Sadly, it has become commonplace for developed nations to make big pledges when tragedies occur, but seldom are all funds collected to drive development strategies. Only 10% of funds pledged to Haiti after the January 2010 earthquake have arrived in Port au Prince thus far. Core funding is often lumped into ‘security programs’, while so-called ‘soft development’ strategies languish. Soft development aid dollars are often tied up in the activities of foreign NGOs. The amount of NGOs in Haiti is staggering. The presence of so many foreign personnel, who are often unaccountable to the Haitian government or people as a whole, is troubling and potentially destabilizing. Furthermore, the flow of private security personnel into Haiti could also drive conflict.

Policing in the Western world has undergone a massive metamorphosis in the past two decades. A “multilateralization” process has unfolded, which has made the state police less prevalent in the daily lives of citizens.[2] Private security firms, security technologies, and an array of other services have replaced the state as the primary keeper of the peace. This fact is not reflected at all in the Western-driven UN policy towards Haiti, where the way forward is often seen as entrenching a strong, top-down, state-centred policing model. Why is one model good for ‘us’, and another good for ‘them’? The UN Transition Mission in Haiti (UNTMIH) has as a core part of its mandate the obligation to train “PNH specialized units in crowd control, the rapid reaction force and Palace security, areas considered to be of distinct importance.” Nothing in this mission mandate touched upon the redress of past injustices in Haiti. Language tying security efforts to economic reforms and trade liberalization is commonplace in UN resolutions on Haiti.[3] The MINUSTAH mandate of 2004 called for the creation of a “secure and stable environment within which the constitutional and political process in Haiti can take place,” so as to promote the “economic stability of Haiti”.[4] This mandate further aimed:

to assist the Transitional Government, particularly the Haitian National Police, with comprehensive and sustainable Disarmament, Demobilization and Reintegration (DDR) programmes for all armed groups, including women and children associated with such groups, as well as weapons control and public security measures….[5]

The Police Nationale d’Haïti (PNH) has long been the primary entity with which the West has done business in Haiti, whereas foreign actors have backed away from dealing with civil society groups, particularly the Lavalas movement which twice elected Aristide. Robert Perito claims that despite after “nearly two decades of international assistance, the PNH remains dysfunctional, corrupt and incapable of controlling crime and maintaining public order without the presence of U.N. forces.”[6] Of course, there is nothing inherently wrong with promoting economic stability and security in Haiti, but what type of security are we talking about and what type of economy?

Yasmine Shamsie sharply criticizes UN policy as being out of touch with Haitian realities, highlighting that the development strategy in Haiti has long:

…focused on the export-manufacturing sector, devoting little attention to the country’s rural sector. In a country where close to 65% of the population is engaged in some form of agricultural production, assisting peasant farmers would have been the most direct way of alleviating poverty (donors contended poverty alleviation was their overall objective) and addressing the vast imbalance between rich and poor, thereby fostering political equality. Yet international donors directed less than 1% of the $550 million in donor aid and loans distributed in FY 94/95 to peasant agriculture.[7]

James Lebovic contends that in the post-Cold War era it is “apparent that the UN and various governmental and non-governmental organizations have pursued a peace-building strategy of promoting market economies and democratic elections that has often been ineffective or counterproductive.”[8] This analysis lends itself to the argument that UN policy towards Haiti has done more to solidify the position of the wealthy elites in Port-au-Prince, and the large landowners (many of them empowered by the Duvalier family[9]), than to alleviate the pressure created by massive social and economic inequalities in Haiti. Furthermore, former President Bill Clinton may lack the proper credentials to be a UN emissary to Haiti. His administration stymied efforts by Aristide to reform the Haitian economy and disperse Haiti’s wealth more equally amongst the rural poor. Instead of addressing economic inequalities, Aristide, was forced into the privatization of state entities, which only drove insecurity issues and led to open conflict.[10] Morley and McGillion posit that under the Clinton administration:

efforts to democratize the Haitian state were perceived as a potential threat to longer-term U.S. objectives: the restoration of political stability; the survival of an, albeit reformed, military institution with its external linkages to the Pentagon intact; and the promotion of an open economy and a development strategy that accorded foreign investors a central role.[11]

As the United States and most Western economies have entered into a period of “state capitalism” themselves, it would be unjust for future UN policy towards Haiti to force neo-liberal economic development upon a struggling nation via ill-planned UN Security Council resolutions and conceptually weak security programs. Similarly, the top-down, state-centred approach to security in Haiti has continuously served to entrench right-wing, violent elements of the Haitian political scene, drowning out the voices of the rural agriculturalists and Lavalas supporters who make valid claims against the trade and development agenda of Western powers and Haitian elites. If Western powers want to empower Haitian people and recognize their ability to shepherd the country out of chaos, they should approach security provision in a more nuanced manner. Conceptual approaches from Africa might serve well in Haiti. Bruce Baker, who posits a theory of “multi-choice policing” in Africa, writes:

The extended family may protect the compound, but it is the street committee that sorts out the assault at the bar, the sorcerer that detects the culprit, the headman or local priest that mediates a settlement over damages caused by a neighbour, a spontaneous mob that handles the bus station pickpocket, the commercial security guard that secures the entrance to the city centre office and the state police that are called if a colleague is murdered at the bank. Policing, as it is experienced, is a complex pattern of overlapping policing agencies.[12]

Why not strengthen the social fabric of Haitian communities instead of ignoring it? While it may be easier to deal with one body over the many disparate factions that can provide security in Haiti, it is time to recognize that the PNH has had a deleterious effect on at least some aspects of state-building and that all the reforms and training in the world will not reverse a culture of brutality overnight.

Perito claims that the “processes of disaster response and recovery generally reinforce existing inequalities.”[13] This is something that should be heeded as the international community takes up the call to ‘fix’ Haiti. Justice reforms, meaningful agricultural reforms, emigration programs, and addressing the economic injustices of the past perpetrated by the French and American governments must be key components of future UN policy towards Haiti. Sadly, with a French and American veto on the Security Council this will be a tough proposition for leaders to make.

[2] David H. Bayley and Clifford D. Shearing, The New Structure of Policing: Description, Conceptualization, and Research Agenda (Washington, D.C.: National Institute of Justice, 2001) at 9.

[3] This is true in the UNTMIH mandate, but is also in evidence in the MIPONUH police-training mission mandate.

[4] UNSC Res. 1541, UNSCOR, 2004, S/RES/1542 1-2.

[5] Ibid.

[6] Robert M. Perito, “Haiti After the Earthquake” (2010) 5 Peace Brief 1 at 3.

[7] Yasmine Shamsie, “Building ‘Low-Intensity’ Democracy in Haiti: The OAS Contribution” (2004) 25:6 Third World Quarterly 1097 at 1102.

[8] James H Lebovic, “Uniting for Peace? Democracies and United Nations Peace Operations after the Cold War” (2004) 48:6 Journal of Conflict Resolution 910 at 934.

[9] Arché Jean, The Role of Agriculture in the Economic Development of Haiti (Indiana: AuthorHouse, 2008) at 97ff.

[10] Shamsie, supra note 4 at 1101.

[11] Morris Morley & Chris McGillion, “’Disobedient’ Generals and the Politics of Redemocratization: The Clinton Administration and Haiti” (1997) 112:3 Political Science Quarterly 363 at 363.

[12] Bruce Baker, “Multi-choice policing in Africa: Is the continent following the South African pattern?” (2004) 35:2 Societies in Transition 204 and 204.

[13] Perito, supra note 6.

Yet Mike Bakunin, who recently left SOAR to establish a sister branch in Rivière Ouest (Manitoba) with a more awesome acronym, claims that these groups don’t just advocate violence. “For those who think that anarchists are just about chaos and firebombing, that’s not the case. Groups like FFFC Ottawa give the rest of us a bad name – we can actually engage with the issues as well as anyone. Now obviously the summit will be focusing on economic and financial matters, so we think that we can best get our message across if we zero in on those issues as well. It’s hard to convey complex messages like that with firebombs…not impossible though.”

As an example, Mike points to the debate over a proposed international bank tax. Although countries including Britain and the U.S. were initially pushing for a tax on banks to pay for bailouts when they became necessary, countries whose banks never needed to be bailed out such as Australia, Brazil, and Japan – with Canada leading the way – opposed the idea. Now as an alternative the Canadian government is proposing an idea called “embedded contingent capital” (ECC); essentially bonds issued by banks which would automatically convert into shares in times of crisis, providing instant extra capital. Finance Minister Jim Flaherty and Julie Dickson, the head of the Office of the Superintendent of Financial Institutions (OSFI), have recently been touting the merits of ECC. “The problem,” Mike says, “is that because there’s so much uncertainty about what would trigger the conversion, buyers of the bonds will demand a hefty risk premium which may end up costing the banks more than the tax would have. Plus, in a time of crisis, the conversion of the bonds might scare away other investors and exacerbate capital flight. So I think we have to fight ‘the man’ on this – even if ‘the man’ is Julie Dickson.”

It’s clear that ECC won’t be the only financial reform discussed at the summit. Reform of the Basel Accords – international banking regulations – will be a major focus. The Basel Committee on Banking Supervision (BCBS), based at the headquarters of the Bank for International Settlements in Basel, Switzerland, is composed of representatives of the central banks of developed and emerging market countries. It was created in 1974 in an effort to harmonize banking regulations across borders. Agreements among BCBS member states – called the Basel Accords – were negotiated by national leaders, finance ministers, and central bank governors. These agreements do not operate like treaties in the normal sense, with each country signing and ratifying them, but rather are intended as an international standard that national bank regulators can use when creating their domestic regulations. Implementation is left to each country’s discretion, but most regulators do in fact implement the accords (95 national regulators have committed to implementing the most recent accord by 2015). They aren’t applied uniformly however, since national regulators may include local variations on the rules.

The first agreement, now called Basel I, was agreed in 1988. It was designed around the concept of minimum capital requirements: the minimum amount of cash banks have to keep on hand relative to their total assets (loans they are owed). Basel I created 5 categories of assets based on risk level, and required banks to keep capital equal to 8% of the assets, weighted according to risk. It was implemented by BCBS member states by 1992. The second accord, Basel II, was agreed in 2004, and served to “upgrade” the original accord, creating a three-pillar structure. The first added nuance to the capital requirements of Basel I, distinguishing between three different categories of risk. The second gave new tools to regulators to better review compliance with capital requirements. The third pillar promoted market discipline in order to foster stability and predictability. Negotiations for Basel III were undertaken in response to the recent global financial crisis, and the G20 summits are a key part of the process. Proposed changes to Basel II include: revising the categories of capital (tiers) to improve transparency, strengthening risk coverage requirements, introducing a leverage ratio to supplement the risk rules, requiring the creation of capital buffers to promote counter-cyclicality, and a minimum liquidity standard for international banks. G20 finance ministers see the eventual implementation of Basel III as inevitable.

Mike believes it’s crucial for the protestors to have their voice heard while the Basel negotiations proceed in Toronto. “In pushing for a stateless society, we have to make the most of times when the different parts of the machine – government and big corporations and banks – turn on one another. First they’ll fight about international regulations, and then the next step is complete mutual annihilation. Basically what I’m saying is that we want the most stringent risk coverage and capitalization rules possible.”

The challenge for the collectivist anarchists is ensuring that they have a clear position on every financial reform issue, lest they appear to the public as an incoherent rabble. “Right now at our meetings we’re trying to hammer out what stance we’ll take on phase 2 of the International Accounting Standards Board’s new Financial Reporting Standards, and their impact on the life insurance industry.” Finance Minister Flaherty has supported Canadian life insurers in their appeal to the board for an exemption from the new rule. “On the one hand, big corporations shouldn’t be exempt from accounting best practices, but on the other hand these new rules would definitely create a lot of volatility for insurers– particularly with regard to long-term products. So I guess we’re not sure if this is a step forwards or backwards in the march to the destruction of the state. We hope to have decided by next week.”

Despite the complexity of the negotiations, Mike is confident his group’s nuanced message will get across to the public and to world leaders. “I’m optimistic. We’ll print out our arguments in an executive summary, and see if we can submit if for consideration by the delegates.”

Asked if there was a backup plan for conveying their opinions, Mike considers: “…probably firebombs.”

THE FIRE REPRESENTS EMBEDDED CONTINGENT CAPITAL

Numbers that the Americans are debating include a levy at 0.15% for 10 years on all financial institutions with more than $50 billion in consolidated assets.

With Germany and England ready to take action and implement similar levies, and with Obama seeking to push the US to do the same, it’s unclear what kind of overall effect these levies would have on banking if they are carried out on a piecemeal, domestic basis. These financial institutions are international in character. Their activities transcend national borders, and thus any attempt at regulation will need to account for the cross-border transactions and international nature of the institutions. Will domestic regulation really solve the inherent problem of big banks making big investments without thinking about the potentially big (and devastating) consequences?  Probably not.  So then what’s the point?

Edwin M. Truman, Senior Fellow at the Peterson Institution for International Economics in Washington, proposes a different analysis. He says, “There are two dimensions — paying for the past and paying for the future.”  Instead of seeing the tax as a sure-fire way to implement reform in the banking industry, he would see it as a way for governments to recoup their bailout cash and to provide a cushion for future bailouts.

One other contentious factor in the taxing of banks is the worry that levies will create further competition for banking jurisdictions. While when it comes to corporations law, Roberta Romano has deemed this competition for jurisdiction the genius of American corporate law, it is not clear that there is a direct parallel for the banking sector. For a financial institution, its bottom line may more readily be finding the jurisdiction with the lowest tax, as opposed to a jurisdiction with great legal experience in banking affairs. Starting competition between major governments as to who could offer the lowest levy won’t address the major internal reforms sought for the entire banking system.  Banks are also usually backed by some kind of governmental guarantee (at least to a certain amount), which complicates a government’s interest in hosting a foreign bank seeking to evade that nation’s bank levies.

So what can these levies do so long as there is no unified global approach? The answer is, in short, insurance.

In the case of Sweden, the insurance role of the levy  funded by those financial institutions creating the risks is clear.  According to measures adopted late last year, the government plans to raise roughly 2.5% of the GDP in the form of bank levies over the next 15 years. The annual levies begin at 0.018% of the institution’s liabilities (equity capital and some junior debt securities excepted.) Starting in 2011, the levies will rise to 0.036%. Sweden has based these numbers on what they project a potential future banking crisis would cost. As such, money collected under these taxes is allocated into a stability fund. If a future crisis were to arise, bailouts would come from this fund and not from the public purse.

Meanwhile, the world awaits to see if there will be a global reaction to these proposed levies. All eyes will be on the G-20 meetings in Washington later this month when the IMF delivers a report on bank levies.  While it still remains a contentious matter, there may still be hope for a more unified approach in order to revolutionize responsibility undertaken by financial institutions.

The conceptual change that international investment law seems to have gone  through has not however reached one very fundamental point. To my great surprise, speakers continually repeated the same old mantra concerning the main objective of investment treaties: the objective of investment treaties, so it was argued, is the protection of investors. This, I would argue, carries the same amount of logic as claiming that the objective of preparing a salad is cutting tomatoes. While it is true that Bilateral Investment Treaties (BITs) are designed to provide a protective and stabile environment for investors, it is also clear that such protection is a tool and not an end in itself.

When raising this point with one of the other conference participants, she simply answered: “it all makes sense, but none of it is written in BITs”. Technically at least, she was right. Most BITs do not specifically approach public interests and focus almost exclusively on the protection of investors. This narrow view has also led arbitrators to ignore public interests in many arbitral awards. Investment arbitrators, after all, are authorised to decide only in accordance with BITs. Referring to public interests when these are absent from BITs may therefore be considered as unlawfully exceeding the arbitrators’ powers.

The reason for the exclusion of public interests from BITs could be the “race to the bottom” phenomenon, in which states try to be as attractive as possible to foreign investors and therefore cannot afford to insist on maintaining large policing powers in BITs. I also heard others claim that the truth is far simpler: that BIT negotiators do not think about the problems that may result from such exclusion and thus neglect to include public considerations in BITs.

To return to the issue with which I started, none of the above can change the fact that BITs’ main objective is not the protection of investors. There is no benefit in the protection of investors just for the sake of protecting them. The protection of foreign investors is merely a tool, used in order to generate benefits, namely jobs, technology transfer, improvement of infrastructure or in short – development. In one of the first attempts to regulate the field of international investment law, The Havana Charter dictated over more than sixty years ago that: “international investment, both public and private, can be of great value in promoting economic development and reconstruction, and consequent social progress”. The Abs-Shawcross Draft Convention from 1959 adopted similar narrative as it envisaged foreign investments as a tool for the promotion of development. This simple essential truth has been forgotten over the years.

I started this post with the presentation of a certain dichotomy: on the one hand, it seems that some level of recognition of the public role of international investment law has been achieved, but on the other hand, people still claim that the main objective of BITs is the protection of investors. I believe that by acknowledging the inherent mistake which lies at the heart of the latter belief, both objectives and recent developments can be reconciled. Indeed lately, a new generation of BITs specifically acknowledge the true objective of BITs and “developmental language” is brought once again to the fore.[2] The Canadian Model FIPA for instance states:

“Recognizing that the promotion and the protection of investments of investors of one Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity, to the development of economic cooperation between them and to the promotion of sustainable development”

By acknowledging the true objective of BITs, arbitrators could include public considerations within their interpretation of investment treaties and thus achieve a more balanced approach, one that cohabits with states’ needs and reflects the recognition that foreign investment effects public interests, alongside those of private investors. Acknowledging development as the true objective of BITs, so I claim, is obvious and should be better reflected within any debate over the field of international investment law.

[1] International Investment Treaty Law and Arbitration: Evolution and Revolution in Substance and Process, Sydney University Faculty of Law, 19-20 February 2010. “

[2] See recent Canadian Model FIPA, Norwegian Model BIT, IISD Model BIT.

TRIPS has been controversial from the start. Developing countries and advocates for the ‘intellectual commons’ are of the view that TRIPS jeopardizes developing country access to knowledge and essential medicines that are critical to their well-being and growth.[ii] In contrast, some developed countries, in particular the US, are of the view that TRIPS did not go far or fast enough in establishing a global IP regime: the US is pushing developing countries to accept standards that go further than TRIPS in the bilateral and regional free trade agreements that have flourished as WTO negotiations have stalled.[iii]

The developing countries have legitimate concerns. They are net technology importers and must thus establish and maintain IP systems which will be of little benefit to them in the short term, while reducing their access, on affordable terms, to necessary technology and drugs. The question thus becomes: How did TRIPS come to be adopted? While there is no single or simple answer to this question, Drahos and Brathwaite, in their article Who Owns the Knowledge Economy: Political Organizing Behind TRIPs[iv] offer one insightful, if sobering explanation.

Drahos and Brathwaite argue that TRIPS was adopted by members of the WTO as a result of a failure of democratic processes. On the one hand, a small group of IP industry leaders successfully convinced the US, the EU and Japan, the dominant patent-holding countries, to adopt stronger IP rights as the central element of their trade agenda.[v] On the other hand, developing countries lacked IP expertise in trade negotiations, they were largely absent from the IP negotiations, and they lacked bargaining power in the face of US trade sanctions and the US-EU-Japan block. Compounding this problem was the fact that the movement to protect the intellectual commons was still under-developed. Where it existed, it was scattered and under-resourced.

The authors set this struggle over intellectual property rights in its modern context. While patent systems were initially designed to confer benefits on inventors, multinational corporations have become the dominant holders of IP rights. IP rights confer monopoly benefits on multinationals. Knowledge based corporations use the power conferred by IP rights to establish ‘knowledge cartels’ to control the use of their patented knowledge, to control the supply of patented products, and to set high prices for their products, which include drugs. They justify the price as reflecting their discovery and development costs.

Once these patents expired and generic manufacturers produced drugs far more cheaply, drug companies expanded into developing country markets as part of their growth strategy. The fact that these countries offered little or no IP protection at the time did not matter because these countries did not have the knowledge capacity to reproduce patented goods. However, as developing countries such as India and Brazil gained technological expertise, they were able to manufacture, far more cheaply, products such as drugs which they and their neighbouring countries urgently needed. Developed countries began to question the costs of drugs in their markets, and thus the relationship between patents and prices. Drug makers saw their market share beginning to erode and, more importantly, their IP asset base threatened.

Drahos and Brathwaite argue that this was the motivating factor that led Pfizer, IBM and other IP-reliant corporations to effectively mobilize their industries and lobby the US (and ultimately the EU and Japanese authorities). Their message was simple: American knowledge and inventions were being stolen by countries which did not have strong IP protection regimes. Widespread adoption of US-style IP protection was necessary to protect American jobs and wealth. The US government ‘bought’ the message, and ultimately compelled developing countries to adopt their IP agenda through the strategic use of unilateral trade threats and sanctions, bilateral agreements, and the WTO.  Despite certain differences in their point of view, the EU and Japan supported the adoption of an ‘international IP code’.

Some developing countries, including India, resisted. However, India’s absence at several critical meetings, and the relentless pressure of key developed countries, meant that the interests of corporate IP holders, now adopted by their governments, prevailed. Drahos and Brathwaite are of the view that, while transnational activism against the use and extension of IP rights has developed, this activism may be too isolated to “force governments to design IP rights that serve the welfare…of citizens.”[vi]

The authors are correct to emphasize the need for concerted efforts. Their cautious outlook is justified by accounts of how poorly TRIPS is suited to developing country needs, and by accounts of how the developed world is continuing to push for enhanced IP rights.[vii] Nonetheless, there are some reasons for hope. Sell and Morin outline how NGOs and developing countries are using discourses of bio-piracy, fairness and access to medicines to successfully restrain TRIPs.[viii] Commentators are turning their attention to how TRIPs can be made to work for developing countries.[ix] De Beer and Harris argue that developing countries are exercising their growing clout and improved tactical capabilities to demand fairness,[x] as is evident in their unwillingness to back down in WIPO, reported by IP Watch, above.

Drahos and Brathwaite’s article provides an insightful account of how this controversial agreement came to be. Their work is part of an important literature that looks critically at intellectual property in a number of ways: by examining the impact of the characterization of the patent’s limited monopoly grant over inventions as private “property rights”; by highlighting how the original intention to incent and reward inventors has been manipulated as IP has become corporately owned; and the role that private interests have played in defining public concerns and policy priorities in the realm of international law. A clear understanding of how power relations structure the role and function of the patent system over time is necessary if the system is to be adapted to meet the needs of developing countries.

[ii] Peter Yu, Five Disharmonizing Trends in the International Intellectual Property Regime, Michigan State Univ. Coll. of Law Legal Studies Research Paper, No. 03-28, 2007. www.ssrn.com|abstract=923177.

[iii] In fact, (source).

[iv] Peter Drahos and John Brathwaite, “Who Owns the Knowledge Economy: Political Organizing Behind TRIPS”, Corner House Briefing Papers, Briefing 32, September 2004. Available online at: http://www.thecornerhouse.org.uk/item.shtml?x=85821

[v] Susan Sell provides a similar analysis of how, in her words, “the IP lobby was particularly effective in translating their private interests into a matter of public interest.”See: Susan Sell, Private Power, Public Law: The Globalization of Intellecutal Property Rights, Cambridge University Press 2003, p. 99. Hereinafter Sell

[vi] Drahos and Brathwaite, supra note iv at page 32.

[vii] See, for example, Susan Sell, supra note v, chapter 6.

[viii] See for example, Sell, ibid; see also Jean-Frédéric Morin, The Strategic Use of Ethical Arguments in International Patent Lawmaking 3 Asian J. WTO & Int’l Health L & Pol’y 518 2008.

[ix] E.g., Sean A Pager, Patents on a Shoestring: Making Protection Work for Developing Countries, 23 Ga. St. U. L. Rev. 755 2006-2007.

[x] Jeremy de Beer, (ed) Implementing the World Intellectual Property Organization’s Development Agenda, Wilfrid Laurier University Press, 2009; Donald P. Harris, TRIPS and Treaties of Adhesion Part II: Back to the Past or a Small Step Forward? 2007 Mich. St. L. Rev. 185,

This latest crisis in Sino-Google relations has taken on international significance beyond just the opening of another front in the ongoing trade disputes between China and the United States, and it represents more than just the latest development in the long-lasting ideological clash between the Chinese government and western internet service providers Google, Yahoo, and Microsoft. And while this isn’t the first time an American corporation has sought to impose its will on a foreign government, this may be the first such standoff that has an ideological or public international law dimension to it. Among other things, it prompted US Secretary of State Hillary Clinton to declare last week that the United States intends to advance “internet freedom” at the United Nations.

One interesting question that comes out of this is whether corporations of Google’s stature will be able to shape the policies of state actors in much the same manner as they can those of industry players. For example, Apple and then Google transformed the wireless industry when they required cellular providers to significantly alter their practices which restricted free access to information as a condition to carrying their newly-developed cell phones; will Google similarly be able to compel the Chinese government to alter its policies concerning access to information by threatening to leave the country? It is a threat the Chinese government must take seriously; aside from the direct economic benefits that China gains from having Google offices in the country, China to some extent relies on services like Google’s to connect its citizens with the rest of the world in areas like business, science, and art – and thereby fuel China’s cultural and economic growth.

Of course, the flip side of this is the vast amount of profits Google stands to forego by removing itself from the Chinese market. China is by far the world’s largest online community, with close to 400 million internet users. Notwithstanding its corporate motto of “don’t be evil,” it seems unlikely that Google would threaten to turn its back on such a large market over a silly ideological dispute over free speech unless 1) the move is nothing more than a negotiating tactic, or 2) it considered its operations in China to lack growth potential. If the move is just a negotiating tactic vis-à-vis the Chinese government, it can be seen as evidence of Google’s footprint in international affairs, even if the bid is ultimately unsuccessful. And if Google doesn’t foresee long-term growth potential in China, one must ask to what extent a free-flowing marketplace of ideas is central to what Google does.

If Google proves incapable of bending China to its will through the sheer force of its economic clout, there are a number of international forums through which Google could further exert pressure on Beijing. The most likely, perhaps, is the WTO. Indeed, a number of American business interests have already begun lobbying for the US Trade Representative to invoke WTO treaties to compel China to relax its internet censorship. These groups allege that China has violated its commitment to allow unlimited and equal access to foreign internet services by essentially requiring such services to either self-censor, in compliance with government guidelines, or relocate outside of China’s borders where they would be subject to limited accessibility behind the “Great Firewall of China” or potentially banned altogether.

Access to information is an area that is currently woefully under-regulated, with norms varying enormously from one place to another based on cultural and market factors. It could be argued that in an information-based and globally-linked society like ours, this is an impediment to trade that the WTO is well-placed to address.

Most countries censor or control information on the basis of moral or political grounds; from a positivist standpoint, it is no less legal for the Chinese government to intercept dissidents’ emails or block news pertaining to certain political events than it is for the US government to monitor the conversations of suspected terrorists or block access to child pornography. However, the ethical question of who should lawfully be able to restrict the flow of information, and on what basis, is still very much open, as evidenced by the ongoing net-neutrality debate in the US and the expanded debate on legitimate limits of free speech. If the present matter is brought before the WTO for mediation, it would first prompt a much-needed general discussion on the question of whether there is a need to regulate access to information on a global level in today’s technological climate, and second go a long way toward determining the principles by which it might be regulated (for example, appealing to UN declarations such as the International Covenant on Civil and Political Rights).

“Africa could rightly be described as the major theatre of contemporary cases of shared sovereignty.”[1]

It is the hope of many African leaders that greater cohesion in African trade will lead to more firm patterns of national development. Formalizing the international trade sector within Africa could lead to greater national tax revenues, a freer exchange of ideas, labour and technology across borders, the stabilization of regional agricultural and natural resource markets, and greater cooperation over shared infrastructure projects such as the creation of highways, waterways development, and even the deployment of green technology such as wind energy projects.[2]

While more flamboyant African leaders such as Muammar Gaddafi stress the need for pan-African unity (Gaddafi even calling for a United States of Africa), smaller regional unification bodies are already active. Most Westerners might be surprised that much of West Africa, the nations of the Economic Community of West African States (ECOWAS), already has a unified currency between fifteen nations. Since its creation by treaty in 1993, ECOWAS trade commissioners from a diverse array of fields attempt to integrate trans-national policies on social affairs, water resources, energy, and security matters. Just as NATO intervenes in foreign conflicts, when civil unrest unfolds in member states, such as recently in Guinea, ECOWAS applies strong diplomatic and military pressure to uphold the rule of law.

The East African Community (EAC) was first launched in 1967, but was then dissolved and later re-launched after a treaty agreement was signed in 1999 between its three original member states: Kenya, Tanzania and Uganda. Burundi and Rwanda later became full members of the EAC. The EAC has worked to harmonize national and municipal laws and strengthen the training of the judiciary within the community. The East African Passport was introduced with the creation of the modern EAC, and alongside efforts to decrease trade tariffs it has been integral to helping people and goods move across borders with relative ease. Citizens of NAFTA countries should be so lucky! The EAC envisages sharp integration in terms of foreign policy and a full monetary union under its common market – although no timetable has been set for this.[3]

Another strong regional body in Africa is the Southern African Development Community (SADC), which was established in its modern form during the waning days of Apartheid via treaty in 1992. The SADC also tackles a variety of issues, including the reduction of drug trafficking, preservation of shared waterways, and legal harmonization. A free trade area was launched in August 2008 and the SADC’s member states are now collectively pursuing investment in their national economies. The relatively light hand applied to the deteriorating situation in Zimbabwe demonstrates that the SADC lacks the diplomatic strength of a body like ECOWAS. Instead, the organization seems to focus on shared goals in economic development more than on the cultivation of shared political institutions.

An interesting development has been the launching of the Common Market for Eastern and Southern Africa (COMESA), which since its creation via treaty in 1993 has fostered closer links between the nations of the SADC and the EAC, among other nations. The United Nations Economic Commission for Africa (ECA) has long pushed for regional integration in this region,[4] which is bound together through aspects of its colonial and post-colonial identity, as well as geographic avenues of trade that makes such integration beneficial to regional development goals.[5] COMESA also extends to other nations not involved in formal regional political integration schemes, such as Ethiopia, Eritrea, Egypt and Libya. However, not all nations of the aforementioned bodies have taken part in COMESA, notably Tanzania who quit its involvement in the year 2000.

It is also notable that the nations of the Maghreb and North Africa have to this date made very few concrete efforts to engage in regional economic integration. While The League of Arab States has as its goal the promotion of commercial relations between Arabic speaking peoples, this has not translated into large-scale economic integration in the Arab world, including North Africa. Rather, the Arab League has served as a socio-political organization. Maghreb states have toyed with the idea of further economic and political integration but planning is still in the development phase.

ECOWAS, the EAC, the SADC and COMESA can all play a role in driving economic development in Africa. In particular, they can help businesses feel safe to expand across borders through more strict and clear regulation and through ensuring that proper arbitration systems are in place. Amazu Asouzu writes that post-colonial African states have traditionally not trusted larger arbitration regimes such as the International Centre for Settlement of Investment Disputes (ICSID). These states viewed “arbitration as an alien system of justice devised to subvert the institutions and interests of developing states.”[6] Political enforcement of such legal mechanisms, through mutually beneficial regional development, can play a role in helping businesses enter new markets, create jobs, and improve the lives of African peoples.

The right to development stresses the indivisibility off human rights, and the inter-linkages between civil and political rights, on the one hand, and economic, social and cultural rights, on the other.[7]

However, this brand of economic development must be coupled with a human rights and social agenda in mind – one that is backed up by diplomatic and military force if national leaders get out of hand. ECOWAS, however belatedly or poorly, has flexed its muscles to bring its member states into line on these issues. The SADC has failed to recognize these principles in its dealings with Zimbabwe. Using a dualistic socio-economic approach, the aforementioned regional bodies can be active members in helping African peoples recognize their collective right to development.

[The author will spend six months in 2010 blogging from Cape Town, South Africa, covering topics related to regional integration issues in African governance, particularly energy, trade, and security concerns.]

[2] Henry Kibet Mutai, Compliance with International Trade Obligations: The Common Market for Eastern and Souther Africa (Boston: Kluwer Law International, 2007) at 104.

[3] Ibid at 119.

[4] Ibid at 129.

[5] Ibid.

[6] Amazu A. Asouzu, International Commercial Arbitration and African States (Cambridge: Cambridge University Press, 2001) at 412.

[7] Tiyanjana Maluwa, International Law in Post-Colonial Africa (Boston: Kluwer Law International, 1999) at 312.

One of the most important functions of a written constitution is the entrenchment of certain human rights which are recognized as universal and not subject to the whims of the legislature; as such, the Canadian Charter was also an important step, as it broke with the British tradition of parliamentary supremacy by giving broad powers of judicial review to the courts, and granted even broader rights than did the US Bill of Rights (though this is partly balanced by the fact that Charter rights are subject to the notwithstanding clause).

One might worry, then, about the protection of human rights in countries that do not have written constitutions. Most notably, the UK has no formal written constitution, but instead relies on conventions and common law principles to fill in the gaps of statute law. Many such principles, written or unwritten, as well as certain statutes and treaties, have been granted constitutional force.[3] Through its emphasis on legal and political tradition, the UK has historically attempted to protect human rights and civil liberties without infringing on the sovereignty of Parliament.[4]

Another country without a written constitution is Israel. The constitutional order in Israel consists of unwritten principles, case law, the Declaration of Independence, and a number of limited Basic Laws. The 1990s saw a “Constitutional Revolution” in Israel,[5] motivated by the belief that human rights should not be left in the hands of any legislator, with the knesset adopting the Basic Laws on Human Dignity and Liberty and Freedom of Occupation that protected basic human rights and gave courts broad powers of judicial review in order to uphold them. Nevertheless, due to internal social and religious tensions, the government has continued to postpone the adoption of a formal written constitution, despite undertaking to do so since the establishment of the state.

Given the fact that constitutional principles are not as well-defined or -entrenched in Israel as they are in Canada, or even in the UK, it is interesting to take note of last week’s High Court of Israel ruling which found that privately-run prisons are unconstitutional.[6] The decision is notable for a number of reasons, chief among them that it establishes an international precedent. Private prisons are common in many countries, most notably the UK (where they have existed since the 1990s) and the US (where privatization of prisons can be traced back to the 1850s).[7] They are also prominent in France, Australia, and New Zealand, and successful constitutional challenges have not been mounted in any of these countries despite ongoing public debate. How is it that private prisons have been ruled unconstitutional in Israel, but not in the US, with its similar though better-defined base of liberal values and where the tradition of constitutional litigation is thought to be much stronger?

The Court’s decision[8] cited the political philosophies of Locke and Hobbes, as well as the constitutional principles laid out by former Chief Justice Barak. It addressed the relationship between the state and the individual, maintaining that the right to enforce criminal law through incarceration is one of the most invasive of the state’s responsibilities in exercising a monopoly on the use of force, and that the state may not delegate such fundamental tasks to private enterprise. Most importantly, using a variation of the Oakes test, it asserted that economic efficiency cannot override basic principles of human rights; depriving a person of liberty is a violation of his fundamental rights to liberty and dignity, and may only be done for the public good – not to make a profit.[9] Profiting from the exercise of the state’s authority undermines the legitimacy of this authority.

Other considerations that have been raised in public debate are concerns that a for-profit penal system may result in lobbying legislators and judges to make it easier to incarcerate individuals than the public interest would warrant;[10] in one US case, two judges were found guilty of accepting $2.6 million from a private prison company to send children to their jails.[11] Other arguments have been advanced challenging the economic efficiency and the overall effectiveness of privately-run prisons. It has also been suggested that the preponderance of private prisons in the US is a contributing factor to the US having the world’s highest rate of incarceration.[12]

Clearly, the High Court’s decision will have far-reaching implications, and may result in similar constitutional challenges elsewhere based on similar principles. That a constitutional precedent of this magnitude has been set in Israel, a country without a written constitution or a strong tradition of constitutional litigation, may cause some to rethink their conceptions of constitutionality. Clearly, a constitution is about more than having a fixed written document. In fact, it is difficult to imagine any constitution that is limited to written documents, as, in the case of Canada, is alluded to by the word “includes” in s. 52(2) of the Constitution Act, 1982. Constitutional force can be assigned to principles deriving from any source, as the High Court demonstrated in citing Locke in tandem with Barak, as well as to various means by which to interpret them. A formal written constitution is merely a tool for expressing society’s most entrenched norms; as the Israeli example illustrates, the absence of a written constitution does not necessarily suggest a normative void. As countries in the developing world strive for constitutional reform (whether it emulates the Canadian model or not), we would do well to remember that a written constitution is a means, not an end in itself.

[1] Peter Hogg, Canadian constitutional scholar, quoted at http://www.cbc.ca/news/features/constitution/

[2] Roy McMurtry, former justice minister of Ontario, quoted at http://www.thestar.com/article/215547

[3] See, for an early example, Entick v. Carrington, http://www.constitution.org/trials/entick/entick_v_carrington.htm

[4] Though in recent years we have in fact seen a trend away from parliamentary supremacy and a recognition that there may be situations in which the judiciary may override the express view of the legislator; see for example Baroness Hale’s obiter in Jackson v. Attorney General, http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd051013/jack-1.htm

[5] In the words of Aharon Barak, Chief Justice of the High Court at the time.

[6] http://www.haaretz.com/hasen/spages/1129539.html

[7] http://en.wikipedia.org/wiki/Private_prisons

[8] as reported in the Israeli media; I have yet to see the actual text

[9] http://www.haaretz.com/hasen/spages/1129516.html

[10] http://www.guardian.co.uk/commentisfree/2009/mar/03/prison-population-titan-jails

[11] http://www.nytimes.com/2009/03/28/us/28judges.html?_r=2

[12] Supra, note 10.

The idea was subsequently picked up by UK PM Gordon Brown and presented to the G20 at their meeting in St Andrews, Scotland on Nov 7th.  Brown presented the tax as an instrument to fund future bank bailouts.  Moreover, he sees the tax as increasing accountability in the financial sector.   However, the idea was not received as well as had been hoped.  The USA has rejected the idea, and Canadian Finance Minister Jim Flaherty also came out against the tax.

While things looked dismal for the tax proposal following the G20, it seems that at least as far as the US is concerned, the idea in principle may still be kicking around Congress.  U.S. House of Representatives Speaker Nancy Pelosi has spoken out in favor of a similar proposal, affectionately named the Wall Street tax, from which funds would be used for job-creating legislation sought to be passed in December.  The Democratic proposals are citing nearly a $150 billion per year fund to help with economic recovery. However, the US is staunch about the necessity of the tax being an international one, otherwise it stands the risk of losing financial jobs to markets overseas.

So what would these taxes practically look like? Democrat Representative John Larson proposes a 0.25 percent tax on over-the-counter (OTC) derivatives transactions.  But once again, we see the Democrats in favour of the tax being adamant about applying this potential tax internationally.  These OTC derivative transactions go on primarily between banking and financial institutions and include interest rate contracts, credit default swaps, foreign exchange contracts, commodity contracts and equity contracts among others.    To contrast, France was looking at roughly 5 cents on every 1,000 euros.

As long as the US dollar remains as a standard trading currency, there is an opportunity to achieve the goals set out by this potential tax proposed by some Democrats.  Even when money is traded in US dollars between two foreign banks, the transaction passes through New York.  However, a potential tax only on USD transactions thus would tally another minus for the already weakening use of the USD as a currency of trade.

However, it leaves one to wonder how feasible a truly solidified global financial tax really is.  While places like New York and London have been seats of financial power for ages, there’s no telling what might happen if the tax isn’t uniformly implemented.  All it takes is one or two countries with a relatively stable currency to withhold to cause a great threat to the goals of the tax.  The danger is not just in the abandoning of the US dollar as a currency of trade, but rather corporations moving operations overseas.  Like the phenomenon of ships leaving the US to be registered under Flags of Convenience, a non-uniform global tax might cause corporations to do the same.  And that certainly wouldn’t help raise funds for stability or any future bank bailouts, nor would it help create more jobs in this continued time of high unemployment.

The Australian Court decided that international anti-competitive activity which takes place wholly outside of Australia may still influence the Australian market, and thus Australian law may possibly apply. It should be noted that this approach is by no means unique or new, as other domestic antitrust authorities are empowered by law to prosecute international anti-competitive activity.[1] But when examining the above-mentioned tension between the two conflicting forces, domestic regulation and an international problem, a more complex picture is revealed.

On the one hand, it is true that due to the lack of an international governing body or antitrust prosecution authority, the Australian authorities do not have much choice but to try and regulate international anti-competitive activity which affects Australian markets.  On the other hand, such an approach is not without consequences. Leaving the prosecution of international anti-competitive conduct to local antitrust authorities is both inefficient and somewhat inappropriate. First, domestic regulation of international anti-competitive conduct is often focused on domestic interests rather than on the interests of the international community as a whole. It may therefore endorse commercial practices that although beneficial to the local market, are harmful for others (the example of export cartels is one often given in this regard). Furthermore, domestic authorities may find it extremely difficult to investigate anti-competitive activity which occurs in several countries.

Secondly, it is problematic to argue that international enforcement by any single State is appropriate, especially when, for example, such action may be considered as a violation of another state’s sovereignty[2] (or as some describe it, “overregulation”[3]). One State’s standards concerning what is wrong and what is right may not coincide with those of another, and as one prominent author once said: “No one has elected the United States or the European Union [or Australia in this case, AK] to be enforcer for the world”.[4]

Arguably, this is a “lose-lose” situation in which both alternatives may bring about difficulties. The obvious solution to this problem is at least theoretically simple, and can be found in the shape of international regulation. The reality however shows that starting from 1948, almost all attempts made towards the international regulation of this field have either completely failed[5] or ended as non-binding “recommendations”.[6] A broader review of this situation reveals an even sadder picture, as despite efforts made by the European Union, this topic is currently not even being discussed. At the WTO Cancun Ministerial Conference and later at the Doha’s “July decision” this issue was completely removed from the international negotiations table.[7]

The existence of bilateral cooperation agreements indeed helps, but by no means solves the entire problem. International co-operation agreements between domestic competition authorities usually involve the exchange of information, informal connections and as reported by the OECD,[8] “surprise investigations” and raids in recent years. However, it should be noted that the main objective of these agreements is usually the protection of domestic markets, i.e. each State is still concerned only with its own local markets and the State’s operation is usually limited to its own market’s best interests. “International thinking” and governance are therefore still missing from the process.

“I found out that if you are going to win games, you had better be ready to adapt”

– Scotty Bowman, Hockey Legend

The international community is rightfully rushing toward financial globalization; despite popular critiques, there is no doubt that the opening of markets, the increase in cross-border investments and the ensuing financial integration have all brought about great prosperity, including for developing countries (India and China are two incredible examples). But it appears that in the race forward, the introduction of some of the rules which are so necessary for the sustainability of this new globalised environment has been forgotten. The new world requires new rules, and until a proper international policy is established, it seems that the field of international antitrust law will remain some sort of a “wild west”, where each town sets its own laws and hangs its own criminals.

In order to treat an international problem, the world’s nations should establish an international supra-governmental body to develop international policies and conduct international enforcement. That may seem politically unlikely for the moment, but as the exposure of states to international markets increases, the need for proper regulation is becoming more imminent. Hopefully, a proper international action will follow.

[2] Weinrauch, Roland. Competition Law in the WTO: The Rationale for a Framework Agreement (Graz:

Neuer Wissenschafts-Verlag, 2004) [Weinrauch] at 76.

[3] Andrew T. Guzman, “Public Choice And Regulatory Competition” (2002) 90 Geo. L.J. 971 at 973.

[4] Eleanor M. Fox, “International Antitrust and the Doha Dome” (2003) 43 Virginia Journal of International

Law 911 at 924.

[5] See attempts made within the WTO framework.

[6] See attempts made within the UN or OECD frameworks.

[7] WTO, Doha Work Programme: Decision Adopted by the General Council on 1 August 2004, WT/L/579,

August 2004, online: WTO

<http://www.wto.org/english/tratop_e/dda_e/draft_text_gc_dg_31july04_e.htm>

[8] OECD, Hard Core Cartels: Third report on the implementation of the 1998 Council Recommendation

(Paris: OECD 2005) online: OECD <http://www.oecd.org/dataoecd/58/1/35863307.pdf > at 31.