Norwegian Sovereign Wealth Fund Excludes Sesa Sterlite, Africa Israel Investments and Danya Cebus From Its Investment Universe

The Norwegian Sovereign Wealth Fund, through its Ministry of Finance, continues to use its sovereign investing to advance Norwegian foreign policy (Backer, Larry Catá, Sovereign Investing and Markets-Based Transnational Rule of Law Building: The Norwegian Sovereign Wealth Fund in Global Markets, American University International Law Review 29(1):1-122 (2013) (SSRN or Digital Commons)). In these two recent decisions one sees two quite distinct aspects of the way that the political ambitions of the Norwegian Kingdom are playing out in that Constitutional Monarchy's private investment activities.

(Pix (c) Larry Catá Backer 2014)

In one case, the Ministry of Finance has decided to exclude the company Sesa Sterlite (SESA.NS), India's biggest zinc and aluminum maker, from the Government Pension Fund Global (GPFG). Sesa Sterlite is a subsidiary of Vedanta, itself a natural resources industry enterprise that has been the object of some concern to the NSWF for its environmental and human rights detrimental activities under emerging international norms as advanced by Norway (e.g., Padmaparna Ghosh, Norway govt fund sells its Vedanta stake: Norway govt fund sells its Vedanta stake, Live Mint and the Wall Street Journal, Nov. 7, 2007 ("The ethics council said, “allegations levelled at the company regarding environmental demage and complicity in human rights violations, including abuse and forced eviction of tribal people, are well founded.” Ibid). It has been painted with the same brush as its parent.

In another set of decisions, the Finance Ministry advances the Kingdom's political agenda to seek a resolution to its liking of the Israeli-Palestinian Wars. To that end, in likely in concert with similar actions across Europe, the ministry instructed the NSWF for a second time to exclude Africa Israel Investments (AFIL01.TA) and its construction subsidiary Danya Cebus (DNYA.TA) from its investments. "Africa Israel Investments and Danya Cebus were first excluded from the fund in 2010 because they were involved in the building of Israeli settlements in the West Bank but the ban was lifted last August." UPDATE 2-Norway's $810 bln fund excludes two Israeli, one Indian firm, Reuters, (Jan. 30, 2014). This falls in line with current efforts to structure the parameters of a formal settlement of that conflict along the lines accepted by a concert of developed states and within which the parties are expected to settle through negotiation (e.g., Karen Laub, Jordan Valley settlements hit by boycott campaign, Tulsa World (AP), ("The European Union says Israel's settlements in the West Bank and east Jerusalem are illegal under international law, but has not called for a consumer boycott of settlement products.")). "The moves followed recently issued European Union guidelines prohibiting the awarding of EU grants, loans or prizes to Israeli entities on occupied Palestinian lands." (John Reed, European moves against settlements revive Israel boycott fears, Financial Times, Dec. 12, 2013).

The Ministry also announced changes to the exemption on government bonds.

The Press Release may be accessed here and below

Please find the Council on Ethics’ recommendations here:
--Africa Israel Investments and Danya Cebus
--Sesa Sterlite.

Publication of the Papers from the 2013 Conference of the Association for the Study of the Cuban Economy

The proceedings of the Association for the Study of the Cuban Economy’s 23rd Annual Meeting entitled “Reforming Cuba?” (August 1–3, 2013) is now available. The presentations have now been published by ASCE HERE.

The proceedings papers are listed below with links to their sources in the ASCE Web Site.

For the 2013 ASCE program, click here »
For the detailed proceedings of the annual meeting, click here »
To see the video of ASCE President Ted Henken opening remarks, please click here »
To see the video of Prof. Borjas' keynote address, please click here »

Sovereign Investing Evolves in in China--Gao to pass on the reins at CIC

I have written about the spectacular growth of the Chinese Sovereign Wealth Fund--that is that cluster of funds that, together, now have become an immensely influential force in global markets, which is centered on the China Investment Corporation (CIC).  (Backer, Larry Catá, Sovereign Investing in Times of Crisis: Global Regulation of Sovereign Wealth Funds, State Owned Enterprises and the Chinese Experience. Transnational Law & Contemporary Problems, Vol. 19, No. 1, 2009). 

 (Gao Xiqing, Vice Chairman & President)

I have suggested that as it has developed, it is providing one of three principle models of sovereign investing in this century. (Backer, Larry Catá. "Sovereign Investing and Markets-Based Transnational Rule of Law Building: The Norwegian Sovereign Wealth Fund in Global Markets." American University International Law Review 29 no. 1 (2013): 1-122)). All three contribute in significant ways to the merger of public and private governance systems touching on social, cultural and economic rights (e.g., Backer, Larry Catá, The Private Law of Public Law: Public Authorities as Shareholders, Golden Shares, Sovereign Wealth Funds, and the Public Law Element in Private Choice of Law. Tulane Law Review, Vol. 82, No. 1, 2008). Even the United States may be toying with the idea of a national fund (we have state funds) ostensibly as an economic stabilization mechanism (John Aziz, Does the United States need a sovereign wealth fund? The Week, Jan. 2014). The notion of regulation through markets intervention as a private player pursuing public interest appears to be strengthening. 

Now comes the news that one of the principal forces behind the construction of the Chinese Sovereign Wealth Fund will be stepping down. That replacement combines both economic and political considerations in ways that are both interesting from the perspective of Chinese internal power politics and for what it suggests about the evolving shape of Chinese sovereign investing.  Henry Sender, Founding president to Step Down at China Sovereign Wealth Fund, Financial Times, Jan 22, 2014.  

Cuban Americans and the American Dream

It is sometimes suggested that like immigrants from certain Asian countries, immigrants from Cuba, certainly after 1959, constitute a "model minority." (Crystal Parikh, "The Passion: The Betrayal of Elián González and Wen Ho Lee," in Racial Transformations: Latinos and Asians Remaking the United States 170, 177 (Nicholas De Genova, ed., Duke University Press, 2006).

(Pix (c) Larry Catá Backer 2014)

 But times change, as do migration patterns.  What began fifty years ago as the first wave of the consequences of class struggle within the Cuban Revolutionary and international politics, has been increasingly overtaken both by the changing realities of globalized economies (including that of Cuba) and the changing character of the still quite vibrant class struggle dynamics within Cuba and within globalized economies.  (Michael Schuman, Marx’s Revenge: How Class Struggle Is Shaping the World, Time, Inc., March 25, 2013).

As migration patterns and underlying economic realities change, so do the prospects even of model minorities.  The post includes an interesting discussion of some fo those changes as they are affecting the Cuban American community within its heartland in South Florida. Greg Allen, Poll Findings: On Cuban-Americans And The Elusive 'American Dream', NPR's Morning Edition (Jan. 22, 2014), some of which follows.  The polling data provides a nice gateway to more subtle analysis of the effect of changing individual and structural characteristics on the production of wealth.

Norwegian Sovereign Wealth Fund Revokes Exclusion of Companies Formerly Engaged in Activities in Myanmar; the Rise of Legalism in Investment Discipline

The Norwegian Sovereign Wealth Fund has been at the forefront of efforts to internationalize a coordinated system of hard and soft law with the object of producing a robust system of human rights sensitive corporate governance and corporate economic activity.  (e.g.,  Backer, Larry Catá, Sovereign Investing and Markets-Based Transnational Rule of Law Building: The Norwegian Sovereign Wealth Fund in Global Markets (December 2013). American University International Law Review 29 no. 1 (2013): 1-122 (2013))

(Pix (c) Larry Catá Backer 2014)

At the end of 2013, the Norwegian Sovereign Wealth Fund announced a curious change of heart.  It announced the revocation of its prior determination to exclude a number of companies that had participated in a joint venture with the Chinese state-owned company China National Petroleum Corporation (CNPC), which was responsible for the construction and operation of an overland gas pipeline across Myanmar. The original exclusion had been based on the finding that the construction of the pipeline would entail an unacceptable risk of the companies contributing to serious and systematic human rights violations.  The original exclusion order had been accepted by the Ministry of Finance, with the exception of the Chinese SOE involved--PetroChina.

Having finished the project, it appeared that the excluded companies were ready for rehabilitation.  The difference turns, for the Ethics Council, on the difference between the construction of the pipeline and its operation, a distinction that even they understood was not exceedingly robust. This raises a number of issues relating to the effectiveness of the active shareholder and market intervention policies of the NSWF, as well as the extent to which decisions are based on political calculation rather than on the application of international norms transposed into the Norwegian domestic legal order. (e.g., Backer, Larry Catá, Sovereign Wealth Funds as Regulatory Chameleons: The Norwegian Sovereign Wealth Funds and Public Global Governance Through Private Global Investment (May 4, 2009). Georgetown Journal of International Law, Vol. 41, No. 2, 2009).  More likely, the decision continues evolution of a precise jurisprudence in the construction of legal structures of the "soft law" of human rights based constraints on the private market investments of a state organ.  The intersection fo that development with the political realities of Norwegian state policy suggests both the promise and limits of state based systems of business and human rights and reinforces the importance of the international sphere in its development.

The Press Release and Opinion follow.

Call for Papers for the Annual Conference of the European Business Ethics Network (Berlin 2014)

 (Pix (c) Larry Catá Backer 2014)

 

I have been following recent discussion about law and ethics with some interest. At Penn State Law, for example, there are those who insist that ethics has little role to play in law or in the instruction of lawyers beyond an education in the rules of professional conduct.  There are others who view ethics as the essence of the social norm system underlying all systems of law, and therefore worthy of study as a branch of moral philosophy. Many of us, like most of us in the American legal academy, understand that the critical importance of the ethical dimension of law and lawyering is built into the structures of our substantive and process systems and bound up in the essence of the professionalism and fidelity to the rule of law that mark our system (e.g., efforts like Ethics Across the Curricula). And, indeed, in Europe, the connection is both vibrant and well understood as something well beyond either the narrow legalism of the lawyer's rules of professional responsibility or the amorphous focus on theory within philosophy. This is especially the case in business. 

 

In that regard, I include here a call for papers the Annual Conference of the European Business Ethics Network (Berlin 2014) along with a notice of the CFP for the special track on Law and Business Ethics forwarded to me by my colleague Karin Buhmann.  These might be of interest to those of you who might find this work connected with your own.

Xin Fang Reform in the Wake of the 3rd Plenum?

I have been writing about the 3rd Plenum of the Chinese Communist Party (e.g., Gearing Up for the 3rd Plenum of the Central Committee of the 18th Chinese Communist Party Congress). One of the most interesting products of the 3rd Plenum was its approach to the deportation of petitioners, a discussion bound up with the reform of the laojiao system (e.g., Backer, Larry Catá and Wang, Keren, The Emerging Structures of Socialist Constitutionalism with Chinese Characteristics: Extra Judicial Detention (Laojiao and Shuanggui) and the Chinese Constitutional Order. Conference: Rule of Law with Chinese Characteristics, Vol. 2013, p. 101, 2013; Pacific Rim Law and Policy Journal (2014)).

(Pix (c) Larry Catá Backer 2014)

But those reforms may well have an impact on the system of Xin Fang, China's petition system. In the wake of the 3rd Plenum, reports from China indicated an intent to reform this system (Related stories from state organs: China announces more reforms to petition system 2013-11-29;  Official pledges reforms to China's petition system 2013-11-28; Chinese gov't to address petitioning more efficiently 2013-11-28; Local governments combat "corruption on wheels" 2013-11-24).

This post provides background for those reforms and its possible connecitons with the reform of the laojiao system.  It was prepared by my research assistant Shan Gao (Penn State SJD  expected). 

Contested Collisions Conference Annotated Program

I was fortunate enough to have participated in a conference, "Contested Collisions," convened by Dr. Kerstin Blome, Prof. Dr. Andreas Fischer-Lescano, Dr. Nora Markard, and Prof. Dr. Stefan Oeter. The conference will be held in Bremen, 10th January 2014, - 12th January 2014.

The Conference Program may be downloaded HERE.

(Pix (c) Larry Catá Backer 2014)

This post includes the posted conference materials, a listing of conference participants with links, and and my annotations and analysis of many of the presentations.

My contribution is entitled: "Governance Polycentrism--Hierarchy and Order Without Government in Business and Human Rights Regulation." It has been posted to the Social Science Research Network and may be accessed here. The PowerPoints of my presentation may be accessed HERE.

Irreconcilable Differences in Culture and Outlook: Marty Lipton on "Key Issues for Directors in 2014" Contra Institute for Human Rights and Business "Top 10 Business and Human Rights Issues"

In 2006 I posited that traditional business governance and emerging internationalist business and human rights frameworks were ships passing in the night. (e.g., Backer, Larry Catá, Multinational Corporations, Transnational Law: The United Nation's Norms on the Responsibilities of Transnational Corporations as Harbinger of Corporate Responsibility in International Law. Columbia Human Rights Law Review, Vol. 37, 2006).

(Pix (c) Larry Catá Backer 2014)

Very few have attempted to bridge the divide between the business and the international communities. The most successful serious attempt to bridge this divide in recent years has centered on the work of John Ruggie, who as the Special Representative of the UN Secretary General oversaw a long process leading to the creation of a set of Guiding Principles for Business and Human Rights endorsed by the U.N Human Rights Council in 2011 (See John Ruggie, Just Business: Multinational Corporations and Human Rights (New York: WW Norton, 2013).  


Yet despite these advances, elite lawyers and law firms, and the business cultures they advance, continue to adhere to traditional business governance models that are increasingly at odds with developing corporate governance norms at the transnational public and private law levels. This post considers the basis of this disjunction between business legal cultures at the national level and the thrust of emerging corporate governance frameworks beyond the state.  It illustrates these differences by contrasting two excellent examples of the distinct premises that underlie each, premises that may not be reconcilable in the forms presented but which the Guiding Principles, deliberately applied, may ultimately bridge.  The traditionalists are represented by Marty Lipton on "Key Issues for Directors in 2014" and contra are the Institute for Human Rights and Business "Top 10 Business and Human Rights Issues for 2014."

Religion, Social Norms, and the State--The 2014 Letter of the Sacerdotes Mayores de Ifá of Cuba

 (La Reina del Mar en Copacabana, La Republica (Ecuador) (30 Dec. 2011) ("Varios fieles frente a las aguas de la playa de Copacabana como una ofrenda para Yemanjá, la diosa del mar, en Río de Janeiro, Brasil. Creyentes brasileños de Yemanjá celebran la deidad a fin de año, ofreciendo flores y lanchas, grandes y pequeños, en el océano, a cambio de bendiciones para el año que viene. "))

 

For the last two years I have written of the annual letter of the Cuban Council of the High Priests of Ifá (Consejo Cubano De Sacerdotes Mayores De Ifá), the practitioners of traditional religion brought over from West Africa with the slave trade and now naturalized as a powerful indigenous religion throughout the Caribbean and growing in the United States. (e.g., Religion, Social Norms, and the State--The 2013 Letter of the Sacerdotes Mayores de Ifá of Cuba, Law at the End of the Day, Jan. 2, 2013; Religion, Social Norms, and the State--The 2012 Letter of the Sacerdotes Mayores de Ifá of Cuba, Law at the End of the Day, Jan. 3, 2012).

The Consejo Cubano De Sacerdotes Mayores De Ifá just released their annual letter for 2014; Letra del Año 2014 (On the history and purpose of the letter in Nigeria and the New World).  These annual letters suggest  the nature of divine will and advice for a propitious year ahead.  It serves the state the way all priestly  interventions are meant to--advice, connection with the divine, and authoritative means of conveying the appropriate forms of responding to events. Because these indigenous religions ought to be accorded equal dignity with the religions brought to the United States by other immigrant communities, I thought it useful, as we contemplation the New Year's messages of the world's religious leaders (e.g., Message of HIs Holiness Francis for the Celebration of the World Day of Peace, 1 Jan 2014 ("it is easy to realize that fraternity is the foundation and pathway of peace.")), that we ought to heed these messages as well.  

Call For Papers: "Workshop on Business and Human Rights – Networks of Transnational Governance" at Hebrew University

Dr. Guy Harpaz, Prof. Sascha-Dominik Bachmann, and Pini Miretski are organizing an exciting  international workshop on Business and Human Rights – Networks of Transnational Governance that will be held on February 19-20, 2014, at the Hebrew University of Jerusalem, Israel. I will be participating as well.

(Pix (c) Larry Catá Backer 2013)

The workshop aims to bring together scholars and practitioners, in order to examine the various interfaces among networks of transnational regulation designed to regulate the respect of businesses for human rights. We shall seek to understand the interfaces and linkages between the various regulative initiatives in this developing field. In the workshop we will question whether emerging networks are replacing the roles previously taken by the state, whether the privatization of regulation is supplied by transnational networks and orchestrated by states, or whether an evolution of polycentric governance is complementing an entrapped international legal order.

The Call for Papers follows.

Conference Paper Posted: "Governance Polycentrism--Hierarchy and Order Without Government in Business and Human Rights Regulation"

I am looking forward to participating in a conference, "Contested Collisions," convened by Dr. Kerstin Blome, Prof. Dr. Andreas Fischer-Lescano, Dr. Nora Markard, and Prof. Dr. Stefan Oeter. The conference will be held in Bremen, 10th January 2014,  - 12th January 2014.

(Pix (c) Larry Catá Backer 2014)

The Conference Description provides:

This three-day conference will controversially discuss the concept of "regime collisions." The concept is used to describe the fact that fragmentation into an increasing number of international regimes with overlapping areas of competence can lead to contradictory decisions or mutual obstruction. The first phase of the conference will critically examine the phenomenon of regime collisions from a theoretical perspective. Is this a merely technical conflict of norms, or a competition of societal interest groups for specific goods? Is it best described as a problem of hegemony, as assemblage, as a cloak for North-South conflict? The second phase will look more closely at possible solutions to this phenomenon. Can there be a "meta-collision law", or no? What could be other ways to integrate colliding regimes with one another? How can private regimes be included in such solutions? The third phase will look at case studies to discuss the impact of the different theoretical and practical approaches in different fields.

The Conference is hosted by the Collaborative Research Center 597 "Transformations of the State" through its Project A2 "The Juridification of Dispute Settlement in International Law." The Collaborative Research Center 597 provides a space where "Scholars in political science, law, sociology, economics and communication studies work together to determine if, and precisely how, pressure from globalization and liberalization over the past thirty years have changed the core institutions and functions that define the classical nation state." In its current "third phase (2011-2014) we are now examining how the changes are affecting the supply of the state's normative services such as security, governance, welfare and legitimacy. Are fewer of these services produced or is its quality decreasing?"

The Conference Program may be downloaded HERE.

My contribution is entitled: "Governance Polycentrism--Hierarchy and Order Without Government in Business and Human Rights Regulation."  It has been posted to the Social Science Research Network and may be accessed here.  This post includes the Abstract and Introduction to my conference paper.