Larry Catá Backer's comments on current issues in transnational law and policy. These essays focus on the constitution of regulatory communities (political, economic, and religious) as they manage their constituencies and the conflicts between them. The context is globalization. This is an academic field-free zone: expect to travel "without documents" through the sometimes strongly guarded boundaries of international relations, constitutional, international, comparative, and corporate law.
Sunday, January 14, 2024
Jie Ouyang on Embedding Private Law into the Green Transition: The Case of the ‘Green Principle’ under the Chinese Civil Code (European Chinese Law Research Hub)
One
of the most interesting aspects of this article is the way that it seeks to weave the emerging reconstitution of the spaces for public and private activity through the medium of law--public law setting the core objectives of social collectives, and private law serving as the means (mimicking the structures and ideologies of public law) through which those objectives are embedded in the network of contract and institutional autonomy that is the modern economic organization. In China, in particular, the modalities of this embedding in the private sector, through law, both advances a critical normative project of New Era Theory--the organization of social relations through legalities that extend from the economic, to the social, cultural, and political. But it also advances another key element of New Era objectives as it moves farther from those of Reform and Opening Up--the reconstitution of the relationship between markets and socialist modernization. In that respect, certainly, the model is that of the reformed theory of the operation of the central state owned enterprises (for a more elaborate discussion of the evolution of this model for SOEs, see, e.g., Chinese State-Owned Companies and Investment in Latin America and Europe). Transposed to private enterprises, these organs are meant ti operate now in state supervised private organs in markets that are themselves supervised. Both, like SOEs, are meant to serve as a means, rather than the ends of social relations (and thus the key difference with the animating ideologies of markets based liberal democracies). It is in this respect certainly that the means by which this transformation is attempted becomes far more interesting; in that respect this article significantly contributes to the literature and is strongly recommended.
I am cross posting the essay below. The original ECLRH post may be accessed HERE.
And as a plug for the marvelous work at the European Chinese Law
Research Hub: if you have observations, analyses or pieces of research
that are not publishable as a paper but should get out there, or want to
spread event information, calls for papers or job openings, or have a
paper forthcoming- do not hesitate to contact Marianne von Bloomberg.
‘Ecological civilisation’
has been a core pillar of the Communist Party of China’s political
agenda in recent years. It highlights the growing importance of
balancing economic growth with environmental protection. Environmental
degradation comes from economic growth, economic growth relies on market
functioning, and the market runs on private contracts. Private law
doctrines, such as freedom of contract and limited liability of
corporations, provide the legal and institutional framework
that enables market actors (especially those with stronger bargaining
power) to reap the profits from market transactions, while legally
outsourcing the environmental externalities to the general public. Think
of a cheap pair of jeans – it is cheap because its enormous environmental costs
are not factored into its pricing and such pricing is possible because
contract law allows/encourages us to only care about our immediate party
(‘privity of contract’).
Granted, public environmental regulation
poses significant limitations to private dealings. But if private law
causes the problem in the first place, maybe we could also think about
how we can address the problem from within private law. In the
civil codification project since 2017, though the Chinese legislators
refrained from a complete overhaul of existing civil legislation, they
did endeavour to reconcile the tension between private autonomy and
public environmental good. Among others, Art. 9 of the Chinese Civil Code
(‘CCC’), which is often known as the ‘green principle’, prescribes
sustainability as an overarching principle of private law. It reads:
When conducting a civil activity, a person of the civil law shall act in
a manner that facilitates conservation of resources and protection of
the ecological environment.
This principle is highly abstract – just as abstract as other
established principles in private law such as good faith and public
policy. Judges in China, however, have not shied away
from engaging with this principle, often in a rather creative way. For
example, if I plant trees on your land illegally, you would think that
you can rightfully ask me to cut them down. But several courts[1] said no – as trees could help prevent soil erosion. In another case,[2]
the court reversed a homeowner association’s resolution that prohibited
a homeowner from installing an electric vehicle charging station in the
parking lot. The decision highlighted the scientific fact that electric
cars can reduce fossil fuel consumption and have zero tailpipe
emissions. (A side note: the Chinese authority has been actively
promoting electric cars since the early 2000s.)
The green principle can be read as an attempt to align private law
with the Constitution, which in the eyes of Chinese jurists is the
‘mother law’ that gives birth to other fields of law. Art. 26 of the Chinese Constitution
provides: ‘The State protects and improves the environment in which
people live and the ecological environment. It prevents and controls
pollution and other public hazards.’ The green principle is even part of
a broader political project, namely ecological civilisation, which
radiates to the entire state apparatus. For example, the Supreme Court
has been actively mobilising local courts to provide ‘judicial
services’ in order to achieve carbon peak and carbon neutrality, which
includes the imperative of ‘correctly applying the green principle’.
Ecological civilisation is not only the task of the state as Art. 26 of
the Constitution seems to indicate. With Art. 9 CCC, it is indicated
that every private person, too, is not part of the transition towards a
more sustainable future.
The green principle represents a welcome approach to opening up
private law doctrines for environmental concerns. But many actually find
such a politically laden principle disruptive to the system of private
law. In their eyes,
private law centres around interpersonal autonomy and deals with direct
exchanges between the parties themselves. Of course, they defend party
autonomy and demarcate a clear boundary of private law for a reason –
the tentacles of the party-state are already way too present almost
everywhere. Sure, we need a proactive and responsive state to fight
climate change and save the environment, but what if the state itself is
inconsistent in its commitments? For example, China was building
significantly more new coal plants in 2022 to address the electricity shortage and was turning forests into farmland
to ease the food crisis. Sure, we need to involve private parties to
internalise the environmental costs, but what if the green principle is
instrumentalised as another gateway for party politics to creep into
civil society? For example, the word ‘resources’ under Art. 9 CCC has
not only been interpreted as ‘ecological resources’ but also as ‘social
resources’[3] and ‘judicial resources’,[4]
which carry significant indeterminacy that can only be determined by
the judges’ political sensitivity. The green principle tells a rosy
story of an ecologically responsive private law of the 21st century, but, what will the real outcome be?
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