Wednesday, October 16, 2019

Международная научно-практическая конференция “Транснациональное бизнес-право: стираем границы” [International Scientific and Practical Conference “Transnational Business Law: Erasing Borders”]

I am delighted to pass along information about what will be an exciting transnational event: Международная научно-практическая конференция “Транснациональное бизнес-право: стираем границы” [International Scientific and Practical Conference “Transnational Business Law: Erasing Borders”].  My great thanks to Professor (Dr.) Stanislav Buyanskiy, Dean of the Narxoz School of Law and Public Policy for organizing this conference.

17 октября в г. Алматы в отеле Double Tree by Hilton Almaty пройдет Международная научно-практическая конференция “Транснациональное бизнес-право: стираем границы”. Организатор — Школа права и государственного управления университета Нархоз. На мероприятии соберутся выдающиеся специалисты и профессионалы со всего мира для обсуждения современных международных бизнес-задач. В конференции примут участие 150 человек — директора юридических департаментов топ-500 компаний Казахстана и партнеры ведущих юридических фирм. Будут освещены последние изменения и разработки по таким темам, как международные корпорации, юридический комплаенс, разрешение споров и другие актуальные темы по бизнесу и праву. На мероприятии выступят Генеральный консул США Эрик Мэйер, Профессор Школы права университета Пенсильвании (США) Ларри Ката Бакер, ректор Университета Нархоз Эндрю Вахтель и другие авторитетные спикеры из Казахстана, России и США. Партнеры мероприятия – Университет Нархоз, Палата юридических консультантов «Kazakhstan Bar Association», KPMG Kazakhstan и «Параграф» информационные системы. Организационный партнер – Lincoln Company. Подробнее о Конференции, спикеры и программа

On October 17, in Almaty, the Double Tree by Hilton Almaty hotel will host the International Scientific and Practical Conference “Transnational Business Law: Erasing Borders”. Organizer - School of Law and Public Administration of the University of Narkhoz. The event will bring together outstanding specialists and professionals from around the world to discuss modern international business problems. The conference will bring together 150 people - directors of legal departments of the top 500 companies in Kazakhstan and partners of leading law firms. The latest changes and developments on topics such as international corporations, legal compliance, dispute resolution and other relevant topics in business and law will be highlighted. The event will feature US Consul General Eric Mayer, Professor of Law School of the University of Pennsylvania (USA) Larry Kata Baker, Rector of Narxoz University Andrew Wachtel and other authoritative speakers from Kazakhstan, Russia and the USA. Partners of the event are Narxoz University, the Chamber of Legal Advisers “Kazakhstan Bar Association”, KPMG Kazakhstan and “Paragraph” information systems. Organizational partner - Lincoln Company. Read more about conferences, speakers and the program
 Program and speakers are listed below.

Congressional-Executive Committee on China (CECC) Hearings: Forced Labor, Mass Internment, and Social Control in Xinjiang 17 October 2019

The Congressional-Executive Commission on China was created by the U.S. Congress in 2000 "with the legislative mandate to monitor human rights and the development of the rule of law in China, and to submit an annual report to the President and the Congress. The Commission consists of nine Senators, nine Members of the House of Representatives, and five senior Administration officials appointed by the President." (CECC About). The CECC FAQs provide useful information about the CECC. See CECC Frequently Asked Questions. They have developed positions on a number of issues (e.g., here).

CECC tends to serve as an excellent barometer of the thinking of political and academic elites in the United States about issues touching on China and the official American line developed in connection with those issues. CECC becomes an even more important barometer of coherence and fracture in policy approaches as the discipline of activities between the political parties and the President and Legislature fractures in new and dynamic ways. As such it is an important source of information about the way official and academic sectors think about China. As one can imagine many of the positions of the CECC are critical of current Chinese policies and institutions (see, e.g., (here, here, here, here, here, here, here, here, here, here, here, here, and here).

The CECC has made its position clear with respect to the situation in Xinjiang and has been an important force in  influencing opinion in the US. For a listing of its engagements see HERE. On 10 October 2019  CECC distributed a "Xinjiang: Chairs’ Statement on State and Commerce Department Actions."
U.S. Representative James McGovern (D-MA) and U.S. Senator Marco Rubio (R-FL), the Chair and Cochair, respectively, of the bipartisan and bicameral Congressional-Executive Commission on China (CECC), issued a joint statement following the Department of Commerce’s October 7th decision to place 28 Chinese governmental and commercial organizations on the Department’s “Entity List” and the State Department’s October 8th announcement of visa restrictions against Chinese officials responsible for the “detention or abuse of Uyghurs, Kazakhs, and other members of Muslim minority groups” in the Xinjiang Uyghur Autonomous Region (XUAR). The Commerce Department action constricts the export of items subject to the Export Administration Regulations (EAR), including U.S. made software and microchips, to entities complicit in the mass arbitrary detention and high-technology surveillance in the XUAR. The CECC has long pressed both the State and Commerce Departments to sanction Chinese officials and restrict U.S. exports to state security entities and to businesses profiting from the expansion of the XUAR’s surge in security spending.
“We support the actions taken by the Administration to restrict visas for certain Chinese officials in the XUAR and to place 28 Chinese governmental and commercial organizations on the Commerce Department’s ‘Entity List.’ For too long, Chinese authorities and businesses have escaped accountability for their complicity in systematic and egregious human rights abuses in the XUAR. The Administration should encourage other nations to take similar measures because the mass internment of over a million ethnic Uyghurs and other Turkic Muslims is one of the world’s worst human rights situations. We also call on the Administration to take further action by imposing Global Magnitsky sanctions, including closing access to the U.S. financial system, against Chen Quanguo, XUAR Communist Party Secretary and Politburo member, and other officials in the XUAR complicit in these gross violations of human rights.”
 For October 2019, CECC will hold hearings on "Forced Labor, Mass Internment, and Social Control in Xinjiang." It is not clear where this will go in terms of shaping US policy.  But it certainly has to be added to the mix of a complicated relationship between these two states. The description of the hearings provided by CECC follows below.

Tuesday, October 15, 2019

Texts Related to U.S. Sanctions on Turkey: Executive Order on Syria-related Sanctions; Syria-related Designations; Issuance of Syria-related General Licenses

This Press Release today from the U.S. Office of Foreign Assets Control (OFAC)
Today, the President issued a new Executive Order Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria​. In addition, OFAC has issued Syria-related General License 1, "Official Business of the United States Government," General License 2, "Authorizing Certain Activities Necessary to the Wind Down of Operations or Existing Contracts Involving the Ministry of National Defence or the Ministry of Energy and Natural Resources of the Government of Turkey," and General License 3, "Authorizing Official Activities of Certain International Organizations Involving the Ministry of National Defence or the Ministry of Energy and Natural Resources of the Government of Turkey." Finally, OFAC has added the following names to its list of Specially Designated Nationals and Blocked Persons.

Please visit this link for more information on this action.

The text of President Trump's Executive Order follows in its entirety.  It is left for the reader to assess in the context of a wholly lamentable situation that perhaps need not have come to pass.  For earlier thoughts on that see here: In Defense of America First: Brief Reflections on the Resignation of James Mattis as U.S. Secretary of Defense. Modest European sanctions may also be on the way.  See, e.g., EU countries agree to suspend arms exports to Turkey).  For reporting from the AP see here (US "Treasury Secretary Steven Mnuchin said the sanctions will hurt an already weak Turkish economy. Pence said the U.S. will continue to ramp up the sanctions “unless Turkey is willing to embrace a cease-fire, come to the negotiating table and end the violence.”").

Declaración de la Coalición por la Paz y la Ética al inicio de la 5ª sesión del Grupo de Trabajo intergubernamental de composición abierta sobre las empresas transnacionales y otras empresas con respecto a los derechos humanos

La Coalición por la Paz y la Ética (CPE) ha publicado para su distribución general la siguiente declaración al comienzo de la quinta sesión del IGWG: (Inglés acqui)
 Descarga aquí

The Indirect Effects of Threats of Helms-Burton Lawsuits on Cuban Access to Global FInance--How Legal Risk Shapes Markets in Cultures of Risk Mitigation and Compliance

Reuters 9 October 2019)

Helms-Burton litigation against non-Cuban global enterprises has become something of a spectator sport among those who drive public opinion by drawing attention to things in ways that they would like attention drawn.  That news either appears as "human interest" or "wow, look at the conseqeunces of historical conflict unresolved" types of  coverage.  Lawyers, of course, enjoy technical news about the suits for any insight it might being to sharpening legal skills and applying new strategies more broadly.  Political people, especially thos ein the thick of the civil war among factions of the American elite will draw form the lawsuits "great" insights about the goodness of their faction and the evil of the other.

Much of this is helpful, I imagine, for the purposes for which it is launched onto the arena of manipulating mass opinion. It is less helpful for understanding one of its most important consequences--the way that compliance and risk itself continue to grow as has become potent tools in using financial markets to political ends. Some interesting reporting from Marc Fran for Reuters in Cuba,  Tougher U.S. sanctions make Cuba ever more difficult for Western firms (9 October 2019) provides a window on how it is working in the context of efforts to restrict Cuban access to financial markets. The reporting follows below with quite useful details.

What makes the reporting so interesting is the way it shows how it is the risk of litigation--rather than the threat of specific and concrete action, that has the greatest effect on access to financial markets.  That access is restricted in two ways.  First, access sis restricted  by increasing the cost of capital (building high risk into pricing).  Second, and more crudely, access is restricted  risk by avoiding the market for Cuban related financing entirely. Here one sees a curious mix of both business and legal risk in the calculus both of the cost of that risk (if one were to lend) or the value of the market for that financing in the first place because of the scope of the perceived risk in that market.

More important, perhaps, is the way that legal risk augments costs bythe way in which it affects the structuring of transactions. In order to gain access to credit from institutions willing to finance a project, companies must go through the time and trouble to restructure their operations in a way that minimizes the exposes of the business to the risks of litigation.  For many companies that involves the construction of multi-level legal structures that eventually tie in to Cuba through joint ventures with Cuban locals (almost always the state). But this sort of structuring produces its own legal and business risk, and it costs time and money to develop and operationalize models.  Lawyers, accountants, bankers no doubt welcome the opportunity.  Fir business the two layer increases in costs of the deal may push a project from likely profitable to unprofitable.  And, of course, all of this is added to the sometimes lengthy and inscrutable process of obtaining review and approval of projects within Cuba.  

The bottom line, the decision to permit litigation is having effect on Cuba.  More generally it is teaching all (powerful) states that projecting targeted risk into financial markets can have substantial political effect.  Expect to see more of this--and not only from the United States. 

Sunday, October 13, 2019

Coalition for Peace and Ethics Statement on the Start of the 5th Session of the Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights

The Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights (intergovernmental working group or IGWG) was mandated "to elaborate an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights."

A well orchestrated 5th session will take place 14-18 Oct 2019. For that event a number of carefully curated materials have been made available for those with the resources and capacity to access them on the U.N. website. See the revised Draft hereSide events programmeRevised Draft programme of workGeneral information. In addition, the OEIWG was gracious enough to have organized an informal consultation on the updated draft programme of work for the fifth session, 9 October 2019 Room XXIV at Palais des Nations. 

* * *

The Coalition for Peace and Ethics has released for general distribution the following statement on the start of the 5th Session of the IGWG: (en español aqui)

The Coalition for Peace and Ethics salutes IGWG and those at the center of its work. 

We acknowledge the work of their allies.

We appreciate the tremendous work and good faith of all of the participants and respect the  objectives toward which these efforts are directed.

The Coalition for Peace and Ethics shares with those influence drivers many of the fundamental principles that have directed their efforts and encourage them to continue a strong adherence to their further development.  

We further regret that the process of development of the draft has tended to marginalize both the sustained engagement of the objects of the Treaty's purpose, and made it difficult for non-governmental organizations without resources and capacity to effectively participate in the process of the elaboration of a draft Treaty, except, as audience and to some extent, as "focus group."  

The Coalition for Peace and Ethics regrets that the process, for reasons that are inherent in the politics of business and human rights after the endorsement of the U.N. Guiding Principles for Business and Human Rights, has produced the sort of well managed factionalism through which both the "Zero Draft" and the current Draft Legally Binding Instrument" were elaborated

The Coalition for Peace and Ethics welcomes the openness of the IGWG to receive comments on its work and further on its progress toward producing a draft Treaty that will actually be circulated as such.

Lastly, the Coalition for Peace and Ethics agrees international law might contribute, in some specific ways, to evolution of norms and  standards against which the human rights and sustainability consequences of the economic activities of states as well as of business enterprises might be assessed and managed

On the basis thereof, the Coalition for Peace and Ethics:

1. Cautions the IGWG and its allies of the dangers of proceeding  with the development of the Draft and its future incarnations without deep and effective consultation with the large and varied communities of actors that have neither the resources nor the capacity nor that status to sit at the principal table where decisions about the Treaty drafting are being made.  To the extent that the Treaty project is viewed as another elite project, it runs the danger of losing both legitimacy and authority among the classes of individuals for the protection of which the work of the IGWG is directed.   
2. Cautions the IGWG and its allies against the temptation of drafting the Legally Binding Instrument in a manner that is accessible to rights holders.  As drafted the Treaty may appear to some to be little more than a means through which control over the protection, mitigation, and remediation of rights is effectively delegated to organizations (including states, enterprises, and non governmental organizations) who would act for rights holders.  As written, the language and the structures are complex, remote, and incapable of easy understanding by those most in need of its protections.

3. Regrets that the Draft Legally Binding Instrument  continues what we believe to be its (no doubt popular) position with respect to the construction of a class of rights holders--"victims"--through which the obligation of the Treaty will be operationalized. 

4. Cautions against the decisions, written into various key potions of the Draft, to abandon effective efforts toward the construction of coherent and coordinated standards.  The result will only increase the principal use of the any resulting Treaty as a play book for judiciary and law shopping among adhering states in ways that will make the obligations written into the Treaty even more remote from rights holders. The Treaty ought not to be constructed as a means of empowering lawyers; nor should it be framed as a means through which lawyers from developing states can effectively strip the courts of developing states of effective control of the legal development of rights within their domestic legal orders.  Neither of these dangers is adequately addressed in the draft Treaty. 

5. Welcomes the efforts to introduce a legal regulation of human rights due diligence within the Treaty framework.  But it cautions against the porous nature of the current approach that will produce fracture rather than coherence that will in its effects undo the efforts to unify the practice of human rights due diligence among enterprises and states irrespective of location and without regard to national deviations in the normative basis of such due diligence. 

6. Encourages the IGWG to take its own suggestion and reconsider the basis of the rights afforded to individuals away from a statutory basis and toward a harm basis.  It is to be regreted that the IGWG has again sought to revisit the approach of legal liability abandoned after 2005 and the Norms project.  Whatever its value at the time, the international community had spoken to some extent, and the plausibility of constructing a legally viable framework on the basis of standards of dubious legality and even less wide acceptance as law in many jurisdictions will tend to serve as a distraction at best, and a means of unsuccessfully ending this project at worst. 

7. Suggests that, as written, the Draft Legally Binding Instrument  appears better suited as a framework instrument than as a legally binding instrument that is ready for transposition, as such, into the legal orders of adhering states.

8. Regrets the continued efforts to build into the Treaty framework some sort of distinction between transnational and other enterprises.  The effort suggests, no doubt without basis, efforts to sneak items of national advantage into a treaty that is meant to celebrate multi-lateral solidarity.  That alone is enough cause for regret.  The extent to which such differences no longer matter, the continued reference to transnational versus local enterprises creates substantial areas of ambiguity that will not help the Treaty project achieve its aims. 
9. Encourages the IGWG with its future work on transforming this draft into a document that is more specific, more accessible, less elite driven, and more compatible with a view that all actors in the process of embedding human rights in economic activity are entitled to respect and inclusion in the process of building a treaty framework for its important goals.
10. Advises the IGWG to more vigorously center issues of sustainability, including issues of environmental, bio-diversity and climate change within the broader framework of human rights enhancing obligations imposed on both business and states. The failure to acknowledge and embed the human rights aspects of sustainability may, in effect, constitute a human rights wrong. The failure to address this may significantly undermine the value and authority of any Treaty that emerges from this process.
11. Warns the IGWG that the failure to consider the role and effectiveness of data driven governance standard setting and implementation modalities may seriously impede the operationalization of the Treaty and its framework. Data driven governance, quantitative ratings based social credit regimes ought to play an important part in the construction of a business and human rights legal framework.  It is essential for accountability not just with respect to enterprises but also with respect to states on which the primary legal obligation for respect of law and its enforcement continues to rest.
12. Regrets that the continued differentiation between "transnational" and other enterprises continues to find its way into critical portions of the Treaty draft.  CPE encourages the IGWG to consider elimination of this unnecessary distinction, if only to avoid the intimation that the Treaty is made to favor the national interests and economic protectionism of some states at the expense of others.

The Coalition for Peace and Ethics applauds the work of the many actors who have helped bring this project to this stage of development.  It encourages a broader engagement, especially among stakeholders who generally tend to be ignored by the powerful actors who have tended to treat this project as slightly more proprietary than is necessary.  Leadership and guidance is not ownership, and respect for that distinction may spell  the difference between a treaty that is widely accepted and one that is widely ignored. 

With respect to these observations and comments, and for the purpose of aiding in the consideration of issues that might be usefully considered in moving the Treaty project forward, the Coalition has offered to the IGWG its Treaty Project Working Group's Commentary on the U.N. Inter-Governmental Working Group (Geneva) 2019 Draft 'Legally Binding Instrument to Regulate, in International Human Rights Law, The Activities of Corporations and Other Business Enterprises' (Textual and Conceptual Analysis).  Full Print Version HERE: 14-2_Treaty_Special_Issue_2019; online (ISSN 2689-0291) and in print format for download (ISSN 2689-0283 (print)). Either may be accessed by clicking THIS LINK HERE.

Coalition for Peace and Efforts Treaty Project Working Group
Larry Catá Backer
Flora Sapio 
3 October 2019 


Saturday, October 12, 2019

Blacklists and Social Credit Regimes in China: Paper and PowerPoints

(Pix Credit: Social Credit Watch, Report: Understanding the Social Credit System (23 Sept. 2019))

Black(white)(red)lists have been an instrument of regulatory management for a long time.

The city was filled with murder and there was no counting the executions or setting a limit on them. . . .Finally one of the younger men, Gaius Metellus, ventured to ask Sulla in the senate at what point this terrible state of affairs was to end. . . . “We are not asking you,” he said, “to pardon those whom you have decided to kill; all we ask is that you should free from suspense those whom you have decided not to kill.” Sulla replied that he was not sure  yet whom he would spare, and Metellus at once said: “Then let us know whom you intend to punish.” . . . Then immediately, and without consulting any magistrate, Sulla published a list of eighty men to be condemned. (Plutarch, The Fall of the Roman Republic, Sulla, ¶ 31).

In the West it has long been common for leaders of states (or those whose leadership guides the state) to establish proscription lists.  * * * Chinese history is also full of lists created by officials and others. They are all were used to similar effect—to identify individuals or societies for the purpose of reward or punishment.  That was accomplished either by listing or ranking; the former where the list itself contained the restriction or privilege; the latter where the list permitted others to use rank to determine consequence. * * *  Lists, however, in themselves are merely passive conclusions; they acquire potency only when circulated, and, in the wake of circulation, when they produce a timely social, political and economic consequences undertaken through and supported by the state. These consequences, themselves, must be keyed to societal values that resonate in ways that create incentives to support or condemn particular practices or behaviors that served as the basis for placement on the list. In other words, there must be a connection between  that facts that produce assessments on which list are created, and the consequences, related to that data for placement (or non-placement) on that list.

The value of lists, then, lies in their utility for managing effects. * * * But while a single list may be useful means of actualizing a score, super-scoring becomes possible only by the development and coordination of a larger aggregation of lists, each potent within its own narrow field, but together capable of producing a coherent means of managing any aspect of societal expression (and its underlying beliefs). It is in that context that it is possible to think about lists, and a developing list universe system, at the center of China’s Social Credit (CSC) system.  This essay considers the role of lists in the construction of CSC conceived as a vast super-scoring system that effectively displaces law and administrative regulation as the engine for ordering society through government. The essay first very briefly describes the CSC system.  It then considers two questions: (1) how does one build a super scoring system through the structures of CSC?; and (2) what role do lists play within that framework. It ends with a short consideration of what may be the principle challenges for political and general education that now arise in the context of these digital regulatory measures.
The paper may be accessed HERE:

The PowerPoints follow below and may be accessed HERE:

Other presentations may be accessed here.

Thursday, October 10, 2019

From Afronomics Law: Symposium on UNIDROIT/FAO/IFAD Draft Legal Guide on Agricultural Land Investment Contracts (ALIC)

James Thuo Gathii, Olabisi D. Akinkugbe, and Nthope Mapefane  are the editors of Afronomics Law, an exciting new site that is well worth exploring.
AfronomicsLaw focuses on the international economic law landscape as it relates to the Africa. Its primary goal is to complement existing forums that analyze, discuss and debate international economic law issues as they relate to Africa. It offers scholars, policy makers and others interested in these issues a forum to insightfully reflect on these developments more contemporaneously with than the scholarship that is being produced. The blog also offers the growing and important voice of scholars and practitioners of African international economic law, a forum to share their views. AfronomicsLaw is a blog in association with the African International Economic Law Network, (AfILEN), but is independently run by its Editors.

The editors tell us that "The blog was officially launched at a cocktail hosted on the sidelines of the Fourth African International Economic Law Network Conference at Strathmore University Law School in Nairobi. The cocktail was sponsored by Sheria Publishing House. In attendance to celebrate the Blog Launch were our Editors – James Thuo Gathii, Olabisi D. Akinkugbe, and Nthope Mapefane. Also in attendance were some of our Contributing Editors Luwam Dirar, Titilayo Adebola, Tsotang Tsietsi, Ohio Omiunu, and Regis Simo. Many Contributors to the blog were also present."

Please have a look. 

Of particular interest may be Afronomics Symposium on UNIDROIT/FAO/IFAD Draft Legal Guide on Agricultural Land Investment Contracts (ALIC) which I have reposted below.

Wednesday, October 09, 2019

Important Upcoming Conference: “China’s Legal System at 40 Years — Towards an Autonomous Legal System?” University of Michigan Law School 11-13 October

I am delighted to post information about an upcoming an important conference for those interested in the cutting edge of Chinese academic research centered in the United States. Hosted at the University of Michgan Law School and organized by by the eminent scholars Mary Gallagher and Nicholas Calcina Howson, the conference “China’s Legal System at 40 Years — Towards an Autonomous Legal System?” the conference will be a
once in a generation gathering of scholars and practitioners working across many fields and around the globe on the development of the legal system in the People’s Republic of China and the broader Chinese world. Both of us are excited about this unique opportunity to welcome to Ann Arbor and the University of Michigan so many accomplished colleagues and friends from varied disciplines to engage in an intensive dialogue about the Chinese political legal system.
A list of Conference attendees and the titles of their contributions, along with the conference schedule, all drawn form the public parts of the conference website, follow.  You are encouraged to reach out to conference participants for copiers of their papers.

Monday, October 07, 2019

"Social Credit and Foreign Enterprises Along the Silk Road": Remarks prepared for a Lecture Delivered at the Institute for East Asian Studies Cologne, Germany October 2019

Set out below is the text of remarks prepared for a Lecture Delivered at the Institute for East Asian Studies in Cologne, Germany. The Remarks, entitled, "Social Credit and Foreign Enterprises Along the Silk Road," considers the now controversial issue of the application of Chinese social credit ratings regimes on non-Chinese companies. The application raises important issues about the nature of governance in both China and the West, the convergence of distinct approaches to corporate accountability, and the use of data driven governance as both a means of standard setting and as the means by which such standards are applied.

To those ends the remarks begin from the simplest of starting points: how is it that one can construct a social credit system? From there the remarks considered China’s Social Credit system structures in general terms. That provides the grounding necessary to then focus on that part of the social credit system that targets business integrity. To those ends the remarks turned to a consideration of a July 2019 publication of the State Administration of Markets on business related Social Credit lists, and more importantly, the 16 July 2019 State Council Guiding Opinion. Lastly, the remarks considered its implications for non-Chinese business operating in China and within the BRI sphere of influence.

The text of the Remarks follow below; they may be downloaded HERE.

The PowerPoints of the Remarks may be accessed HERE.