2002; Commission v. Kingdom of Belgium, Case C-503/99, 4 June 2002; Commission v. Kingdom of Spain, Case C-463/00, 13 May 2003; Commission v. United Kingdom of Great Britain and Northern Ireland, Case C-98/01, 13 May 2003; Commission v. Federal Republic of Germany (Volkswagen), Case C-112/2005, dated 23 October 2007; Federconsumatori v. Comune di Milano, Case C-463/04 and C-464/04, 6 Dec. 2004. Discussed in Larry Catá Backer, The Private Law of Public Law: Public Authorities as Shareholders, Golden Shares, Sovereign Wealth Funds, And the Public Law Element in Private Choice of Law, 82 Tulane L. Rev. 1801 (2008).
 See, e.g., Torben M. Andersen, Bengt Holmström, Seppo Honkapohja, Sixten Korkman, Hans Tson Söderström, Juhana Vartiainen, The Nordic Model: Embracing globalization and sharing risks (The Research Institute of the Finnish Economy, 2007) available https://economics.mit.edu/files/5726; The Nordic Countries: The Next Supermodel, The Economist (Feb. 2, 2013) available http://www.economist.com/news/leaders/21571136-politicians-both-right-and-left-could-learn-nordic-countries-next-supermodel
 Nordic Morning, Expectations for state-owned companies: profitability and exemplary responsibility (2015), available http://reporting2015.nordicmorning.com/en/corporate-responsibility/expectations-for-state-owned-companies-profitability-and-exemplary-responsibility.html.
 Government Offices of Sweden, Objectives for state-owned companies, http://www.government.se/government-policy/state-owned-enterprises/goals-for-state-owned-companies/. The Swedish state speaks here of the use of its ownership to move forward balanced gender distribution policies, economic goals, sustainability goals, and additional goals assigned to specific enterprises. Id.
 See, e.g., Hans Christiansen, The Size and Composition of the SOE Sector in OECD Countries, OECD Corporate Governance Working Papers, No. 5 (OECD Publishing, 2011) (describing substantial investment in enterprises across OECD states, both in terms of overall employment and in terms of investment in enterprises). For Germany, see Germany - Competition from State-Owned Enterprises (Jan. 17, 2017) available https://www.export.gov/article?id=Germany-Competition-from-State-Owned-Enterprises.
 See, e.g., OECD, State-Owned Enterprises in the Development Process (OECD Publishing, Paris, 2015) (“If the government of a low income country embarks on a strategy of catch-up industrialization, a case can certainly be made for establishing SOEs to carry our key functions.” Id., 34).
 See, e.g., John Nellis, The Evolution of Enterprise Reform in Africa: From State-owned Enterprises to Private Participation in Infrastructure —and Back?, ESMAP Technical Paper 084 (The International Bank for Reconstruction and Development/THE WORLD BANK, 2005) available https://www.esmap.org/sites/esmap.org/files/08405.Technical%20Paper_The%20Evolution%20of%20Enterprise%20Reform%20in%20Africa%20From%20State-owned%20Enterprises%20to%20Private%20Participation%20In%20Infrastructure%20and%20Back.pdf.
See, Ha-Joon Chang, State-Owned Enterprise Reform (U.N. Department For Economic and Social Affairs (UNDESA) New York, 2007). Available https://esa.un.org/techcoop/documents/pn_soereformnote.pdf.
 See, . For a critical assessment, see, e.g., Wendy Leutert, Challenges Ahead in China’s Reform of State-Owned Enterprises, Brookings Asia Policy No. 21 (Jan. 2016) 83-99. Available https://www.brookings.edu/wp-content/uploads/2016/07/Wendy-Leutert-Challenges-ahead-in-Chinas-reform-of-stateowned-enterprises.pdf.
 This policy is founded on the concept of socialist modernization and its principal object to develop Chinese productive forces under the leadership of the Communist Party to advance the development of the state and its population. See, e.g., Yu Guangyuan (ed.), China’s Socialist Modernization (Foreign Languages Press, 1984); Qizhi Zhang, An Introduction to Chinese History and Culture (A General Progression to the Socialist Modernization of the People’s Republic of China), 441-467 (Springer Berlin Heidelberg, 2015).
 Larry Catá Backer, The Rule of Law, the Chinese Communist Party, and Ideological Campaigns: Sange Daibiao (the 'Three Represents'), Socialist Rule of Law, and Modern Chinese Constitutionalism, 16 Transnat'l L. & Contemp. Probs. 29 (2008), available at https://ssrn.com/abstract=929636; see also Jiang Shigong, How to Explore the Chinese Path to Constitutionalism? A Response to Larry Catá Backer, 40 Modern China 196 (2013), available at http://journals.sagepub.com/doi/pdf/10.1177/0097700413511314.
 See, e.g., Hongying Wangm, Commentary, A Deeper Look at China’s “Going Out” Policy, CIGI (March 2016), available at https://www.cigionline.org/sites/default/files/hongying_wang_mar2016_web.pdf.
 See, Chen Zhimin, Nationalism, Internationalism and Chinese Foreign Policy, 14 Journal of Contemporary China 35-53 (2006).
 See, Central Inspection Group inspection of the SASAC's Party Group and the Party Group of the Central SOEs. The Central Inspection Group found that some enterprises blindly copied Western corporate governance models, weakening Party leadership, the "articles of association of some central enterprises do not clearly specify the requirement of Party building"; it was pointed out to many central enterprises "that discussions of major issues do not go through the Party Committee Meeting or use instead use Party/Government joint meetings etc."
 See, e.g., Debt risk for main state-owned enterprises is controllable: China, The Economic Times (India) (Jan. 27, 2017), http://economictimes.indiatimes.com/articleshow/56806126.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst (While many state companies are bloated and inefficient, China has relied on them more heavily over the past year to generate economic growth in the face of cooling private investment.).
 See, e.g., Arkamoy Dutta Majumdar, West Bengal to restructure state-owned enterprises, Live Mint (Feb. 12, 2017),
http://www.livemint.com/Companies/zUcXsREgJSe875buUFuGiL/West-Bengal-to-restructure-stateowned-enterprises.html (“The government said at least 16 companies are to be merged and five subsidiaries of West Bengal Electronics Industry Development Corp. Ltd, or Webel, to be wound up. The state would, after the restructuring, continue to run 44 focused enterprises, most of which, though, are loss-making. Chief minister Mamata Banerjee reiterated that this restructuring will not lead to job cuts.”).
 But see, SOEs holding regulation not in line with laws, says economist, The Jakarta Post (Feb. 1, 2017), http://www.thejakartapost.com/news/2017/02/01/soes-holding-regulation-not-in-line-with-laws-says-economist.html.
 See, e.g., PM says too many state-owned enterprises underperforming, Saturday Express (Jan. 18 2017) (Trinidad / Tobago), http://www.trinidadexpress.com/20170118/business/pm-says-too-many-state-owned-enterprises-underperforming (“In his address, Rowley said that since the 1960’s government has become involved in various aspects of the local economy to the point that this policy has brought “us to our present situation where we have about 100 state enterprises and their subsidiaries.”); BIDV Securities: Reform still needed in Vietnam’s state-owned enterprises, World Finance (Feb. 6 2017), http://www.worldfinance.com/inward-investment/asia-and-australasia/bidv-securities-reform-still-needed-in-vietnams-state-owned-enterprises.
 For general consideration of the issues, see, e.g., Hao Liang, Bing Ren, and Sunny Li Sun, An Anatomy of State Control in the Globalization of State-Owned Enterprises, 46(2) Journal of International Business Studies 223-240 (2015); Ian Bremmer, The New Rules of Globalization, Harvard Business Review (Jan.-Feb., 2014), available https://hbr.org/2014/01/the-new-rules-of-globalization.
 See, e.g., Dali L. Yang, Remaking the Chinese Leviathan: Market Transition and the Politics of Governance in China (Stanford University Press, 2004).
 See, e.g., OECD, Policy Roundtables, State Owned Enterprises and the Principle of Competitive Neutrality (2009) available https://www.oecd.org/daf/competition/46734249.pdf (“Due to their privileged position SOEs may negatively affect competition and it is therefore important to ensure that, to the greatest extent possible consistent with their public service responsibilities, they are subject to similar competition disciplines as private enterprises” Id.); Antonio Capobianco, and Hans Christiansen, Competitive Neutrality and State-Owned Enterprises: Challenges and Policy Options, OECD Corporate Governance Working Papers No. 1 (2011).
 See, OECD, State-Owned Enterprises as Global Competitors; A Challenge or an Opportunity? (OECD Publishing, Paris, 2016), available http://www.keepeek.com/Digital-Asset-Management/oecd/finance-and-investment/state-owned-enterprises-as-global-competitors_9789264262096-en#.WTNqHcm1tPM .
 I have considered this in the broader context of transnational public economic activity with a focus on China. See, e.g., Larry Catá Backer, Sovereign Investing in Times of Crisis: Global Regulation of Sovereign Wealth Funds, State-Owned Enterprises, and the Chinese Experience, 19 Transnat'l L. & Contemp. Probs. 3 (2010-2011).
 OECD, Guidelines, supra note 5.
 These include: I. Rationales for state ownership; II. The state’s role as an owner; III. State-owned enterprises in the marketplace; IV. Equitable treatment of shareholders and other investors; V. Stakeholder relations and responsible business; VI. Disclosure and transparency; and VII. The responsibilities of the boards of state-owned enterprises. See id.
 See id. at ¶¶ III-IV.
 The issue of sovereign immunity is of long standing. See, e.g., John G. Hervey, The Immunity of Foreign States When Engaged in Commercial Enterprises: A Proposed Solution, 27(7) Michigan Law Review 751-775 (1929). The issue of sovereign immunity became particularly pressing after 1945 when emerging Western markets systems confronted Soviet state based economic activity. See, e.g., Bernard Fensterwald, Jr., Sovereign Immunity and Soviet State Trading, 63(4) Harvard Law Review 614-642 (1950); Michael Brandon, Sovereign Immunity of Government -Owned Corporations and Ships, 39 Cornell L. Q. 425 (1953-1954). On sovereign immunity and the SOE generally see George K. Foster, Collecting from Sovereigns: The Current Legal Framework for Enforcing Arbitral Awards and Court Judgments against States and Their Instrumentalities, and Some Proposals for Its Reform, 25 Ariz. J. Int'l & Comp. L. 665 (2008); A. F. M. Maniruzzaman, Sovereign Immunity and the Enforcement of Arbitral Awards against State Entities: Recent Trends in Practice, in American Arbitration Association Handbook on International Arbitration Practice chp. 28 (Juris, 2010) available http://www.academia.edu/519348/Sovereign_Immunity_and_the_Enforcement_of_Arbitral_Awards_against_State_Entities_Recent_Trends_in_Practice.
 See, e.g., Camilla Wee, Regulating the Human Rights Impact of State-owned Enterprises: Tendencies of Corporate Accountability and State Responsibility, International Commission of Jurists Danish Section (Oct. 2008), available at https://business-humanrights.org/sites/default/files/reports-and-materials/State-owned-enterprises-Oct-08.pdf.
 See, e.g., Paul Blyschak, State-Owned Enterprises and International Investment Treaties: When are State-Owned Entities and their Investments Protected?, 6 J. Int’l L. & Int’l Relations 1 (2011); Norah Gallagher, Role of China in Investment: BITs, SOEs, Private Enterprises, and Evolution of Policy, 31(1) ICSID Review 88-103 (2016); Junji Nakagawa, Regulatory Harmonization Through FTAs and BITs: Regulation of State Owned Enterprises (SOEs) Society of International Economic Law (SIEL), 3rd Biennial Global Conference (2012), available at SSRN: https://ssrn.com/abstract=2103237.
 See, e.g., Ines Willemyns, Disciplines on State-Owned Enterprises In TPP: Have Expectations Been Met? (Leuven Center for Global Governance Studies, Working Paper No. 168, Jan. 2016), available at https://ghum.kuleuven.be/ggs/publications/working_papers/new_series/wp161-170/wp-168-willemyns-website.pdf.
 Special Representative of the Secretary-General, Guiding Principles on Business and Human Rights (United Nations 2011), available at http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf [hereinafter UNGP].
 Special Representative of the Secretary-General, Guiding Principles on Business and Human Rights: Implementing the United Nations "Protect, Respect and Remedy" Framework, U.N. Doc. A/HRC/17/31 (Mar. 21, 2011), available at http://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdf (by John Ruggie).
 UNGP, supra note 38, at 3 ¶ I.
 Id. at 13 ¶ II.
 Id. at 27 ¶ III.
 See id. at 6 ¶ 4.
 See Working Group on the issue of human rights and transnational corporations and other business enterprises, OHCHR, http://www.ohchr.org/EN/Issues/Business/Pages/WGHRandtransnationalcorporationsandotherbusiness.aspx (last visited April 24, 2017).
 And principally the Ministry of Enterprise and Innovation, Government Offices of Sweden. See OHCHR, Leadership and Leverage: Embedding human rights in the rules and relationships that drive the global economy, 2016 UN Forum on Business and Human Rights Forum Programme, available at http://www.ohchr.org/Documents/Issues/Business/ForumSession5/PoW.pdf.
 5th UN Forum on Business and Human Rights, 14-16 November 2016, OHCHR, http://www.ohchr.org/EN/Issues/Business/Forum/Pages/2016ForumBHR.aspx (last visited April 25, 2017). The UN Human Rights Council, under paragraph 12 of its resolution 17/4, established the Forum to serve as a key global platform for stakeholders to ”discuss trends and challenges in the implementation of the Guiding Principles and promote dialogue and cooperation on issues linked to business and human rights.” It is guided by the Working Group on Business and Human Rights.
 The Working Group on human rights and transnational corporations and other business enterprises was established by the UN Human Rights Council in June 2011. The Working Groups report to the Human Rights Council and to the UN General Assembly. See Working Group on the issue of human rights and transnational corporations and other business enterprises, OHCHR, www.ohchr.org/EN/Issues/Business/Pages/WGHRandtransnationalcorporationsandotherbusiness.aspx (last visited April 25, 2017). The Working Groups are part of what is known as the Special Procedures of the Human Rights Council. Special Procedures, the largest body of independent experts in the UN Human Rights system, is the general name of the Council’s independent human rights monitoring mechanisms. Special Procedures mandate-holders are independent human rights experts appointed by the Human Rights Council to address either specific country situations or thematic issues in all parts of the world. The experts are not UN staff and are independent from any government or organization. They serve in their individual capacity and do not receive a salary for their work.
 Working Group On The Issue Of Human Rights And Transnational Corporations And Other Business Enterprise, Report of the Working Group on the issue of human rights and transnational corporations and other business enterprises, U.N. Doc. A/HRC/32/45 (May 4, 2016), available at https://documents-dds-ny.un.org/doc/UNDOC/GEN/G16/091/71/PDF/G1609171.pdf?OpenElement (Languages: E F S A C R) [hereinafter WG, 2016 Report].
 WG, 2016 Report, supra note 48, at 1.
 State-owned enterprises must lead by example on business and human rights – New UN report, OHCHR (June 17, 2016), http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=20123&LangID=E.
 “Many States the world over manage large portfolios on State-owned enterprises (SOEs), which have risen as significant actors in the global economy, active at home and abroad in diverse sectors such as energy, utilities, infrastructure, transports, telecommunications, and banking. The proportion of SOEs among Fortune Global 500 companies has grown from 9.8% in 2005 to 22.8% in 2014, with US$389.3 billion of profit and US$28.4 trillion in assets.” Id.
 2016 Forum on Business and Human Rights, OHCHR, http://www.ohchr.org/EN/Issues/Business/Forum/Pages/2016ForumBHR.aspx (last visited April 21, 2017).
 See, e.g., Larry Catá Backer, Ruminations 70: American Anti-Multilateralism and the Prospects for a Comprehensive Treaty for Business and Human Rights, Law at the End of the Day (Feb. 8, 2017, 8:44 PM), http://lcbackerblog.blogspot.com/2017/02/ruminations-70-american-anti.html; Larry Catá Backer, The 45th Presidency and Multilateral Treaties--Fear, Loathing and a Repudiation of 20th Century Americanism, Law at the End of the Day (Feb. 2, 2017, 10:53 PM), http://lcbackerblog.blogspot.com/2017/02/the-45th-presidency-and-multilateral.html.
 See, e.g., TDM Call for Papers: Special issue on "China's One Belt, One Road: Economic Changes, Power Shifts and Prospects / Consequences for the World of Arbitration", Transnational Dispute Management (Jan. 27, 2017), https://www.transnational-dispute-management.com/news.asp?key=1652.