Recently I have been considering the issue of the construction of governance orders in the 21st century. I have suggested that political power is no longer necessarily the highest form of effective power, that states have become more limited as projections of power outside the territorial borders of these political units become easier, and I have suggested that both the division between public and private power and the hierarchical arrangement of power pursuant to that division have also softened. Larry Catá Backer, Governance Without Government OR Government without a State?: Gunther Teubner on Complications of Umooring Corporate Governance From Corporate Law, Law at the End of the Day, June 25, 2009; Larry Catá Backer, Governance Without Government: A Preliminary Overview Law at the End of the Day,June 16, 2009.
It is possible now to conceive of corporations that can regulate themselves--by arranging the operations to be subject to state regulatory regimes of their choice. The resulting basket of regulation reflects more the preferences of large enterprises with respect to the aggregate regulations to which it wishes to be subject, than the imposition of popular will through the law of any single nation state. See Larry Catá Backer, The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality,Tulsa Law Journal, Vol 41, 2006. It is also possible for these entities to intermesh, producing industry wide regulation. More interestingly, it is also possible for private entities to develop autonomous governance systems beyond the nation state in which corporations, investors, consumers, non governmental organizations and the media substitute for the state and its organs. See Larry Catá Backer, Economic Globalization and the Rise of Efficient Systems of Global Private Lawmaking: Wal-Mart as Global Legislator, University of Connecticut Law Review, Vol. 39, No. 4, 2007. These autonomous systems are both institutionalized and regulatory, but exist only within specifically defined frameworks. More ominously, political and economic actors, without a state have increasingly institutionalized and bureaucratized their organization, creating governments operated under a constitution and subject to a juridified code of conduct overseen by an administrative structure. See, e.g., Backgrounder: al-Qaeda (a.k.a. al-Qaida, al-Qa'ida), Council on Foreign Relations, April 18, 2008.
But it is also possible to conceive of states as market participants on a global scale. This participation include projections into the economies of other states through the activities (operational and investment) of state owned enterprises. See Larry Catá Backer, State Owned Enterprises and Sovereign Investment in Foreign Economic Entities, Law at the End of the Day, Jan. 28, 2009. More importantly, perhaps, they also involve increasingly significant projections into global investment markets, for example through sovereign wealth funds. See Larry Catá Backer, Sovereign Wealth Funds as Regulatory Chameleons: The Norwegian Sovereign Wealth Funds and Public Global Governance Through Private Global Investment, Georgetown Journal of International Law, Vol. 40, No. 4, 2009. And states have sought to project their regulatory authority against enterprises operating within their territories, or with effects within their territories, for example in the United States under the Alien Tort Claims Act. Increasingly, states and private actors have sought to mediate their relationships through the construction of international soft law overseen by national actors with the consent of private enterprises. These regimes, from the Global Compact to the Organization for Economic Cooperation and Development Guidelines for Multinational Corporations represent strategic alliances between public and private domestic and international organizations for the regulation and stabilization of specifically defined sectors of activity. See Larry Catá Backer, The OECD Guidelines for Multinational Corporations: Using Soft Law to Operationalize a Transnational System of Corporate Governance, Law at the End of the Day, March 5, 2009. Moreover, the move toward a conflation of private and public space and the global spillover of national conduct has opened the door to assertions of broad national power to project their judiciaries abroad. See Larry Catá Backer, Universal Jurisdiction, Universal Law, Prosecutorial Discretion, Law at the End of the Day, April 13, 2009. It has also created opportunities for vertically integrated public private regulatory frameworks. See Larry Catá Backer, From Moral Obligation to International Law: Disclosure Systems, Markets and the Regulation of Multinational Corporations, Georgetown Journal of International Law, Vol. 39, 2008.
Within these networks of governance and systems, it is possible to see the outlines of governance and government in the coming decades. These include a proliferation of government beyond the state, and governance without government (at least as government is traditionally understood as necessarily legitimate only if viewed to a territory which it controls). Non state actors are constructing governments without states. These constructions range from groups seeking political power to those operating in economic sectors. States are becoming more involved in projections of public power through private markets in which they compete with private actors in functionally differentiated sectors of activity that no single state controls. At the same time, governance is becoming possible without government. States have developed a taste for privatizing governmental functions. See Larry Catá Backer, Surveillance and Control: Privatizing and Nationalizing Corporate Monitoring after Sarbanes-Oxley, Law Review of Michigan State University, 2004. Networks of actors have begun governing using an panoptic model of transparency, disclosure and efforts to control the machinery for the production and elaboration of values. See Larry Catá Backer, Global Panopticism: States, Corporations and the Governance Effects of Monitoring Regimes, Indiana Journal of Global Legal Studies, Vol. 15, 2007.
Still, this is a messy business. States are still strong, and some retain the disposition to be aggressive to the extent of their ability to control. Other have effectively ceased to exist. Still others exist as equals or inferiors in power to non state economic and political actors. Moreover, not all states are facing changes in the nature of their power and the exercise of their sovereignty vis a vis other states and non state actors in the same way. Neither the development of governance without government nor of government without a state is happening in single minded linear fashion. Many non state actors retain their position as juridical entities subordinate to the state that effectively control them; but an increasing number do not. The ease of movements of capital and the integrity and uniformity of global standards for governance, coupled with growing expectations of behavior among states makes existence beyond the power of a state increasingly feasible. And feasibility nurtured into fact produces a necessary turn to governance. And the relationships among these actors changes in context and over time. But what makes for the greatest part of the mess is that all of these actors are acting simultaneously against each other, over and over again in contexts that change over place and time.
A recent example of the overlap of private an public regimes, non-state governments, traditional states, and non state entities as regulators, and the consequences of their collisions drives home these points. I speak here of the recent successful ransoming of the cruise ship Le Ponant from the Somali pirates that had held her and her passengers and crew hostage in 2008. The story is , for our purposes, well related in William Langewiesche, "The Pirate Latitudes," Vanity Fair No. 584:148-153, 181-187, April 2009.
For most, the story is one of the perils of piracy and the fortitude of the French in resolving this particular ransoming to the satisfaction of the global media. "Within hours in Paris the top French military commanders held a triumphant press conference during which they announced the liberation of the hostages, and the arrest of six Somalis (half the pirate force, they said), at the end of a successful military operation that had been carried out with the permission of Somali authorities, whatever that may mean, and had involved no payments of state funds." Id., at 187. But for others modern piracy suggests the multi level and heterogeneous nature of international public-private relations in the 21st century.
But neither of these stories is particularly interesting except for its revelations of the modern nature of power and governance relationships. What emerges is an apt descriptor of many of the criss crossing sectors of modern global governance. First consider the ship itself, the Ponant.
The pirates themselves represent another sovereign non governmental actor. Well trained, well organized, and autonomous from any political control within the territory in which they operate, the Somalis present a political unit with a state owned enterprise--piracy. That is, they acquired control of other people's possessions and released them for money. The pirates were essentially the operations arm of the community of Somalis that lived along the coast and made their living off of piracy.
And, indeed, in this part of the world, piracy has been naturalized within the conventional practices of business. "In Mombasa, Kenya, I recently spoke to a seafarer named Andrew Mwangura, who has become the go-to man in many piracy cases, and who described elaborate payment schemes involving investors, money-launderers, and specialized middlemen in London, Dubai, and Nairobi." Id., at 184. For all that, these actors tend to be underestimated because of the colonial, race, ethnic and class blinders of those who are their targets. "A band of barefoot natives, Fuzzy Wuzzies in rags, hip-firing their Kalashnikovs with poor aim, and worshipping some filthy G.P.S. as if it had fallen from the sky. They should have surrendered days before, even to the Canadians. But they hadn’t, and that was the problem. They were not particularly bellicose or arrogant, but they refused to be impressed when they should have been." Id., at 184.
The navies of France and Canada were soon on the scene. But they could do little. Bound by their own codes of behavior, and fearing to lose the hostages to the pirates, all they could do was watch. Though that could be done drantically and plans could be put in place for rescue.
Ultimately, it was the company, and not the state, whose participation helped solve matters.
The navies of the various governments, meanwhile appeared to have been playing to the global media. And rightly so--for the press and the people of those states are the primary constituencies of those governments and the principle consumers of its product--in this case "action" to "defend" the "hostages" from criminal elements in a lawless part of the world. But the context in which the state operated, so different from that in which the pirates and the company operated, also made governmental action less effective. "Fuzzy Wuzzies they were, but until Paris decided it could accept casualties among the Ponant’s crew, they had stymied the French national will. " Id., at 184.
But it was more than that. The company, CMA CGM, does not operate in a vacuum. And its relations are not just institutional. Structural coupling, communication and integraiton across systems was as important here as other factors. But what made this particularly interesting was that the structural coupling, the communication and coordination occurred between state and non state actors and related to the actions of a quasi public non state actor operating within the territory of a state that had ceased to exist.
And the national law of the players apparently could not reach the payment in any case. "This was private money, floating free of national constraints, and it could be spent quite legally on ransom. To be clear about the rules that apply: extortion is illegal everywhere, except when it is construed as taxation; the payment of extortion, however, is legal, unless it is construed as bribery." Id. But it should be remembered that extortion was not illegal within the territory of the place controlled by the Somali pirates. Indeed, there it might even be understood as positive obligation of local Somali law as experienced on the ground. On the other hand, there was nothing that would prevent the French from acting after the fact. "Reluctantly [Sarkozy] agreed to give Saadé several days to work out a deal before he would damn the consequences and send the French Navy into action. He summoned the families of the crew to a confidential meeting in the presidential palace, where he is reported to have said, “We’re dealing with crooks. They want money. We’re going to give it to them. But afterward it’s my affair.”" Id., at 185. And, indeed, it is nlot clear how effective the negotiations between the company and the pirates might have been without the presence of the state and its navy.
And so the transactions were effected. The company paid the ransom; the pirates released their hostages; and the French government swooped in and got their lawless bandits (about six of the pirates and several hundred thousand dollars were recovered). Id., at 186. However, the "main culprits and 90 percent of the ransom money remained in Garacad, a town clearly in view from the frigate yet completely out of reach." Id., at 187. Still, everyone could claim victory. The state satisfied its electorate and the expectations of the media. The company salvaged its business with little fussy and at small cost. The Somalis made money on the extortion transaction. The Somali national government continues to be a fantasy useful in uinternational circles.
Langeweische suggests "One of the ironies at play is that the maritime industry being victimized is itself a standard-bearer for the advantages that exist in a world beyond law and regulation." William Langewiesche, "The Pirate Latitudes," supra at 181. Yet it might be more correct to suggest that in a world beyond conmventional governance, the dynamics of governance and interactions among actors is at once reverting to a pattern existing between the rise of power monopolizing states, yet at the same time evidencing new patterns of control by potent non-sovereigns within the ambit of their control. This is both a more complex world and one that is harder to control by any singularity. The state is all powerful, and yet it is impotent in the face of modern forms of action by non state actors and unconventional activities--like piracy. Piracy is both internationally reviled and yet widely practiced within certain states, or communities of people exercising the powers of states within small territories. These actors are both public and private entities, though unconventionally organized in either aspect. Companies, themselves, are globally diffused. They appear to be both an aggregation of intentionally embraced regulatory schemes segmented to attain advantage. But they are also capable of acting in the place of states. And they have more successfully than conventional states, been able to adjust to the realities of activities, like piracy. Traditional state law and military power seems to play an overwhelming and yet not necessarily efficient force in transnational activities. Moreover, the stakeholders of each of the major actors--the company, the state, and the pirates--creates incentives to act that were both distinct and not consistent. Yet they each ultimately complemented the other.
Thus, what at first appears to be a story about pirates and lawlessness on the high seas reveals more about the fractious nature of power and its diffusion in a post modern global setting. Those who wish to regulate in this environment will have to acknowledge that governance will be a complicated affair. There are now more participants than states. Each of the actors serve both public and private purposes. Law is neither the beginning nor the end of the most effective form of governance. And international organizations provide little effective service. In particular, it will be important to understand both the limits of state power, and the trajectories of corporate citizenship within this emerging framework of power. But it will also be necessary to remember that while the nature of state power is changing, it has not disappeared.
It is possible now to conceive of corporations that can regulate themselves--by arranging the operations to be subject to state regulatory regimes of their choice. The resulting basket of regulation reflects more the preferences of large enterprises with respect to the aggregate regulations to which it wishes to be subject, than the imposition of popular will through the law of any single nation state. See Larry Catá Backer, The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality,Tulsa Law Journal, Vol 41, 2006. It is also possible for these entities to intermesh, producing industry wide regulation. More interestingly, it is also possible for private entities to develop autonomous governance systems beyond the nation state in which corporations, investors, consumers, non governmental organizations and the media substitute for the state and its organs. See Larry Catá Backer, Economic Globalization and the Rise of Efficient Systems of Global Private Lawmaking: Wal-Mart as Global Legislator, University of Connecticut Law Review, Vol. 39, No. 4, 2007. These autonomous systems are both institutionalized and regulatory, but exist only within specifically defined frameworks. More ominously, political and economic actors, without a state have increasingly institutionalized and bureaucratized their organization, creating governments operated under a constitution and subject to a juridified code of conduct overseen by an administrative structure. See, e.g., Backgrounder: al-Qaeda (a.k.a. al-Qaida, al-Qa'ida), Council on Foreign Relations, April 18, 2008.
But it is also possible to conceive of states as market participants on a global scale. This participation include projections into the economies of other states through the activities (operational and investment) of state owned enterprises. See Larry Catá Backer, State Owned Enterprises and Sovereign Investment in Foreign Economic Entities, Law at the End of the Day, Jan. 28, 2009. More importantly, perhaps, they also involve increasingly significant projections into global investment markets, for example through sovereign wealth funds. See Larry Catá Backer, Sovereign Wealth Funds as Regulatory Chameleons: The Norwegian Sovereign Wealth Funds and Public Global Governance Through Private Global Investment, Georgetown Journal of International Law, Vol. 40, No. 4, 2009. And states have sought to project their regulatory authority against enterprises operating within their territories, or with effects within their territories, for example in the United States under the Alien Tort Claims Act. Increasingly, states and private actors have sought to mediate their relationships through the construction of international soft law overseen by national actors with the consent of private enterprises. These regimes, from the Global Compact to the Organization for Economic Cooperation and Development Guidelines for Multinational Corporations represent strategic alliances between public and private domestic and international organizations for the regulation and stabilization of specifically defined sectors of activity. See Larry Catá Backer, The OECD Guidelines for Multinational Corporations: Using Soft Law to Operationalize a Transnational System of Corporate Governance, Law at the End of the Day, March 5, 2009. Moreover, the move toward a conflation of private and public space and the global spillover of national conduct has opened the door to assertions of broad national power to project their judiciaries abroad. See Larry Catá Backer, Universal Jurisdiction, Universal Law, Prosecutorial Discretion, Law at the End of the Day, April 13, 2009. It has also created opportunities for vertically integrated public private regulatory frameworks. See Larry Catá Backer, From Moral Obligation to International Law: Disclosure Systems, Markets and the Regulation of Multinational Corporations, Georgetown Journal of International Law, Vol. 39, 2008.
Within these networks of governance and systems, it is possible to see the outlines of governance and government in the coming decades. These include a proliferation of government beyond the state, and governance without government (at least as government is traditionally understood as necessarily legitimate only if viewed to a territory which it controls). Non state actors are constructing governments without states. These constructions range from groups seeking political power to those operating in economic sectors. States are becoming more involved in projections of public power through private markets in which they compete with private actors in functionally differentiated sectors of activity that no single state controls. At the same time, governance is becoming possible without government. States have developed a taste for privatizing governmental functions. See Larry Catá Backer, Surveillance and Control: Privatizing and Nationalizing Corporate Monitoring after Sarbanes-Oxley, Law Review of Michigan State University, 2004. Networks of actors have begun governing using an panoptic model of transparency, disclosure and efforts to control the machinery for the production and elaboration of values. See Larry Catá Backer, Global Panopticism: States, Corporations and the Governance Effects of Monitoring Regimes, Indiana Journal of Global Legal Studies, Vol. 15, 2007.
Still, this is a messy business. States are still strong, and some retain the disposition to be aggressive to the extent of their ability to control. Other have effectively ceased to exist. Still others exist as equals or inferiors in power to non state economic and political actors. Moreover, not all states are facing changes in the nature of their power and the exercise of their sovereignty vis a vis other states and non state actors in the same way. Neither the development of governance without government nor of government without a state is happening in single minded linear fashion. Many non state actors retain their position as juridical entities subordinate to the state that effectively control them; but an increasing number do not. The ease of movements of capital and the integrity and uniformity of global standards for governance, coupled with growing expectations of behavior among states makes existence beyond the power of a state increasingly feasible. And feasibility nurtured into fact produces a necessary turn to governance. And the relationships among these actors changes in context and over time. But what makes for the greatest part of the mess is that all of these actors are acting simultaneously against each other, over and over again in contexts that change over place and time.
A recent example of the overlap of private an public regimes, non-state governments, traditional states, and non state entities as regulators, and the consequences of their collisions drives home these points. I speak here of the recent successful ransoming of the cruise ship Le Ponant from the Somali pirates that had held her and her passengers and crew hostage in 2008. The story is , for our purposes, well related in William Langewiesche, "The Pirate Latitudes," Vanity Fair No. 584:148-153, 181-187, April 2009.
For most, the story is one of the perils of piracy and the fortitude of the French in resolving this particular ransoming to the satisfaction of the global media. "Within hours in Paris the top French military commanders held a triumphant press conference during which they announced the liberation of the hostages, and the arrest of six Somalis (half the pirate force, they said), at the end of a successful military operation that had been carried out with the permission of Somali authorities, whatever that may mean, and had involved no payments of state funds." Id., at 187. But for others modern piracy suggests the multi level and heterogeneous nature of international public-private relations in the 21st century.
If anyone had saved lives it was the pirates themselves, along with Marchesseau, and the shipowners in Marseille, Rodolphe and Jacques Saadé. By satellite phone they had succeeded with negotiations in an evolving global dimension that lies beyond the reach of government and its conventions. For all its firepower and training, the French Navy was neutralized by the fact that Ahmed never threatened to start executing the hostages, and that for whatever reason he actually cared about their welfare. As a result, the best the French Navy could do was stand by, eat well, and serve as bagmen for the money. It was successful at this—maybe more so than other navies would have been—but the claims that were subsequently made of a French national victory were exceedingly thin.Id.
But neither of these stories is particularly interesting except for its revelations of the modern nature of power and governance relationships. What emerges is an apt descriptor of many of the criss crossing sectors of modern global governance. First consider the ship itself, the Ponant.
The company that owns the Ponant is a Marseille-based shipping conglomerate called CMA CGM, which is held by a Franco-Syrian-Lebanese family named Saadé, and does business through 650 agencies and offices worldwide, serving 403 ports in 150 countries, and operating more than 400 container ships, many of them under flags of convenience—cherry-picking the official home ports in a mockery of national chauvinisms. If there were a God looking down from above, he would have to approve, if only on the basis that all are equal in his sight. Id., at 150.Citizens of three nations, united as a family unit, operate a ship from headquarters in France. But the ship itself, though operated form France, is governed by the laws of the Wallis and Futuna Territory. "The Futuna island group was discovered by the Dutch in 1616 and Wallis by the British in 1767, but it was the French who declared a protectorate over the islands in 1842. In 1959, the inhabitants of the islands voted to become a French overseas territory." Wallis and Futuna Territory, CIA Factbook. The reasons are simple--convenience and profit maximization. It appears that while it is advantageous for the company to operate as a French concern as far as its customers are concerned, it is also useful to apply the regulatory framework of the Wallis and Futuna Territory with respect to the business of the enterprise--that is the tourist ship Ponant. Wallis and Futuna has the distinction of serving as
a tax haven that does not impose French labor laws on shipowners but allows the French flag to be flown. The tax haven is Mata-Utu, the home port painted on the Ponant’s stern, . . . where the Ponant has never been. Today the territory is ruled by a French envoy, a fractious assembly, and three local kings. CMA CGM maintains a mailbox and an e-mail address there, in Mata-Utu, through which employment inquiries can be routed.William Langewiesche, "The Pirate Latitudes," supra at 150. And evasion of French labor laws was apparently necessary to effect the image of the ship as a French fantasy adventure venue. This required hiring a French crew, for the most part.
Most were not sailors but hotel staff. Six were Filipinos, and formed a group apart. In the kitchen, the chef was an African from Cameroon, but because he had learned to cook in Lyon from Paul Bocuse, a famous father of nouvelle cuisine, he was considered to be as French as the French themselves. Of the rest of the crew all except one Ukrainian were as French as the French, but by birth. Id.Thus a French company run by a transnational family based in France, Syria and Lebanon could proudly maintain its adherence to all universal human rights norms--including non discrimination under hard and soft international law and French law. "Appropriately, the CMA CGM personnel department promotes the United Nations’ Universal Declaration of Human Rights, and vigorously denounces “any kind of discrimination, based on national, social or ethnic origin, race, sex, age, religion, political or other opinions.” This means, of course, that the company denounces discrimination in favor of the French." Id. AT the same time it could also continue to run its Wallis and Futuna operation in compliance with the laws of that place applicable to the ship--effectively replacing one set of regulations for another more amendable to the needs of the enterprise. "They stemmed from the culture of a global shipping industry which over the past 60 years has pursued profit and efficiency in part by ridding itself of labor unions, and more fundamentally by freeing itself from the constraints of the nation-state and its laws." Id. The company was French by convenience, and when inconvenient, its operations could be something quite distinct. And its owners could be whatever they wanted. The object, of course, was to maximize the value of the operations--and a French sailing holiday required a mooring in France. But it did not require identity with or conformity to French law to the extent they detracted from the business.
The pirates themselves represent another sovereign non governmental actor. Well trained, well organized, and autonomous from any political control within the territory in which they operate, the Somalis present a political unit with a state owned enterprise--piracy. That is, they acquired control of other people's possessions and released them for money. The pirates were essentially the operations arm of the community of Somalis that lived along the coast and made their living off of piracy.
They called themselves the Coast Guard, and apparently did have origins as vigilante fishermen who in the early 1990s sailed out to regulate and rob foreign boats that were smuggling all manner of contraband to and from Somalia and overfishing the coastal waters. Loosely speaking, they were the same group who later, in September 2008, hijacked the Ukrainian ship Faina, loaded with weapons for southern Sudan, and who ignored the presence of American warships for more than four months, and then walked away with $3.2 million, to the embarrassment of officials worldwide. The Coast Guard is said to have 400 members—whatever membership means, and however a count could be taken. Four or five such pirate groups are believed to operate in Puntland. They are large, fluid, clan-based alliances whose contours are inherently difficult to discern, and who derive their resilience in part from the very looseness of their structures. They are genuine organizations nonetheless. Id., at 186.Thus, the community was organically constituted, and self referencing entity with its own mission, organization structure and regulatory authority. And they were functionally differentiated to provide economic benefits for their people through the operation of an extortion business, the business of piracy, with supply lines, and a business organization in which different jobs were tasked to people in accordance with their abilities. Together they could deliver their product successfully and produce money for the community.
And, indeed, in this part of the world, piracy has been naturalized within the conventional practices of business. "In Mombasa, Kenya, I recently spoke to a seafarer named Andrew Mwangura, who has become the go-to man in many piracy cases, and who described elaborate payment schemes involving investors, money-launderers, and specialized middlemen in London, Dubai, and Nairobi." Id., at 184. For all that, these actors tend to be underestimated because of the colonial, race, ethnic and class blinders of those who are their targets. "A band of barefoot natives, Fuzzy Wuzzies in rags, hip-firing their Kalashnikovs with poor aim, and worshipping some filthy G.P.S. as if it had fallen from the sky. They should have surrendered days before, even to the Canadians. But they hadn’t, and that was the problem. They were not particularly bellicose or arrogant, but they refused to be impressed when they should have been." Id., at 184.
With nothing but a group of French nationals as a shield, they were enjoying meals, going back and forth between ship and shore, and negotiating directly with the Saadés in Marseille, as if the French Navy did not even exist. The pattern was unusually frustrating to French authorities, as more recent piracy cases have been to American, Russian, and Chinese authorities. It raised disturbing questions about the relevance of governments and the exercise of power. More specifically, a suspicion crept in that these pirates knew exactly what they were doing, and that they understood the forces at play with more sophistication than had been assumed.Id., at 184.
The navies of France and Canada were soon on the scene. But they could do little. Bound by their own codes of behavior, and fearing to lose the hostages to the pirates, all they could do was watch. Though that could be done drantically and plans could be put in place for rescue.
The French government arrived, at first with another warship, a smallish, 260-foot corvette named the Commandant Bouan, which overtook the Canadians and assumed a position about three miles in trail of the Ponant. Unbeknownst to the Ponant’s crew, a large operation had been launched by officials in Paris under the direct supervision of the French president, Nicolas Sarkozy. Over the next several days the operation would grow to include a half dozen French Navy ships, two Bréguet maritime patrol planes, several Falcon executive jets, at least one government Airbus, many helicopters, at least 50 commandos from the navy and the gendarmerie, a squad of frogmen, several landing craft, hundreds of amphibious assault troops, multiple urgent motorcades through Paris (with motorcycle escorts), and a string of command-and-control centers, starting with a 24-hour crisis-management bureau that was established in the presidential palace. The commandos were particularly dashing, the way they flew from Djibouti and parachuted into the sea to get aboard the warships.Id. at 183.
Ultimately, it was the company, and not the state, whose participation helped solve matters.
The pirates briefly left him unguarded on the bridge, and hurried the engineers down into the engine room to see what was wrong. When Marchesseau was alone, the satellite phone rang. It was a manager from the company, calling from Marseille. Marchesseau did not let him speak. In French he said, “We have about 10 pirates aboard. They want to take us to Somalia. We’ve stopped the motor. I can’t talk any longer. It’s dangerous, and I’m hanging up.” His heart pounded. He had taken a chance, but the contact with the company turned out to be the one that counted. Id., at 183.The company also set up its own crisis center ("CMA CGM had set up a 24-hour crisis office, under the direction of the owner’s 38-year-old son and heir apparent, Rodolphe Saadé." Id., at 184). It conducted negotiations for the payment of the ransom. Id. These were undertaken under the nose of and without the intervention, of the French government. Business to business exchanges among a global operator and a local pirate, both of whom seemed to know what they were doing. And indeed, CMA CGM has already internalized the risk of piracy. It was likely that the ransom paid would be compensated through the company's insurer--just as it might in the case of fire or business interruption. Thus, "the money was not going to be paid directly by CMA CGM, but by its insurance company—which, according to the Paris-based Intelligence Online, was the now-notorious American company A.I.G. " Id., at 185. After negotiation, the original $3 million demand was reduced to "2.15 million
The navies of the various governments, meanwhile appeared to have been playing to the global media. And rightly so--for the press and the people of those states are the primary constituencies of those governments and the principle consumers of its product--in this case "action" to "defend" the "hostages" from criminal elements in a lawless part of the world. But the context in which the state operated, so different from that in which the pirates and the company operated, also made governmental action less effective. "Fuzzy Wuzzies they were, but until Paris decided it could accept casualties among the Ponant’s crew, they had stymied the French national will. " Id., at 184.
But it was more than that. The company, CMA CGM, does not operate in a vacuum. And its relations are not just institutional. Structural coupling, communication and integraiton across systems was as important here as other factors. But what made this particularly interesting was that the structural coupling, the communication and coordination occurred between state and non state actors and related to the actions of a quasi public non state actor operating within the territory of a state that had ceased to exist.
Furthermore, the ship’s owner, CMA CGM chairman Jacques Saadé, was making it clear through back channels that he intended to pay some sort of ransom. Sarkozy and Saadé were acquaintances and political allies, if not close friends. It is said that Sarkozy invoked principle to persuade Saadé not to pay, but to no avail. Saadé understood the reasoning, but in practice he had to place the safety of his crew and ship first—a decision compounded by the certainty that casualties would impose costs higher than the paltry $3 million demanded.Id., at 185. "If anyone had saved lives it was the pirates themselves, along with Marchesseau, and the shipowners in Marseille, Rodolphe and Jacques Saadé. By satellite phone they had succeeded with negotiations in an evolving global dimension that lies beyond the reach of government and its conventions." Id, at 187.
And the national law of the players apparently could not reach the payment in any case. "This was private money, floating free of national constraints, and it could be spent quite legally on ransom. To be clear about the rules that apply: extortion is illegal everywhere, except when it is construed as taxation; the payment of extortion, however, is legal, unless it is construed as bribery." Id. But it should be remembered that extortion was not illegal within the territory of the place controlled by the Somali pirates. Indeed, there it might even be understood as positive obligation of local Somali law as experienced on the ground. On the other hand, there was nothing that would prevent the French from acting after the fact. "Reluctantly [Sarkozy] agreed to give Saadé several days to work out a deal before he would damn the consequences and send the French Navy into action. He summoned the families of the crew to a confidential meeting in the presidential palace, where he is reported to have said, “We’re dealing with crooks. They want money. We’re going to give it to them. But afterward it’s my affair.”" Id., at 185. And, indeed, it is nlot clear how effective the negotiations between the company and the pirates might have been without the presence of the state and its navy.
And so the transactions were effected. The company paid the ransom; the pirates released their hostages; and the French government swooped in and got their lawless bandits (about six of the pirates and several hundred thousand dollars were recovered). Id., at 186. However, the "main culprits and 90 percent of the ransom money remained in Garacad, a town clearly in view from the frigate yet completely out of reach." Id., at 187. Still, everyone could claim victory. The state satisfied its electorate and the expectations of the media. The company salvaged its business with little fussy and at small cost. The Somalis made money on the extortion transaction. The Somali national government continues to be a fantasy useful in uinternational circles.
Langeweische suggests "One of the ironies at play is that the maritime industry being victimized is itself a standard-bearer for the advantages that exist in a world beyond law and regulation." William Langewiesche, "The Pirate Latitudes," supra at 181. Yet it might be more correct to suggest that in a world beyond conmventional governance, the dynamics of governance and interactions among actors is at once reverting to a pattern existing between the rise of power monopolizing states, yet at the same time evidencing new patterns of control by potent non-sovereigns within the ambit of their control. This is both a more complex world and one that is harder to control by any singularity. The state is all powerful, and yet it is impotent in the face of modern forms of action by non state actors and unconventional activities--like piracy. Piracy is both internationally reviled and yet widely practiced within certain states, or communities of people exercising the powers of states within small territories. These actors are both public and private entities, though unconventionally organized in either aspect. Companies, themselves, are globally diffused. They appear to be both an aggregation of intentionally embraced regulatory schemes segmented to attain advantage. But they are also capable of acting in the place of states. And they have more successfully than conventional states, been able to adjust to the realities of activities, like piracy. Traditional state law and military power seems to play an overwhelming and yet not necessarily efficient force in transnational activities. Moreover, the stakeholders of each of the major actors--the company, the state, and the pirates--creates incentives to act that were both distinct and not consistent. Yet they each ultimately complemented the other.
Thus, what at first appears to be a story about pirates and lawlessness on the high seas reveals more about the fractious nature of power and its diffusion in a post modern global setting. Those who wish to regulate in this environment will have to acknowledge that governance will be a complicated affair. There are now more participants than states. Each of the actors serve both public and private purposes. Law is neither the beginning nor the end of the most effective form of governance. And international organizations provide little effective service. In particular, it will be important to understand both the limits of state power, and the trajectories of corporate citizenship within this emerging framework of power. But it will also be necessary to remember that while the nature of state power is changing, it has not disappeared.
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