Just Published: Dini Sejko, "Sovereign Investors as ICSID Claimants: Lessons from the Drafting Documents and the Case Law," Vanderbilt Journal of Transnational Law, Vol. 56, No. 3, 2023

 

 

I am delighted to pass along the news that Dini  Sejko's excellent article, "Sovereign Investors as ICSID Claimants: Lessons from the Drafting Documents and the Case Law," has been published in the Vanderbilt Journal of Transnational Law, Vol. 56(3):853-903, 2023.The abstract lays out the principal arguments:

Abstract: The prominence of state-controlled entities (SCEs) in foreign direct investment (FDI) flows has created multilayer regulatory challenges. The nature of SCEs and geo-economic considerations related to their investments have exacerbated investment-related concerns and, since the global financial crisis and during the global pandemic, triggered legal reforms. Concurrently, SCEs have increasingly relied on international investment arbitration to solve their disputes.
This Article examines the role of the International Centre for Settlement of Investment Disputes (ICSID) in resolving cases brought by an increasing number of sovereign investors. The Article begins with a linguistic analysis of the ICSID Convention’s relevant provisions, which lack a definitive regulatory position, and then reviews historical and drafting documents showing the position of some states that participated in the negotiations. Part III uncovers new cases and further examines understudied ones, and introduces a holistic and systematic analytical study of the case law, drawing lessons from consistencies in the awards. In Part IV, the awards are grouped, focusing on salient issues deriving from the diverse factual and legal elements of the cases. Initially, Part IV focuses on the first ICSID case in which a state-owned enterprise acts as a claimant. The analysis continues with the first application of the Broches test, an examination of awards in which investors were operating for little or no profit, and a review of awards in which sovereign investors were treated as any other privately owned investor. Last, the Part reviews the particularities of Chinese SCEs in FDI flows and ends with an assessment of the role of sovereign wealth funds and related awards.
A comprehensive evaluation of the case law reveals that European SCEs have massively relied on the ICSID system, in contrast with Chinese SCEs that have made marginal use of it. Part V explains the relevance of the consistent approaches and argues that ICSID tribunals have established a jurisprudence constante in dealing with SCEs that confirms their access as claimants in investor-state disputes. Conversely, Part VI provides innovative approaches and instruments to assess the owner’s role in sovereign investors’ transactions and prevent distortions of the Centre’s jurisdiction. The last Part summarizes the research findings.

Indeed, Sejko considers an increasingly important aspect of international trade outside of the G7--the utility of markets based investment  treaty dispute resolution mechanisms for resolving the disputes between states and enterprises that are owned or controlled by other states. That ought to be an important element in South-South trade and calls into question the usual narrative of the exploitative private enterprise taking advantage of developing states through investment treaty provisions and the resolution mechanisms operationalized through mechanisms like ICSID (see eg here). Yet Sejko finds that 

The statistical analysis of the ICSID case law that underpins this Article demonstrates that sovereign investors have acted as claimants in ICSID since the very beginning of its operations, with one of the first cases having been lodged by AGIP, an Italian energy SOE. Nowadays, cases filed by SCEs account for around 3 percent of all ICSID arbitral decisions. Surprisingly, the majority of these ICSID awards are filed by European SCEs, while SCEs from developing countries represent only a minority. (Sejko, supra, p. 901).

Sejko does an excellent job of laying out both the trajectories of law and the challenges that are emerging as state controlled entities seek to operate in global markets. The analysis of the sometimes thin line between  these enterprises as state instrumentalities (thus moving to a state to state model of dispute resolution) or as commercial vehicle owned by states, is particularly useful. 

The article's introduction follows.

The Hard Nosed Business of Advocacy in Liberal Democracy's New Era: The View From Just Stop Oil and the Legitimacy of Correctly Manifesting LGBTQ+ Solidarity

 

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It is a rare pleasure to peek within the workings of solidarity building among civil society organizations.  Those practices, of course, have no ideology in and of themselves.  And it is likely that civil society groups across the political spectrum are constantly peeking into each other's practices, actions, and strategies for tips on how to effectively thrust themselves into the messy business of nudging a lazy and ignorant mass society toward the sort of proper attitudes that then spell influence for them and represent a step closer to the realization of the goals to which all this effort is expended. 

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Today's lesson is brought to the reader from the civil society organization, Just Stop Oil--a blue check mass organization with quite spectacular interventions designed to both get the attention of the masses (and their official minders in the public and private spheres) and then to capture  the narratives within which these masses are taught how to think and offered an orthodoxy of consequences for thinking "right." Fair enough--those appear to be the rule of politics in this new era for liberal democracy. Of course, any group can utilize these approaches and tactics, and as easily directed against as by Just Stop Oil.

In this case, Just Stop Oil has provided its audience with a hard lesson in solidarity building. Its target is a potential ally; its tactics a reminder that solidarity can as easily be crafted into a system of hierarchy as it can be framed in all sorts of other ways.  Implicit in the tactics used is the notion that with a limited attention range of a target group (the masses and their shepherds) it is necessary to "prioritize (that is to develop a hierarchy of value for just causes), and that all allied groups will have to ensure that they conform to that hierarchy. An important additional element is that this is an entirely one way street. 

The object of all of this solidarity building appears to be the organizers of an LGBTQ+ event, as well as an insistence on the deployment of a catechism and working style for the organization and its members that centers the issues and concerns of Just Stop Oil.  Again, fair enough, but instructive beyond this  specific manifestation of strategic hardball. There is, of course, no need to proffer, in return, a commitment by Just Stop Oil about their gender practices and sensitivities. That may just have to wait.  "Writer Jeffrey Ingold explained: “There is a story in The Guardian today about how London may flood due to rising sea levels soon if urgent work isn’t carried out on the Thames Barriers. There can’t be Pride if London is under water. “What is the point of queer liberation if we don’t have a liveable planet?” (here).

And failure to comply comes at a cost--the part of the pack that reminds one of a famous movie sequence in which an important person of commerce suggests that he will make an offer that cannot be refused.

As related in an opinion piece appearing in the UK press organ, the Guardian (James Greig, "Is Pride the right target for Just Stop Oil? Yes, when it’s letting our common enemy off the hook" 30 June 2023):

Queer members of Just Stop Oil issued Pride in London with a set of demands this week, arguing that “the climate crisis is the biggest threat to LGBTQ+ rights, due to social collapse”. This comes after Pride faced accusations of “pinkwashing” over its decision to make United Airlines the headline sponsor of this year’s event. . . . I am behind Just Stop Oil’s intervention, partly because it is dramatic and a little messy – there’s a kind of supervillain campness to it issuing a public ultimatum against a ticking clock.

Credit here (Christians! Shall Sparatcus tear down your churches? (1919)

In some ways, it seems suited to the times to once again think of these sorts of intervention in aesthetic terms.  Reminds me of the good old days of Berolt Brecht and his crowd. This is the world of the Freikorps and Sparakus. But it also reminds of the intertwining of politics and the aesthetic; also of its consequences in the theatrics of violence to which this sort of campness and politics as art might descend.  And there is a campness to counter-revolutionary tropes that might not be easily avoided. Perhaps that is the language of politics today--the theater of camp may have more substance than the mellifluous banalities oozing out of the organs of the administrative apparatus of social relations. That, indeed, would drive the camp in liberal democratic politics to newer heights--and profound bathos. These are lessons tht can only be learned in each generaiton that both proudly decouples itself from its parents and insists that theirs is the path of de-risking action from consequence.

But why engage in the dreariness of early 21st century political camp, when the 20th century offers a richer though much more meaningful palette.  It might, in that respect, be worth in ending this reflection, to indulge in the camp of Rise and Fall of the City of Mahagonny (German: Aufstieg und Fall der Stadt Mahagonny) (Kurt Weill music; Bertolt Brecht lyrics; 1930; Berlin), and more specifically Können einem toten Mann nicht helfen (Can't Help a Dead Man)

Können einem toten Mann nicht helfen.
Können uns und euch  und niemand helfen

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Thus it goes for civil society in Mahagonny. 

People only dream of Mahagonny
Because the world is so rotten ;
There is no peace in us-
No unity-
And there is nothing one can depend on.
But Mahagonriy Doesn't exist;
For Mahagonny Never occurred .
For Mahagonny Is only a made-up word. (here)

Just Released: "Good Practice Toolkit: Strengthening Modern Slavery Responses"

 I am delighted to bring to the attention of readers the publication of the "Good Practice Toolkit: Strengthening Modern Slavery Responses." It is the 4th of a series of reports undertaken by academics from the Australian Human Rights Institute (UNSW Sydney), Business and Human Rights Centre (RMIT), the University of Melbourne, the University of Notre Dame Australia, the University of Western Australia and Willamette University, together with the Human Rights Law Centre, the Business & Human Rights Resource Centre and Baptist World Aid.

The Good Practice Toolkit draws on findings from the multi-year project showing how companies are responding to the MSA and conducting human rights due diligence. It identifies and addresses two areas of business practice that are notably weak: engagement with stakeholders; and engagement with suppliers.

“The Good Practice Toolkit provides guidance on how to approach these areas as part of a broader human rights due diligence process and highlights good practice examples from both reporting entities and other businesses,” said Professor Justine Nolan, director of the Australian Human Rights Institute and one of the Toolkit’s authors.

 Its re-imagining of the idea and practice of mandatory human rights due diligence as originally framed in the UNGPs to the specific context of Australia's Modern Slavary law is particularly interesting.

All reports can be read here. The Good Practice Toolkit may be downloaded HERE IN PDF FORMAT.

Global SWF: 2023 GSR Scorecard--Governance, Sustainability, and Resiliance Progress by State Owned Investors

 

Over the last three years, Global SWF LLC  has produced a quite useful GSR Scoreboard, which assesses the Governance, Sustainability, and Resilience progress and efforts of the world’s 200 largest State-Owned Investors.Global SWF has just released it latest GSR Scorecard. They note the following:

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  Significant increase in GSR scores across the board when compared to the past three years;
• Largest improvement among SWFs, which are catching up quickly with pension funds; and around sustainability, as funds intensify their impact activities and reporting;
• Overall ranking led by Temasek, which continues to be highly regarded, sought after, and used as a model by governments across the world – do not miss the main feature on pages 20-25 of the report;
• Three other funds with full marks: CDPQ (Global SWF’s 2022 Fund of the Year), NZ Super (best financial performance in the past decade); and NSIA (remarkable case in the African context);
• Regionally, the Middle East has seen the largest improvement, from 32% in 2020 to 52% in 2023. PIF is leading the way with some unprecedented efforts around sustainability in the region;
• We expect the scores to keep increasing in the years to come as funds mature and recognize the importance of aligning with best practices around governance, sustainability, and resilience.

The web-based report can now be accessed openly at https://globalswf.com/reports/2023gsr.

Global SWF will be hosting a Zoom webinar July 10, at 8am EST / 1pm BST / 4pm GST / 8pm CST. Those interested may register now at https://bit.ly/gsr2023.

The Executive Summary follows below. The full report may be accessed HERE.

Thoughts on Surya Deva and Tara Van Ho, "Addressing (In)Equality in Redress: Human Rights-Led Reform of the Investor-State Dispute Settlement Mechanism," The Journal of World Investment and Trade 24 (2023) 398-436

 

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The third decade of the 21st century has (at least) seen the emergence of a vigorous debate about the first principles of economic and political relations, one last seen in this form in the 1980s. Back then, the debate, at least within that hothouse world of academia (with substantial strategic spillover to the political and economic classes that found these battles useful), pitted free market liberal democratic theorists seeking to complete building the vision unveiled by the U.S. as the vanguard state triumphant over the forces of fascism and militarism, against a motley collection of critical theorists allied (loosely) with the much more old timely collectivist  and ideological theorists within the anti-colonialist/imperialist and Marxist Leninist camps.  

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One moved toward technocratic empiricism within which the social sciences flourished, and markets based, risk taking, profit incentive based individual centered collective organization could be deployed to maximize collective activity at any level of organization. It produced tendencies toward technocratic bureaucratization and an emphasis on process with safety nets, but one in which individual choice sat on a throne of glory. Everything and everyone was a unit of production, the value of character of which was to be judged by their contribution to welfare as defined by the orthodox ideology. It encouraged the transformation of education and academic into blue collar factories, at least eventually; universities and think tanks became factories for the production of fact or data based inputs for what became algorithmically modeled realities built on ideological foundations. The modern apotheosis of this manifestation can be seen today in the trajectories and power of data driven governance, of the triumph of AI and big data management (eg smart houses, cities, enterprises and social organs), and more potently in the field of business, human rights, and sustainability, toward a triumph of the accountability and compliance collective (eg here). 

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The other moved toward theoretical revolutionary transformation.  Much of it was naively utopian; some of it was violent; and much of it expressed a desire to remake a world that had been remade around them but about which they remained at the peripheries (see here and here).  This was a space for theory, and the development of ideology that was fashioned against another. It was both a reflection of what it sought to challenge, and a strategy towards remaking--not the world but the perception of the world.  Given the privileged status of many of its theorists--of people playing revolution who had the means and the otium to both become conscious of oppression and to transform a condition of hierarchy into the basis of a transformative ideology that could be scaled to any collective and sourced in any set of historical periods projected forward--it straddled realities perceived almost inevitably from positions of privilege even within subaltern communities. Nonetheless it was powerful: collectivist, grounded in the evolution of a powerful vision of social justice (the contests over the defection of which fractured these critical and revolutionary movements through the 1980s); and saw in empiricism, markets, and governance the strategic vehicles for the realization of their visions.  The modern apotheosis of this manifestation can be seen today in the trajectories and power of social justice orthodoxies (however defined), and in the movements toward a triumph of the precautionary principle (applied through collectives) as a core modality of managing human individual and collective activity; one in which profit is a suspicious category, and one driven by judgments grounded in external impact of action. One understands that manifestation as well in the way in which individual agency is transferred to collective authorities with the power to discipline individual action in the service of collective objectives.

The ideas fueling old wars never die--they just migrate to suit the times.  And they re-emerge with some vigor as the global community appears to be passing from one historical era to another.  It is at moments like that when the old tensions re-emerge and the old battles--nicely decanted in marvelously interesting vessels, re-emerge to both entertain and manage the popular perceptions, as a predicate for allowing ruling groups to act. In the 1980s, the impending fall of the experiment in European Marxist-Leninism and the effective bankruptcy of so-called people's liberation and revolutionary movements both in the first and developing worlds, provided the necessary context.  In the 3rd decade of the 21st century it is the collapse of that vision from the 1980s that has set the stage for re-imagining the way in which it will be required to "see" the world, and thus approach issues of judgment ("good" or "bad") and accountability (alignment of ideological world view with the pragmatics of administrative organization of aggregated political, economic, social, and cultural human collectives).

Some old timely things remain vibrant--though repurposed--for example the state. Yet even here, the state has become a notion that is meant to fit in a new vessel--its police power is certainly useful--as are their bureaucracies.  But the state must also be bent to the service of the apex global collective (and thus the current conflicts about the nature, role, and precedence of international "law" in the control of human collectives). Others organs and principles must be questioned, judged, and to some extent either transformed or abandoned--for example notions of risk, nature and purpose of markets, the hierarchy of human collective authority arranged around categories of function (political, economic, social, cultural) or identity (caste, race, religion, ethnicity, gender and gender identities, age) or history (for example, ethno-historical, religio--ideological-deteminism, colonial-imperialist anti- or pro-hegemonic, and migratory-chauvinistic).  In their place, new orthodoxies of perception--social justice, equality, non-discrimination, and remedy--ought to be applied with equal vigor to natural and abstract individuals.

This has had particular application through the lens of the human rights and sustainability impacts of economic activity (and the irony far less so with respect to the human rights and sustainability impacts of political, cultural or social activity). It is in this light that one ought to welcome the marvelous article recently published by Surya Deva and Tara Van Ho, "Addressing (In)Equality in Redress: Human Rights-Led Reform of the Investor-State Dispute Settlement Mechanism,"  The Journal of World Investment and Trade 24 (2023) 398-436. The abstract suggests the perspective from which the authors seek to engage in the re-emerging debate about first principles:

In the context of ongoing debates concerning the reform of the investor-State dispute settlement (ISDS) mechanism, this article critiques the widely-accepted approach that seeks to fit international human rights law (IHRL) into the existing structure of ISDS and argues that IHRL should at least be treated as ‘primus inter pares’ vis-à-vis international investment law. Testing ISDS on the touchstone of the human rights to equality, non-discrimination, and an effective remedy, the authors demonstrate that ISDS is incompatible with IHRL. Considering various structural and systemic problems, abolishing ISDS is perhaps the only normatively sound solution to address this incompatibility with IHRL. However, as this may not be politically feasible in the near future, this article articulates eight principles for a human-rights compatible international dispute settlement mechanism. We argue that these principles should inform the current efforts to reform the ISDS mechanism to avoid the risk of making only cosmetic changes. (Deva & Van Ho, supra).

 

Pix Credit: The burning of the throne of Louis Philippe during Revolution of 1848 here

The goal is simple--abolish an important manifestation of the post-1980s orthodoxies of liberal democracy and markets privileged organization of human social relations--and replace it with another. This one adopts the discursive language of human rights but is meant to transform the values basis of social relations and from that to transform  those relations to something closer, perhaps, to the imaginaries put forward in the 1950s-70s (but in contemporary form). The path is more complicated. Finding it impossible to effect this transformation immediately (dethroning one set of discursive orthodoxies for another is a complicated business and will produce resistance) they propose  the application of an ancient though sometimes successful strategy--using the discursive trajectories of contemporary orthodoxy against itself  and in that way inducing the current orthodoxy to reject its own core values in small and well managed stages.  To that end eight principles for a human-rights compatible international dispute settlement mechanism. Bravo. The fight over first principles is now much more out in the open--and much more unavoidable for those who now must be put in the uncomfortable position of choosing sides.

Given the quite ambitious objectives of this intervention that argument and those principles are worth some additional consideration.  Those follow below.  

Otium, Catulle, tibi molestum est; [Leisure, Catullus, is a troublesome thing to you:]
Otio exsultas nimiumque gestis; [In leisure you revel and delight exceedingly:]
Otium et reges prius et beatas [Leisure in the past has been the downfall of kings and]
      perdidit urbes. [prosperous cities] (Catullus)  L 51.13–16 (Catullus: The Complete Poems for American Readers (NY: Dutton Paperback, 1970), p. 60).

We are all. it seems, now in a version of Fellini's Satyricon. It remains only to be seen what role the director has in store for each of us. 

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Podcast: Lab Grown Meat Approved for Consumption by FDA

 

If you've been following the alternative-meat news lately, then you won't be too surprised to hear that a new alternative has been recently developed for market consumption: cell-cultivated or lab-grown chicken. Would you eat it?

Access podcast here

Я не позволяю (ne pozvolyayu/"I do not allow")--Mr. Putin's Address of 24 June 2023 and the Difficulties of Governance in Wartime Russia

 

Great feudal autocracies face a difficult balancing--one that is impossible to maintain  for long periods without substantial and sometimes painful corrections. 

On the one hand, these feudal autocracies face what might be called the "Polish Problem"--a "Golden Liberty (Polish: Złota Wolność) in which the nobility retained substantial authority over other social classes and the system of monarchy itsef (a republic under the presidency of the Kong in which the privileges of governance were centered on the nobility). This is a sort of (in Russian terms) boyar democratic dictatorship in which every member of the nobility enjoyed the Liberum veto based on the notion of unanimity and activated by declaring--Nie pozwalam! (I do not allow) or Sisto activitatem! (Latin: I stop the activity) and for everyone else--dictatorship.  

On the other hand, these feudal autocracies face what might be called the "praetorian problem"--a concentration of power in a core of leadership that can only be maintained through the support of a praetorian elite (traditionally the military but in Russia perhaps better understood as led by the apparatus of state security with the concurrence of the military hierarchs and key elements of the inner sanctum administrative and economic elites. Here, again, what appears to be concentrated and hierarchical authority can persist only with the concurrence of the ruling circle which exists in a sort of violent and sometimes corrupt symbiosis with its core of leadership. But that circle, in turn, functions within the interaction of the traditional feudal orders--the priest/bureaucrats; the warriros/state security, and the Merchant/boyars (Georges Duby, The Three Orders: Feudal Society Reimagined (University of Chicago Press, 1980, pp. 57-74).

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Perhaps Russia, like other states, teeters between between one form of (communal) feudal autocracy and another form of (praetorian) feudal autocracy. That might permit, perhaps again, to construct an interpretive box within which the relationship between Mr. Putin (the Russian President and the elected monarch of the Russian feudal autocracy), and Yevgeny Prigozhin (the leader of the Wagner Group and a high ranking boyar in what appears to be the Russian nobility of the present day) might be understood. More specifically it might provide a way of putting into some sort of reassuringly rational interpretive box the recent decision of Mr. Prigozhin, first to declare betrayal by certain elements of Mr. Putin's military praetorians, and second, after skirmishes with Russian forces, to start to march his forces onto the imperial capital of this feudal autocracy. to replace a large segment of the Russian praetorian establishment,sparking rumors that Mr. Putin had flown out of Moscow. These actions sparked a national broadcast by Mr. Putin (Обращение к гражданам России; English language version here) decrying treason and betrayal by the Wagner Group. (see here, here, here, and here).

The imperial capital then prepared for a confrontation between the forces of the core of leadership and the Wagner Group, only to be thwarted as a key semi-autonomous vassal princeling--who currently holds the title of President of Belorussia--announced that a settlement of some kind had been reached between the leader of the Wagner Group and the Russian core of leadership.

 The Russian mercenary leader Yevgeny V. Prigozhin announced that his troops marching toward Moscow would turn around, shortly after the leader of Belarus said he was in talks with Mr. Prigozhin on a deal to “de-escalate tensions.”

The negotiations between Mr. Prigozhin and President Aleksandr G. Lukashenko of Belarus opened the possibility that the rapidly evolving security crisis embroiling the Russian government could be resolved without armed fighting. But Mr. Prigozhin did not immediately say whether his forces were leaving the southern city of Rostov-on-Don, where his forces had he has seized critical military and civilian buildings. (Russia-Ukraine War: Russian Paramilitary Chief Says His Forces Will Turn Around)

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From a certain perspective drawn from the plausibilities of social and power relations in that nation, this makes a certain amount of sense. War is a great lubricant, in those systems, for the re-imagining of power relations among a praetorian center and an autocratic quasi-military nobility. The idea was not to shed Russian blood, per se, it was to rearrange the dynamics of autocracy under wartime conditions in Russia (see here). 

And in this case the traditional use of exile to a vassal state plays well both with traditional tropes and the interests of all parties (Wagner leader Prigozhin will move to Belarus following the mercenary group's uprising against Putin, Kremlin spokesman says).  Mr. Putin is not in a position to destroy Mr.  Prigozhin and Mr. Prigozhin is not yet in a position to destroy Mr. Putin. Note not destroy the system or its objectives--preserve it, both will claim.  But to change the balance between the democratic dictatorship of the nobility (the Polish solution) and the traditional end of the line of Russian politics--the praetorian (and now bureaucratic) autocracy. And the theater in which these internal politics is played out--and facilitated--is Ukraine, both the prize and pathway.

All of this has provided some drama for the consumption of political collectives no longer used to the ebbs and flows of power in dynamic Eastern European autocratic feudal political systems--however well dressed up they might now operate in the operational language of contemporary politics.   And it is not done. Once this dynamic starts, it is likely that a host of additional and consequential actions will follow. There will be lots of speculation, but the only thing is it now safe to say is that no one has emerged from this stringer--for the short term.  And weak people with authority at their disposal can make for very unpredictable players.  I suspect in the current environment, none of the critical actors can let down their guard.  For the rest of us, the possibilities of these internal "conversations" spilling  either out of their borders or producing substantially greater  misery in Ukraine, and the start of of tilt in wartime solidarity from China to a Turkey-Iran axis (see here and here) ought not to be dismissed.  Many more things are on the table(s) now and we can expect lots of moves to be made on the three dimensional chess board that is Ukraine on the world stage.

 Mr. Putin's address follows in English and the original Russian. It is worth a careful read if only to get a sense of the discursive boxes within which these ancient dynamics now play out.

Convocatoria abierta para el Nº 33 de la revista Iuris Dictio “La seguridad. Desafíos para los Estados y la comunidad internacional” [Open call for the Nº 33 of the Journal Iuris Dictio] "Security. Challenges for States and the international community”

 

 

Convocatoria abierta para el Nº 33 de la revista Iuris Dictio

2023-06-23

Dossier Nº 33

“La seguridad. Desafíos para los Estados y la comunidad internacional”

 

La revista Iuris Dictio invita a investigadoras/es, estudiantes y docentes del ámbito jurídico a enviar sus artículos para ser considerados como parte del Dossier Nº 33 de la revista, que será publicada en junio de 2024. El dossier versará sobre los desafíos y las tensiones que surgen en los Estados y en el plano internacional, producto de la necesidad de seguridad, en su más amplio sentido.

 

Open call for the Nº 33 of the Journal Iuris Dictio
2023-06-23
Issue No. 33
"Security. Challenges for States and the international community”
The Iuris Dictio journal invites legal researchers, students and teachers to submit their articles to be considered as part of the magazine's Issue No. 33, which will be published in June 2024. The issue will deal with the challenges and tensions that arise in the States and at the international level, product of the need for security, in its broadest sense.

The Masses Must be Educated!--The (Mis)Management of Business and Human Rights Populism

 

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One of the most interesting turns in the organization of economic activity, at least within liberal democratic and post-colonial environments, has been the development of a rhetoric for, an ideology of, and a set of working models that can be drawn upon by economic enterprises that seek not merely to comply with law and the expectations of the market, but also  to actively participate in the management of social change. This turn is especially significant, since it appears to bend  markets further into socio-political spaces in ways that mimic the sensibilities of Marxist-Leninist systems in which there has always been a strong intuition that markets and economic activity are tools that must be deployed to advance political and ideological objectives. The great difference, of course, is that in Marxist-Leninist systems that toolkit is at the disposal of the vanguard party and operationalized through its administrative apparatus, which includes but is not centered on markets--that is on the mechanisms through which individualized private choices are usually realized in everyday life.  

The outward manifestation of this turn may be best understood by the imperative of political agendas driven by particular end goals--the masses must be educated!

 In the liberal democratic and post-colonial camps, this task has traditionally been the domain of the state (at least in modern times) through its control of the education system (as contentious as its content and objectives may be from time to time) especially targeting the young  who must be socialized as completely as possible for insertion into political and labor markets. But it has also been the domain of private actors--civil society, social, affinity group, and religious collectives--who target the (more or less adult) masses not for socialization, but for the normalization of particular ways of looking at the world, of preferred systems of right and wrong, and of specific objectives  the plausibility f which within dominant ideological systems might somehow be constructed.

The object of all of this mass education especially by private actors is usually to manage the way in which the masses approach interaction with and accountability from the state for specific outcomes (e.g., gender equality, social welfare programs, consumer protection, etc.) and also for setting the normative  baseline (e.g., social justice, limits on exercises of state power, development and protection of rights, etc.)  But in diffuse power systems (like those in liberal democratic and post-colonial political spaces), the masses are educated to be deployed against other critical social, economic, and religious actors.  In the economic sphere, mass education is the means by which mass action can be rationalized (expectations and desires cultivated along principled grounds) and action undertaken against targeted actors to conform behavior to mass expectation (the boycott, pressure on the state to "do something" and the like). 

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What the generations-long movement from corporate social responsibility to responsible business conduct and norm-compliance based accountability founded on a corporate responsibility to respect human rights and other international norms has appeared to produce is not merely a strong taste for compliance, but also a desire for entities, once the object against which educated masses were deployed, to become a source of mass education in their own right. In effect, a long process of core normative changes in the way in which society imagines the role and function of economic activity--from inward facing and profit generating and risk bearing; to outward facing and impacts generating and risk controlling-- has transformed the expectations built into permitted collective economic activity from one that is passive with respect to the construction and implementation of political and social ideologies and objectives, to one in which the enterprise is now expected to embed those ideologies and expectations into its production and market behaviors. That change, in turn, changes the way understands the source and management of mass education in liberal democratic and post-colonial spaces--or at least puts it in a different light.  

Elite consensus now appears to have been moving from "the masses must be educated" to the new imperative--the masses must be educated by the enterprise! 

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That, perhaps, is the single greatest consequence of the movement that, officially at least, culminated in the endorsement of the UN Guiding Principles for Business and Human Rights, around which these new imaginaries of the enterprise as a n agent of vanguard socio-political change can now be advanced. In the United States, and especially since the social upheaval that occurred in in the wake of the murder of George Floyd, U.S. enterprises have becme more active agents of the social justice movement that became more centered in elite discourse after that time (Companies Taking A Public Stand In The Wake Of George Floyd’s Death ("Numerous companies have made public statements against racism and injustice and announced donations and other displays of support since the death of George Floyd unleashed protests across the United States starting on May 26th.") also here and here). But this merely marked a substantial point of public recognition for a tendency that had already begun to shape enterprise culture with respect to race, ethnicity, and identity issues--the core of what appeared to make up the public face of social justice discourse in the US . This had been identified by some since 2015 as "woke capitalism" and so identified constructed as a point against which other forms of woke capitalism could be developed in opposition (Woke Corporate Capitalism: What is the antidote to this “corporate wokeness” infiltrating our largest American companies?). However one described it or its history--and however one posited a values core to be protected--the die had been cast: enterprises would now be expected to educate the masses.

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It is at this point that contemporary economic enterprises  have begun to realize one of the consequences of any responsibility to educate the masses through their production, in their operations, and through their markets: there is, in market economies, a market in education for the masses.  And while it is clear that the masses must be educated, in liberal democratic and post colonial spaces (unlike Marxist-Leninist spaces) the markets for educators remains quite robust.  Enterprises, indeed, have entered a quite crowded market--already well populated by traditional educators--civil society, religious, identity group, political, and other organizations--whose business model is indeed founded on the ability to successfully project an education onto the masses and then deploy that educated mass as an instrument for attaining more concrete socio-political results. More significantly, the range of education broad enough--indeed as broad as the tolerated political spectrum--to ensure sometimes substantial conflict in the principles, morals, and objectives of the education proffered to and made available for consumption by the masses. While that has been a well understood element of the business model of the so-called non-profit sector, it is somewhat alien to what had been the profit sector. 

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The consequences are not yet apparent (but short term reaction see here), but the effects have been well reported. Two insights perhaps are worth noting.  The first is the way in which corporate mass education can produce enormously vibrant counter-education that targets the mass educating enterprise.  That was in effect  the effort by Anheuser-Busch to consider rolling out a mass education campaign (in the form of solidarity building) around its Bud Light Brand. What started as a mild affirmation campaign targeting the politics of social justice and inclusion was rapidly transformed into a battle among competing visions for cultural production in social relations in which the Bud Light brand became an incarnation of a socio-political contest over the meaning and application of human rights through markets. The episode will likely be carefully studied by all key stakeholders.  The other involved the development of Trans friendly clothing marketed by Target. That also produced a counter mass movement--in both cases transforming the market (for products) into a marketplace in which products became the semiotic embodiment of contested approaches to mass education and cultural, socio-political expectations to be manifested by patterns of consumption.  This also will be carefully studied.That, perhaps, is the most profound lesson of this transformation--the reality that production, and especially the objects and services produced, now acquire a double character: they are at once a physical manifestation of a thing in itself (a can of beer) and also are a manifestation of socio-political allegiance (one is drinking ideas as well as beer). 

But the bottom line: the political education of the masses through markets and by economic actors does, indeed, may contribute to substantially changing the meaning and function of economic activity.  On the one hand, it puts markets and people at the center.  One consumes not just products and services but their meaning and signification. It continues the transformation of consumption from a voluptuary exercise to a manifestation of ideology and politics--and thus aids in the transformation of economic actors from producers to goods and services to active agents of politics and ideological embedding. Perhaps the change makes obvious what had been the dual realities of markets all along.  On the other hand, the centering on the ideological role of production and its connection to organs of political authority may substantially reshape the way way production is understood and its costs and value calculated. One cannot speak as much about profit (or value added) as an inward calculus--it may now have to be re-calibrated to include the socio-political profit of such production and (appropriate) consumption. Nonetheless the now more formally circumscribed role of economic actors in the education of the masses (as part of the value added of production), and in the political interactions between producers and consumers of goods and services, will continue to reshape the landscape of production in ways that can hardly be anticipated.

Additional thoughts follow.

 

Mr. Blinken Goes to China--The Initial Texts and Emerging Discursive Positions

 

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Mr. Blinken has gone to China on a long postponed visit. 

We have a responsibility to defend, protect, and advance the interests of the United States and its people. And that is what motivates us in our relationship with China and, for that matter, with any other country. And we believe the best way to do that is to do exactly what we’ve done over the last two and a half years.

We’ve made major investments, historic investments, at home – in our infrastructure, in our technology, in our research and development capacity, in our competitiveness. And at the same time we re-engaged with allies and partners and we created much greater alignment, convergence with them, on the approach to China. (Secretary Antony J. Blinken with Leila Fadel of NPR Morning Edition )

 For those who prefer stability and continuity in foreign relations, there might be a little comfort to be drawn from the statement of the current US Secretary of State, sounding quite like his predecessor in the Trump Administration --but perhaps more elegantly and in the language of east Coast East Coast academically refined discursive tropes.  Still one cannot but like the new Eiuropean inspired discursive overlay first trotted out at the recently concluded G7 meeting:

There is a profound difference, for the United States and for many other countries, between de-risking and decoupling. Our countries traded more over the last year – in fact, more than ever over the last year – nearly $700 billion. Healthy and robust economic engagement benefits both the United States and China. And as Secretary Yellen testified before Congress last week, it would be, as she put it, disastrous for us to decouple and stop all trade and investment with China.

We are for de-risking and diversifying. That means investing in our own capacities and in secure, resilient supply chains; pushing for level playing fields for our workers and our companies; defending against harmful trade practice; and protecting our critical technologies so that they aren’t used against us. I made clear that we’ll continue to take targeted actions that are necessary to protect U.S. national security. (Secretary of State Antony J. Blinken’s Press Availability )

The discursive approaches of the Chinese side evidenced a quite different start and end point:

Xi stressed that major-country competition does not represent the trend of the times, still less can it solve America's own problems or the challenges facing the world. China respects U.S. interests and does not seek to challenge or displace the United States, and in the same vein, the United States needs to respect China and must not hurt China's legitimate rights and interests, said Xi. "Neither side should try to shape the other side by its own will, still less deprive the other side of its legitimate right to development."

Xi said China always hopes to see a sound and steady China-U.S. relationship and believes that the two major countries can overcome various difficulties and find the right way to get along based on mutual respect, peaceful coexistence and win-win cooperation, calling on the U.S. side to adopt a rational and pragmatic attitude and work with China in the same direction. (Xi meets Blinken in Beijing)

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There there is an equal commitment to pursuit of a vision that is at least as old as the start of the Trump Administration. "China refused to entertain Washington's bid to resume military-to-military communication channels, citing U.S. sanctions as the obstacle. The two sides appeared entrenched in their positions over everything from Taiwan to trade, including U.S. actions toward China's chip industry, human rights and Russia's war against Ukraine." (Reuters).

At least they are talking again. Listening will take a little longer. Engagement longer still. De-risking in a win-win environment will prove quite interesting to achieve, if that is indeed the point of all of this. It is not clear how many actually believe that is the point anymore. For the moment, however, the appropriate face to face performance is required for global media-propaganda organs, and an elaboration of the earlier dress rehearsals within their respective camps that occurred in May 2023 (Comparing What is on Offer as Empires De-Couple (work together to build a community of one heart and one mind (同心同德的共同体)): Studying the G7 Hiroshima Leaders’ Communiqué and President Xi Jinping Keynote Speech at the Inaugural China-Central Asia Summit).  Still, there is always something one can learn by watching reruns in a new setting. 

And yet the discursive character of these performances ought not to be discounted.  It took barely a day or so for that character to be revealed as both sides returned to feed their internal constituencies the sort of abstracted sustenance that each desires as they differentiate themselves from the other (de-risking or de-coupling or win-win; in this realm do the terms retain any stable meaning?) and better reveal objectives and sensibilities. 

Attending a fundraiser in California, Biden said Xi was very embarrassed when a suspected Chinese spy balloon was blown off course over U.S. airspace early this year. Blinken had said on Monday the chapter should be closed. "The reason why Xi Jinping got very upset in terms of when I shot that balloon down with two box cars full of spy equipment in it was he didn't know it was there," Biden said. "That's a great embarrassment for dictators. When they didn't know what happened. That wasn't supposed to be going where it was. It was blown off course," Biden said. (China hits back as Biden labels Xi a 'dictator')

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On the Chinese side this produced too tempting a discursive opportunity to ignore. They took advantage of the opportunity in three ways.  The first stressed the emerging hierarchies of the international order that were powerfully sub-textual during the visit of Mr. Blinken to China. The response to the Presidential utterance came from a spokesperson from the Chinese foreign ministry--the sort of response assignment one would expect for such matters touching on inferior powers. The second was to school a sovereign equal on behavior norms in the context of a well known and well worn ideological disagreement with respect to which both sides had long ago both staked their positions and developed sophisticated discursive tropes routinely hurled against each other (one the Chinese side see eg here). Third, the terse Chinese response was itself quite interesting--especially when it was blown up by press and media organs: "It is a grave disregard for basic facts, a serious breach of diplomatic protocol, a serious violation of China's political dignity and amounted to open political provocation," she added. "China expresses strong dissatisfaction and firm opposition."(here). One can quibble with the judgment--a grave disregard for basic facts might as easily appear a usual if impolite rehash of an assessment that is neither new nor with respect to which the US officials have been shy about proclaiming when it suits them. Perhaps a greater sensitivity here in the face of the US-China competition for management of the master narrative of democracy (see here). The seriousness of the breach of protocol is certainly contextually contingent--as been equals boorishness is sometimes the way in which equals communicate--and between the Marxist-Leninist and liberal democratic camps it has been a way of rhetorical life for generations.  But bravo for the subtle effort to re-frame the nature of the relationship. Neither the United States nor China have any particular interest or responsibility for protecting the discursive dignity of the other--indeed both have made a sport of it for a very very long time. The performative squealing though appears to play well with the press. Lastly, one ought to be comforted by the allegation of provocation--that resort to old timely language provides a very nice exposure to the rhetorical framework within which communication can be embedded.  But to take that as a meaningful communication would be to miss its point. 

And the point--the performance of Mr. Blinken's visit might not have been worth the contribution to climate warming that the consumption of fuel used to transport that gentleman to Beijing produced.  Or, the object was something entirely different. But that is well beyond my pay grade. 

The full text of Secretary Antony J. Blinken with Leila Fadel of NPR Morning Edition; Secretary of State Antony J. Blinken’s Press Availability; and Xi meets Blinken in Beijing follow.

 

The UN Guiding Principles for Business and Human Rights--Reflections on the UNGP's 12th Anniversary of Endorsement

 

The UN Guiding Principles for Business and Human Rights were endorsed unanimously by the UN Human Rights Council this month twelve years ago s in its resolution 17/4 of 16 June 2011. A very different time. 

At the time of its presentation to the Human Rights Council, John Ruggie, then serving as Special Representative for the Secretary General (SRSG) on the issue of human rights and transnational
corporations and other business enterprises, noted in his transmittal report (A/HRC/17/31):

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13. What do these Guiding Principles do? And how should they be read? Council
endorsement of the Guiding Principles, by itself, will not bring business and human rights challenges to an end. But it will mark the end of the beginning: by establishing a common global platform for action, on which cumulative progress can be built, step-by-step, without
foreclosing any other promising longer-term developments.
14. The Guiding Principles’ normative contribution lies not in the creation of new international law obligations but in elaborating the implications of existing standards and practices for States and businesses; integrating them within a single, logically coherent and comprehensive template; and identifying where the current regime falls short and how it should be improved.

Twelve years out, the SRSG's words have proven to be oracular. HRC endorsement did not bring about an end to business and human rights challenges.  Almost from the time of its endorsement, critical stakeholders were hard at work to move on from or through the UNGP. They took seriously the notion of the endorsement as the "end of the beginning" and sought to move from the beginning somewhere else.  That somewhere else has, it turns out, included attempting to patch together something that passes for an international legally binding instrument that would, at best move the UNGP to a "next" phase, or move the business and human rights community in an altogether different direction. It has also included first a vigorous effort to encourage the performative state theatrics of the "National Action Plan" process; one that was, at least on paper, potentially useful, but that in reality (and paralleling what civil society heartily criticized business performance of the second pillar duty to respect)  as an elaborate exercise in virtue signalling. 

More recently, states have engaged, with great vigor, in expanding the substantial governance gaps that were a prime motivation for the UNGP project in the first place.

The root cause of the business and human rights predicament today lies in the governance
gaps created by globalization - between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental challenge. (Ruggie 2008 Report, Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework (A/HRC/8/5)).

Mercifully, the emerging governance gaps do not repeat the failures of those identified by Professor Ruggie. Rather they create quite interesting new ones.  These are the gaps that are created in the spaces between national legislative efforts to project business and human rights regulatory authority along supply chains, blocking legislation,  and the quite distinct set of state recognition (and transposition) of international human rights norms into their domestic legal orders. Perhaps even the appearance of forward motion is forward motion; and in any case, the need to project domestic political authority outward simultaneously with other states appears to be  the political condition of the third decade of the 21st century. 

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What the SRSG might have envisioned as a consensus based (more or less) basis for step by  step "progress" as that is envisioned in the text of the UNGP has become a cacophony of efforts producing a bricolage of legislation, norms, and public and private regulatory efforts that tend to mark this age. That cacophony has become polyphonic: while it might once have been a "family fight" among leading expositors of a business and human rights vision from the soft and comfortable environs of the developed world (including taking on the mantel of speaker for the less well privileged) has become a mirror of the great ideological divisions of the contemporary global political orders--one in which Marxist-Leninist, post-colonial, indigenous, and theocratic voices are also increasingly determined to be heard in their own voices. Moreover, healthy markets in private standards have emerged as well.  These all focus on the corporate responsibility to respect to human rights.  The state duty to protect human rights, as a developing area, appears far more attached to past practice and sensibilities about the distinction between international law and the realm of domestic legal ordering.

Nonetheless there has been progress and, indeed, a common platform for action appears to be emerging within the UNGP framework. That common platform is compliance based, and grounded on a sort of triumph of the precautionary principle of public law now transposed and embedded in the principles and habits of economic activity. The consequences have yet to be fully appreciated. But some are already visible: the transformation of the working style of economic activity from one encouraging risk taking for innovation to one far more risk averse; the redirection of the costing of economic activity from that of production to that of impact; the willingness to rely on qualitative rather than quantitative analytics; while at the same time the inevitable move from bureaucratic systems of exercises of administrative discretion to the development of data driven assessment models grounded in risk of human rights breaches; and lastly the move toward the establishment of a global common law of human rights torts.   

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And thus, after twelve years, and in an odd sort of way, John Ruggie's prediction--that the UNGP’s "normative contribution lies not in the creation of new international law obligations but in elaborating the implications of existing standards and practices for States and businesses; integrating them within a single, logically coherent and comprehensive template; and identifying where the current regime falls short and how it should be improved" (2011 Report; ¶14)--has come true. People and collectives have interpreted those implications in ways that suit them and then run with those implications toward whatever goal they think they can connect to the interpretive trapeze acts that bridge the idea/ideal of the UNGP and the realities of what is to be sold to a target audience.  

That, then, is what twelve years have brought. Great promise and greater expectations have been realized.  That realization, however, may have manifested itself in remarkably unanticipated ways.   At the root of both innovation and resistance, are the UNGP--the common platform. Nonetheless, it is not the principles of the UNGP around which all of this activity is manifesting, but rather around the idea of the UNGP--its language, and the way in which it has ordered the world of business and human rights. States, enterprises, civil society may be inspired by the UNGP, they may draw on their interpretation of its principles and objectives, they may use the UNGP as a springboard to something more desired.  All of that litters the arena of law, policy, practice, and sensibility in public and private sectors. But none of this requires a close analysis of the principles themselves.  Nor is the language of those principles themselves subject to the sort of interpretive contestations that mark statutes or constitutional principle. 

It is sometimes possible to detach the idea of the body of text that is the subject of commentary from the text itself. In the case of the UNGPs, for example, the idea of the UNGPs as a whole becomes as important as the substance of its text. In this case the UNGP are objectified in ways in which it is no longer essential to understand how it works or even its three pillar structures. The UNGP stands for something else--as a project, as a process, as a set of aspirations, and the like. It is in some sense a fetish—a sign that signifies something else. And it is this “something else” that may be invoked by those who apply the UNGPs in this way. A commentary of the objectified UNGP , as distinct from a commentary of the UNGP, is an important additional context from which meaning and application may be extracted. (LC Backer, Commentary on the UNGP (OUP forthcoming 2024), chp 1 draft)

That, though, may be enough.