16 Sep Corporations for International Law!
Don’t be surprised if you see a headline along these lines in the not-so-distant future.
The NY Times today has an interesting lead story on how corporations are now pushing for federal regulation in various areas instead of fighting it, on issues ranging from fuel efficiency to predatory lending practices to cigarette lighter safety. The story highlights three elements of this about-face. First, business would rather have a single set of federal regulations than a patchwork of them from the states. Second, the big players are seeing the downside of voluntary standards, as smaller companies win a competitive edge by opting out. And third, they’ve come to understand that if they accept that regulation is going to happen, they can participate in the process and steer the substance of the laws in their direction. The article cites corporate success in securing provisions in regulatory measures broadly barring lawsuits as an example of this last element.
All three point to an inevitable parallel development at the level of international regulation. Business is increasingly suffering from a patchwork of national laws as it goes transnational. Big brand names are saddled with the costs of increasingly effective codes of conduct while lower-profile concerns slip under the radar screen. Of course corporate actors will be better positioned to influence the substance of international regulation if they are at the table. In the end, the certainties of centralized international regulation (even if some battles are lost) will look better than the prevailing miasma of competing norm regimes.
Climate change is an example where this is already playing out, but they are and will be many other contexts in which business is getting on the IL bandwagon. That may be as important a development as any other in entrenching IL’s new breadth.
Update: another recent example here, reporting Google’s initiative to secure privacy standards at the international level.
Peter, an interesting observation – which I agree with.
I wonder, however, if you can take your observation one more step. To my mind traditional international lawmaking (i.e., multilateral treaty negotiation) has been unfashionable in recent years among legal theorists too. Internationalists — often drawing from the constructivist school of IR — have preferred in recent years to focus on sub-state actors, transnational litigation, or transnational networks. Treaties have been criticized as promulgating a vision of IL that is too state-centered. Sovereignists/revisionists, on the other hand, continue to generally condemned international law as anti-democratic and a threat to democratic sovereignty.
As you note, however, national laws are increasingly going transnational. As a result, transnational litigation is beginning to occur not only in the U.S., but throughout the world. Increasingly, the EU and various other countries apply their commercial laws extraterritorially (think the recent EU antitrust against Microsoft, or the french court lawsuit against Yahoo). And ATS-type litigation is beginning to spring up in many countries outside the U.S. In short, countries are using national laws to assert their global influence and tackle global challenges.
These sort of extraterritorial lawsuits seem a much greater threat to democratic sovereignty from a sovereigntist perspective than international law. And if other countries extraterritorial litigation turns out to be unfriendly to western conceptions of human and environmental rights, it may be opposed by the new internationalists who have embraced transnational litigation when it was only U.S.-centered.
So, I wonder if in the legal academy there might also be a reinvigoration of the IL bandwagon, as you put it. That Sovereigntists might recognize that international law may be a good way to check rampant extraterritoriality (and the various problems you list). And internationalists may wish to turn back to more traditional IL, concerned if the new national laws are not as friendly to goals of liberal internationalism as they might have hoped.
Austen
Peter, Austen:
It is wonderful to imagine a global regulatory system with top-down codes of corporate conduct that transcend all national rules and voluntary standards to which the NY Times article and your comments allude. While such a model may ultimately reduce transaction costs to a minimum which is the holy grail of every economist, the question remains, at what cost shall this be achieved?
It is also wonderful to imagine that American corporations are seeking protection under US federal regulation because US states, on their own, without help from abroad, are aggressively seeking to legislate, as if they were independent sovereign nations, in areas traditionally considered preempted by Congress and within the plenary authority of the executive branch within the meaning of the US Constitution.
It is quite another, however, to acknowledge that much of the reason that American corporations are seeking the ‘cover’ of US federal regulations is because, as all good multilateralists are aware, the European Union has found a very effective way of exporting their brand of social welfare regulation and mandatory (ostensibly voluntary) standards globally at the expense of national trade and sovereignty interests. One might credibly argue also that it has been at the expense of the international trade system itself.
Europe has exported its brand of regulation abroad via the UN multilateral treaty system (via national implementation of legal obligations assumed upon the ratification of multilateral treaties – a/ka/a treaty harmonization), unilateral imposition of top-down standards upon the supply-chains of their trading partners’s industries and via compulsory adoption by corporations of ostensibly private standards developed by activist NGOs funded by the EU Commission and national member state governments, which threaten ‘name and shame’ disparagement campaigns targeting the brand reputations of noncompliant companies. Coincidentially such private standards happen to mirror and fulfill declared European regional policies and are sanctioned by the various European-funded agencies within the UN system.
The Financial Times recently reported about several dimensions of this phenomenon. In an article entitled ‘Standard Bearer’, by Tobias Buck, the EU essentially stated that, ‘we in Brussels have, for better or worse, become the regulatory capital of the world, and you, America, can do little to stop us’.
Constitutional sovereigntists find it difficult to accept such an outcome given that it would be tantamount to the US Congress ‘outsourcing’ its constitutional function to an international body without providing Americans with the due process of law to which they are legally entitled. In other words, harmonized supranational regulation deprives Americans of their constitutional right to have their interests adequately represented by their local and regionally elected representatives. Since overregulation is tantamount to hidden taxation, such outsourcing amounts also to a violation of Congress’ taxing power. Given the diffuse nature of international body governance, congressional representatives would hold little or no influence and control over the development or outcome of international regulatory promulgations.
International bodies operating within the imagined paradigm of global goverance about which you both speak would provide for only national government representation, which in the parlance of the US Constitution, essentially means the executive branch, namely the president, exercising his treaty power. Unless every new law/regulation enacted by such an international body would be deemed a treaty amendment, the Senate would be unable to exercise its constitutional responsibility of rendering advice and consent’ as a check upon the president’s initial decision to enter into the treaty in the first place. For obvious reasons, therefore, American citizens would be denied their constitutionally guaranteed rights, especially since the national government as currently constituted would be ill-prepared to take these myriad interests into account when forming its positions. This is, in large part, why the US has ratified so few treaties relatively speaking as compared to more culturally homogenous nations.
After all, there is no treaty or national constitution in the world that is quite like the US Constitution with its separation (balancing) of competing powers (branches), which anticipates and recognizes as sancrosant prexisting negative individual rights rather than positive rights granted which can be granteth and taketh away by the sovereign. Also, there is NO precedent in American law for adjudging treaties as coequal with the US Constitution, despite recent academic efforts to reinterpret prior jurisprudence and the constitution itself.
In other words, the US Constitution remains the key membrane protecting American citizens, including corporations, from extra-territorial and/or harmonized regulations enacted via multilateral treaties, including overly stringent health and environmental rules and more publicly oriented IP rules that remain unchallenged at the WTO. It must be remembered that the WTO Agreements are susceptible, like the numerous multilateral environmental treaties of the UN, to ‘pollution’ by Europe’s Helvetian /paternalistic approach to governance. In some respects both political parties in the US acknowledge this truism, as well as corporations – that too much WTO law is not a good thing. Therefore, in many ways corporations may not be for international law as much as you would like to think.
Lawrence Kogan
Austen, this is a good point. All the sub/nonstatism may just be a way station to centralized global decision making. I don’t know that the result will be treatymaking in the traditional mode, though, and so constructivist approaches may be useful even as applied at the top. I also think it will take something pretty dramatic for the sovereigntists to sign on to this development, although they might evolve under cover of nominal state consent (sovereigntism and isolationism aren’t the same thing; many sovereigntists are okay with the WTO, for example).
Lawrence’s comment is consistent with this last observation. Two further thoughts: 1) I don’t think the new global governance will provide only for national representation. Check out my post last week about ISO standards and the Microsoft’s document software. Not that non-state representation in international decision making will make it any more palatable to sovereigntists. 2) The US Constitution will be a pretty permeable membrane, and not very effective at protecting American anything from foreign and international law, at least not over the long run; and the sovereigntists either get on the bandwagon themselves (and fade into obscurity) or continue to resist (and fade into obscurity).