The Internationalization of Sovereign Investing: Considering the Global Supervisory Function Within the Chinese Sovereign Wealth Fund

The networked relationships between sovereign wealth funds and the largest financial and resource companies continues to develop.  One of the most interesting set of relationships is that between the Chinese Sovereign Wealth Fund, the China Investment Corporation, and some of the largest private enterprises based in the developed world.   Consider the International Advisory Council of the China Investment Corporation from the China Investment Company website:

Function
The International Advisory Council (hereafter referred to as the “Council”) is an internal advisory body consisting of experts of international reputation and status, who would, at the request of the Company, provide advice to assist the Company in better understanding global macro-economic and financial issues, developing its overall strategic direction and policies, including overseas investment strategies, policies and processes of the Company.

The Council convenes once a year, and may convene interim meetings at the request of the Company as and when necessary. The Public Relations and International Cooperation Department functions as the secretariat of the Council, and Mr. Wang Shuilin, MD and Head for above Department serves as Secretary-general of the Council.

Members
Asia
Zeng Peiyan (China)
Chairman, China Center for International Economic Exchanges; former Vice Premier of the State Council, China

Frederick Ma (Hong Kong, China)
Honorary Professor, School of Economics and Finance at University of Hong Kong; former Secretary of Commerce and Economic Development, Government of the Hong Kong Special Administrative Region, China

Taizo Nishimuro (Japan)
Chairman, Tokyo Stock Exchange Group; former Chairman & CEO, Toshiba Corporation

Yingyi Qian (China)
Dean, School of Economics and Management at Tsinghua University; Professor of Economics, University of California at Berkeley

Andrew Sheng (Malaysia)
Chief Advisor to China Banking Regulatory Commission; former Chairman, Hong Kong Securities and Futures Commission, China

Joseph Yam (Hong Kong, China)
Executive Vice President of the China Society for Finance and Banking; Distinguished Research Fellow of the Institute of Global Economics and Finance, Chinese University of Hong Kong; Chairman of Macroprudential Consultancy Limited; former Chief Executive of the Hong Kong Monetary Authority

Americas
David L. Emerson (Canada)
Chairman, Board of Emerson Service Ltd.; former Minister of Foreign Affairs, former Minister of International Trade, former Minister of Industry, Canada

Merit E. Janow (United States of America)
Professor of International Economic Law and International Affairs, Columbia University; Chairman, NASDAQ Stock Market LLC; former member of the Appellate Body of WTO

John J. Mack (United States of America)
Chairman of the Board, Morgan Stanley; former Chairman and Chief Executive Officer, Morgan Stanley

John L. Thornton (United States of America)
Chairman, Board of Trustees of the Brookings Institution; Non-executive Chairman, HSBC North America; former President, Goldman Sachs Group

James D. Wolfensohn (United States of America)
Chairman, Wolfensohn & Company; Chairman, Citigroup International Advisory Board; former President, World Bank Group

Europe
Knut N. Kjaer (Norway)
President, RiskMetrics Group; former Chief Executive Officer, Norges Bank Investment Management (NBIM)

Jean Lemierre (France)
Advisor to the Chairman of BNP Paribas; former President, European Bank for Reconstruction and Development

Lord Nicholas H. Stern (United Kingdom)
I.G. Patel Professor of Economics and Government, London School of Economics; former Chief Economist, World Bank Group

Two of them John Mack and John Thornton are executives at companies where the CIC has investments in. John Mack was Chairman of the Board and CEO of Morgan Stanley until January 2010, an entity in which the fund had a 9.9% ownership stake in and John Thornton was a director of Intel which the CIC had a major investment to conduct research into developing "clean" technologies.  Another of the members, Knut N. Kjaer, was intimately connected with the work and investment framework of the Norwegian Sovereign Wealth Fund.  A couple of the members held key positions at the World Bank.  One of them, James Wolfensohn, served as president of the World Bank from 1995-2005, and since 2006 "Wolfensohn has been the chairman of the International Advisory Board of Citigroup ( C - news - people ). In 2009 he joined the International Advisory Council of China Investment Corp." Chris Barth, Get Briefed: James Wolfensohn, Forbes, Jan. 12, 2011. None of this suggests bad conduct--quite the opposite, it suggests the construction of a well considered network of private and public expertise that could, if used effectively, tie the Chinese sovereign investing enterprise more closely to the elite network of financial giants.

Recent scholarship has begun to suggest that a transnational class has been emerging that not only drives the shape and speed of globalization, but also manages globalization instrumentally through the transnational corporation. . . . Much of the analytical framework is grounded in a sophisticated reworking of traditional Marxist-Leninist critiques of its arch-nemesis—capitalism.191    But that stance ought not to blind those skeptical to the value of Marxist-Leninism as ideology to the utility of the important insight of the rise of international networks of economic, political, and cultural elites who together can serve to provide a necessary protection for economic entities against the reach of the regulation of any one state. (From Backer, Larry Catá, The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality. Tulsa Law Journal, Vol 41, 2006).

("China Investment Corp. (CIC) which has suffered huge losses in its past investment ventures, may receive more government funds. Picture: A press conference held by CIC. (Photo/CNS)", Liang Shi-huang,Sovereign wealth fund to get US$200 billion injection, China Times, April 28, 2011)

China's CIC has also been astute in moving its operations in line with these network frameworks. It was recently reported that "Zhang JunsaiTeck Resources in 2009." Rob Gillies, China, US counting on Alberta's huge oil sands reserves, Anchorage Daily News, June 27, 2011.  While the American government frets over these moves, the Chinese ensure that the American state becomes increasingly removed from effective resistance.  It's network of key individuals in the West and among the most strategically useful sectors of business and finance suggests the utility of networks over the formal structures of governance. 

The Internationalization of Legal Education--Globalization or Americanization? The View From Spain

The internationalization of legal education continues to gain momentum.  Once a hodgepodge of efforts--harmonization based efforts in Europe, comparative law efforts from the United States and Japan, and development based efforts from Asia, Africa and Latin America--the focus of efforts now have increasingly stressed an internationalization of both curricular efforts in home faculties, and institutional arrangements within a growing network of participating institutions.  While there is much focus on the efforts of American institutions to participate (and perhaps to seek to dominate) the framing and implementation of these efforts, there are equally important developments outside the United States.

I was recently privileged to have been asked to participate in one such effort led by Spanish legal experts, the Congreso Sobra la internacionalización de la educación superior de derecho. 

The conference was hosted in Toledo, Spain, by the Universidad de Castilla-La Mancha facultad de ciecias jurídicas y sociales, and organized by D. Pedro José Carrasco Parrilla, profesor titular and decano of the faculty of juridical and social sciences at the Universidad de Castilla-La Mancha and Da. Eva Andrés Aucejo profesora titula at the Universitat de Barcelona.  Professor Andres Aucejo is also the director and president of the Revista de Educación y Derecho (the Education and Law Review), an exciting new journal devoted to issues of internationalization of legal education.    

Professor Andres Aucejo has written about the journal--"Acerca de la Revista de Educación y Derecho/Education and Law Review" Revista de Educación y Derecho/Education and Law Review 0:11-20 (2009). The program of the one day conference is described here:

Many of the conference papers have been published.  They may be accessed here.  They include:

Nicolás Zambrana Tévar, La globalización de las Facultades de Derecho: el Global Law Program de la Universidad de Navarra [Universidad de Navarra];

Thomas Eger y  Alessio M. Pacces, The European Master in Law and Economics: A Program with a Focus on the Economics of the Europeanization and Internationalization of the Law [University of Hamburg] [Erasmus University, Rotterdam].

Joana Abrisketa Uriarte y Cristina Churruca Muguruza, El Máster Europeo Con- junto en Acción Internacional Humanitaria: un máster basado en competencias [Univer- sidad de Deusto].

Manuel Bermejo Castrillo, y Pilar Otero González, Hacia una formación jurídica sin fronteras. El reto de la implantación de titulaciones conjuntas de dimensión internacional [Universidad Carlos III de Madrid].

 Additional aticles of interst included:  Educación Superior en Derecho sin fronteras: “Transnational Legal Studies: Word Wide Study. Higher Education for international students and international Instructors”, by Gianmaria Ajani, Professor of University of Torino. Dean of the Faculty of Law. Univer- sity of Torino, y “The Master of Laws in International Economic Law and Policy (IELPO LLM.): a global master”, by Xavier Fernández, Profesor Titular de Derecho Internacio- nal Público. Universitat de Barcelona. 

There were many noteworthy presentations; I mention three in particular.  The first was that of César Arjona Sebastiá, who serves  as Profesor titular in the Department of Public Law at ESADE in Barcelona.  He spoke of the Center for Transnational Legal Studies and its innovative structure, pedagogy and approach to legal internationalization.  The Center for Transnational Legal Studies provides model for networked education, in which a number of law faculties from across the globe come together in a place not connected to any of them for the purpose of bringing selected numbers of each of their students and faculty together for instruction in a curriculum liberated from the structures of any of the domestic legal orders of any of the participating schools.  It suggests a form of internationalization that is built through cooperative projects among a number of diverse institutions.  But it has its complications--from cost to administration, to devoting the time and energy necessary to avoid deviating from the internationalizing mission of the program. Yet it evidences the possibility a useful pedagogy beyond the domestic legal order of any predominant state. There is now enough law beyond the state, and which affects actors in transactions across borders, to support a course of study and serve as a basis for training useful to lawyers. Yet this is not an endeavor for the fainthearted, or for institutions with inadequate resources to support such efforts.  Arjona Sebastià is the author of  “Transnational Law as an Excuse. How Teaching Law Without the State Makes Legal Education Better”, in C. Menkel-Meadow & F. Werro (eds.), Teaching Transnational Law, Ashgate (forthcoming, 2011).

 (César Arjona Sebastiá)

The second was the presentation by Mónica Navarro, Profesora Titular y Adjunta a la Vicedecana de Relaciones Internacionales y de Investigación de la Universidad de Barcelona, entitled "El programa de doble titulación de la Universidad de Barcelona con la Nova Sourteastern University." The presentation provided an analysis and description of emerging double degree programs, in this case leading to the possibility of acquiring law degrees (and consequently providing the necessary basis for seeking licensing as a lawyer) in multiple national jurisdictions.  Professor Navarro suggested both the complexity and value of double degree programs.  Beyond issues of coordination, the principle difficulty is one of language and students' sense of the availability of value in a double degree.  Yet it also provides a mechanism for making it easier for students to take advantage of market opportunities across borders.  When done correctly, it can also serve as a bridge for faculty interaction, exchange and research possibilities.

The last was the presentation of  Miguel Gómez Jene, Profesor titular y vicedecano de Ralaciones Internacionales, Institucionalesy Metodología at UNED, the Universidad Nacional de Educación a Distancia.  Profesor Gómez Jene suggested the possibilities of distance education in the context of the internationalization of legal education.  What made the presentation particularly interesting was both the language of instruction and the growth of the market for this type of education delivery.  Professor Gómez Jena noted that English had become the lingua franca of supra national legal studies--so that distance learning courses offered by this Spanish university abroad tended to be offered to non-Spanish audiences in English.  He also described the substantial growth in interest in distance education.  The distance learning efforts now reaches 160,000 students, covering 26 field options, and involving 10,000 instructors.  The UNED option offers the possibility of internationalization without the cost associated with on-the-ground programs that may be limited to only the most well endowed institutions.   It is likely that internationalization will at least be supplemented, if not spearheaded, through the use of technology, especially for those financially unable to create live programs. 

My presentation, "Global Law Schools on the U.S. Model," touched on two substantially irreconcilable approaches to internationalization that are emerging in the United States.  The first focuses on globalizing the law school curriculum through internationalization.  The second consists of more recent efforts to globalize the law school curriculum by internationalizing the conventional U.S. curriculum.   The presentation spoke to an emerging current of nationalist globalization.  I focused specifically on American efforts to permit accreditation of foreign law schools for the awarding of U.S. J.D.‘s in the context of the main themes of the current discussion about the globalization of thew legal profession.  My main thesis will be this:  The global legal education community, led by the Europeans, has been constructing a vision of globalization of legal education that has as its basis the idea of harmonization and convergence of different systems and the development of a new institutional model grounded in harmonized global  trends in law. The United States appears to be taking two approaches to this development.  On the one hand, some institutions are participating in educational internationalization.  But American institutions are also working against this general trend by positing a form of globalization that has as its foundation the idea that national legal education can go global without globalizing the law taught. In place of harmonization and globalization of law, the Americans a model grounded in extraterritorial competition for socialization in the laws of the domestic legal order of dominant states. 

I have included below the introductory materials from my PowerPoint presentation in English and Spanish.  The PowerPoints may be accessed here in ENGLISH, and ESPAÑOL. 

 

Gaming Knowledge About Multinationals: Teaching Global Fast Foods

For some time now, traditional education has appeared to become increasingly antiquated as a method for producing and conveying knowledge.  Though the conventional institutions of education remain important, at least as a method of sorting people into appropriate social and economic classes, real knowledge is increasingly conveyed through the methods people use to amuse themselves.   

 (McDonald's Videogame by Molleindustria, The Game)

One of the primary methods of amusement are video games. Since the middle of the first decade of the 20th century, some have noticed the increasing use of video games as a method for educating "players," using games to socialize people and to inculcate players with the normative values that underlie the operations of a game.  For example, "To explore how the United States can harness the powerful features of digital games for learning, the Federation of American Scientists, the Entertainment Software Association, and the National Science Foundation convened a National Summit on Educational Games, on October 25, 2005 in Washington, DC. The Summit brought together nearly 100 experts to discuss ways to accelerate the development, commercialization, and deployment of new generation games for learning."  Digiplay.org.  The Education Arcade "explores games that promote learning through authentic and engaging play. TEA's research and development projects focus both on the learning that naturally occurs in popular commercial games, and on the design of games that more vigorously address the educational needs of players." The Education Arcade. The Education Arcade has made two papers available for download:   Moving Learning Games Forward and Using the Technology of Today in the Classroom Today.

The military has been sensitive to the uses of gaming as a means of training.  Cpl. Shawn C. Rhodes, Training Marines with Video Games, Marine Corps News Service, March 10, 2005. Technology sensitive media has also noted the extent of this phenomenon.  It is also aware that gaming has the potential to free the close connection between education and schools, especially for young people.

Big corporations beware: Some video game developers are on a mission to skewer your reputation.

For several years, hard-core game players have complained that big consumer brands are increasingly being featured in their virtual game worlds. Even worse, they say, are "advergames," video games developed by companies to promote products.
Now a new genre of games is flipping that promotion on its head. Known as "anti-advergames," the new titles satirize big companies and question corporate polices ranging from how cattle are raised to low pay for workers. . . .

One of the earliest titles in the nascent genre is Persuasive's "Disaffected!," which puts players in the role of managing a FedEx Kinko's copy franchise.
"Disaffected!" gives players the chance to step into the shoes of "demotivated" FedEx Kinkos employees, a blurb about the game on Persuasive Game's Web site said. "Feel the indifference of these purple-shirted malcontents firsthand, and consider the possible reasons behind their malaise--is it mere incompetence? Managerial affliction? Unseen but serious labor issues?"
Another new game, from the Italian design shop Molleindustria, skewers McDonald's by taking players though a game experience in which they discover that to make money running the company they must exploit underdeveloped countries and low-wage workers and feed unhealthy growth hormones to cattle.
"Behind every sandwich, there is a complex process you must learn to manage," Molleindustria said in a statement. "From the creation of pastures to the slaughter, from the restaurant management to the branding. You'll discover all the dirty little secrets that made (McDonald's) one of the biggest companies (in) the world." (Daniel Terdiman, Games that Stick it to the Man, CNET, Feb. 3, 2006).

(McDonald's Videogame by Molleindustria, The Game)

 

McDonald's Videogame by Molleindustria is particularly interesting in this regard. The game designers explain the purpose of the game:

 Making money in a corporation like McDonald's is not simple at all! Behind every sandwich there is a complex process you must learn to manage: from the creation of pastures to the slaughter, from the restaurant management to the branding. You'll discover all the dirty secrets that made us one of the biggest company of the world. (McDonald's Videogame by Molleindustria, The Game)

The underlying goals are also clear, if you read carefully:

For decades McDonald’s corporation has been heavily criticized for his negative impact on society and environment.
There are inevitably some glitches in our activity: rainforest destruction, livelihood losses in the third world, desertification, precarization of working conditions, food poisoning and so on…
Denying all these well founded accusations would be impossible so we decided to create an online game to explain to young people that this is the price to pay in order to preserve our lifestyle.
We’ll continue on our way, with our well-known determination. Join us and have fun with us!
Ronald McDonald ((McDonald's Videogame by Molleindustria, Why This Game)

The game can be downloaded:

Do you wanna play McDonald's videogame offline?
Do you wanna publish it on your website or portal?
Here are the files you can download and share for free:

Stand-alone version for PC exe zip 1934 Kb
Stand-alone version for Mac hqx 3697 Kb
Online version for Flash enabled browsers swf 1402 Kb

So why the fuss?  Efforts like these provide a window on an emerging and potentially powerful method of teaching, and especially of explaining and training people in new bases of normative values.  This might prove particularly useful to organizations seeking, for example, to reach consumers and investors that might affect corporate behavior (it is, of course, also extremely useful for teaching normative values in relation to the state).   The McDonald's game teaches about the functioning of a complex corporation in the food service sector that drives home lessons that when taught directly, tend to be lost on everyone but the most sophisticated audiences.  The lessons have a strong normative component that problematize the basic values of shareholder welfare maximization, policy on environmental and labor relations, supply chain control and decision time horizons,.  It suggests the difficulties of corporate relations with stakeholders, consumers, investors and the state.  One can criticize the game for completeness or point of view, but it effectively teaches complex subjects and advances a normative position that would otherwise be hard to convey.  It also marks the way ion which education can serve political and policy ends.  

Civil society actors interested in naturalizing a societal acceptance of the values of business and human rights, of corporate social responsibility and other values would do well to consider the power of teaching through the development and wide distribution of games like this.  Corporations are not helpless in the face of these games; they are also free to develop and distribute their own versions of these sorts of games.  Especially where soft law requires deepening a sense of the importance and methods that they represent, games may prove to be the most effective means of teaching consumers about critical values.  For groups that may be disadvantaged, such games may also provide an easy basis of teaching them how to seek remedies and the nature of their rights.  Such games might, for example, serve to broaden knowledge about John Ruggie's Protect-Respect and Remedy framework.  It might provide a vehicle for teaching sensitivity to the rights built into the OECD's Guidelines for Multinational Enterprises. 

Let the games begin.

Scenes From the Streets of Barcelona: Direct Democracy, Disenchantment and the Globalization of Resistance

Since the end of May of 2011, the streets and Plazas of Barcelona (along with those of Madrid and other cities in Spain) have been filled with young people (mostly) who, inspired by events in Tunisia and Egypt, believe that direct democratic action is also an effective tool of political life within conventional Western states organized as representative democracies. Using the tactics refined in the Middle East against Israel, and the former leadership of a variety of Muslim majority states in North Africa, these individuals hope to recast the institutionalization of government in the face of the progressive abstraction of the individual within the political machinery of Western states and the increasing remoteness of the state (through its reproduction at a variety of levels from the local to the supra national).

(From Larry Catá Backer, Sign at Street Demonstration, Barcelona, Spain, June 19, 2011).

Fusing a variety of streams of grass roots activism (some of which might be conceptually incompatible, but there is flexibility built into the chaos of change)--from conventional pre-1989 Western Marxism, to those who would finish the project of 1968, to modern anti-globalization activists, to pensioners without benefits and young people without jobs related to their courses of study who want state action against austerity measures, and anti-financial capitalist movement types, anti Euro movement organizations, and anti-IMF& World Bank types--these individuals have set up camps all over Spain and seek to pressure the state apparatus to resist taking actions to stem the consequences of the financial excesses of the present government in the context of long term economic hard times.  Known as Indignados, they would turn anger at the failures of the state to the excuse to refashion government and reconstitute power relationships within the state and beyond.

Josep Maria Antentas & Esther Vivas provide a glimpse into the thinking in a posting to First Food on May 21, 2011:

Rebellion of the indignant: Notes from Barcelona’s Tahrir Square,

Posted May 21st, 2011 by kerssen

by Josep Maria Antentas & Esther Vivas
There is no doubt about it. The wind that has electrified the Arab world in recent months, the spirit of the repeated protests in Greece or the student struggles in Britain and Italy, the mobilizations against Sarkozy in France... has come to the Spanish State.
These are not then days of “business as usual”. The comfortable routines of our “market democracy”" and its electoral and media rituals have been abruptly altered by the unforeseen emergence in the street and public space of citizen mobilization. This “rebellion of the indignant” worries the political elites who are always discomfited when the people take democracy seriously... and decide to start practicing it for themselves.
Two years ago, when the crisis which broke out in September 2008 took on historic proportions, the “masters of the world” experienced a brief moment of panic, alarmed by the magnitude of a crisis they had not anticipated, through their lack of theoretical instruments with which to understand it, and feared a strong social reaction. Then came the empty claims of a “refoundation of capitalism” and false mea culpas that little by little evaporated, once the financial system was underpinned and in the absence of a social explosion.
The social reaction has been slow in coming. Since the outbreak of the crisis, social resistance has been weak. There has been a very large gap between the discrediting of the current economic model and its translation into collective action. Several factors explain this, in particular, fear, resignation before the current situation, scepticism with regard to trade unions, the absence of political and social reference points, and the penetration among wage earners of individualistic and consumerist values.
The current outbreak did not, however, start from scratch. Years of work on a small scale of alternative networks and movements, initiatives and resistance of more limited impact had kept the flame of contestation alive in this difficult period. The general strike of September 29m 2010 also opened a first breach, although the subsequent demobilization by the leaderships of the CCOO and UGT and the signing of the social pact closed the path of trade union mobilisation and furthered if possible, the discredit and lack of prestige of the biggest unions among combative youth and those who have launched the camps initiative.
Indignant!

“Indignation” so much the fashion through the pamphlet by Hessel [the former French resistance fighter Stéphane Hessel], is one of the ideas that define the protests which have started. Here there reappears in another form, the "Ya Basta!" of the Zapatistas in their uprising of January 1, 1994, then the first revolt against the "new world order" proclaimed by George Bush senior after the first Gulf War, the disintegration of the USSR and the fall of the Berlin wall.
“Indignation is a start. One is outraged, rises up and then one sees” said Daniel Bensaïd. Gradually, however, we have passed from discomfort to outrage and from that to this mobilization. We have a true “mobilized indignation”. From the earthquake of crisis, the tsunami of social mobilization develops.
To fight more than unease and indignation is required, we must also believe in the usefulness of collective action, that it is possible to overcome and that all that has gone before is not lost. For years the social movements in the Spanish State have essentially known defeats. The lack of victories which show the usefulness of social mobilization and increase the expectations of the possible weighed like a heavy slab on the slow initial reaction to the crisis.
Precisely at this point the great contribution of the revolutions in the Arab world to the ongoing protests has registered. They show that collective action is useful, that “Yes we can”. That is why they, as well as the less covered victory against the bankers and the political class in Iceland, have been a reference point from the beginning for the protesters and activists.
Along with the belief that "this is possible”, that things can be changed, loss of fear, in a time of crisis and difficulties, is another key factor. “Without fear” is precisely one of the slogans most heard these days. Fear still grips a large majority of workers and popular sectors and leads to passivity or xenophobic and unsympathetic reactions. But the 15M mobilization and the camps expanding like an oil slick are a powerful antidote to fear that threatens to dismantle the schemes of a ruling elite at the forefront of an increasingly delegitimized system.
The 15M movement and the camps have an important generational component. Each time a new cycle of struggles breaks out, a new generation of activists emerges, and “youth” as such acquire visibility and prominence. While this generational and youth component is essential, and is also expressed in some of the organized movements that have been visible lately like "Youth without future", it must be noted that the ongoing protest is not a generational movement. It is a movement of criticism of the current economic model and attempts to make workers pay for the crisis which is fundamentally weighted towards youth. The challenge is precisely that, as on so many occasions, the youth protest acts as a triggering factor and catalyst for a broader cycle of social struggles.
The spirit of anti-globalization returns
The dynamism, the spontaneity and the thrust of the current protests are the strongest since the emergence of the anti-globalization movement more than a decade ago. Emerging internationally in November 1999 at the protests in Seattle during the WTO Summit (although its antecedents go back to the Zapatista Chiapas uprising in 1994), the anti-globalization wave quickly came to the Spanish state. The consultation for the abolition of the foreign debt in March 2000 (held the same day as the general elections and banned in several cities by the Electoral Board) and the big mobilization for the summit in Prague in September 2000 against the World Bank and the IMF were the first signs of this, particularly in Catalonia. But the mass movement really arrived with the demonstrations against the World Bank Summit in Barcelona on June 22 and 24, 2001. Just ten years later we are witnessing the birth of a movement whose energy, enthusiasm and collective strength has not been seen since then. It will not, therefore, be a nostalgic tenth anniversary. Quite the contrary. We are going to celebrate it with the birth of a new movement.
The assemblies now in Plaza Catalunya (and, indeed, all the camps around the state beginning with that at Sol in Madrid) have given us priceless moments. The 15M and the camps are authentic "foundational struggles" and clear signs that we are witnessing a change in cycle and that the wind of rebellion is blowing again. Finally. A true “Tahrir generation” emerges, as did before a "Seattle generation” or a “Genoa generation”.
Through the “anti-globalization” impulse across the planet, following the official summits in Washington, Prague, Quebec, Goteborg, Genoa and Barcelona, thousands of people identified with these protests and a wide range of groups from around the globe had the feeling of being part of a movement, of the same "people", the "people of Seattle" or "Genoa", sharing common objectives and feeling part of the same struggle.
The current movement is also inspired by the most recent and important international reference points of struggle and victory. It can be situated in the wake of movements as diverse as the revolutions in Egypt and Tunisia and the victory in Iceland, placing their mobilization in a general struggle against global capitalism and the servile political elite. In the Spanish state, the 15 M demonstrations and now the camps, in a simultaneous example of decentralization and coordination, generate a shared identity and symbolic membership of a community.
The anti-globalization movement had ithe international institutions, WTO, World Bank and IMF and multinational companies in its line of fire. Later, with the start of the "global war on terror" proclaimed by Bush junior, criticism of war and imperialist domination acquired centrality. The current movement places as its axis the criticism of a political class, whose complicity and servitude to the economic powers has been more exposed than ever. "We are not goods in the hands of politicians and bankers" read one of the main slogans of 15M. There is criticism of the political class and professional politics and criticism, not always well articulated and consistent, of the current economic model and financial powers. "Capitalism? Game over".
Towards the future
The future of the 15M initiated movement is unpredictable. In the short term the first challenge is to continue to build on the existing camps, set them up in cities where they do not yet exist and ensure they continue at least until Sunday May 22. May 21, the day of reflection, and May 22, election day, will be decisive. In these two days building the camps at a mass level is essential.
It is necessary to also consider new dates for mobilization, in the wake of 15M, to maintain the rhythm. The main challenge is to maintain this simultaneous dynamic of expansion and radicalization of the protest which we have experienced in the last few days. And in the case of Catalonia, look for synergies between the radicalism and desire for a change in the system expressed in 15M and the camps, with struggles against public expenditure cuts, particularly in health and education. The camp in Plaza Catalunya has already become a meeting point, a powerful magnet, for all the more dynamic sectors in struggle. It has become a meeting point for resistance and struggle, for building bridges, facilitating dialogue, and propelling future demonstrations. Establishing alliances between the protests under way among unorganized activists, and the alternative trade unionism, the neighbourhood movement, neighbourhood groups and so on, is the great challenge of the next few days.
“The revolution starts here...” was the claim yesterday at Plaza Catalunya. Well, at least a new cycle of struggles is beginning. So there is no doubt already that, more than a decade after the rise of the anti-globalization movement and two years after the outbreak of the crisis, social protest has come back to stay.
Josep Maria Antentas is a member of the editorial board of the magazine Viento Sur, and a professor of sociology at the Autonomous University of Barcelona.
Esther Vivas is a member of the Centre for Studies on Social Movements (CEMS) at Universitat Pompeu Fabra. She is also a member of the editorial board of Viento Sur.

See also ¡La indignación toma las plazas!, Canalsolodario.org.  

But, of course, this isn't either diffused anger at a changing world, or merely the angst so typical of well feed Westerners. Anger has been focused on a set of decisions that are posed to threaten the life styles and expectations of Western Europeans in substantial ways.  In particular, the austerity programs that the institutions of the European Union and its instrumentalities have been developing, and particularly those that are meant to protect the Eurozone, that has energized the masses.  

There have been two recent violent interactions between the street demonstrators and the forces of the state,.  The first was a widely televised and largely failed effort by police to roust the demonstrators form their encampment in the Plaza Catalunya on May 27th.  See, Visión Siete: Represión contra "indignados" en Barcelona.The other occurred a few weeks later when, on June 15, 2011, the Indignants attempted to block the Catalan Parliament to prevent its members from meeting to vote on a controversial austerity measure.  

 

(From Barcelona: Angry crowd pursues Catalan MPs, BBC News Online, June 15, 2011; (caption reads: "The "indignados" movement has raised tensions as Catalan MPs consider budget cuts").

 

This last episode has also generated some substantial controversy, but one with a substantial ironic twist.  The Catalan government Interior Minister, Felipe Puig, referred to the tactics of the Indignants as a new method of urban terrorism veiled by a false passive resistance ("'Estamos antes nuevos métodos de guerilla urbana tras una falsa resistencia pacifica,' afirmó ayer el conseller de Interior, Felipe Puig, en referencia a los incidentes del miercóles durante la concentración de los 'indignados.'" Carla Mercador, "Puig Dice que tras los 'indignados' hay nuevos métodos de guerrilla," Que, Barcelona, 17 June 2011 at 4).  The government promised to find and punish individuals it deemed particularly responsible and individual legislators inconvenienced were vowing to take legal action personally against those responsible.  Id.  The irony, of course, stems from the tactics themselves.  The sort of non violence that pushes a state to either resist or collapse has been seen as a perfectly fine weapon when deployed against the Israeli state (in the form of naval incursions and mass border crossings, for example), or when used against governments of other states that some see as disposable, from the government of the People's Republic of China, to those of Ukraine, Egypt and Tunisia.  It quickly appears to change character from the vanguard actions of the masses to the criminal activity of irresponsible people when deployed against the states willing enough to support this elsewhere.  These states ought to expect that the tactics they have helped to sustain must, at some point,m be turned against them.  As uncomfortable as that might seem, they are merely reaping the rewards of their own efforts in a globalized world where ideas and tactics, like capital and economic activity, now move without the constraint of borders. 

All of these forces and ideas were nicely ion display on June 19, 2011, when hundreds of thousands of Catalans turned out for a demonstration in the central part of the city. The the press dutifully printed police underestimations of the size of the event (e.g., Qué reported 75,000 participants, Anna Cabeza, "El movimiento 15-M Sigue Vivo," Qué, June 20,, 2011 at 2).  However, it appeared fairly clear that the Barcelona demonstrations brought out several hundred thousand people--enough to topple governments in an election. The same was likely true for the demonstrations in Madrid.  While there were few incidents in Spain, the Paris demonstrations produced about 127 arrests for what were termed exceeding permitted limits of protest.  Id.

The demonstration was especially powerful as a nexus point for traditionally separate political, social and economic forces, all of which now find themselves threatened by the actions of a state apparatus that cannot seem either to lift the nation from its recession or present a coherent plan for responding to its present circumstances.  For Americans who might be tempted to look on this smugly as some sort of European problem brought on by non-market interventionist, the demonstrations serve as a reminder where a state puts ideology over pragmatism in dealing with the needs of its citizens, instability is sure to follow.  And Americans have begun a love affair with ideology and purity tests that augur badly for pragmatism and stability.

With that, some pictures of the fact of public discontent, all taken by me as the demonstration progressed; for all it would be most useful to read the signs:

In the end, what appears to be an emerging trend has manifested itself in Europe in a new form.  The individual has become increasingly abstracted within the machinery of ever more complex representative institutions.  The individual is reduced to a passive transaction cost of governance--they are required to vote, and only to vote, for personal representatives who, together with unelected administrators (within the state) and representatives of international organizations (without the state) together actually construct policy and wield power that affects the individuals as members of the particular class, group or aggregation targeted.  While the dynamic in authoritarian states is distinct from that in democratic ones, the functional result tends to converge, at least in the most general terms.  Individuals vote and conform; representatives legislate, enforce and judge. Against this, the individual in the West has found a useful weapon: non-conformity.  The weapon is useful because of its origins--as a means by which Western States and colonized groups were able to push democratic values to its edges in order to effect fundamental change where that was impossible.  It has become part of the mythology of progress in the United States (race), India (anti-colonialism) and other places.  But the weapon can also be used as a substitute for conventional warfare in asymmetrical wars.  The war waged by the Palestinians and their allies has been a brilliant testing ground for these new tactics. Israel-Palestine provides a space where the West will indulge actions oblivious to their potential utility generally.  And so just as the Israeli's developed targeted killing and other state privileging tactics now used elsewhere and by others, so Palestinians developed the tactics of using people (individuals) in place or armies.  That tended to even the effectiveness of fighting forces  (one can't fight against a civilian the way one fights against someone deemed to be in the military) in asymmetrical warfare and serve also to produce substantial political effects--states that failed to abide by the rules of asymmetrical warfare tended to have their governments open to effective de-legitimization campaigns.   It is one thing, for example to kill a fighter seeking to prevent the demolition of a house in occupied land, it is quite another to kill a civilian (especially one from a wealthy foreign state like the U.K.) who is effectively engaged int he same "work."  But these tactics proved generalizable--and useful in challenging the legitimacy of a state by its own people.  Starting slowly and tragically in Ukraine and China, the tactics, refined further in conflict zones, proved successful in North Africa in 2011.  Now they are being deployed in elsewhere and by individuals who seek to even the odds against overwhelming force. The Catalan minister was not wrong to suggest that the Indignants are waging war against the state.  They are. They are also seeking to de legitimate the state to the extent it seeks to deploy its power against them--effectively using law against the state apparatus to overcome the state apparatus itself.  But in the context of increasingly remote government, the unintended consequences of the development of tactics of asymmetrical warfare appears to have begun to have effects even within conventionally democratic states. Where, if anywhere, this will lead, however, remains to be seen.       

     

Endorsing the Protect-Respect-Remedy Framework

On June 16, 2011, the United Nations Human Rights Council endorsed the "Guiding Principles for the Implementation of the UN Protect, Respect and Remedy Framework", drafted by UN Special Representative on business & human rights John Ruggie.  The press release regarding the action by the Council speaks for itself:

 

 

New Guiding Principles on Business and human rights endorsed by the UN Human Rights Council
GENEVA – In an unprecedented step, the United Nations Human Rights Council has endorsed a new set of Guiding Principles for Business and Human Rights* designed to provide -for the first time- a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity.
“The Council’s endorsement establishes the Guiding Principles as the authoritative global reference point for business and human rights,” said John Ruggie, the Secretary-General’s Special Representative for Business and Human Rights. “They will also provide civil society, investors and others the tools to measure real progress in the daily lives of people.”
The Guiding Principles are the product of six years of research led by Professor Ruggie from Harvard University, involving governments, companies, business associations, civil society, affected individuals and groups, investors and others around the world. They are based on 47 consultations and site visits in more than 20 countries; an online consultation that attracted thousands of visitors from 120 countries; and voluminous research and submissions from experts from all over the world.
The new standards outline how States and businesses should implement the UN “Protect, Respect and Remedy” Framework in order to better manage business and human rights challenges.
Under the ‘State Duty to Protect,’ the Guiding Principles recommend how governments should provide greater clarity of expectations and consistency of rule for business in relation to human rights. The ‘Corporate Responsibility to Respect’ principles provide a blueprint for companies on how to know and show that they are respecting human rights. The ‘Access to Remedy’ principles focus on ensuring that where people are harmed by business activities, there is both adequate accountability and effective redress, judicial and non-judicial.
In giving its endorsement, the Human Rights Council commended Professor Ruggie for developing the UN “Protect, Respect and Remedy” Framework, and recognized the role of the Guiding Principles in providing comprehensive recommendations for its implementation.

ENDS

The Special Representative’s mandate was created in 2005 by the then UN Commission on Human Rights (now Human Rights Council) in order to move beyond what had been a long-standing and deeply divisive debate over the human rights responsibilities of companies. Professor Ruggie, of Harvard University, was appointed to the position by Kofi Annan, UN Secretary-General at the time, and was extended in his role by current Secretary-General Ban Ki-moon. His aim was to build meaningful consensus among all stakeholders about the roles and responsibilities of both States and companies with regard to business’s impacts on human rights. To achieve that consensus, he conducted extensive research and convened consultations around the world.
Learn more about the mandate and work of the Special Representative, visit:
http://www.ohchr.org/EN/Issues/TransnationalCorporations/Pages/SRSGTransCorpIndex.aspx
and
http://www.business-humanrights.org/SpecialRepPortal/Home
For more information and media requests, please contact Ms. Lene Wendland (Tel. +41 22 928 9299 / email: lwendland@ohchr.org) or Mr. John E. Grova (Tel. +41 22 928 9463 / email: jgrova@ohchr.org).

(From Business and Human Rights Website)

The text of the Principles, now required reading for anyone advising multinational corporations and those entities engaged in activities with or through them,  is available here.

Khodorkovskiy v. Russia: Process Rights for Individuals, Political Rights for States

The European Court of Human Rights has published its opinion in Case of Khodorkovskiy v. Russia (Application no. 5829/04); ECHR May 31, 2011).  What emerges is both the willingness of the Court to protect a litigant's process rights in connection with incarceration and trial, but also the extreme deference of the Court of Human Rights to the discretion of states in applying its criminal law.  

 (From Pronouncement of sentence for Khodorkovsky postponed, Dec. 15, 2010).

Here is a brief description recently published by the American Society of International Law website:

Khodorkovskiy v. Russia (May 31, 2011)
Click here for document (approximately 49 pages)

The European Court of Human Rights has held that Russia violated several provisions of Articles 3 and 5 of the European Convention on Human Rights in connection with the arrest, trial, and detention of Mikhail Borisovich Khodorkovskiy ("applicant"), a businessman, who, before his arrest in 2003, was the major shareholder of a large oil company (Yukos) and one of the richest persons in Russia. The Court did not find, however, that Khodorkovskiy's criminal prosecution in Russia was politically motivated or commenced to enable the Russian government to appropriate his shares in Yukos. According to the Court, "[t]his is a very serious claim which requires an incontrovertible and direct proof. Such proof . . . is absent from the case under examination."
Khodorkovskiy claimed that his arrest, detention, and trial were carried out in a manner that violated his human rights and dignity. Khodorkovskiy has been detained since 2003 in different prisons, and the Court reviewed each facility to determine whether the conditions experienced by Khodorkovskiy were severe enough to amount to inhuman and degrading treatment prohibited by Article 3 of the Convention. The Court concluded that the situation at one prison amounted to "'inhuman and degrading treatment' within the meaning of Article 3 of the Convention" and that conditions in another were "very uncomfortable, but not so harsh as to reach the threshold of severity required to bring the situation within the ambit of Article 3 of the Convention."
Khodorkovskiy also complained that the security arrangements in the courtroom—he was held in a cage and surrounded with guards during the hearings—were degrading and humiliating and in violation of Article 3 of the Convention. The Court agreed, ruling that the cumulative effect of the courtroom measures "could have been reasonably perceived by the applicant and the public as humiliating."
Finally, the Court also found the manner in which Russian authorities apprehended Khodorkovskiy was in violation of Article 5 § 1 (b) of the Convention.
The Court awarded the applicant 14,543 euros for costs and expenses (the whole amount claimed) and 10,000 euros for non-pecuniary damage.

(Picture of ECHR Building, from What ECHR’s Khodorkovsky Ruling Really Means, Committee for Russian Economic Freedom, June 3, 2011)

Most interesting is that portion of the opinion the develops the framework of analysis for the assertion of the prosecutorial power of states, especially when asserted against the principle of a large economic enterprise with a strong connection to the state.

As the Court noted, the case generated a significasnt amount of political as well as economic interest within and outside of Russia.

The applicant's case attracted considerable public attention in Russia and abroad. In the course of the trial and afterwards many prominent public figures and influential organisations expressed their doubts as to the fairness of the criminal proceedings against the applicant and his colleagues. The applicant submitted documents to that effect.

Thus, according to the applicant, his allegations were endorsed by the comments of leading Russian politicians and foreign governments; the findings of the Special Rapporteur of the Parliamentary Assembly of the Council of Europe; the Parliamentary Assembly, which concluded that the circumstances of the applicant's case went “beyond the mere pursuit of criminal justice, and include elements such as the weakening of an outspoken political opponent, the intimidation of other wealthy individuals and the regaining of control of strategic economic assets” (Resolution 1418 (2005), adopted on 25 January 2005); the judgment of the London Extradition Court in the case of Chernysheva and Maruev v. Russian Federation, in which the judge concluded that “it is more likely than not that the prosecution of Mr Khodorkovskiy is politically motivated” and that “President Putin had directed that ... Mr Khodorkovskiy should be prosecuted”; the granting on 6 April 2005 by the United Kingdom authorities of political asylum to other individuals closely linked to the applicant who had also been granted refugee status. The applicant also referred to the decisions of the Nicosia District Court (Cyprus) of 10 April 2008 in an extradition case concerning former Yukos managers, and to some other European jurisdictions. The applicant considered that in those proceedings the courts had established that his prosecution and that of his colleagues was politically motivated. (Khodorkovskiy v. Russia (Application no. 5829/04); supra, at Para. 85).

Khodorkovskiy asserted that the proceedings themselves were politically motivated--they served the state's interests in working through Russia's economic relationships with a large corporation.  In effect, the arrest and subsequent prosecution improperly used the prosecutorial arm of the state in the state's economic relationship with a domestic corporation and its controlling shareholder. But the court was unmoved, and in the process has now helped better define the parameters within with the state may use its criminal power in its relationships with large economic actors. This portion fo the opinion is reproduced here:

VIII. ALLEGED VIOLATION OF ARTICLE 18 OF THE CONVENTION

249. The applicant complained under Article 18 that the State had used the criminal prosecution for a political end and in order to appropriate the company's assets. Article 18 of the Convention provides:

“The restrictions permitted under [the] Convention to the said rights and freedoms shall not be applied for any purpose other than those for which they have been prescribed.”

A. The parties' observations

250. The Government submitted that the applicant's allegations that his criminal prosecution had been politically motivated were not supported by the materials of the case. The Government referred to the judgment delivered in the applicant's case as proof that the charges against him were serious and genuine. They also described the events which had preceded the start of the investigation into the activities of the Yukos management, especially with regard to the Apatit case.

251. The applicant maintained his allegation that his criminal prosecution had been politically motivated. The applicant submitted that the above materials were powerful evidence of ulterior purposes contrary to Article 18. He had at the very least adduced “prima facie evidence pointing towards the violation of that provision” (Oates v. Poland (dec.), no. 35036/97, 11 May 2000), which the Government had entirely failed to address. The fact that he had been convicted in no way precluded improper motives in bringing the charges. Further, as a matter of Convention law, it was immaterial whether there was evidence justifying the bringing of the prosecution, if, as a matter of fact, it was brought for “other purposes” (see Gusinskiy v Russia, no. 70726/01, 19 May 2004). Indeed, the fact that he had received a long sentence supported the inference of political motivation. The travaux préparatoires for Article 18 indicated that the drafters of this provision were concerned to ensure that an individual was thereby protected from the imposition of restrictions arising from a desire of the State to protect itself according “to the political tendency which it represents” and the desire of the State to act “against an opposition which it considers dangerous”. The applicant maintained his argument that his arrest and consequent detention on 25 October, just a few weeks before the Duma elections on 7 December 2003 and shortly before the completion of the Sibneft/Yukos merger, had been orchestrated by the State to take action against an opposition which it considered “dangerous”, contrary to Article 18.

252. The applicant asserted that those activities had been perceived by the leadership of the country as a breach of loyalty and a threat to national economic security. As a counter-measure the authorities had undertaken a massive attack on the applicant and his company, colleagues and friends.

253. In support of his allegations the applicant submitted reports from international and Russian media, various governmental and non-governmental organisations, the PACE report “On the circumstances surrounding the arrest and prosecution of leading Yukos executives” (published on 29 November 2004 by Mrs Leutheusser-Schnarrenberger, the Special Rapporteur for the Parliamentary Assembly of the Council of Europe), the US Senate resolutions on this subject, European Parliament reports, documents of the UK House of Commons, decisions by the UK courts in cases of extradition of several former Yukos managers to Russia, and decisions by the Cypriot, Dutch, and Swiss courts to the effect that the prosecution of the applicant was politically motivated. In particular, the applicant referred to the words of the Swiss Federal Tribunal, which in August 2007 found that the facts, if analysed together, “clearly corroborate the suspicion that criminal proceedings have indeed been used as an instrument by the power in place, with the goal of bringing to heel the class of rich 'oligarchs' and sidelining potential or declared political adversaries”. The applicant also quoted public statements by several high-ranking Russian officials who had acknowledged that “the Yukos case” had political overtones (Mr Gref, Mr Illarionov, Mr Shuvalov, Mr Mironov, Mr Kasyanov and some others). The applicant produced witness statements by several former Yukos managers. He further referred to his submissions within the case Khodorkovskiy v. Russia (no. 2), no. 11082/06, which contain a more detailed analysis of his political activities and business projects.

B. The Court's assessment

254. The Court reiterates that it has already found that, at least in one respect, the authorities were driven by improper reasons. Thus, the Court found that the applicant had been arrested in Novosibirsk not as a witness but rather as a suspect. However, the applicant's claim under Article 18 is different from his grievances under Article 5. The applicant maintained that the entire criminal prosecution of Yukos managers, including himself, had been politically and economically motivated. The Court reiterates in this respect that “Article 18 of the Convention does not have an autonomous role. It can only be applied in conjunction with other Articles of the Convention” (Gusinskiy v. Russia, no. 70276/01, § 75, ECHR 2004-IV). In the light of the above the Court will consider the applicant's allegations under Article 18 of the Convention in conjunction with his complaints under Article 5 of the Convention, cited above.

255. The Court reiterates that the whole structure of the Convention rests on the general assumption that public authorities in the member States act in good faith. Indeed, any public policy or an individual measure may have a “hidden agenda”, and the presumption of good faith is rebuttable. However, an applicant alleging that his rights and freedoms were limited for an improper reason must convincingly show that the real aim of the authorities was not the same as that proclaimed (or as can be reasonably inferred from the context). A mere suspicion that the authorities used their powers for some other purpose than those defined in the Convention is not sufficient to prove that Article 18 was breached.

256. When an allegation under Article 18 is made the Court applies a very exacting standard of proof; as a consequence, there are only few cases where the breach of that Convention provision has been found. Thus, in Gusinskiy v. Russia (no. 70276/01, § 73–78, ECHR 2004-... (extracts), the Court accepted that the applicant's liberty was restricted, inter alia, for a purpose other than those mentioned in Article 5. The Court in that case based its findings on an agreement signed between the detainee and a federal minister of the press. It was clear from that agreement that the applicant's detention was applied in order to make him sell his media company to the State. In Cebotari v Moldova (no. 35615/06, §§ 46 et seq., 13 November 2007) the Court found a violation of Article 18 of the Convention in a context where the applicant's arrest was visibly linked to an application pending before the Court. However, such cases remain rare (see, as an opposite example, Sisojeva and Others v. Latvia [GC], no. 60654/00, § 129, ECHR 2007-II). Particularly, the Court notes that there is nothing in the Court's case-law to support the applicant's suggestion that, where a prima facie case of improper motive is established, the burden of proof shifts to the respondent Government. The Court considers that the burden of proof in such a context should rest with the applicant.

257. In the case at hand the applicant referred to various sources which confirm his allegations of “improper motive”. First, he invited the Court to consider the facts surrounding his business and political activities, as well as the major policy lines adopted by the President's administration at the relevant time. Indeed, those facts cannot be ignored. In particular, the Court acknowledges that the applicant had political ambitions which admittedly went counter to the mainstream line of the administration, that the applicant, as a rich and influential man, could become a serious political player and was already supporting opposition parties, and that it was a State-owned company which benefited most from the dismantlement of the applicant's industrial empire.

258. On the other hand, any person in the applicant's position would be able to make similar allegations. In reality, it would have been impossible to prosecute a suspect with the applicant's profile without far-reaching political consequences. The fact that the suspect's political opponents or business competitors might directly or indirectly benefit from him being put in jail should not prevent the authorities from prosecuting such a person if there are serious charges against him. In other words, high political status does not grant immunity. The Court is persuaded that the charges against the applicant amounted to a “reasonable suspicion” within the meaning of Article 5 § 1 (c) of the Convention.

259. Nevertheless, the combination of the factors mentioned above have caused many people to believe that the applicant's prosecution was driven by the desire to remove him from the political scene and, at the same time, to appropriate his wealth. The applicant strongly relies on those opinions; in particular, he relies on resolutions of political institutions, NGOs, statements of various public figures, etc. The Court took note of those opinions. However, it must recall that political process and adjudicative process are fundamentally different. It is often much easier for a politician to take a stand than for a judge, since the judge must base his decision only on evidence in the legal sense.

260. Finally, the Court turns to the findings of several European courts in the proceedings involving former Yukos managers and Yukos assets. Those findings are probably the strongest argument in favour of the applicant's complaint under Article 18 of the Convention. However, the evidence and legal arguments before those courts might have been different from those in the case under examination. More importantly, assuming, that all courts had the same evidence and arguments before them, the Court reiterates that its own standard of proof applied in Article 18 cases is very high and may be different from those applied domestically. The Court admits that the applicant's case may raise a certain suspicion as to the real intent of the authorities, and that this state of suspicion might be sufficient for the domestic courts to refuse extradition, deny legal assistance, issue injunctions against the Russian Government, make pecuniary awards, etc. However, it is not sufficient for this Court to conclude that the whole legal machinery of the respondent State in the present case was ab intio misused, that from the beginning to the end the authorities were acting with bad faith and in blatant disregard of the Convention. This is a very serious claim which requires an incontrovertible and direct proof. Such proof, in contrast to the Gusinskiy case, cited above, is absent from the case under examination.

261. In such circumstances the Court cannot find that Article 18 was breached in this case.  (Khodorkovskiy v. Russia (Application no. 5829/04); supra, at Paras. 249-261).

The rationale is elegant.  First the Court declared that Article 18 is not an autonomous provision but must be read as supporting a substantive right otherwise contained in the Charter (for this purpose they chose to rest that connection on Article 5).  Then the Court read into Article 18 a strong presumption of good faith by states.  To rebut this presumption the applicant must show " must convincingly show that the real aim of the authorities was not the same as that proclaimed", which is reviewed applying a "very exacting standard of proof."  The Court then dismisses the proof offered by the applicant as either not worthy of much weight because it was not produced as a result of a court proceeding ("However, it must recall that political process and adjudicative process are fundamentally different. It is often much easier for a politician to take a stand than for a judge, since the judge must base his decision only on evidence in the legal sense." PARA 259) or where it was produced as a result of a court hears as distinguishable from the issues the applicant precisely raises ("the evidence and legal arguments before those courts might have been different from those in the case under examination." PARA 260). 

The standard, then, becomes clear:  there must be direct and incontrovertible proof that "the whole legal machinery of the respondent State in the present case was ab intio misused, that from the beginning to the end the authorities were acting with bad faith and in blatant disregard of the Convention." (PARA 260).  The Court does not provide more explanation, other than to suggest that the test is exacting and that the burden of proof never shifts from the applicant tot he state, even where the applicant offers a prima facie case of improper motive. It does suggest that it is disposed to work backwards (from a jurisprudential point of view) from the presumed result--the state always acts in good faith.  It then implies the range of cases with respect to which it might be inclined to find improper motive--where press freedom appears to be at stake (in the guise of economic arrangements--(Gusinskiy v. Russia (no. 70276/01, § 73–78, ECHR 2004)); or where the integrity of the judicial process itself is at issue (Cebotari v Moldova (no. 35615/06, §§ 46 et seq., 13 November 2007)).  Beyond that, the Court implies, it is not prepared to go and it will rationalize that decision through the veil of the "exacting standard presumption test"). 

(From Dmitry Gololobov, Commentary: Yukos Case In Strasbourg Is An Uphill Battle, Radio Free Europe, 2010 ("A year ago at a Russian justice-system awards ceremony, Russia's representative to the European Court of Human Rights, Pavel Laptev, said: "Members of the press -- write this down: Russia will win the [Yukos] case. It is possible to win under the procedures of the European Court of Human Rights." "))

What one is left with is the sense that, Article 18 might be used against the state where political rights are challenged, but it cannot be used when mere economic rights are at stake.  As far as economic rights are concerned, and most particularly, the rights of stakeholders within corporations and the corporate entity itself, the state retains a substantial power to do as it likes, and to deploy the whole of its domestic legal order for that effort, even where its essence incorporates subterfuge.  This should come as no surprise to Americans; the celebrated use of the tax laws to incarcerate criminals has been celebrated since the early part of the last century.  This has little do do with the quality of the evidence; it has everything to to with the character of the right. Thus, the issue wasn't so much whether the case was politicized, but whether it was politicized in a way that affected rights more carefully protected under the ECHR framework.  In the struggle between states and the largest economic entities within globalization, as states gauge their maneuvering room, this decision will likely have have some impact.