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Asia-Pacific

Emerging Voices: Implied Conferrals as Consequences of ASEAN’s International Legal Personality

by Daniel Seah

[Daniel Seah is a PhD candidate at the Faculty of Laws, University College London.]

Has the Association of Southeast Asian Nations (ASEAN) finally had its own post-ontological moment?  No longer are we condemned to participate in the banality of questioning ASEAN’s legal existence as an international organization (IO). After all, since 2008, its international legal personality was expressly conferred in Article 3 of the ASEAN Charter, a constituent treaty.  Now is the time to ask a more useful question: what are the legal consequences that flow from ASEAN exercising its international legal personality? Nowhere is an answer to this question more clearly thrown into relief than in the conferral of competences by member States upon ASEAN, which is the focus of this post.

IOs are not created equal; there is a great variety in their functions and objectives. Establishing the objective international legal personalities in these IOs is the easy bit. More difficult are the issues that bear on how the legal personality has been exercised by an IO; and what legal consequences arise for the IO and its member States, as separate legal persons. Because an IO at international law is a legal person, it (or its bodies) can act on behalf of member States although some of these acts are not expressly conferred in the constituent treaty – I call these “implied conferrals”. The word “conferral” is not a legal term of art. It had been variously defined as “capacities” (CF Amerasinghe) to indicate the consequences of international legal personality; “international delegations” (Curtis Bradley & Judith Kelley) to explain a range of legal (and non-legal) decision-making exercised by IOs; or “competences” on which the European Union (EU) is authorised to act in particular areas such as the common commercial policy.

In this post, I instance the early practice of the ASEAN Intergovernmental Commission on Human Rights (AICHR) as an example of implied conferrals. (more…)

My Latest Paper on the Enforcement (or Lack Thereof) of ICSID Awards in China

by Julian Ku

Those international investment law nerds out there know that Article 54 of the ICSID Convention requires each state party to “recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State.”  Many of you also probably know that China is one of the most enthusiastic players in the bilateral investment treaty system that often gives ICSID tribunals jurisdiction to issue awards in favor of investors against host governments.

My latest paper, “The Enforcement of ICSID Awards in the People’s Republic of China”, discusses how China (nearly 20 years after joining the ICSID Convention) has failed to adopt any domestic legal mechanism that would fulfill its article 54 obligations.  The only theory by which China could claim fulfillment is if Chinese courts gave the ICSID Convention “direct effect” within its domestic legal system.  I cast some doubts on that theory as well.  Here is the abstract, and comments, of course, are always welcome.

The People’s Republic of China is one of the most enthusiastic signatories of bilateral investment treaties that grant mandatory jurisdiction to the ICSID investment arbitration system. This essay considers the PRC’s domestic laws affecting the fulfillment of its ICSID Convention obligations to recognize and enforce ICSID awards. It notes that the PRC has failed to enact any specific legislation to comply with the ICSID Convention’s recognition and enforcement obligations, making its compliance with these obligations uncertain. It concludes that the only way that the PRC could claim to have fulfilled its treaty obligations is to declare that the ICSID Convention and related agreements have direct effect in its domestic law. The status of treaties within PRC law, however, remains uncertain and unsettled. For this reason, it is likely that a judicial interpretation from the Supreme People’s Court is necessary to guarantee enforcement of such an award within the PRC system. Without such an interpretation, it is highly doubtful that a PRC court would enforce an ICSID award, despite the ICSID Convention’s plain requirement that it do so.

Japan’s New Cybersecurity Strategy

by Duncan Hollis

The tendency in the United States is to think about cyberthreats exclusively in terms of US interests (a tendency I’ve certainly followed on more than one occasion).  Hence, the extended attention to questions of whether and how Congress should regulate cybersecurity.  But, of course, cyberspace — and cyberthreats — are global.  Every nation is now faced with developing a strategy for responding to these threats, whether through the deployment of government resources, private industry, or public-private partnerships.  So, I read with interest Hitachi’s English-language summary of Japan’s new Cybersecurity Strategy, which was adopted by Japan’s Information Policy Council earlier this week (you can read the policy itself here in Japanese).  Here are some highlights:

  • Japan (like most other States) has moved away from using “information” as the adjective to describe the issue; so it’s now cybersecurity, not information security
  • Japan’s National Information Security Center will be given more authority to play a “command” role in dealing with cyberthreats
  • Japan will revisit what counts as “critical infrastructure” to include targets, which, if attacked, would have significant socioeconomic effects or impact civilians more broadly.
  • Japan will increase consultation with the private sector and pursue more information sharing.
  • There will be a “Cyber Clean Day” to raise user-awareness of cyberthreats and ways to combat them.
  • A Cyber Defense Unit will be established within Japan’s Self Defense Forces with responsibility for countering cyber-attacks that constitute part of armed attacks;
  • In terms of international relations, the Japanese government intends to continue to study how international law, including international humanitarian law, is applicable to cyberspace; establish confidence-building to avoid any escalation of tensions; and prioritize cooperation with the United States.

Japan is truly a high-tech culture, but I was surprised during my Spring semester there, how little attention cyberthreats have received; indeed, the most visible “cyberthreat” has been anonymous users making threats via the Internet (this was the dominant story line this past Spring on the cyber front).  I saw much less attention to the threats posed by large-scale DDoS attacks, let alone infiltration of critical infrastructure by Advanced Persistent Threats.  So, it is a welcome development to see the Japanese government moving forward on these issues.  That said, I don’t see much in the way of “new” ideas here; almost everything Japan’s government is talking about doing there is on the table here in the United States (with the possible exception of a “Cyber Clean” day, which I attribute to the fact that the Japanese populace is much more willing to undertake collective enterprises than the U.S. citizenry). Still, I’m very interested to see how Japan approaches the question of cyberattacks and the use of force, especially given its Constitutional structure with respect to military activities.  Will they adopt Harold Koh’s mutli-factored, contextualized standard?  Or, will they be one of the first States to accept the Tallinn Manual’s effects-based approach?  Or, is there some other way they could approach the issue?  Comments welcome, especially from those readers who can offer more insights into how the Japanese government is thinking about these topics.

Hat Tip:  Mihoko Matsubara

The NSA Leaker’s Dumb Choice of Refuge: Hong Kong

by Julian Ku

There has been a rightful flurry of media interest in the saga of Edward Snowden, the U.S. government contractor who is the apparent source of the leaks about the U.S. National Security Program’s data mining surveillance program.  One area of focus is Snowden’s decision to take refuge in Hong Kong from a possible prosecution by the U.S. government.

As I noted here in my comments to this Foreign Policy post, this is an odd, borderline dumb, choice of refuge.  As everyone now realizes, the U.S. has a special extradition agreement with Hong Kong, although it does not have one in China.  This agreement looks pretty similar to other U.S. extradition agreements, and it has been something that the U.S. government and the HK governments valued so highly that they executed it in 1997, after HK’s return to Chinese sovereignty, to ensure continued cooperation in these sorts of matters.

If Snowden was really afraid of extradition, he should have gone to a place like Ecuador, which has shown it does not mind angering the U.S.  Or he could have wandered across the border into China, which doesn’t have an extradition treaty.  But in choosing Hong Kong, he exposes himself to a real possibility of an extradition proceeding without any guarantee of his prevailing.  And he launches a zillion conspiracy theories about his real intentions: is he secretly planning to turn himself into the Chinese government?

What he will get, I suppose, is the maximum level of publicity he could desire and a level of celebrity Julian Assange will be envious of.  Which is probably what he wants.

China and the Philippines Take Their “Battle” Over South China Sea to Military Conference

by Julian Ku

The indefatigable Benjamin Wittes at Lawfare has a short post describing a lively exchange between the Chinese and Filipino representatives at MILSOPS, an invitation-only off-the-record meeting of top military officials from the Asia-Pacific region, about China’s nine-dash-line claim to the South China Sea.

Apparently, this has been an ongoing debate at this annual conference. Last year, the Chinese representative presented this set of powerpoint slides usefully entitled:  “China has indisputable sovereignty over the islands in the South China Sea: Understanding the South China Sea issue from the angle of law”.  (The title says it all). Ben says he is somewhat constrained in his reporting since the conference is off-the-record, but hopefully he can get participants to write more about their exchange.

The one thing that is a constant in these slides and from other articles from China is that Chinese officials are using their claim to sovereignty over the “Nansha” islands as the basis for their claims of “indisputable sovereignty.”  And China does indeed have plausible sovereignty claims to many of the islands in the South China Sea, and those sovereignty claims are of course not subject to UNCLOS arbitration.  But no one in China has really offered a particularly detailed explanation of how the sovereignty claims to the islands can justify the “nine-dash line” (see my earlier post here describing the nine-dash line claim) which goes well beyond a 12 mile territorial sea or the 200 mile exclusive economic zone. Thus, even if China had sovereignty over every random rock in the South China Sea, it can’t quite support the nine-dash line.  I wish Chinese scholars would offer a more comprehensive explanation or defense of the nine-dash line, as oppose to muddying the issue by raising their island sovereignty claims.  It is the nine-dash line that makes China’s claims unusual, and particularly dangerous.  And, oddly, it overshadows and weakens China’s much better and more legally supportable claims to particular South China Sea islands.

The First Serious Defense of China’s Position on the Philippines UNCLOS Arbitration

by Julian Ku

Professor Stefan Talmon of the University of Bonn and St. Anne’s College in Oxford offers one of the first serious attempts to defend China’s position on the UNCLOS arbitration brought by the Philippines.  In an essay published by the Global Times, China’s hawkish state-owned daily paper, Professor Talmon argues that all of the Philippines’ claims against China fall outside of the jurisdiction of the UNCLOS arbitral tribunal.

For example, the claim that China’s maritime claims in the South China Sea based on the so-called nine-dash line are invalid, the claim that China has unlawfully claimed maritime entitlements beyond 12 nautical miles around certain insular features and has prevented Philippine vessels from fishing in the waters adjacent to those features, and the claim that China has unlawfully interfered with the exercise by the Philippines of its right to navigation and other rights cannot be decided without touching upon China’s claim to historic title and rights within the area of the nine-dash line.

In addition, any measures taken by China against the Philippine vessels may also be subject to the “law enforcement activities” exception with regard to fisheries matters or may be excluded as an exercise of China’s sovereign rights and jurisdiction provided by UNCLOS.

The claim that China unlawfully occupies certain low-tide elevations in the South China Sea cannot be addressed without dealing with the question of sovereignty or other rights over these insular land territories.

Finally, declarations that certain submerged features form part of the continental shelf of the Philippines, that China has unlawfully exploited the living and non-living resources in the Philippines’ exclusive economic zone and continental shelf, and that China has interfered with the Philippines’ right to navigation and other rights in areas within and beyond 200 nautical miles of the Philippines cannot be made without engaging in sea boundary delimitations.

I have to admit I am not very persuaded by this analysis. In Prof. Talmon’s defense, the essay is very short and not an attempt to provide a deep legal analysis of the problem.  But the idea that any challenge to the nine-dash line is excluded from UNCLOS arbitration is hardly obvious to me, since the basis of China’s nine-dash line is very murky anyway. It is not an historic bay.  I suppose it could be an “historic title” within the meaning of Article 298, but that is hardly obvious. Under Prof. Talmon’s reading, any claim of historic title, even if it undermines all of the other principles of UNCLOS, are outside the jurisdiction of the UNCLOS tribunal.

Similarly, when the Philippines argues that something is a “rock” and not an “island” under the definition of UNCLOS, I don’t see how that requires a sea boundary determination?

Most importantly, I can’t see how Prof. Talmon can avoid the question of why China is not even bothering to make these jurisdictional arguments in the UNCLOS tribunal. It is an oddly disrespectful move, to say the least, for China to essentially boycott the tribunal. Does Prof. Talmon think the Philippines case is so weak that ignoring the arbitration is justified?

Still, it is worth exploring these questions, since the arbitral tribunal will likely do so. I would hope Prof. Talmon has a longer version of his views posted somewhere, and if not, he is welcome to do so here at any time!

 

Ian Buruma Is A Great Historian, But Like Everyone Else, He Doesn’t Understand the Legal Issues in the Senkakus/Diaoyu Dispute

by Julian Ku

The WSJ Saturday edition has a long review essay by distinguished historian Ian Buruma providing some historical perspective on the close to hot Chinese-Japanese conflict over the Senkaku Islands. It is a fascinating essay, and I was particularly struck by his argument that the Senkaku issue was essentially ignored by Mao Zedong and Deng Xiaopoing, whereas today’s comparatively weaker Chinese leaders cannot afford to downplay it.

As a historian, Burama sees this conflict as driven almost entirely by nationalist forces in both China and Japan (but mostly China) for contemporary political reasons rather than for deepseated historical animosities.  This is a view that is worth keeping in mind.

But I have one quibble with Buruma’s narrative.  He first describes the Senkakus as part of the territorial booty acquired in Japan’s 1895 military victory over China.  But this is not the official Japanese view of how Japan acquired sovereignty over the Senkakus because everything that was acquired in 1895 (like Taiwan) was returned to China in the post-World War II settlement. Japan’s view is that the Senkakus had perhaps had been part of Okinawa, but at any rate, had never been part of China pre-1895.

Buruma later describes the Senkakus as part of Okinawa that was returned to Japan in 1971.  But now he adopts the Japanese view of the legal position, and rejects China’s view that the Senkakus were never part of Okinawa.  But the U.S. acknowledged that there was a difference between the two island entities when it returned both in 1971 to Japan.

This is not really to criticize Buruma, whose writing I admire.  Rather, it is to highlight just how confusing the legal background to this territorial dispute is. Even historians can’t keep the positions straight. How will we ever expect the politicians to do so.

Does China Also Have a Territorial Claim to Okinawa? Not Really, But It is a Good Way to Freak Out Japan

by Julian Ku

An article in China’s leading state-run paper, the People’s Daily, suggesting that the time may be ripe to reopen the question of Japanese sovereignty over Okinawa has already sparked sharp reactions.  The WSJ’s blog on China picked up the story, as did this Business Insider post, headlined: “China Now Says It May Own Okinawa, Too.” Other even more lurid headlines: “China Demands Japan Cede Sovereignty Over U.S. Military Base Okinawa.” have popped up all over the internet.  As there is a massive U.S. military presence on Okinawa, this issue will likely draw more attention here in the States.  The idea had already been mooted last July, as this article notes. The Chinese foreign ministry has already been asked about this, and failed to clarify matters much, leading to more heated reactions in Japan.

I think all of this might be a bit of an overreaction (perhaps an overreaction that the Chinese actually were hoping for).

The argument about Okinawa was raised as part of the larger argument about the sovereignty over the much disputed Senkaku/Diaoyu Islands in the East China Sea.  Okinawa, also known as the largest of the Ryukyu Islands, was historically treated as a vassal kingdom by both China and Japan.  Its status, like that of the nearby Diaoyu Islands, was never entirely settled during much of the nineteenth century.

The Okinawa discussion was part of the article’s attempt to rebut the Japanese claim that the Diaoyu/Senkaku islands were historically part of the Okinawa/Ryukyu kingdom, and since Okinawa is now part of Japan, the Diaoyu/Senkaku are as well.  The article’s position is that the Diaoyu/Senkakus were always considered part of Taiwan, and hence part of China.

To fully push back on the Okinawa point, the article raises questions about the Japanese claim to Okinawa.  This is not exactly new, since Okinawan independence activists have raised the same arguments. I think Okinawa is today similar to Puerto Rico, and it is largely a self-determination question rather than a historical title question.

But what makes everyone nervous, however, is the idea that Okinawa’s previous status as a vassal state to the Chinese Empire gives China some sovereignty claims to Okinawa as well. This idea is deeply troubling, since at various times Korea, Vietnam, and other states have arguably had that relationship with China.  It has little basis in contemporary international law, as far as I can tell.  So I think this idea needs to be firmly rejected, and I have little doubt that countries like Korea, Vietnam, etc. are going reject it.

But the article is not really focused on establishing the vassal state theory of sovereignty (Now that would be quite an article). Most of the article is about the Diaoyu/Senkakus.  The Okinawa argument is only meant to further weaken Japan’s arguments for sovereignty over the Diaoyu/Senkakus.  If Japanese sovereignty over Okinawa is uncertain or at least less than perfect, than its claim to the Diaoyu/Senkakus is weakened as well.  But the article doesn’t flesh out, nor does it need to, actually establish China’s own claim to Okinawa in order to question Japan’s claim.

I don’t think the Chinese government will be making any moves on Okinawa any time soon. But it is useful for the Chinese to float such ideas, so that they can gracefully back down and “settle” for the Diaoyu/Senkakus one day.  A dangerous game to play, unfortunately, and one that may backfire if it continues to foster anti-Chinese Japanese nationalism.

 

 

Sore Loser? Colombia’s Unpersuasive Accusations Against the Chinese ICJ Judge

by Julian Ku

ABC’s Univision reports on this op-ed by former Colombian foreign secretary and former vice justice minister, which seems to accuse shadowy Chinese business interests of influencing the recent ICJ decision in Nicaragua v. Colombia.  Here is the crux of the alleged wrongdoing (or at least shady conduct):

…in November 2012, the ICJ issued a ruling that certified that most of the contended area belonged to Colombia. Nicaragua however, was awarded an area of nearly 7,500 square kilometer.

Nicaragua needed part of the awarded area to be able to build the massive inter-oceanic canal the government is envisioning, according to Sanín and Ceballos. The canal is set to be built in 10 years at an estimated cost of nearly $30 billion.

The alleged problem is that one of the judges who delivered the ICJ’s decision is Xue Hanqin, a Chinese national who apparently knew the Nicaraguan ambassador to the court from a previous work position. The Colombians argue that Xue Hanqin probably knew about the canal and should have recused herself because her government had a major interest in the ruling’s outcome. Since she didn’t there are growing suspicions that she might have been working to advance China’s economic and geopolitical agenda.

My Spanish is even vaguer than my French, but, accepting the Univision description as accurate, than this seems like a weak attempt to discredit the ICJ decision.  To be sure, it is possible that Judge Xue knew the Nicaraguan ambassador from her time as a diplomat, and it is also quite likely that she knows about the Chinese government’s interest in a Nicaraguan canal.

But none of that seems to be close to enough to require a recusal or its equivalent.  To be sure, the ICJ’s practice on recusal is pretty lax, and could use some further development.  But even if you think that the Egyptian judge should have been recused from the Israeli Wall advisory opinion, at least the accusation there was about statements made, or views held, by the individual judge.  It was not a claim that he should recuse himself because the Egyptian government opposed the Wall.

But the Colombians are essentially saying that because the Chinese government would have favored the Nicaraguan case, and had a material interest in a favorable outcome, its judge should have recused herself.  That could not be the rule, since it would require recusals all the time.  Now, if they had evidence Judge Xue held shares in a Chinese company that was building the canal, that would be something.  But there is no such accusation, as far as I can tell. (Note: Colombia did not even request her recusal).

Is Judge Xue biased? I suppose she might have been. But she would not have been much more biased than any of the other judges on the ICJ.  With 15 judges, her bias could not have been all that important in the ICJ’s unanimous opinion anyway.

Bored with Japan and the Philippines, China Intensifies a Third Border Dispute with India

by Julian Ku

Not content to push border disputes with only Japan and the Philippines, China apparently has decided that now is also a good time to create a border crisis with India.  Last week, Chinese troops apparently crossed over a disputed border to camp 20 km inside Indian-claimed territory in the remote region of the Himalayas (the Chinese deny the incursion has occurred and both sides appear to be climbing down a bit).

This rather hostile-to-China essay in the Japan Times provides a nice summary of how China has stepped up its activities on three different territorial fronts at the same time.  First, there is the ongoing dispute with the Philippines over the Scarborough Shoal/Huangyan Island in the South China Sea. Then, there is that dangerous dispute with Japan over the Diaoyu/Senkakus in the East China Sea.  Finally, China is provoking India.

Overall, China’s strategy appears to be to put its interlocutors on the defensive and to exhaust them with low-intensity incursions. This is working.  Japan is now repeatedly having to scramble its jets over the Senkakus at repeated Chinese incursions, and India is apparently rushing troops to the remote border region to confront the Chinese troops.  But, as the author of the essay notes, these are all reactive measures that allow China to keep the initiative.  China is not seeking a war, but it is seeking to push the envelope against its neighbors, with some success. India is trying to keep the dispute from escalating and Japan has been defensive about the Senkakus for the first time in decades.

Only the Philippines seems to be able to push back and force China to react, albeit through the soft pressure of an Annex VII UNCLOS arbitral proceeding.

It is impressive how China can keep three of its neighbors scrambling to respond while it slowly builds up its territorial claims.  In the long run, China v. India/Japan/Philippines/Vietnam/etc.  seems like bad odds, but so far it is working. Will international arbitration play any role in resolving these disputes?  I doubt it, but we will soon get some empirical evidence if the Philippines is able to win a judgment that affects or shifts China’s behavior.

China Updates its Talking Points on the Philippines Arbitration

by Julian Ku

Professor Craig Allen of University of Washington alerts me to this excerpt from the press conference held yesterday at China’s Ministry of Foreign Affairs.  It is the first time, as far as I know, that a Chinese government spokesman has offered a detailed explanation of China’s legal position in the Philippines arbitration.   It still doesn’t fully make sense, or at least it is still not fully responsive, but it is something at least.  China’s explanation goes something like this.

1. It is the Philippines that is illegally occupying various islands in the South China Sea, not China.

2. Although the Philippines claims it is not seeking to contest sovereignty in the arbitration, it has consistently said it is seeking a “durable solution” to dispute.  This is “self contradictory.”

3. The principle of the “Land Dominates the Sea” means that all of the Philippines’ claims are essentially maritime delimitation claims that “inevitably” involve resolving questions of territorial sovereignty over various islands and reefs. But these are the questions excluded from UNCLOS arbitration. Hence, China’s rejection of arbitration has a “a solid basis in international law.”

4. Every nation in the region, including China and the Philippines, has committed to the Declaration of the Code of Conduct for the South China Sea, which obligates them to resolve disputes on territorial and maritime rights through bilateral negotiations.

Let’s toss out points 1 and 4 since they don’t really change much of the legal analysis on whether China’s rejection of arbitration has a “solid basis in international law.”

The really interesting parts of the statements are in points 2 and 3.  To China, the Philippines is misleading everyone by pretending to be interested in the Law of the Sea when they are really trying to advance their sovereignty claims. I am not sure that “durable solution” necessarily means “resolving sovereignty claims” but I suppose it is plausible.

The most important point is Number 3, which is that the disputes over the island/rock/reef distinction or the Nine Dash Line are so inextricably linked with sovereignty that they cannot be separated.

This is really what a jurisdictional challenge would look like, if China argued its case.  I think this is the most plausible part of China’s argument, but it is not exactly a slam dunk.  First of all, China’s invocation of the “Land Dominates the Sea” doesn’t help their argument much here since the infamous Nine Dash Line doesn’t seem to flow from any land claims, or at least China has usually based the Nine Dash Line on “historic rights,” not land.

In any event, the Philippines is not rejecting the “Land Dominates the Sea” principle.  They are just arguing that the “land” China is relying on is a rock, not an island within the meaning of UNCLOS Art. 121(3), and hence cannot grant China a 12 mile territorial sea even if China did have sovereignty.  Since some of these rocks/islands fall within the Philippines Exclusive Economic Zone, this is not a sovereignty issue but a UNCLOS issue.  I am not sure that the Philippines is right about this, but they certainly have a good case.

It is also worth noting that the Chinese statement is conspicuously silent on China’s obligation under UNCLOS to at least allow a UNCLOS arbitration tribunal to determine whether it has jurisdiction (UNCLOS Art. 288(4)).  China’s statement simply assumes that the jurisdictional issue is clear, and it has no further obligations.  As almost any lawyer could tell you, jurisdictional issues are almost never clear, and even when they are, you have an obligation to go to court/arbitration to resolve them.

So China is slowly beginning to engage on this issue, and they are making a bit of progress. Still, they need better talking points. (And they need to be careful invoking the phrases like the “Land Dominates the Sea,” that could come back to hurt them later.)

Arbitrating Bangladesh Labor Rights

by Roger Alford

BangladeshThis week 170 garment workers in Bangladesh died after the Rana Plaza building collapsed. A few months ago 112 garment workers in Bangladesh died after the Tazreen Fashions garment factory was destroyed by fire. Both tragedies were the result of inadequate fire and safety standards.

These tragedies could not have come at a worst time for major retailers that purchase garments from these factories. For months the International Labor Rights Forum and other labor rights groups have encouraged garment retailers to sign a binding agreement that would create a system of rigorous inspections, transparency and oversight. Thus far, they have had limited success, with only the parent company of Tommy Hilfiger and Calvin Klein brands and one German retailer signing on.

The agreement, the Bangladesh Fire and Building Safety Agreement, would establish a nine-member Oversight Committee, with four members appointed by Bangladesh and international labor groups, four members appointed by business representatives chosen by companies sourcing from Bangladesh, and one member mutually chosen by the other eight. Corporations that sign on to the MOU would help fund the costs of improving fire and safety standards in the factories where they source their supplies. As reported by the New York Times here,

The companies would bear the costs of improvements through higher prices for clothes and grants to workers who miss workdays because of renovations. The cost of the inspection program to each company would vary by the firm’s size, but it would be capped at $500,000 a year…. Labor groups say a roughly 3 percent annual increase in prices paid to the factories would be sufficient to make the needed improvements.

A key provision in the Agreement is binding arbitration. Specifically, the Agreement requires the Oversight Committee to develop a plan for the implementation and administration of the Bangladesh fire and safety program that includes “[a] process for binding and legally enforceable arbitration of disputes between parties to this MOU with respect to this MOU and the program….”

In other words, labor unions and participating corporations would sign a binding agreement to improve the working conditions of Bangladeshi garment workers, and any corporation that failed to comply with its funding or other obligations under the MOU could be the subject to international arbitration enforceable under the New York Convention in that corporation’s home country.

I have long advocated the use of international arbitration to address human rights concerns such as core labor rights. As I argued in “Arbitrating Human Rights“:

“[O]ne can anticipate that many corporations will increasingly include core human rights and environmental standards as contractual covenants in their international agreements. These contracts will also include grievance procedures, including arbitration, as a com­mon mechanism for dispute resolution. Serious noncompliance with substantive contractual obligations will trigger invocation of the dispute resolution provisions. Thus, by contracting for human rights as a substantive obligation and contracting for arbitration as a procedural guarantee, corporations throughout the globe can establish a firm basis for the promotion of human rights within their spheres of influence.”

In order to incentivize corporations that source their garments from Bangladesh, large wholesale and institutional buyers and IP holders, such as colleges and universities who purchase garments or license trademarks, can require these corporations to sign reasonable labor agreements such as the Bangladesh Fire and Building Safety Agreement as a condition in their agreements. In other words, upstream contracts can require downstream supply chain labor rights.

Tragic events like the death of 170 and 112 garment workers—a death toll that is over ninety times greater than that of the Boston marathon bombings—should be sufficient incentive to sign MOUs like that proposed in Bangladesh to improve the working conditions of garment workers who earn just over $1 a day.