Revolutionary Approach to International Law: The Role of International Lawyer in Asia (International Law in Asia) 9811979669, 9789811979668

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International Law in Asia

Eric Yong Joong Lee Editor

Revolutionary Approach to International Law The Role of International Lawyer in Asia

International Law in Asia Series Editor Eric Yong Joong Lee, YIJUN Institute of International Law, Seoul, Korea (Republic of)

This series aims to provide the latest perspectives on international law in this ever changing region of Asia. Each book of this series will address specific aspect of highly contemporary global issues such as armed conflict, maritime disputes, human rights and refugee crises, sustainable development/climate change, outer space, finance and economy, trade (WTO and FTA), investment, development, technology, intellectual property, international crime, global health, regional questions, etc. This book series invites leading international law scholars and practitioners in Asia to contribute their expertise in interpreting a wide range of legal questions that arise in relation to the above topics through an Asian lens. This series will serve as useful guide for international lawyers, diplomats, businessmen and students to understand current and future trends of international law in Asia.

Eric Yong Joong Lee Editor

Revolutionary Approach to International Law The Role of International Lawyer in Asia

Editor Eric Yong Joong Lee YIJUN Institute of International Law Seoul, Korea (Republic of)

ISSN 2731-8044 ISSN 2731-8052 (electronic) International Law in Asia ISBN 978-981-19-7966-8 ISBN 978-981-19-7967-5 (eBook) https://doi.org/10.1007/978-981-19-7967-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Prologue

One of the most fundamental changes in the postwar world is the end of European domination. After two world wars, European hegemonies gave up their colonial policies against Asia, Africa and Latin America which they had maintained since the seventeenth century. Three hundred years’ imperialistic expansion under Eurocentrism was finally over and was followed by the Cold War which divided the world into two sides along the ideologies. After the Cold War, the world enjoyed relative stability and prosperity under America’s hegemony that lasted for the last thirty years. However, the long-reigning hegemon is now in decline. At the same time, the world faces colossal waves of economic, social, health, security, informational as well as technological changes. At this crucial turning point, the spotlight is on Asia. In the map below, more people are living inside the circle than outside.

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Northeast Asia contains three of the ten biggest traders of the world and Southeast Asia is the fastest developing economic region. These regions are also leading the current digital revolution. The international lawyers in this region are thus obliged to launch a new ‘platform’ to address recent changes in a global context. Academic research is often a revolution. Scholars are encouraged to overturn old ideas and principles in order to better approach the truth. In today’s international law discipline, such a revolutionary approach is needed to address the paradigmatic shift of international society. It should reflect the changing world and ideas beyond the traditional European and American ideas. Responding to such need, this book provides contributions from Asian international law scholars and practitioners on contemporary global issues in the digital age. Given the rapidly shifting global legal landscape and framework, they shed light on the theoretical and practical questions in international law and reexamine their global context. Such independent and forward-looking approach suggests many valuable ideas on how to shape the global common good in the future. This book is expected to meet the needs of the global community to adapt to the swiftly transforming international legal framework from a fundamentally innovative viewpoint. We hope it will be a steppingstone to create an Asian framework of international law and related international legal think-tank and school. These ideals are shared among the members of the Revolutionary International Law Group who address highly topical academic and practical questions in this book. The Revolutionary International Law Group will serve as an outpost for the current and future international law research and practice. The Group tries to address the important changes of global society from a viewpoint of international law. The Revolutionary International Law Group will try to further develop common norms, values and ideas for global society. The Revolutionary International Law Group will feature more native Asian voices than the Third World Approaches to International Law (TWAIL) and more practical analyses than Critical Legal Studies. We believe that our narrative will be an important guide in navigating the recent waves of changes to arrive at a well-balanced and truly globalized international law. It will satisfy social and human needs in the contemporary world and beyond. Eric Yong Joong Lee on behalf of all the authors

Contents

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Legal Status of Remote Operator in Maritime Autonomous Surface Ships (MASS) Under International Law: Who Can be a Ship Master? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Junghwan Choi

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Why Will China’s Belt and Road Initiative Bring a Bright Future to the World? An International Lawyer’s Perspective . . . . . . Ran Guo

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The Past, Present, and Future of Investor-State Arbitration in East Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dae Un Hong and Ju Yoen Lee

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Unveiling the Imperative of Distributive Justice in Science, Technology, and Development: A Legal Analysis . . . . . . . . . . . . . . . . . Ridoan Karim

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Rethinking Twenty Years of American Unilateralism in the Middle East: A Critical Evaluation of the War on Terror . . . . 101 Eric Yong Joong Lee

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A Call to MNCs to Be a Key Part of Climate Solutions Through the CHM Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Tsung-Sheng Liao

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Thailand’s Lawsuit Against the United States for Causing COVID-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Patthara Limsira and Winatta Saengsook

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OBOR as an Agent of Revolution in International Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Hamid Mukhtar and Hafiz Abdul Rehman Saleem

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Contents

Inflation Reduction Act’s Clean Vehicle Provisions: Analysis of Potential International Trade Law Violations . . . . . . . . . . . . . . . . . . 177 Soojin Nam

10 The Coordinating Role of Public International Law: Observations in the Field of Intellectual Property . . . . . . . . . . . . . . . . 197 Sung Pil Park 11 The Artificial Intelligence in International Law . . . . . . . . . . . . . . . . . . 215 Young-Yik Rhim and KyungBae Park 12 Revitalizing Anthropological Approaches in International Law: From International Law to Global Law . . . . . . . . . . . . . . . . . . . . 239 Tikumporn Rodkhunmuang 13 Lost Opportunities in the CPTPP Dispute Settlement Mechanism: Lessons for Future FTAs . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 Rajesh Sharma 14 Pointing with Boneless Finger and Getting Away with it: The Ill-Substantiation Problem in Cyber Public Attribution . . . . . . . . . . . 281 Fan Yang 15 Engineering Compulsory Food Safety Liability Insurance in China: A Joint Perspective of Public and Private International Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 Lin Zhang and Xiaochen Zhang

Chapter 1

Legal Status of Remote Operator in Maritime Autonomous Surface Ships (MASS) Under International Law: Who Can be a Ship Master? Junghwan Choi Abstract This study discusses the legal status of a remote operator of MASS, and the possibility of granting them status as a ship employee or master under international law. This research argues that the status of seafarer or deemed seafarer should be required for R-level MASS, and the status of master or deemed master with the right to command in matters relating to ship operation be conferred for RU- and A-level MASS. The study presents an expanded notion of seafarers by extending the combination of ship and human elements—concerning seafarers in existing international maritime conventions—to deem remote operators of MASS ship employees. Finally, this study suggests that remote operators be regarded as a human element by perpetuating the notion of the master, retaining their status as the final entity of responsibility for the ship, even if the cutting-edge ICT-based commercialisation of MASS is realised. Keywords Maritime Autonomous Surface Ships · Ship Master · Remote Operator · International Maritime Organisation · The 1982 United Nations Convention on the Law of the Sea

This is an updated and revised version of the author’s article titled, “Legal Status of the Remote Operator in Maritime Autonomous Surface Ships (MASS) under Maritime Law” published at Ocean Development and International Law (Vol. 52, No. 4, 2022) under the official permission of INFORMA UK LIMITED and Co-Autor. J. Choi (B) Law School, Dalian Maritime University, No. 1 Liaoning Road, Dalian, Liaoning 116026, P.R. China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_1

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Introduction Keeping pace with the emerging era of the fourth industrial revolution, shipbuilding and shipping industries around the world are concentrating on developing technologies for maritime autonomous surface ships (MASS) based on cutting-edge information and communication technology (ICT) solutions.1 However, the successful launch of MASS operations, currently in pilot mode, must be preceded by integrative and simultaneous preparations of legal, institutional and regulatory frameworks. This requires concerted effort by the International Maritime Organisation (IMO), the adoption of appropriate national laws by flag, coastal and port states, as well as the development of rules and standards by classification societies and marine insurance companies. In addition, there must be port facilities where MASS can dock.2 This poses a critical regulatory challenge to the existing international and domestic law, and to all normative systems relating to seaworthiness and crew qualification and certification. A paradigm shift is required for the social institutions and physical infrastructure linked to the entire maritime regulatory regime.3 MASS-related regulatory issues were on the agenda at the 105th session of the Legal Committee (LEG) of the IMO and the 99th session of the Maritime Safety Committee (MSC) in 2018.4 MASS is expected to change the cargo shipping market through operation and process optimisation and efficient resource management and is emerging as a new paradigm for shipowners and the maritime industry.5 This study discusses the legal status of a remote operator of MASS and the possibility of granting them status as a ship employee or master in international law. Traditionally, an onboard master and crew perform their duties on behalf of the shipowner. In the future, however, the remote operator of the MASS will not board the ship, but will work from an onshore control centre to navigate and operate the vessel. Owing to the distinct nature of the work, different qualifications and job skills will be required for future crew. This raises a number of questions. For example, can the remote operator be regarded as the master and crew in the MASS? Assuming that multiple remote operators command and control the vessel from an onshore control centre, can the decision-making authority be regarded as the master of the vessel? This research argues that the status of seafarer or deemed seafarer should be required for R-level MASS, and the status of master or deemed master with the right to command in matters relating to ship operation be conferred for RU- and A-level MASS. The author presents an expanded notion of seafarers by extending the combination of ship and human elements—concerning seafarers in existing international maritime conventions—to deem remote operators of MASS ship employees. Further, it suggested that remote operators be regarded as a human element by perpetuating 1

Wariishi (2019). Kim et al. (2020); Ringbom (2019). 3 Veal and Tsimplis (2017). 4 IMO Doc (2018a, 2018b). 5 World Maritime University (2019). 2

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Table 1.1 Four levels of autonomy identified by the IMO working group Autonomy level

Autonomy levels in a regulatory context

Description

Degree one

M: Manual navigation with automated processes and decision support

Ship with automated processes and decision support: Seafarers are on board to operate and control shipboard systems and functions. Some operations may be automated

Degree Two

R: Remote-controlled vessel with crew Remotely controlled ship with on board seafarers on board: The ship is controlled and operated from another location

Degree Three

RU: Remote-controlled vessel without crew on board

Remotely controlled ship without seafarers on board: The ship is controlled and operated from another location. There are no seafarers on board

Degree Four

A: Autonomous vessel

Fully autonomous ship: The operating system of able to make decisions and determine actions independently itself

Source IMO Doc. MSC 99/INF.3, 18 January 2018, Analysis of Regulatory Barriers to the use of Autonomous Ships Submitted by Denmark, 6

the notion of the master, retaining their status as the final entity of responsibility for the ship, even if the cutting-edge ICT-based commercialisation of MASS is realised.

The Concept of the Remote Operator in MASS Autonomy Level of MASS Prominent companies in Korea and other advanced countries have set up roadmaps for MASS development, pilot operation and commercialisation and are supporting and fostering autonomy-driven industries.6 In response to these developments, the IMO began to address the classification of autonomous operated ships, adopting the term “MASS.” At IMO MSC 99, in 2018, the level of ship autonomy was classified into four degrees,7 as shown in Table 1.1.

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Felski and Zwolak (2020). IMO Doc (2018c).

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The four degrees of automation of MASS set by the IMOwhich comprises: manual navigation (level M); remote-controlled vessel with crew on board (Level R); remotecontrolled vessel without crew on board (Level RU); and autonomous vessel (Level A).8

Definition of the Remote Operator in MASS The notion of the remote operator was first presented under the term “a shore control centre operator” in the project, “Maritime Unmanned Navigation through Intelligence in Networks,” which was conducted in 2012–2015 under the auspices of the European Commission.9 Likewise, Rolls-Royce used the term “shore-based operator” in its research project, “Advanced Autonomous Waterborne Applications” supported by the Finnish Funding Agency for Technology and Innovation.10 On the basis of recent commentary on the issue, the remote operator can be defined as the person who has the final decision-making power and may be a master or a person deemed to have the position of the master.11 A clearer notion of the remote operator was presented in the Danish report titled, “Analysis of Regulatory Barriers to the Use of Autonomous Ships” submitted at IMO MSC 99.12 Here, a “remote operator” is defined as “a person with the required qualifications who performs or monitors the navigation of one or more autonomous ships without being on board the ship in person and who is entitled to represent the ship vis-à-vis the authorities.”13 This was adopted as the official definition of the remote operator by the IMO.14 8

IMO Doc (2018d). “A Shore Control Centre Operator, who monitors the safe operations of several autonomous ships simultaneously from a cubicle station and controls the vessels by giving high level commands, e.g., updating the voyage plan or the operational envelope of the autonomous system” See MUNIN (2016). 10 Rolls-Royce, op.cit. 1. 11 For example, Veal,Tsimplis, op.cit. 3, 317 ask readers to “[c]onsider the remote controller of an unmanned ship, sat in a shore-side facility behind a computer screen, remotely controlling the unmanned ship”. L Carey defines “operator” as “the person who is responsible for remotely controlling the movements of the autonomous ship and should not be confused with the “operator” as shipowner or bareboat charterer.” See Carey (2017). Ringbom, op.cit.2, 144 refers to a situation where “…the ship is entirely unmanned and all functions need to be performed either remotely by a shore-based crew or autonomously.” Gogarty and Robinson describe a scenario where “a human operator receives visual images from cameras or sensors on-board a UV and steers it by cable (tethered control) or wireless signal (remote control). This form of human/machine interface is referred to as “teleoperated” Control” see Gogarty and Robinson (2012). Pritchett writes “The first primary mode of operation is by way of a remote operator. In this arrangement, electronic sensors aboard a USV will feed information to a human operator who is not located on the vessel. The operator will then evaluate the relayed information and send commands back to the vessel, which will be carried out by the vessel’s electronic systems” see Pritchett (2015). 12 IMO Doc (2018c) op. cit. 7. at 4. 13 Ibid. 14 IMO Doc (2018e). 9

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Considering the descriptions of the notion of remote operator in these studies collectively, a remote operator can be divided into three types as follows15 : (1) R Level: A person who assists the operation of an autonomous vessel, from the onshore control centre, with a crew physically on board the vessel; (2) RU Level: A person who ultimately controls and commands the matters relating to the operation and control of an autonomous vessel, from the onshore control centre, without crew on board; (3) A Level: A person who minimises the intervention of operation of a fully autonomous vessel that controls operations autonomously through artificial intelligence and an automated system. With definitions thus established, it is necessary to discuss how the concept of a remote operator can be harmonised with the conventional notion of crew and master. This research seeks to establish the legal status of a remote operator by reintroducing the notion of shore-based crew or a shore-based seafarer, which is distinct from the traditional notion of the crew but not incompatible with it. Above all, a remote operator includes an essential human factor that ultimately controls the operation of an autonomous vessel in the onshore control centre even in respect of automation and autonomous operation of a vessel. Of the four levels of autonomy of MASS, remote operators are not involved in Level M vessels, and in this study, we focus on remote operators of Level R (remotely controlled ship with a crew on board), RU (remotely controlled ship without crew on board) and A (fully autonomous ship).

The Remote Operator and Seaworthiness in International Law With the emergence of MASS, a fundamental question has arisen as to whether the human factor, which has been recognised as an essential element in the shipping industry, can be removed from the operation of a vessel.16 Existing international maritime conventions do not separate the elements related to ships and humans, and this can be summarised as follows.

Master and Ships’ Crew as Essential Element of Ships in UNCLOS Article 94(4) of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) stipulates that it is incumbent on each flag state to ensure that each 15

Ibid. Yoo and Shan (2019; Pritchett, op. cit. 11. at 203; Hooydonk (2014); Ringbom, op. cit. 2. at 147; Vallejo (2015); Veal, Tsimplis, op. cit. 3. at 317.

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ship is in the charge of a master and officers who possess appropriate qualifications.17 The question of whether the remote operator can be considered the master and officers of the RU- and A-level MASS should be preferentially resolved in order to satisfy the requirements of this provision. In addition, provisions in International Convention for the Safety of Life at Sea (SOLAS)18 and the International Regulations for Preventing Collisions at Sea (COLREG),19 which are representative conventions relating to the material elements of ship operations, were adopted on the assumption that a ship would be operated and controlled by humans and that all decision-making would include a human element.20 Viewed from this perspective, remote operators of MASS can be considered to satisfy the requirements of onboard seafarers (although they are not on board a ship) on the basis that they control ship operations and make all related decisions.21 However, given that the master and crew work on board the ship, there is a need to discuss whether remote operators can or should be granted the same qualifications as the master and crew.

Human Seaworthiness and the Remote Operator in the Hague-Visby Rules Article 3 of The Hague-Visby Rules sets out the requirements around the seaworthiness of the carrier.22 Pursuant to this article, “seaworthiness” is the exercise of due diligence relating to maritime transfer to make the ship seaworthy, to properly crew, equip and supply the ship and to make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.23 Under this provision, “seaworthiness” can be divided into categories relating to the vessel, equipment and documents, cargo and human.24 Even if a ship itself is considered seaworthy, a crew that does not have sufficient competence is likely to increase the risk of accidents and cause loss and damage 17

United Nations Convention on the Law of the Sea (1833 UNTS 397); Article 94(4) reads that “Such measures shall include those necessary to ensure: (b) that each ship is in the charge of a master and officers who possess appropriate qualifications, in particular in seamanship, navigation, communications and marine engineering, and that the crew is appropriate in qualification and numbers for the type, size, machinery and equipment of the ship”. 18 International Convention for the Safety of Life at Sea (1184 UNTS 278). 19 International Regulations for Preventing Collisions at Sea (1050 UNTS 16). 20 Veal, Tsimplis, op. cit. 3. at 315. 21 Yoo, Shan, op. cit. 16. at 566. 22 The Hague Rules as Amended by the 1 Brussels Protocol 1968 (399 UNTS 189), Art 3 [hereinafter, Hague–Visby Rules]. 23 Hague–Visby Rules, Art 3(1): “The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to: (a) Make the ship seaworthy; (b) Properly man, equip and supply the ship; (c) Make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation”. 24 Todd (2015); Chwedczuk (2016).

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to cargo.25 Therefore, the ship owner must have a crew with sufficient training and competence on board.26 Because the criteria for a carrier’s seaworthiness are all conditions a ship should satisfy at the time of departure, from the standpoint of a prudent carrier, these conditions may vary depending on the season, engineering of the vessel and navigational characteristics.27 According to the IMO, the remote operator of the MASS must satisfy the human element of vessel seaworthiness, which would normally be met by the location of a master and crew on board a ship.28 In the event of role allocation in Level-R MASS, where the vessel is operated by onshore and onboard crew members, remote operators should be required to satisfy the same seaworthiness and competence requirements as applied to the onboard crew. In addition, since remote operators exercise commandand-control authority over vessel operation in the onshore control centre, they should also have competences relating to the automation technology for cargo handling in the port. In the case of RU- and A-level MASS, however, the remote operators directly operate the vessel, and they effectively function as the master and crew for the purposes of the seaworthiness criteria as set out in international conventions. Therefore, we argue that the remote operator should satisfy requirements and competences relating to seaworthiness.29 However, depending on the navigational, engineering and operational characteristics of MASS, the seaworthiness criteria that applies to remote operators may differ from those applied to conventional manned vessels.

“Good Seamanship” in COLREG The “ordinary practice of seamen” was first defined in Article 2(1) of COLREG.30 It stems from the notion of an “ordinary prudent person,” which is the standard by which the duty to exercise due diligence is judged in the case of an illegal act in common law.31 Seafarers, as professionals, are subject to a higher standard of due diligence, as specified in relevant laws and regulations, compared with the standard of due 25

The Makedonia [1962] 1 Lloyd’s Rep 316; The Star Sea [1995] 1 Lloyd’s Rep 651; Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26; Standard Oil Co of New York v Clan Line Steamers (The Clan Gordon) [1924] AC 100. 26 Soyer (2012) Warranties in Marine Insurance 1st ed. Routledge-Cavendish, London. 27 Wilson (2010) Carriage of Goods by Sea. Pearson Education 7. 28 IMO Doc (2021) MSC.1/Circ.1638. Outcome of the Regulatory Scoping Exercise for the Use of Maritime Autonomous Surface Ships (MASS); Vojkovi´c and Milenkovi´c (2020). 29 Carey L, op. cit. 11. at 4; Veal, Tsimplis, op. cit. 3. at 333. 30 CORLEG, Rule (2)(a): “Nothing in these Rules shall exonerate any vessel, or the owner, master or crew thereof, from the consequences of any neglect to comply with these Rules or of the neglect of any precautions which may be required by the ordinary practice of seamen, or by the special circumstances of the case”. See Cockcroft and Lameijer (2003). 31 Cartner et al. (2009).

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diligence applied to the general public. In The Roseline (1981), Mr. Justice Sheen summarised the duties of the masters, owners and officers of a vessel as follows: It is the duty of the owners to make sure that their masters understand their duties and understand that they are expected to run an efficient ship. The other officers must be of adequate qualification and experience to enable the Master to carry out his duties.32

The “ordinary practice of seamen” refers specifically to “skill in, and knowledge of, the work of navigating, maintaining, and operating a vessel” necessarily required of a seafarer possessed of ordinary seaworthiness in terms of practice, knowledge and experience.33 “Good seamanship” is interpreted as meaning “resultant behaviour that can be expected from an average good master or officer”; “skills and knowledge an experienced seafarer would and should exhibit”; “general behavioural principles expected of seafarer to follow” and the nature of work.34 This “ordinary practice of seamen” serves as the standard for judging whether seafarers have exercised due diligence and care in fulfilling their duties. Any damage caused by the seafarer’s negligence in fulfilling their due diligence obligation may result in civil and/ or criminal liability for negligence.35 The ordinary practice of seafarers applies not only during navigation but also when the vessel is anchored or moored. As stipulated in COLREG, it applies not only in the context of preventing collisions at sea but also to other crises such as fire, stranding and flooding at sea.36 Even if the ordinary practice of seafarers is not stipulated in specific individual laws and regulations, appropriate measures should be taken to minimise damage if the vessel is in peril at sea.37 Remote operators, as the entities responsible for the operation of R-, RU- and A-level MASS, should be subject to the same duty of care that applies to the crew.38 Even if a separate international standard for MASS were established, the ordinary practice of seafarers stipulated in the COLREG should apply to MASS operation.39 Therefore, any remote operator must comply with the ordinary practice of seafarers and the standards stipulated in Article 2(1) of COLREG. However, there are limitations in applying the ordinary practice of seafarers and standards directly to remote operators, and these standards will have to be contextually applied within the scope of the functions performed by remote operators in place of seafarers on board or as the ship operating authority. The scope of exercising the ship operating authority will be the navigational operation and control of MASS, which should be performed to

32

The Roseline [1981] 2 Lloyd’s Rep. 41, 411. https://www.i-law.com/ilaw/doc/view.htm?id= 148063. 33 Fujiwara et al. (2009). 34 Allen and Allen (2020). 35 Mandaraka-Sheppard (2013). 36 Vallejo, op. cit. 16. at 417. 37 Mankabady (1987). 38 Miyoshi et al. (2021). 39 Chae et al. (2020; Yoo, Shan, op. cit. 16, 569.

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the standard of the “ordinary practice of seamen” based on their experience and the corpus of relevant knowledge.40

Should a Remote Operator be Deemed a Seafarer or a Land-Based Sea Worker? Since Article 3 of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) applies only to “seafarers serving on board sea-going ships entitled to fly the flag of a Party,” land-based remote operators cannot be treated as ship employees under the current STCW. It is therefore appropriate to review whether the Convention could be interpreted or amended in order to apply appropriate qualification, education and training requirements to remote operators of MASS, or whether it is necessary to adopt a new separate agreement in order to do so. This question precedes the preparation of the substantive international standards applicable to the technical and human facets of MASS. Although international maritime conventions and national laws stipulate the spatial concept of “aboard a ship” as an integral element of the definition of a seafarer,41 it might be argued that the location of the work of individuals who provide labour 24 h a day to a sea-going ship, is not an absolute prerequisite to the definition of a seafarer. This conclusion is supported by the research carried out by a Comité Maritime International working group on the application of international maritime conventions to MASS.42 Among the issues raised in the report was whether a MASS remote operator could be considered a master or a seafarer under the national maritime laws of member states. The working group found that only three of the eleven countries surveyed require the mandatory presence of a master on board43 and that the remaining countries have no separate provisions regarding the 40

Miyoshi et al., op. cit. 37. at 16. For example, see SOLAS, Reg 2(i): “the master and the members of the crew or other persons employed or engaged in any capacity on board a ship on the business of that ship”; MLC, Article II(1)(f): “a seafarer is defined as any person who is employed or engaged or works in any capacity on board a ship to which the Convention. Applies”; UK Merchant Shipping Act 1995, Section 313(1): “master includes every person (except a pilot) having command or charge of a ship and, in relation to a fishing vessel, means the skipper; seaman includes every person (except masters and pilots) employed or engaged in any capacity on board any ship”. In Section 14 of the (Australian) Navigation Act 2012, Australia defines “seafarer” as any person who is employed or engaged or works in any capacity (including that of master) on board a vessel on the business of the vessel, other than the following: a licensed pilot of the vessel (acting as such a pilot); In the US, under 46 USC § 11,113(d)(4) “The term seafarer means an alien crew member who is employed or engaged in any capacity on board a vessel subject to the jurisdiction of the United States”. Under Article 2(1) of the Seafarer’s Act of Republic of Korea, “The term "seafarer" means a person who is employed to provide labour in a ship to which this Act applies: Provided, That those prescribed by Presidential Decree shall be excluded herefrom.”. 42 IMO Doc (2018c). 43 Ibid. 41

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master’s on-board requirements.44 The working group also reported that some countries found it necessary to enact separate national legislation for remote operators to function as masters.45 If a remote operator is excluded from the category of seafarer, then, potentially, a person without the appropriate education, training and qualifications required of a seafarer could remotely control a vessel. This may seriously harm the seaworthiness of the ship. Although the remote operator works on onshore, their location could be characterised as a “special place similar to a sea-going ship.” For example, they may have access to real-time screens displaying weather conditions, maritime traffic conditions, ship and cargo conditions as well as other special features of the ship. Therefore, it is possible to recognise the seamanship of a remote operator in which the functions of each job of a seafarer necessary to ensure seaworthiness and safety can be transferred to the remote operator and implemented remotely from land. Applying the status of ship employee to a remote operator is arguably a rational step. It maintains the human element of vessel seaworthiness by the mutatis mutandis application of international maritime conventions applicable to seafarers to remote operators, as well as national flag state requirements relating to the qualification, education and training of seafarers. Furthermore, this step also addresses the state of normative confusion or absence of norms caused by technological innovations and the development of MASS.46 Moreover, considering that MASS and conventionally crewed ships will coexist in intermingled maritime traffic conditions, there is a need to establish a virtuous employment cycle in which seafarer qualifications are a prerequisite for remote operators and a remote operator can go aboard a manned ship, ensuring harmonious implementation of crew employment policy and sea safety. Remote operators’ jobs can be understood as something not entirely new, but as an on-board job horizontally transferred to an onshore location, with additional technological components such as ICT specific to remote ship operation.47 The IMO should approach the remote operator’s qualifications under the STCW by requiring that the standard qualifications be replaced by those relating to simulator and AI programmes. Remote operator’s qualifications could be regarded as equivalent to the completion of the actual “at sea” experience elements that currently exist under the STCW. In this context, a regulatory policy that unifies or links the duties and qualifications of manned and unmanned ships as much as possible is achieved by equating the remote operators’ qualification requirements with those of conventional seafarers. Above all, the theory of accreditation of seafarers can minimise the need for amendments to the UNCLOS, SOLAS, COLREG, STCW and other international maritime conventions, which can promote the stability of the maritime law system, focusing on the human element of seafarers.

44

Ibid. Ibid. 46 Veal, Tsimplis, op. cit. 3. at 318. 47 Yoo, Shan, op. cit. 16. at 566. 45

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Who Can be a Ship Master in MASS? Duties and Rights of the Ship Master The master of a ship has the vicarious authority to exercise a wide range of agency functions as a representative of the shipowner or a bareboat charterer, as well as a position under public law to exercise command and supervision in order to protect the life on and property of a sea-going vessel.48 In fulfilling this position, while the master is physically distant from the shipowner, they should also protect the interests and rights of the shipowner.49

R Level R-level MASS presents an interesting legal scenario because the role and legal status of the remote operator will have different facets depending on whether the master and some crew members remain physically on board the ship. The problem is that, in the case of an R-level manned MASS, only a small proportion of the entire crew is on board, and the status of the onshore remote operator must be determined in a situation where significant aspects of the operation rely on automated systems. There is a normative issue of allocating duties and rights between the crew on board the vessel and the remote operators. It is uncertain as to whether the position of the master, who is authorised to make final decisions relating to ship safety, should be granted to a member of crew on board or to the remote operator. Considering the current state of technological development and that R-level MASS will likely soon be commercialised, the status of remote operators vis-a-vis on-board crew must be definitively established.50 The first option for R-level MASS is that the onshore control station controls vessel operations rather than onboard crew, owing to the fact that there are only a low number of crew members on board. This option would require that the onshore remote operator be granted the position of master, with the authority to exercise final decision-making in the operation of R-level MASS, with the crew on board performing their duties under the command and control of the remote operator. For this option, new maritime personnel and associated job structure will have to be created, in which the master commanding the ship is based onshore. An advantage of R-level MASS is that sea and ship information and data are collected in the

48

Cartner et al., op. cit. 31. at 145–147. Ibid. 50 Chae et al., op. cit. 39. at 13. 49

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onshore navigation control centre, and this is likely to have a lower error percentage than collecting that information at sea, enhancing the efficiency of ship operation.51 While Article 94 of UNCLOS and Regulation 34 of SOLAS Chapter V emphasise the importance of the master’s duty and responsibility to ensure the safety of navigation, these regulations do not actually require the master (or other crew members) to be physically on board the vessel. Moreover, under this option, the remote operators of R-level MASS can be classified as shore-based remote masters in the sense that they complement the functions and roles of masters on board a vessel. In this situation, they can perform the master’s duties from land. Qualification requirements for shore-based remote masters should be the same as those for masters on board, and certification and education/training should be managed at the same level, with the addition of technical aspects related to remote operation. Furthermore, in terms of crew employment, an accreditation system with compatibility must be ensured to enable interoperability between R-level MASS and conventional ships.

RU and A Level The remote operators of the RU- and A-level MASS will be burdened with considerably heavier duties than remote operators of R-level MASS. Because the RU- and A-level MASS will only be remotely operated without any crew on board, all the roles and functions of the master and crew will be implemented through onshore remote operators.52 If the remote operator is not recognised as the master of Class RU and Class A MASS, then there is no longer a master of these ships. In RU- and A-level MASS, it is therefore essential to discuss whether remote operators will be granted the status of master.53 In light of existing international maritime conventions and the national laws of individual countries, questions may arise as to whether it is possible to abandon the concept of master in RU- and A-level MASS, or whether the function and role of the master can be replaced by AI and advanced technology.54 To address these questions, we discuss the status of remote operators of RU- and A-level MASS via two approaches.

51

Wrobel, Montewka and Kujala analysed that “at least 60 per cent of the accidents have been caused by human errors and the number of accidents will be reduced when autonomous ships are introduced. However, thus far it has not been quantified what percentage of accidents can be prevented by autonomous ships.” See Wróbela et al. (2017) Towards the assessment of potential impact of unmanned vessels on maritime transportation safety. Reliability Engineering and System Safety 165:164–165. 52 Veal, Tsimplis, op. cit. 3. at 317; Vojkovi´ c, Milenkovi´c, op. cit. 28. at 337. 53 Carey, op. cit. 11. at 15–16. 54 Veal, Tsimplis, op. cit. 3. at 317.

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The View that the Remote Operator Cannot be a Ship Master The view that MASS can be operated without a master is based on the idea that shipowners, shipyards, or third-party specialised technicians will directly command and control MASS from onshore control centres in the future, making the function of the master superfluous. Specifically, because the crew is no longer on board, the master cannot exercise their traditional rights of command-and-control and are no longer integral to the functioning of a remotely navigated and operated ship. In addition, commercial activities will be restricted in RU- and A-level MASS, with the commercial role of the master, which has been traditionally performed on behalf of shipowners, processed through land-based communication technology. Based on this view, the operation of RU- and A-level MASS will require revision to Regulation 34 of SOLAS Chapter V on “prohibition of the delegation of the master’s professional judgement” as well as large-scale amendments to COLREG, STCW and the Maritime Labour Convention (MLC).55 Decision-making relating to RU- and A-level MASS will rely on autonomous systems and AI, rather than the decisions of masters in order to ensure safe navigation in the future. The view that RU- and A-level MASS can and should be operated without a maser is also supported by the fact that such vessels require the remote operator to have a different competency from that of a conventional master.56 Conventional masters must be equipped with a high degree of professionalism, such as advanced seafaring skills and accumulated experience and to appropriately exercise duties and responsibilities under relevant private and public laws.57 By contrast, remote operators, which exercise their right to command for the limited purpose of ship operation, do not need the qualifications and competencies of a full-fledged master in carrying out their functions. Moreover, practically, it will likely be difficult to find a master with onboard experience in MASS (or an equivalent level of vessel) for the position of a remote operator. Shipowners will have to hire remote operators with onboard experience as a master, notwithstanding that such an individual will also have to be competent in the skills and operating methods of MASS. In conclusion, creating a new ship position may in fact be more effective than attempting to equate the remote operator with the master. A new ship position would require the creation of designated international standards and requirements for remote operators, including separate qualifications and education/training programmes. The creation of a new ship position will also vitalize the MASS sector in the future.58

55

Maritime Labour Convention, 2006, as amended (2952 UNTS 3). Yoo, Shan, op. cit. 16. at 566. 57 Cartner et al., op. cit. 31. at 3. 58 Yoo, Shan, op. cit. 16. at 567. 56

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The View that the Remote Operator Should be a Ship Master The position that the remote operator of MASS should be granted the status of master is based on the argument that even with the emergence of onshore operating and controlling technologies, it nevertheless remains necessary to retain a master who acts on behalf of the shipowner and is ultimately responsible for decision-making in order to ensure the smooth operation and safety of RU- and A-level MASS.59 This view argues that legally, the remote operator of MASS can be equated to the traditional position of the master, and, moreover, an abrupt abolition of the position of the master, which has been maintained for centuries, would have a significant effect on all trading, technical structures and safety structures centred around ships. This approach to the legal relationship between the remote operator and master is similar to that which has been applied to self-driving cars.60 The advantage of this approach is that it supports legal stability and would require minimal rather than complete revision of the rules and provisions for master and crew under instruments such as UNCLOS, SOLAS, COLREG, MLC and the STCW. This can be illustrated by the following scenario. A physically crewed merchant ship flying the flag of state A, is damaged by a RU- or A- level MASS, flying the flag of state B, without crew on board, remotely controlled and operated by remote operator from a shore control centre of State C. In this scenario, if a remote operator can be equated to the position of ship master, then they are liable if they are at fault or negligent even if they are located in the shore control centre of another state. The current maritime regime relating to the responsibility of masters can be applied with minimal rather than complete revision of the rules.

Remarks In this study, we support the view that the legal status of the remote operator of RU- and A-level MASS should be that of ship master. The remote operator, on this view, can be defined as a shore-based remote ship master. This is congruent with the prohibition of the delegation of the master’s professional judgement as stipulated in Regulation 34 of SOLAS Chapter V.61 Granting remote operators master status may also contribute to legal stability and certainty relating to shipping operation and safety more generally. The remote operator may ensure responsible operation of the ship through command-and-control authority of MASS.

59

Carey, op. cit. 11. at 6. Jo-Ann et al. (2020). 61 SOLAS, Chap. 5. Reg 34(1): “Prior to proceeding to sea, the master shall ensure that the intended voyage has been planned using the appropriate nautical charts and nautical publications for the area concerned, taking into account the guidelines and recommendations developed by the Organization”. 60

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Remote Operator as a Downsized Ship Master in Autonomous Ships It is worth noting that even if the remote operator is deemed the master of the MASS, the authority and responsibilities of the remote operator are different from those of the conventional master under public and private law. The reasons for this are two-fold. First, traditionally, the master is granted a wide range of proxy rights from the shipowner owing to the special nature of the maritime environment. The master takes overall responsibility for the successful completion of the voyage, and assuming responsibility for the ship, cargo, property and the lives of seafarers and passengers, as the commander in charge of navigation and operation. These responsibilities would be carried out by the remote operator, as master. In addition, from the perspective of public interest, the remote operator as the master would assume a wide variety of managerial duties and rights, including the right to take disciplinary action against seafarers in order to keep order on-board the ship, the right to command, the right to take coercive measures as well as various administrative duties related to ship safety.62 However, it stands to reason that the command-and-control authority of the remote operator only concerns the operation of the ship because the dualisation of the ship and workplace facilitates communication with the shipowner at any time in the onshore control station without the need to board the vessel.63 The remote operator’s status and exercise of authority as the master is thus limited to ship operations, and it is appropriate to define the role of the remote operator as a reduced notion of the master. It is hence necessary to differentiate between the conventional master and the remote operator with master status by granting the latter the status of shore-based remote master. For example, it is difficult for a remote operator to be recognised as a stakeholder of the cargo or the agent for the debtors of salvage charges under maritime law. In addition, they may not have the right to maintain order on the ship, the authority of a special judicial police officer, and the status of an agent entrusted with public functions. The remote operator, as is the case with the master, is given the authority to represent the shipowner, but this will be the authority of representation limited to ship operation. Second, different competencies are required by a traditional master compared to a remote operator. The traditional master is the employee of the shipowner and is appointed and dismissed by the shipowner. Usually, the master goes aboard a given vessel and exercises comprehensive powers for several months as the shipowner’s representative. The conventional master must have excellent leadership skills, including communication and ability to cope with risk, in addition to the basic abilities of a seafarer. By contrast, the remote operator’s work pattern is the same as that of a maritime traffic controller, including the shift pattern.64 In particular, since 62

Carey, op. cit. 11. at 15; Cartner et al., op. cit. 31 at 122. Ramos (2019). 64 Baldauf et al. (2019). 63

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RU-and A- level MASS are under the absolute control of the remote operator without crew on board, the ability to operate the control programme is a more important skill than navigational ability.65 If any of the remote operators are unfamiliar with handling the control programme, the ship will be in immediate danger, and action to minimise this risk should be taken through the control programme. When shipowners hire a remote operator, they may require a remote operator to have competencies and qualifications of a master as well as skills for automation control. Therefore, the remote operator of RU- and A-level MASS can be considered to have the master’s status in that they exercise the command-and-control right for the operation of the ship. However, in other commercial or administrative relationships, the authority of the conventional master has a different dimension.

Conclusion Discussions about the operation of automated, autonomous aircraft and motor vehicles have preceded those of ships.66 For these means of transportation, solving technological problems to ensure the operational safety and reliability of autonomous equipment and stabilising the solutions have been more important than solving regulatory problems. Currently, the approach to autonomous operation of aircraft and motor vehicles is focused on realising autonomous operation without losing operability and control by humans, specifically safety.67 However, unlike aircraft and motor vehicles, ships have a wider range of issues to be addressed, such as the inherent risks of the sea, the need for maintenance for continuous seaworthiness, the complexity of sea traffic routes, continuity of operating distances, conflicts of interest between flag states, principles of the market economy and reliance on primitive human functions. Ships operate within the framework of diverse international regulations adopted to prevent these risks, secure maritime safety and protect the marine environment. Engagement in international maritime traffic is not possible without compliance with these regulations.68 Since the world is connected by one body of water, each creation, enactment or revision of regulations according to technological changes in ships is an international issue. Currently, human factors are essential in international maritime conventions in ship-related physical, human and judicial areas. To promote the technological advancement of MASS, these regulatory obstacles must be identified and pre-emptively resolved. Traditionally, a ship is operated by a qualified master and seafarers, and the human element is integral to the operation of the ship. Ships operate within the framework of diverse international regulations adopted to prevent risks, secure maritime safety

65

Ramos et al., op. cit. 63. at 34. ICAO Cir 328 (2011). 67 Vellinga (2019). 68 Hare (1996). 66

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and protect the marine environment. Technological developments relating to conventional ships affect the structural and navigational function and do not affect their legal status as “ships” under international maritime conventions.69 Conversely, RUand A-level MASS are ships without a physical human element on-board. As this human element was previously an indispensable prerequisite of a “ship,” its absence potentially leads to numerous legal obstacles including incompatibility with existing international maritime conventions and the absence of agreed-upon definitions.70 These problems have recently been identified in the MSC and LEG of IMO, which have adopted the classification of MASS and developed definitions for “master,” “crew” and “responsible person” for RU and A-level MASS vessels. In this study, we have discussed the legal status of a remote operator, focusing on the possibility of granting it the status of a ship employee or master. To begin with, it was suggested that it would be possible for the remote operator of MASS to be given a position as a ship employee in the future—the status of shore-based remote seafarer for R-level MASS and shore-based remote master for RU- and A-level MASS. We conclude that the status of seafarer or deemed seafarer should be required for Rlevel MASS, and the status of master or deemed master with the right to command in matters related to ship operation be conferred for RU- and A-level MASS. Currently, human factors are essential in international maritime conventions in ship-related physical, human and judicial areas. However, we argue that minimal revision of the rules and standards for the master and crew under the IMO conventions are needed in order to equate remote operators with master and seafarer, thereby promoting legal stability. Under the existing framework, we have presented an expanded notion of seafarers by extending the combination of ship and human elements to deem remote operators of MASS as ship employees. Further, we have demonstrated that remote operators should be regarded as shore-based remote masters by retaining their status as having final responsibility for the ship, even if cutting-edge ICT-based commercialisation of unmanned MASS is realised. In the future, however, we will accept that qualification, accreditation and education/training systems for remote operators of MASS will need to be adopted. In this regard, it would be necessary to amend existing conventions or even adopt a new international convention as remote operation becomes more sophisticated.

References Allen C Sr, Allen C Jr (2020) Farwell’s rules of the nautical road. 8th eds, Naval Institute Press Baldauf M, et al (2019) Merging conventionally navigating ships and MASS-Merging VTS, FOC and SCC? TransNav: Int J Mar Navig Saf Sea Transp 13(3):496 Carey L (2017) All hands off deck? The legal barriers to autonomous ships. NUS Law Working Paper 17/06. https://doi.org/10.2139/ssrn.3025882 Cartner J, et al (2009) The international law of the shipmaster. Informa Law from Routledge 69 70

Vallejo, op. cit. 16. at 411; Hooydonk V, op. cit. 16. at 406–409. Ringbom H, op. cit. 2. at 162.

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Chae CJ et al (2020) A study on identification of development status of mass technologies and directions of improvement. Appl Sci 10(13):4 Chwedczuk M (2016) Analysis of the legal status of unmanned commercial vessels in US admiralty and maritime law. Journal of Maritime Law and Commerce 47(2):141 ICAO Cir 328 (2011) Unmanned Aircraft Systems (UAS). https://www.icao.int/meetings/uas/doc uments/circular%20328_en.pdf Cockcroft A, Lameijer J (2003) A guide to the collision avoidance rules. Elsevier, p v6 Felski A, Zwolak K (2020) The ocean-going autonomous ship—challenges and threats. J Mar Sci Eng 8(1):41 Fujiwara S et al (2009) Consideration of the ordinary practice of seamen: comparison and verification based on questionnaire. J Jpn Inst Navig 120:189 Gogarty B, Robinson I (2012) Unmanned vehicles: a (rebooted) history, background, and current state of the art. J Law Inf Sci 21(1):2 Hare J (1996) Port state control: strong medicine to cure a sick industry. Georg J Int Comp Law 26(3):571 Hooydonk EV (2014) The law of unmanned merchant shipping–an exploration. J Int Marit Law 20:403 IMO Doc (2018a) LEG 105/14. Review of the Status of Conventions and Other Treaty Instruments Emanating from the Legal Committee IMO Doc (2018b) MSC 98/WP.1/Add.1. Maritime Autonomous Surface Ships—Proposal for a Regulatory Scoping Exercise IMO Doc (2018c) MSC 99/22. Regulatory Scoping Exercise for The Use of Maritime Autonomous Surface Ships (MASS) IMO Doc (2018d) MSC 100/20/Add.1. Framework for The Regulatory Scoping Exercise for the Use of Maritime Autonomous Surface Ships (MASS). IMO Doc (2018e) MSC 99/INF.3. Analysis of Regulatory Barriers to the use of Autonomous Ships Submitted by Denmark IMO Doc (2018f) MSC 99/INF.8. Regulatory scoping exercise for the use of maritime autonomous surface ships (MASS) Submission by Comité Maritime International Working Group on Unmanned Ships (CMI IWG US) IMO Doc (2021) MSC.1/Circ.1638. Outcome of the regulatory scoping exercise for the use of maritime autonomous surface ships (MASS) Jo-Ann P et al (2020) Legal issues in automated vehicles: critically considering the potential role of consent and interactive digital interfaces. Hum Soc Sci Commun 7(153):7 Kim MG et al (2020) Autonomous shipping and its impact on regulations, technologies, and industries. J Int MaritE Saf, Environ Aff, Shipp 4(2):24 Mandaraka-Sheppard A (2013) Modern maritime law (Volume 2): managing risks and liabilitie. Informa Law from Routledge Mankabady S (1987) The law of collision at sea. Elsevier Science Limited Miyoshi T et al (2021) Study of Principles in COLREGs and interpretations and amendments COLREGs for maritime autonomous surface ships (MASS). Trans Navig 6(1):18 MUNIN (2016) Research in maritime autonomous systems project results and technology potentials. https://www.cml.fraunhofer.de/content/dam/cml/de/documents/Sonstiges/ MUNIN%20-%20final%20brochure.pdf Pritchett PW (2015) Ghost ships: Why the law should embrace unmanned vessel technology. Tulane Marit Law J 40:199 Ramos MA (2019) Collision avoidance on maritime autonomous surface ships: Operators’ tasks and human failure events. Saf Sci 116:34 Ringbom H (2019) Regulating autonomous ships-concepts, challenges and precedents. Ocean Dev Int Law 50(2):164 Soyer B (2012) Warranties in marine insurance, 1st edn. Routledge-Cavendish, London Todd P (2015) Principles of the carriage of goods by sea. Routledge

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Vallejo D (2015) Electric currents: pogramming legal status into autonomous unmanned maritime vehicles. Case West Reserv J Int Law 47(1):428 Veal R, Tsimplis M (2017) The integration of unmanned ships into the lex maritima. Lloyd’s Marit & Commer Law Q:314–315 Vellinga NE (2019) Automated driving and its challenges to international traffic law: which way to go? Law Innov Technol 11(2):258 Vojkovi´c G, Milenkovi´c M (2020) Autonomous ships and legal authorities of the ship master. Case Stud Transp Policy 8(2):334 Wariishi K (2019) Maritime autonomous surface ships: development trends and prospects-how digitalization drives changes in maritime industry. Mitsui & Co. Global Strategic Studies Institute Monthly Report. https://www.mitsui.com/mgssi/en/report/detail/__icsFiles/afieldfile/2020/01/ 09/1909t_wariishi_e.pdf Rolls-Royce (2017) Autonomous ships: the next step. Marine Ship Intelligence. https://www.rol lsroyce.com/~/media/Files/R/RollsRoyce/documents/%20customers/marine/ship-intel/rr-shipintel-aawa-8pg.pdf Wilson J (2010) Carriage of Goods by Sea. Pearson Education 7 World Maritime University (2019) Transport 2040: autonomous ships: a new paradigm for Norwegian shipping—technology and transformation. World Maritime University Press Yoo JH, Shan D (2019) Legal status of an onshore remote controller of maritime autonomous surface ships (MASS) under the Canadian maritime law and IMO international conventions. In: annual conference of the Canadian transport research forum: 566; Pritchett, op. cit. 11. at 203

Chapter 2

Why Will China’s Belt and Road Initiative Bring a Bright Future to the World? An International Lawyer’s Perspective Ran Guo Abstract The BRI has made substantial contributions to the world economy and the realization of goals of the United Nations (UN) 2030 Agenda for Sustainable Development. Because of its unique features: it is a regional economic cooperation initiative for global development and the elimination of poverty; it abides by the principles of the rule of law and democracy; it resorts to soft laws for the building of confidence and consensus for the future formulation of hard laws; it is open to diversified participants, but confined to economic and cultural cooperation, thus avoiding geopolitical and military confrontation. The non-institutionalized, non-systematic approach is rooted in China’s path to successful economic development during its opening-up period but poses challenges to the sustainable success of the BRI. Therefore, China should make efforts to make systematic construction of the BRI legal and institutional system; strictly limit its scope to economic and cultural cooperation; and institutionalize the cooperation mechanism with a diversified dispute settlement mechanism at its core, so that the BRI will bring a brighter future to the world. Keywords Belt and road initiative (BRI) · The UN 2030 Agenda · Sustainable development goals · RCEP · Soft law · Dispute settlement

Introduction The Initiative of Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road (hereinafter the Belt and Road Initiative; “BRI”) was proposed by Chinese President Xi Jinping in 2013. The BRI codifies China’s contributions to global governance based on the principle of mutual benefit and win–win cooperation. It also represents China’s commitment to creating an intimate community of shared destiny with the Asian Infrastructure Investment Bank (“AIIB”), the Silk Road Fund, R. Guo (B) Shanghai Maritime University, Shanghai, China e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_2

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and various infrastructure construction projects.1 Numerous studies conducted by various international organizations including the World Bank have demonstrated the BRI has scored great success,2 as “a pathway that represents a bright future for mankind.”3 Despite the fact that China’s BRI has scored remarkable achievements since 2013, controversies over the BRI still persist. It is taken by some scholars as China’s Marshall Plan.4 “A major critique brought forth about the BRI, primarily by American officials, are accusations of ‘debt trap diplomacy’.”5 And the BRI “is largely treated with suspicion in the US and its major allies, characterized largely in terms of debt trap diplomacy, as a predatory, opaque enterprise, and as a threat to Western interests.”6 Accordingly, the United States has proposed various counter initiatives, including Obama’s “Asia–Pacific Rebalancing” strategy, Trump’s “Free and Open Indo-Pacific” (FOIP) strategy, and Biden’s “Build Back Better World” (B3W) strategy, which have without exception failed. This research will comprehensively examine the BRI from the perspective of international law, by making a comparative study of the BRI and the US’ counter initiatives; explore its advantages and defects as an international economic cooperation initiative; and propose tentative constructive suggestions for its improvement. This article is composed of five sections including Introduction and Conclusion. Part two will conduct a thorough investigation of the BRI construction mechanism and its advantages over the US’ counter initiatives, including its nature, principles, and construction approach, seeking to identify the unique features that are conducive for the BRI to bring a bright future for the world. Part three will analyze the nonsystemicity of the current BRI cooperation mechanism and its consequences. Part four will make tentative proposals for its improvement with respect to the BRI’s systematic construction, scope of cooperation, and dispute settlement mechanism.

1

Xi (2017). Ruta (2018); CEBR (2019). The Office of the Leading Group for Promoting the Belt and Road Initiative (22 Apr 2019) The Belt and Road Initiative: Progress, Contributions and Prospects. http:// www.xinhuanet.com/english/2019-04/22/c_137998357.htm. 3 Brawer (2022). 4 Yu and Wallace (2021). 5 Larsen (2021) What Does the Belt and Road Initiative Mean for the Future of the International Integration System?. In: Harvard International Law Review. https://hir.harvard.edu/what-does-thebelt-and-road-initiative-mean-for-the-future-of-the-international-integration-system. 6 Op. cit. 4. 2

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Why the BRI Has Brought a Bright Future to the World? The Nature of the BRI In March 2015, China issued “The Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road” (hereinafter, The Vision and Actions), which enunciated the guiding principles, framework, priorities, and mechanisms of the BRI.7 To implement this Initiative, China focuses on five priorities, including policy coordination, facilities connectivity, free trade, financial integration, and people-to-people communication, for an ultimate purpose of building “a community of shared interests, destiny and responsibility featuring mutual political trust, economic integration and cultural inclusiveness.”8 This has indicated the nature of the BRI, which has been defined by the UN Resolutions as a “regional development initiative,” the “measures facilitate regional connectivity, trade and transit,” and the projects under the BRI are “regional development projects.” Such regional economic cooperation is “to expand trade, increase foreign investments and develop infrastructure, including infrastructural connectivity, energy supply, transport and integrated border management, with a view to promoting sustainable economic growth and the creation of jobs,” thereby playing an important role in achieving stability and development in the region.9 The BRI is neither to replace the existing multilateral economic order, nor to build a new economic order of China. Instead, it is a “regional economic cooperation” to cooperate constructively with the developed countries to sustain and strengthen the liberal international economic order centered on the existing World Trade Organization (WTO) rules, when the WTO functions and reform are in peril and the hegemonic economic order are choking the bilateral and multilateral economic cooperation into death. This is the very nature of the BRI.10 It aims to will work together with international community to achieve the goals of the UN 2030 Agenda for Sustainable Development and build a community of shared destiny for mankind.11 In contrast, the US maintains staunch opposition to the BRI, refusing to back down in great power competition with China.12 The US has launched various counter initiatives to the BRI. Obama’s Asia–Pacific Rebalancing Strategy “sought to expand 7

NDRC, Ministry of Foreign Affairs, and Ministry of Commerce with the authorization of the State Council, the People’s Republic of China (30 March 2015) The Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road. In: Belt and Road Portal. https://eng.yidaiyilu.gov.cn/qwyw/qwfb/1084.htm. 8 Ibid. 9 The situation in Afghanistan: Resolution A/RES/71/9 adopted by the General Assembly. https:// documents-dds-ny.un.org/doc/UNDOC/GEN/N16/391/27/PDF/N1639127.pdf?OpenElement; Resolution 2274 (2016) adopted by the Security Council at its 7645th meeting, on 15 March 2016. https://digitallibrary.un.org/record/823166. 10 Liu (2020). 11 Op. cit. 3. 12 Op. cit. 5.

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American presence within the Asia–Pacific by forging closer military, trade, and people-to-people ties with various states across the region” and “to re-invigorate the US’ primacy” in the region, as part of its “containment strategy” toward China.13 Trump’s FOIP strategy aims to defend against the rising China by building a coalition of regional countries.14 Biden’s B3W strategy, proposed at the 2021 G7 summit, is “an alternative infrastructure initiative” driven by the major Western countries.15 Through this strategy, the US shall invest in the foundations of its strength and align with its allies to compete with China.16 In other words, Biden’s B3W strategy also aims to “expend American resources to counter the behemoth of the BRI.”17 Therefore, the US’ counter initiatives to the BRI are in essence “great power competition” tools and sabotage plans, which aim to defend the US’ hegemony in the international order and its “American First” stance through sabotaging any constructive cooperation between sovereign States. The US persistently proposes sabotage plans to the BRI in order to lockdown China out of a liberal international economic order. The US maintains that its “relative benefits” brought about by its cooperation with other countries have become unbalanced in the existing international economic order system, and hopes to regain a larger proportion of the “relative benefits” by changing the existing system.18

The Principles of the BRI Globalization requires global governance and the best path for global governance is to follow international rule of law.19 The foundation for international rule of law is sovereign equality. The BRI is built on the solid foundation of international rule of law and sovereign equality, which shall provide “an alternative egalitarian future” contrary to “today’s hegemonic Western power.”20 The following are the principles of the BRI.

The Rule of Law The BRI follows the rule of law principle. China’s BRI attempts to forge more cohesive international bonds among the nations of the world. It is “in line with the purposes and principles of the UN Charter. It upholds the Five Principles of 13

Panda (2016). Swaine (2018). 15 Op. cit. 4. 16 The White House (2022). 17 Op. cit. 5. 18 Op. cit. 10. 19 Liu (2022). 20 Op. cit. 5. 14

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Peaceful Coexistence: mutual respect for each other’s sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit and peaceful coexistence.”21 These are the basic principles of both the BRI and international law governing bilateral and multilateral cooperation agreements. At the core, these efforts are aligned. In accordance with these principles, China has created domestic policy documents and action plans to support the BRI. From the perspective of international law, the legal sources of the BRI cooperation mechanism include general legal principles, multilateral and bilateral agreements, and relevant international conventions, forming a multi-layered legal source system.22 This is reflected in the wide variety of applicable laws recognized by the SPC of China. The People’s Courts at various levels are obliged to correctly apply international law, both treaty and custom, as well as to identify and apply foreign law.23 Given this explicit intent to adhere to the international treaty, custom, and legal procedure, the BRI cooperation mechanism consists of an open economic and cultural exchange based on various domestic policy documents and bilateral and multilateral agreements, which are implemented through a range of formal and informal organizations and platforms.24 At the core of international rule of law is sovereign equality. The BRI rule of law does not mean oppression by Western powers or rich countries against small or poor countries in non-western parts of the globe. Instead, it is the democratic governance of all equal sovereign countries.25 All participating countries can independently make decisions on international cooperation in pursuit of cooperative interests.

Democracy The BRI follows the democratic principle, which is embodied in the endeavor to “jointly built through consultation to meet the interests of all sovereign states” (共 商、共建、共享、共赢). Accordingly, China has made efforts to engage in talks with the BRI countries regarding its ideas, attempting to reach a broad consensus supporting cooperation. These efforts yielded a number of declaratory documents on the BRI.26 The more countries and international organizations acknowledge and support the BRI, the more MOUs, mid-term and long-term economic cooperation

21

Op. cit. 7, at II (Principles). He (2017). 23 The SPC of China (2015a, b). 24 Op. cit. 7, at V (Cooperation Mechanisms). 25 Op. cit. 19. 26 On March 17, 2017, the UN Security Council unanimously adopted Resolution 2344, calling on the international community to strengthen regional economic cooperation through regional development initiatives such as the BRI. See also Ufa Declaration by the Heads of Member States of Shanghai Cooperation Organization (10 Jul 2015). http://eng.sectsco.org/load/200119. 22

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plans, and cooperation agreements are concluded between China and partner countries to apply the BRI for their domestic development plans. As a result, China and its partner countries are able to facilitate the development of implementation policies in various fields and support domestic and international enterprises which carry out a range of BRI projects. The advancement and development of the BRI involve not only China’s national interests but also the common interests of all sovereign countries along the Belt and Road. Therefore, the construction of the BRI system and mechanism under the rule of law cannot succeed without taking into account the interests and strengthening joint consultation and communication among all parties, by drawing lessons from the construction of Western-dominated cooperation mechanism.27 The BRI is a clear manifestation of China’s initiative to adapt to globalization, firmly support multilateralism, and shoulder the burden the international community for further development. In contrast to the US that flocks together into exclusive small groups and military alliances against other countries,28 China clearly advocates the values of multilateralism and international democracy, respects the choice of the development path of independent sovereign countries, and engages in win–win cooperation by seeking common ground while reserving differences. Taking the overall interests of human society as the starting point and foothold, China has taken practical measures to improve infrastructure connectivity, the trade development capacity, financial integration and livelihood of people, providing international public goods for the countries along the Belt and Road.29 In contrast, the US’ counter initiatives follow the principles of jungle law and international dictatorship through overwhelming hegemonic power. The US is inconsistent with the historical trend of globalization, multilateralism, and liberalization. Its policy is even pursuing de-globalization, unilateralism, and protectionism.30 The US has manifested its fence-sitter position on the rule of law by applying international law in a selective and unilateral way, withdrawing from international treaties and organizations whichever cannot please its selfish interests, and unilaterally imposing economic, political, and military sanctions against other countries.31 The US has secured its primacy over other countries by bullying, robbing, and colonizing other countries including its allies like Japan and European countries. In order to accomplish the US’ “containment strategy” toward China, Obama’s Rebalancing strategy has allocated unequal status to its “treaty allies—namely, the Philippines, Australia, Japan, South Korea, and Thailand” that are superior to so-called “emerging partners” such as Indonesia, Malaysia, Singapore, and Vietnam.32 The TPP was merely 27

Wang (2022a, b). Zou (2022). 29 Op. cit. 19. 30 Ikenson (2022). 31 Op. cit. 19. 32 Office of the Press Secretary, The White House (16 Nov 2015) FACT SHEET: Advancing the Rebalance to Asia and the Pacific. https://obamawhitehouse.archives.gov/the-press-office/2015/11/ 16/fact-sheet-advancing-rebalance-asia-and-pacific. 28

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“a mechanism by which the US can ensure that it writes the rules of trade in the Asia– Pacific so that other countries “play by [US’s] rules and [US’s] values.”33 Thus, not only its “strategic rivalries” like China and Russia but also its “allies” at various levels of the hierarchy are all excluded from exerting independent influence across the region. This has sabotaged the rule of law and democracy in regional economic cooperation.

The Applicable Law for the BRI The nature of the BRI as a “regional economic cooperation” initiative determines that the main body of its rules is “soft law” embedded in existing “hard law.” The existing international legal system led by the UN remains applicable among all sovereign States and to all areas of the BRI construction. They are “hard law” in the form of international convention and customary international law. The BRI rules are mainly “soft law” in the form of policy, declaration, MoU, joint communique, and various cooperation documents among sovereign countries. Soft law is in alignment with “the generation path of coordinated will in international law,”34 and will be conducive to reach consensus on international agreements, bilateral, multilateral, regional, or global, thus the generation of “hard law” in the future.

The “Soft Law” on the BRI The development of the BRI is an empirical progressive process: first, China established an oversight body or “leading group”35 and put forward its general vision and actions; then it worked to enrich the content of those vision and action statements and refined the proposed implementation measures; and finally, it created problemsolving plans to address specific issues and promote international cooperation in an incremental process. Therefore, the soft law on the BRI includes three categories: The first is China’s policy documents on the BRI. In order to implement the Vision and Actions, various Chinese government ministries and commissions have formulated a range of policy documents and implementation plans to detail what actions they plan to undertake given their respective responsibilities and to simultaneously promote domestic and international cooperation.36 33

Rice (2016). Op. cit. 19. 35 In February 2015, China established a leading group for Promoting the BRI, whose office is under the NDRC. 36 PRC Ministry of Environmental Protection (2017); PRC Ministries of Environmental Protection, Foreign Affairs, Commerce and the NDRC (2017); The NDRC and the State Oceanic Administration of China (2017). For details on policy documents and implementation plans issued by relevant governmental ministries and commissions, see The Belt and Road Portal (Policies and Regulations). https://eng.yidaiyilu.gov.cn/info/iList.jsp?cat_id=10062. 34

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The second is China’s legal and administrative measures on the BRI. Notably, China has made concerted efforts to improve its domestic legal and administrative system in order to facilitate international cooperation, particularly between Chinese and foreign enterprises. In order to resolve any legal disputes arising in relation to the BRI, the Supreme People’s Court (“SPC”) of China has promulgated judicial opinions37 and model cases38 that have played a guiding function for trial and enforcement by Chinese courts at various levels, especially on some key legal issues with respect to the choice and proof of foreign law, application of international conventions and reservation of public order, etc.39 More importantly, China has set up new judicial institutions to create a one-stop dispute resolution center for parties from the BRI participating countries.40 On June 25, 2018, the SPC issued Regulations on Several Issues regarding the Establishment of International Commercial Courts, which sets out the scope and operation of two new international commercial courts in China: (1) Xi’an International Commercial Court, focusing on disputes arising from projects along the Silk Road Economic Belt, and (2) Shenzhen International Commercial Court, focusing on disputes arising from infrastructure developments along the 21st Century Maritime Silk Road.41 On August 26, 2018, the SPC established a 32-member committee of international commercial experts to advise on ways to resolve international commercial disputes and offer suggestions on dispute-related legal issues, as well as on the development of the rules, programs, judicial interpretations, and policies to be elaborated.42 Thus, China has established an international commercial dispute settlement mechanism and institutions, which have integrated mediation, arbitration, and litigation into a single platform to provide judicial services and protections for the purpose of implementing the BRI. According to the top-level design proposed for Chinese enterprise’s overseas investment, the ministries and committees of the Central Government of China have launched various measures to improve their administrative and service systems43 with an ultimate purpose to better administrate, supervise, and support Chinese enterprises, both state-owned and private enterprises, seeking international cooperation.44

37

Op. cit. 23. The SPC of China (2015a, 2015b); The SPC of China (2017). 39 Op. cit. 23. 40 PRC General Office of the Communist Party Central Committee and the General Office of the State Council (2018). 41 The SPC of China (2018a). 42 The SPC of China (2018b). 43 Model service guidelines for overseas economic and trade cooperation zones, insurance industry, and taxation have been issued by relevant ministries. See, e.g., PRC Ministry of Commerce (2015); State Administration of Taxation (2017). 44 The Belt and Road Portal has collected the main policy documents on foreign investment in order to provide continuous assistance for Chinese enterprises to ‘go global’. For details, see The Policy Documents on Enterprise’s Foreign Investment [企业对外投资政策文件汇编] (Dec. 28, 2017). http://www.yidaiyilu.gov.cn/zchj/zcfg/41379.htm. 38

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The third is international cooperation agreements on the BRI. China has concluded a number of international agreements and arrangements to set up structured cooperation mechanisms to support the BRI. In order to promote the effective integration of the BRI with the national strategies, development visions, and overall plans of the BRI countries, China has negotiated and concluded bilateral and multilateral cooperation agreements with these countries. By the end of July 2022, China had signed 205 cooperation agreements with 181 countries and international organizations.45 For example, the Guidelines on Construction of China–Mongolia–Russia Economic Corridor,46 the Cooperation Plan on Dovetailing the Silk Road Economic Belt and Nurly Zhol (Bright Road),47 and the Agreement on Economic and Trade Cooperation between the Eurasian Economic Union (“EAEU”) and China.48 These bilateral and multilateral agreements cover a broad range of areas such as connectivity, production capacity, investment, economy and trade, finance, science and technology, humanities, and marine issues. These policy documents, relevant legal and regulatory documents, and international cooperation agreements have formed a soft-law basis for the BRI cooperation.

The Advantages of the Soft-Law-Oriented BRI Cooperation “Since the creation of this Bretton Woods-UN system in the 1940s, its formal, hard law, broadly multilateral, heavily organized bodies have been joined by a cornucopia of softer, informal institutions with smaller membership, lighter legal obligations, less bureaucracy and a greater reliance on open, flexible, voluntary approaches.”49 The BRI is characterized by the dominance of soft law over hard law. The legal and policy basis of the BRI cooperation mechanism draws on diverse policy documents and implementation plans issued by relevant Chinese government ministries and committees; bilateral multilateral cooperation agreements and joint statements signed between China and participating countries and international organizations; and various position papers issued by international organizations and platforms. Moreover, MoUs, declarations, and communiqués released by various international organizations and platforms are also indispensable components of the principles comprising the BRI cooperation mechanism.50 The soft-law-oriented BRI cooperation is better than the hard-law-oriented initiatives in the following reasons. First, it accords better the divergence of national interests, development levels, religions, cultures, politics, and international relations, to 45

List of Cooperation Agreements with Countries and International Organizations (15 Aug 2022). https://www.yidaiyilu.gov.cn/xwzx/roll/77298.htm. 46 NDRC (2016a). 47 NDRC (2016b); PRC Ministry of Foreign Affairs (2017). 48 Agreement on Economic and Trade Cooperation between the EAEU and China (17 May 2018). http://eec.eaeunion.org/ru/act/trade/dotp/sogl_torg/Documents/Forms/AllItems.aspx. 49 Kirton et al (2016). 50 Op. cit. 7, at V (Cooperation Mechanisms).

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mention a few, in the BRI cooperation. Second, it is more practical to the extent that it will not derogate sovereign integrity by legally binding concessions, but engage on value-added economic cooperation. Third, it is better abided by all BRI countries for mutual beneficiary. The soft law’s effectiveness fundamentally lies in its compliance with the rationality of international law.51 The soft law governance of the BRI is a rational induction based on a wide range of international practices in a specific field, which meets the substantial needs of most countries along the Belt and Road in terms of both morality and interests.52 The practical value of the soft-law-oriented BRI cooperation, although having no mandatory binding force, have produced successful implementation of the BRI, which is characterized by its openness, inclusiveness, and non-confrontation. The soft law and hard law are complimentary to each other to have generated practical and effective implementation of the BRI. Meanwhile, the hard-law-oriented US counter initiatives only serve the advancement of its global economic leadership. The US seizes all opportunities to implement its own will in the process of creating hard law, exerting its hegemonic power to force other countries to obey its orders and accept the terms written by itself, without fully considering the interests of other countries. This was the real reason why India opted out of trade talks with a US-led 14-nation Indo-Pacific Economy Framework (IPEF) in September 2022, to avoid surrendering its markets to the US.53 And this is also the real reason why the vast number of developing countries have long been afraid of international law. On the other end of the spectrum, the soft-law-oriented BRI cooperation starts from the actual effect; pays close attention to the compliance based on the own free will of all parties; and operates to meet mutual benefits.54 The BRI’s advantages over the US’ initiatives are crystal clear especially when considering Biden’s B3W strategy that has listed general guiding principles like “values-driven,” “good governance and strong standards,” “climate-friendly,” “strong strategic partnerships,” “mobilizing private capital,” and “enhancing the impact of multilateral public finance,”55 which are top-priorities for the US, but not for developing countries.

Diversified Subjects of Cooperation The relevant BRI laws and policy documents demonstrate its commitment to promoting openness and inclusiveness. The openness of the cooperation mechanism is reflected by the variety of participant countries, wide area of involved regions, 51

Veneziano (2013). Op. cit. 19. 53 Martin (2022). 54 Op. cit.19. 55 FACT SHEET: President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership (12 Jun 2021). The White House. https://www.whitehouse.gov/briefing-room/sta tements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-betterworld-b3w-partnership. 52

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and mixture of bilateral and multilateral mechanisms used to structure the initiative. Since its inception, the BRI has been envisioned as an inclusive effort. Indeed, the BRI “covers, but is not limited to, the area of the ancient Silk Road”; all countries, international and regional organizations, NGOs and enterprises can participate in it.56 The BRI advocates tolerance among civilizations and respects the political systems, religions, cultures, paths, and modes of development chosen by different countries. The BRI cooperation is built on sovereign equality by all states, despite different levels of economic development, political blocs, military organizations they belong to, disputes of territorial delimitation or human rights etc. In line with the BRI, China or all partner countries will enjoy equal rights and obligations. The level of openness and inclusiveness is manifested by the fact that the BRI cooperation is open to the US who has taken China as its strategic rivalry and launched “great power competition” with China; to European countries that have different views on human rights and global governance from China; and to India, Japan, Vietnam, and the Philippines which have territorial disputes with China. Biden’s B3W strategy is exclusive to the Group of Seven (G7) and other likeminded partners as a “strategic competition” tool to counter China’s BRI. In this regard, the participating countries are not equal. The US-led “major democracies” condescendingly “help” “low- and middle-income countries,” in entire exclusion of China, the second largest economy in the world, and Russia, the second most powerful military power in the world, among many others, including high-income countries.57

Limited Scope of Cooperation China has confined the BRI cooperation to economic and cultural scopes. There might be disagreement between China and the BRI countries with respect to various issues, but China will defend its rights to development and prosperity. The right to development has been rooted in Articles 55–56 of the UN Charter,58 and enshrined the Declaration on the Right to Development of 1986 (DRTD) adopted by the UN General Assembly by its resolution 41/128 (Dec. 4, 1986), in which “the right to development” mainly means “social and economic development of developing countries in general and of the least-developed countries in particular.”59 Meanwhile, the UN 2030 Agenda for Sustainable Development recognizes that “eradicating poverty 56

Op. cit. 7. Op. cit. 55. 58 Article 55 of the UN Charter recognizes the importance of promoting “conditions of economic progress and development” and “solutions of international economic, social, health, and related problems” and all Members of the UN pledged themselves through Article 56 “to take joint and separate action” in cooperation with the UN “for the achievement of the purposes set forth in Article 55.” 59 Article 4(2) of the DRTD; Subedi SP (4 Dec 1986) Declaration on the Right to Development. https://legal.un.org/avl/ha/drd/drd.html. 57

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in all its forms and dimensions, including extreme poverty, is the greatest global challenge and an indispensable requirement for sustainable development” and resolves to “end poverty and hunger everywhere.”60 The BRI is a regional economic initiative conducive to realize the goals and targets set by the UN 2030 Agenda for Sustainable Development. The cooperation mechanism of the BRI is not limited to facilitating open exchanges of goods and services. Rather, it deals with comprehensive economic and cultural cooperation among all BRI countries. It facilitates holistic, pragmatic cooperation with respect to policy coordination, systems connectivity, and unimpeded trade, investment, and cultural exchange, so that all countries can realize economic and cultural development and prosperity.61 Developing modern, reliable infrastructure is the key to economic improvement and integration of nations and transnational blocs, which can help to realize Goal 9 set by the UN 2030 Agenda for Sustainable Development. China works with the BRI countries to build railways, highways, ports, and information and telecommunications facilities to enhance the transnational connectivity of infrastructure and facilities. For example, China and the European Commission have engaged in cooperation on the EU–China Connectivity Platform since 2015. As of the end of July 2022, the China–Europe Railway Express, connecting 24 countries and 196 cities in Europe, has made 57,000 trips, transporting 5.3 million standard containers worth of goods valued at nearly USD 300 billion, and provided myriad social and economic benefits to locals.62 China has signed 16 bilateral or multilateral agreements regarding the facilitation of transport, including the Intergovernmental Agreement of the SCO Member States on the Facilitation of International Road Transport and the Intergovernmental Agreement on International Road Transport along the Asian Highway Network.63 In the ASEAN sphere, China, Laos, Myanmar, and Thailand have compiled the Development Plan of International Navigation on the LancangMekong River (2015–25) to promote the cooperative development of navigation facilities on this key waterway. China is also cooperating with relevant countries to promote improvements in the energy sector such as building oil, gas, and power infrastructures and ensuring the safe operation of cross-border oil and gas pipelines. The China–Russia Oil Pipeline and China–Central Asia Gas Pipelines are all operating reliably. Building on this success, construction has started on the China–Central Asia Gas Pipeline D, the eastern route of the China–Russia Gas Pipeline, and priority 60

“Transforming our world: the 2030 Agenda for Sustainable Development” (A/RES/70/1). Resolution adopted by the General Assembly on 25 September 2015. 61 Op. cit. 7. 62 GT staff reporters (18 Aug 2022) China–Europe Railway Express stabilizes global industry chains, reaching 24 European countries after 9 years of operation. Global Times. https://www.glo baltimes.cn/page/202208/1273301.shtml. 63 Intergovernmental Agreement of the SCO Member States on the Facilitation of International Road Transport (12 Sep 2014). http://eng.sectsco.org/load/207681; Intergovernmental Agreement on International Road Transport along the Asian Highway Network (8 Dec 2016). https://www.unescap.org/sites/default/files/Intergovernmental-Agreement-on-Internati onal-Road-Transport-along-the-Asian-Highway-Network-English-language.pdf.

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energy projects are listed in the China–Pakistan Economic Corridor Cooperation Plan.64 As of March 2019, China had signed bilateral air transport agreements with 126 countries and regions.65 In terms of economic and trade cooperation, China has actively negotiated with the BRI countries to build a free trade zone network, which can help to realize Goals 8, 10, and 17 set by the UN 2030 Agenda for Sustainable Development. As part of China’s global outreach, the China-ASEAN Free Trade Area (FTA) has been upgraded, and China has completed FTA negotiations with Georgia. All ASEAN-10 countries, plus China, India, Japan, Korea, Australia, and New Zealand have concluded the Regional Cooperation Economic Partnership (RCEP) Agreement, which entered into force on January 1, 2022. Real progress in the China–Maldives FTA, the China–Gulf Cooperation Council FTA, the China–Israel FTA, the China–Sri Lanka FTA, and the China–Pakistan FTA have brought the goal of a concerted breakdown of barriers to open trade closer to fruition. China is also committed to international cooperation to expand production capacity and mutual investment, which can help to realize Goal 12. It has encouraged domestic enterprises to “Go Global!,” urging them to cooperate with the BRI countries to increase production capacity, bolster equipment manufacturing, and engage in mutual investment. By the end of March 2019, China had concluded 40 production capacity cooperation documents with Kazakhstan, Ethiopia, Brazil, and other countries.66 In order to create a stable financial environment for the BRI, China is working to create a network of flexible financial institutions and platforms, including the Chinaproposed AIIB and the Silk Road Fund, which can help to realize Goal 9. It hopes that such institutions will support the BRI through innovative financing mechanisms. China has signed currency swap agreements with 22 BRI countries; executed local currency settlement agreements with Vietnam, Mongolia, Laos, and Kyrgyzstan; and concluded agreements on general trade and local currency settlement in investment with Russia, Kazakhstan, Belarus, and Nepal. The Cross-Border Interbank Payment System provides Renminbi (RMB) services to domestic and foreign financial institutions, easing transactional issues that might otherwise stall investment and development initiatives.67 Traditionally, economic and infrastructure expansions are associated with negative environmental impacts. In pursuing the BRI, China is attempting to prove that this negative relationship is not necessary. In order to build a “green” Silk Road, China has committed to sharing its newest technology and best practices in the areas of ecological restoration and environmental protection, which can help to realize Goals 8, 12, 13, 14, and 15. To this end, China has built a cooperation platform highlighting

64

Office of the Leading Group for Promoting the BRI (2017). Office of the Leading Group for Promoting the BRI (2019). 66 Ibid. 67 Op. cit. 64. 65

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environmental issues; hosted the China–Arab Forum on Environmental Cooperation and the Forum on China-ASEAN Environmental Cooperation; and founded the China-ASEAN Environmental Cooperation Centre.68 With respect to maritime matters, China is striving to upgrade or build key ports in cooperation with their host countries, helping these nations develop both portcentered industries and their hinterland economy; maintain safe sea passages; and cooperate on issues affecting maritime trade, the economy, and connectivity.69 For example, Chinese enterprises have undertaken a number of initiatives including the construction of Pakistan’s Gwadar Port, Sri Lanka’s Port of Hambantota, the China– Malaysia Malacca Seafront Industrial Park and the comprehensive development of Kyaukpyu Port in Myanmar.70 These have helped to realize Goals 7, 8, 9, 10, and 14 set by the UN 2030 Agenda for Sustainable Development. The US’ initiatives are in essence geopolitical and military tools, which has little to do with regional economic development. Obama’s Rebalancing strategy has focused to “expand US military presence across the Asia–Pacific.”71 According to “the US Strategic Framework for the Indo-Pacific,” the declassified archives of the Trump Administration, the top interests of the US in the Indo-Pacific region is to “preserve the US economic, diplomatic, and military access,” “enhance the credibility and effectiveness of our [US] alliance,” and “maintain US primacy in the region,” and to deter China; the US will take multiple actions to “[e]nhance combat-credible the US military presence and posture in the Indo-Pacific region to uphold the US interests and security commitments.”72 The Partnership for Global Infrastructure and Investment (PGII), announced in June 2021, is “the repackaged version” of Biden’s B3W initiative. The G7-led PGII has merged economic development and foreign direct investment with geopolitical and military objectives: “The US-led G7 and NATO bloc [is] accelerating its ‘pivot to Asia’: the perceived enemy being China, and the weapon of choice infrastructure finance, focusing on energy and transport assets.”73 In conclusion, the US’ initiatives are not proposed to make any contribution to regional economic development or the UN 2030 Agenda for Sustainable Development. Instead, they serve only for the realization of the US’ hegemonic geopolitical and military interests in the world.

68

Ibid. Ibid. 70 Xinhua (2018); Staff reporter (12 Dec 2018) Outlook positive as Hambantota Port grows with opportunities for Sri Lankans. Xinhuanet. http://www.xinhuanet.com/english/2019-12/24/c_1386 55160.htm; Staff reporter (16 Apr 2017) Malacca, China’s gateway to S-E Asia. Straits Times. https://www.straitstimes.com/asia/se-asia/malacca-chinas-gateway-to-s-e-asia; Staff reporter (8 Nov 2018) China, Myanmar sign port deal after years of negotiations. Global Times. http://www. globaltimes.cn/content/1126664.shtml. 71 Op. cit. 13. 72 US Strategic Framework for the Indo-Pacific (1 May 2021). Whitehouse Archives. https://tru mpwhitehouse.archives.gov/wp-content/uploads/2021/01/IPS-Final-Declass.pdf. 73 Weltman (2022). 69

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Non-confrontation with Other Countries and Existing Cooperation Mechanisms Different from the US’ confrontational initiatives, including Obama’s Rebalancing strategy as part of its containment strategy toward China,74 Trump’s FOIP aiming to defend against the rising China,75 and Biden’s B3W for great power competition with China,76 China’s BRI are non-confrontational with other countries and existing cooperation mechanisms. In order to facilitate friendly cooperation, China not only attaches great importance to the existing bilateral mechanisms but also encourages the signing of new cooperation memoranda of understanding (MOUs) or plans and the establishment of bilateral joint working mechanisms. For example, in order to promote agricultural cooperation, China not only facilitates bilateral cooperation between governments but also gives full support to existing agriculture-related multilateral mechanisms, such as Asia–Pacific Economic Cooperation (APEC), the SCO, and the UN Economic and Social Commission for Asia and the Pacific (UNESCAP). China also participates in major conferences and forums actively, such as the China–Africa Cooperation Forum, the China–Eurasia Exposition, and the China–Arab States Exposition.77 In addition, China is committed to working with relevant countries to establish a dialogue mechanism for agAction on Jointly Promoting Agricultural Cooperation onricultural cooperation, a research and communication platform for agricultural planning, and an information-sharing platform for agricultural resources.78

Synergizing with Existing Cooperation Mechanisms The openness and all-inclusive nature of the BRI will inevitably lead to conflicts with existing multilateral and regional cooperation mechanisms. In Central Asia, it may overlap and even conflict with the EAEU and the Collective Security Treaty Organization (CSTO), which in combination constitute a single de facto structure.79 Although the CSTO aims to create a collective security system, “it is evident that the only effective method of consolidating the CSTO is to unite the national economies of Eurasian countries into an effective economic alliance.”80 Meanwhile, the EAEU acts essentially as an economic integration organization, pursuing a possible Eurasian customs union and a single economic space.

74

Op. cit. 13. Op. cit. 14. 76 Op. cit. 5. 77 PRC Ministries of Agriculture, Commerce, Foreign Affairs and the NDRC (2017). 78 Ibid. 79 Kembayev (2016a, b). 80 Kembayev (2014). 75

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Beyond these organizations, Japan launched the “Central Asia Plus Japan” dialogue mechanism in 2004 to ensure the continuity of its Central Asian energy supply.81 In Southern Asia, India has strengthened its role in the Indo-Pacific region, which indicates the revival of the quadrilateral strategic alliance between the US, Japan, Australia, and India in an attempt to counter China’s rise.82 The Indo-Pacific Energy Strategy may challenge China’s attempts to better connect energy facilities and construct an energy corridor as part of the BRI.83 China has been working in cooperation with relevant countries to resolve these conflicts through synergizing with existing cooperation mechanisms. As early as May 2015, China and Russia signed a joint statement regarding their desire to dovetail various Silk Road Economic Belt projects with those promoted by the EAEU, in order to increase synergy between the two initiatives in the region, thereby promoting the goals of both.84 In July 2017, China and Russia released the Joint Declaration of Further Deepening the Comprehensive Strategic Partnership of Coordination in Moscow, a first attempt at integrating the aims of the BRI and the EAEU.85 On June 8, 2018, China and Russia signed the Joint Declaration of the Joint Feasible Studies on Completing Eurasian Economic Partnership Agreement in Beijing. It recommends that both parties launch negotiations on service trade, investment, natural person mobility, e-commerce, intellectual property rights, competition, energy saving and efficiency enhancement efforts, economic and technological cooperation, SMEs, government procurement, institutional arrangements, and trade in goods.86 However, much has yet to be done before the two parties are able to establish a comprehensive, high-level investment arrangement that will be open to other economies in the Eurasian region. It also remains to be seen how China will resolve possible conflicts with other regional integration programs and successfully avoid confrontation. In Southeast Asia, due to various disputes over territorial sovereignty and maritime interests in the South China Sea (SCS), states including Vietnam and the Philippines are reluctant to pursue all-around economic and cultural cooperation between China and ASEAN; these nations may even attempt to undermine cooperative efforts.87 Meanwhile, “states out of the region have increased their military activities, joint maritime 81

For details on “Central Asia plus Japan” Dialogue, see Ministry of Foreign Affairs of Japan (2022) “Central Asia plus Japan” Dialogue. https://www.mofa.go.jp/region/europe/dialogue/index. html. Accessed 15 Sept 2022. 82 Jaipragas (2017). 83 Staff reporter (27 Oct 2014) India, Vietnam to Sign Deal for Oil Exploration in South China Sea Despite Protest by China. DNA India. http://www.dnaindia.com/india/report-india-vietnam-tosign-deal-foroil-exploration-in-south-china-sea-despite-protest-by-china-2029677. 84 Xu (2018). 85 Staff reporter (5 Jul 2017) China-Russia Joint Declaration of Further Deepening the Comprehensive Strategic Partnership of Coordination [中华人民共和国和俄罗斯联邦关于进一步深化 全面战略协作伙伴关系的联合声明]. Xinhuanet. http://www.xinhuanet.com//world/2017-07/05/ c_1121263941.htm. 86 PRC Ministry of Commerce (2018). 87 Guo (2013, 2017).

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exercises and military operation in the SCS to strengthen their military presence and influence in Southeast Asia.”88 In particular, the US has been working to build a strategic partnership with the ASEAN states to strengthen its influence and protect its so-called “national interests” in the region,89 which may have a negative influence on the 21st Century Maritime Silk Road. Meanwhile, Japan has taken over the leadership of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) Agreement in an attempt to reduce Chinese economic influence in the region and shift economic balances and alliances within Asia.90 Both of these efforts will impede the success of the BRI if some sort of cooperative arrangement cannot be reached to reduce the unproductive tensions at play.

Settling Disputes Through Consultation Although the BRI is predicated on a respect for the rule of law internationally and founded on principles of bilateral and multilateral cooperation, challenges to the implementation and promulgation of the initiative would remain. “This ambitious multinational project comes with serious obstacles: unstable political regimes within host countries [and] subpar international business practice standards, including nontransparency and corruption.”91 Some participating countries are not WTO members, such as Turkmenistan, Uzbekistan, Afghanistan, Azerbaijan, Bahrain, Iran, Iraq, Lebanon, and Syria. For them, barriers to international trade and investment persist, while laws on market access and infrastructure construction vary considerably. When there is no coordination mechanism between the ports of the two countries, repeated customs clearance, inspection, quarantine, and taxation issues will inevitably lead to slow customs clearance, trade delay, and increased costs.92 These issues are at the heart of China’s desire to improve standards and coordination between nations, removing barriers to productive trade indeed at the heart of the BRI itself. At present, the cooperation priorities of the BRI are mainly related to infrastructure construction and energy projects, which are characterized by enormous investments, extremely long-term contracts, and the presence of a dominant party, typically either the government or a state-owned enterprise of the host country. The dominant party acts as one party to the contract and at the same time controls the framework and implementation of the project.93 As there is no unified convention or economic custom in these areas of international cooperation, political goodwill must play a decisive role in any successful coordination, and particularly in the settlement

88

Ibid. at 978. Clinton (2012). This position was reaffirmed by the Trump administration at the 6th US-ASEAN Summit and the 33rd East Asia Summit. See Murphy (2018). 90 Naughton (2015). See also Kuo (2018). 91 Guluzian (2017). 92 Yang (2016). 93 Zhang (2015). 89

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of any dispute.94 For these challenges, the Chinese government and enterprises have faced higher uncertainty and complexity, seeking cooperation and engagement with host countries. Moreover, territorial disputes, geopolitical entanglements, military alliances, and conflicts abound between different countries. Major countries including the US, Russia, India, and Iran have historically exerted military, geopolitical, and economic influence over the BRI countries and continue to do so today. Their strategic competition in the region has exacerbated territorial disputes, further increasing the uncertainty and risk faced in implementing the BRI cooperation mechanism.95 China has been working in cooperation with relevant countries to resolve these conflicts through consultation. Any proposal on the BRI dispute settlement mechanism shall be based upon the application or integration of existing mechanisms. Any dispute settlement treaties or dispute settlement clauses in an international or regional treaty involving the BRI countries may become a reference for either the BRI dispute settlement or the establishment of a new dispute settlement mechanism through consultation. The parties to the dispute are free to choose any mechanism through consultation; to conclude international and regional dispute settlement mechanisms through negotiation and consultation; and to modify the rules by means of supplementary agreements.96

Non-systemicity of BRI Cooperation Mechanism China, in pursuing the BRI, has not formulated any new systematic cooperation mechanism. Instead, it intends to take full advantage of the existing cooperation mechanisms, forums, and platforms to push forward the BRI.97 The BRI is designed to be jointly built through consultation to meet the interests of all, thereby integrating the development strategies of the BRI countries.98 Its “institutional structure is not fixed once and for all, but rather flexible”; it has “no intention to set up its own institutions, but promotes an adequate play of various existing international, regional and sub-regional, bilateral organizations and forums.”99 Indeed, even its membership is not fixed, but open to all countries and organizations in the world, including those countries along the Belt and Road corridor. Further, it neither has a decisionmaking body nor intends to enact its own rules and procedures. The BRI cooperation mechanism is merely adaptive and flexible that can adjust to suit the needs of different participants and different fields of cooperation.100 94

Supra note 92. Li (2017). 96 Wang (2018). 97 Op. cit. 7. 98 Op. cit. 7, Preface. 99 Zeng (2016). 100 Op. cit. 7, V (Cooperation Mechanisms). 95

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This non-systematic cooperation mechanism has divided the opinions of international lawyers. Some have argued that China should employ a non-systematic approach at this early stage without establishing any institutions like a Council, Commission, or Secretariat of the BRI.101 Meanwhile, many international lawyers insist that the BRI cannot be legitimately implemented without concluding multilateral agreements and establishing an international organization with a unified institution.102 Some have proposed building an energy community along the Silk Road,103 while others have gone even further by proposing to create a Silk Road Union.104 Despite the BRI’s lofty aims, the disadvantages of its non-systemicity are obvious. First, the BRI’s nascent structure is still rather fluid, given the lack of intent to institutionalize or create its own decision-making rules and procedures.105 However, the exchange structures that have been created thus far, such as the BRI international summits, forums, conferences, and exhibitions, are not enough legalized and institutionalized to solve major regional or global issues by cooperation. This nonsystemic, non-institutionalized cooperation mechanism has been labeled by some international lawyers as “an abstract or visionary project,”106 with “a fragmented collection of bilateral arrangements made on different terms.”107 Such non-institutionalized, non-systematic framework finds its roots in China’s path to successful economic development during its opening-up period. China has made remarkable achievements by adhering the philosophy that “One can wade across the stream by feeling the way.” By learning from its successful experience, therefore, China has resorted to the same philosophy and adopted a flexible and noninstitutionalized framework for its BRI. At present, the BRI is in its infancy. China started from the ground up during its opening-up. Thus, China is drawing upon its previous successes to design a roadmap for the BRI, neither establishing any new institutions nor concluding any uniform international conventions regarding the initiative. Instead, it will seek progress through experiential learning and adaptation, using the “experiment-feedback-revision-experiment” model within the framework of existing norms and institutions.108 This path is inconsistent with the traditional institutionalization on which all existing cooperation mechanisms are established. Systematic advance planning is

101

Op. cit. 22. Li (2016). 103 Yang (2017). 104 Kembayev (2016a, b); Op. cit. 79. 105 Op. cit. 99, at 539. 106 Op. cit. 91, at 135. 107 Op. cit. 4. 108 Op. cit. 22, at 7. 102

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the essence of this tradition. Its methodology relies on conducting thought experiments109 to consider some potential institutional structure and its hypothetical consequences. An institutional framework is then devised on the basis of certain norms and organizational needs. Then, further steps are later taken to establish or improve its statutes and procedural rules.110 In other words, a traditional cooperation mechanism normally comprises certain institutions endowed with the powers and functions necessary to facilitate the implementation of its aims, such as a plenary organ, executive group of technocrats, or dispute settlement agency.111 Such a systematic planning approach is the first choice of the global community for establishing international cooperation mechanisms. It conforms to the implied requirements for certainty, clarity, and predictability necessary to a cooperation mechanism. For example, the US’ economic initiatives compose only a minor part of the grand geopolitical and military system to secure its hegemonic primacy in the world and advance its values and interests across the globe through systematic construction of legal instruments and international institutions, like TPP and IPEF. Second, the BRI does not have its own dispute settlement mechanism. Instead, it can only resort to existing dispute settlement mechanisms supported by various international organization and platforms, such as the WTO, as well as the arbitration procedures implemented by interested institutions. However, some of the existing multilateral dispute settlement mechanisms have a limited effect on the BRI. For example, the WTO dispute settlement mechanism cannot be applied to non-WTO countries; the Convention on the Settlement of Investment Disputes between States and Nationals of Other States primarily provides the procedural rules for resolving investment disputes between investors and host countries; the Convention Establishing the Multilateral Investment Guarantee Agency mainly deals with disputes involving overseas investment insurance; and the Energy Charter Treaty does not directly protect Chinese investors, as China is currently only an observer state.112 Therefore, it is imperative to establish a bilateral dispute settlement mechanism in order to meet the challenges which will inevitably surface as the BRI progresses.113 Moreover, the biggest drawback of the current BRI cooperation is that such dispute settlement mechanisms are employed by BRI countries on a voluntary basis. As a result, the responsibility for constructing the BRI itself is placed within the scope of the political goodwill of participating countries, which are full of uncertainty. Theoretically, economic prosperity and political success are symbiotic. Leaders of the BRI countries who sustain economic development can promote these accomplishments to further their political success. Therefore, such leaders might be expected to enthusiastically participate in the BRI. However, political will varies among the 109

A thought experiment is a device with which one performs an intentional, structured process of intellectual deliberation in order to speculate, within a specifiable problem domain, about potential consequents (or antecedents) for a designated antecedent (or consequent). See Yeates (2004). 110 Op. cit. 22, at 5. 111 Op. cit. 99, at 527. 112 Liu (2017). 113 Wu (2017); Zhang and Zhang (2017).

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leaders of different states, and even the political will of the same leader may vary at different times given different political climates. Thus, it is impossible to say whether participating nations will retain their enthusiasm or even their participation in the BRI when different political parties come to power. Their policies may change dramatically along with a change in regime, which poses a serious risk to the BRI as a whole. Geopolitical and economic reality is rarely orderly. In the real world, policies, priorities, and allegiances among nations shift frequently, making sustained cooperative initiatives difficult to maintain. In Central Asia, the EAEU countries are also members of another Eurasian regional bloc—the CSTO.114 The EAEU and the CSTO can be combined to constitute a single de facto alliance with Russia as its core and driving force.115 Meanwhile, the Commonwealth of Independent States Free Trade Area (CIS FTA) is a free trade area between Russia, Ukraine, Belarus, Uzbekistan, Moldova, Armenia, Kyrgyzstan, Kazakhstan, and Tajikistan which “provides for free movement of goods within the territory of the CIS, non-application of import customs duties, non-discrimination, gradual decrease of export customs duties and abolishment of quantitative restrictions in mutual trade between the CIS FTA Member States.”116 For these states, choosing between the existing integration agreements and China’s BRI will inevitably require political trade-offs based on considerable political intention. Even if nations initially opt to participate in the construction of the Belt and Road, they may easily change course due to political shifts, thus negating the achievements of the BRI. Moreover, some countries are concerned about China’s BRI because the idea of integration would mean a zero-sum game in terms of less political and economic independence. Malaysian Prime Minister Mahathir Mohamad’s attitude toward China’s BRI was an example in Southeast Asia.117 Third, the BRI’s nature as a “regional economic cooperation” initiative may be changed as such an initiative cannot be independent from existing regional cooperation mechanisms. For instance, since the SCO is a political, economic, and security framework, the overlap of its membership and functions with the BRI will place political, diplomatic, and even security pressure on economic and cultural cooperation between interested nations, potentially to the detriment of trade and economic agreements, particularly in the case of dispute settlement.118 It must be stressed that geopolitics, security, and sphere of influence are not, and shall never be, the aims of the BRI. On one hand, these run against the ultimate goals of the BRI that aims to “promote common development on the principles of engagement out of free will and consultation on equal footing, rather than to seek power or control by a state-centered approach.” On the other hand, they are inconsistent with the facts that the BRI cooperation are centered on “specific business or social projects to enhance economic and social ties instead of geo-strategic elements such as political 114

Op. cit. 79, at 691. Op. cit. 104, at 168. 116 Op. cit. 104, at 183. 117 Geddie (2018); Erickson (2018). 118 Op. cit. 95. 115

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and security cooperation.”119 Furthermore, the inclusion of geopolitics and security into the BRI will inevitably cause more uncertainty and instability in economic cooperation among BRI countries, and amplify the tensions between China and the West, which will pose more economic, geopolitical, and security challenges to the BRI cooperation. Keeping these factors in mind, the current flexible ideology underpinning the BRI may not be the ideal model to build bright, stable, and sustainable international cooperation. In the future, China should take efforts to format the BRI as a systematically planned national policy, generating legal documents that clearly define its specific scope, cooperation areas, cooperation mechanisms, dispute settlement methodologies, and other specific mechanisms, and, ideally, conclude an overarching convention to replace existing bilateral free trade agreements and establish the BRI’s implementing institutions. Doing so will establish a firmer foundation upon which to base development efforts, creating a certain and plausible international cooperation mechanism.120

The Improvement of the BRI to Make a Brighter Future Systematic planning to create a formal BRI cooperation mechanism is necessary to meet the severe challenges facing the initiative, including fluctuating international political will, shifting geopolitical attitudes, and conflicting dispute resolution and administration mechanisms. To address these issues, China should improve the existing BRI cooperation mechanism and seek to create a multilateral cooperation mechanism at the global level.121 China must cooperate with the BRI countries to develop the basic principles of international law, maritime law, and international economic law, thereby protecting its overseas interests alongside those of participating nations, as well as promoting the public good.122

Systematic Construction of the BRI Cooperation Mechanism Pursuing the “multilateralization” of the BRI will be a significant undertaking, as the Initiative presently includes 65 countries, 4.4 billion people, and about 40 percent of global GDP. However, seeking structured alignment through a formal agreement 119

Zhang (2018). International lawyers have suggested that China and other BRI countries should negotiate and conclude “a comprehensive regional or multilateral BRI agreement” or establish “the Silk Road Union.” See Op. cit. 99, at 532; Op. cit. 79. 121 Op. cit. 99, at 541. 122 Op. cit. 102, at 16. 120

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could maximize the major benefits of the BRI for participating countries, allowing them to improve their investment climate, technical standards, and customs and logistics procedures.123 As the chief advocate and organizer of the BRI, China should further improve relevant policy documents, laws and regulations, and foreign cooperation mechanisms to enable interested nations to join more readily this grand Initiative. At the same time, China should make efforts to explain the BRI in international legal language, clarifying and codifying its aims, connotation, organization, functions, cooperation areas, priority industries, promotion methodologies, and dispute settlement mechanism. “The function of international law lies in providing technical support and interpretation for the direction and objectives in international relations that have been defined by a country’s political strategy and national interests.”124 Bearing this principle in mind, in the process of developing international exchanges, China must rely on the institutional system of international law to promote such exchanges and cooperation efforts, developing its goals and ideas through the application of relevant international law.125 When seeking to establish the BRI as a relevant global force, formulating international rules for the BRI is China’s priority task.126 This also presents a strategic opportunity for China to improve its domestic laws, establish relevant bilateral and multilateral mechanisms, and participate in the construction of the international legal system. Therefore, China should incorporate the practice of international law into the construction of the BRI to refine its international legal concepts and viewpoints. This will help to build a new international legal order as well as ground for Chinese international law.127 The BRI soft law should be embedded into and synergized with hard law. China should make efforts to create and implement international rules related to the BRI by means of concluding international treaties and establishing international organizations, based on enhanced global cooperation and economic and cultural development.128 Some international lawyers have proposed an international energy community129 or a Silk Road Union130 as structures for China to push forward the BRI. These suggested initiatives, however, are still in their nascent phases. Nevertheless, some basic principles have been generally acknowledged that the BRI cooperation mechanism should: (1) aim to promote international economic development by facilitating free trade and investment as well as equal opportunity and the right to development; (2) address in a strategic way the relationship between the legal systems in different BRI countries, which are rooted in their culture and religion under international law; (3) adhere to market-oriented, government-driven and business-led development methodologies; and (4) pay close attention to the macro-economic policies 123

Hofman (2015). Op. cit. 22, at 4. 125 Mushkat (2011). 126 Xiao (2015). 127 Op. cit. 102, at 13. 128 Op. cit. 22, at 3. 129 Op. cit. 103. 130 Op. cit. 79, at 692. 124

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of the BRI countries and the micro-economic activities of their enterprises, so that it can provide necessary support and protection for enterprises to compete in the international market.131 Meanwhile, China should institutionalize international cooperation based on existing platforms. Of these, the Belt and Road Forum for International Cooperation is the largest, highest-level multilateral diplomatic platform initiated and hosted by China. It produced 279 deliverable plans in the areas of policy, infrastructure, trade, finances, and connectivity in May 2017. Furthering these efforts, China should work to institutionalize the Belt and Road Forum for International Cooperation by setting up a liaison office to implement the Forum’s follow-up activities132 and an advisory council to oversee regular forum activity.133 Also, China should integrate other platforms, including the Forum on China–Africa Cooperation (FOCAC),134 and establish a comprehensive legal and institutional framework with the ultimate goal of building these forums into an institutionalized multilateral cooperation mechanism. Regarding the possible overlaps and even conflicts between the BRI cooperation mechanism and other multilateral cooperation schemes, China should “make full use of the existing international mechanisms and continuously strengthen community awareness of these international mechanisms and their member states, and actively guide these mechanisms to link up with the BRI in terms of functions, development strategies and actions, thus injecting new connotations and vitality into it.”135 In the area of trade and investment, for example, China should actively promote the WTO’s Trade Facilitation Agreement in the region,136 ensuring that developing and least-developed countries receive the assistance they need. Moreover, China should draft the Strategic Action Framework for Trade and Investment Facilitation of the Silk Road Economic Belt to ensure a functional connection with organizations such as the WTO, the ASEAN, the APEC, and the World Customs Organization. It should facilitate, as far as possible, the measures providing the greatest common good, such as reducing tariffs and non-tariff barriers, adopting standardized processes, speeding up the flow of transportation and people and simplifying customs procedures.137

131

Op. cit. 95. Xi (2017a). 133 The Belt and Road Forum for International Cooperation (16 May 2017) List of Deliverables of the Belt and Road Forum for International Cooperation. China Daily. http://www.chinadaily.com. cn/china/2017-05/16/content_29359377.htm. 134 The 2018 Beijing Summit of the FOCAC adopted the Beijing Declaration-Toward an Even Stronger China-Africa Community with a Shared Future and the FOCAC Beijing Action Plan (2019–2021) on September 4, 2018. See Beijing Declaration, Action Plan Adopted at FOCAC Summit (5 Sep 2018). Belt and Road Portal. https://eng.yidaiyilu.gov.cn/qwyw/rdxw/65061.htm. 135 Op. cit. 92. 136 The Trade Facilitation Agreement entered into force on February 22, 2017. See Ratifications List. http://www.tfafacility.org/ratifications. 137 Op. cit. 92. 132

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Economic Cooperation as the Greatest Common Denominator Multilateral cooperation within the BRI must be streamlined to induce economic cooperation. Scholars have suggested that: “Development is still the main theme of the world today. The BRI is in alignment with the common interest of the international community.”138 All nations have certain similarities. For instance, all countries, regardless of their level of development and political system, have a strong incentive to eradicate poverty and develop their economies; no country would accept another country’s interference in its internal affairs or threats to its security. India is a noticeable example of how ambivalent views regarding the BRI may evolve within a nation on the basis of these natural interests. Biased by the “dread of Chinese hegemony,” “many individuals in the Indian security establishment have positioned China as a greater menace than ever before.”139 As a result, many in the Indian government object to the China–Pakistan Economic Corridor, which, according to some Indian scholars, challenges India’s sovereignty.140 There are also concerns regarding increasing Chinese naval activities in the Indian Ocean, as well as Chinese geo-strategic influence on regions claimed by India.141 Meanwhile, on the other end of the spectrum, many Indians hold liberal views regarding China’s BRI, urging their country to participate in the BRI to “improve Indian connectivity to major markets and resources,” “especially [its] integration with Eurasian economy,” seeing such participation as a way to fulfill India’s increasing energy and infrastructure demands and to build up trust between India and China.142 As can be seen through this example, understanding different countries’ unique perceptions of the BRI and finding common grounds for cooperation will be the first step in the successful implementation of the BRI. The greatest common denominator of cooperation among all BRI countries—their quintessential shared interest—is not to engage in security cooperation, but to develop their economy and achieve a win–win scenario.143 The emphasis on economic matters is not only because the existing security cooperation among BRI countries is characterized by contradictions and a lack of basic consensus but also because the maintenance of international peace and security and the development of friendly relations among nations falls under the purview of the UN and its legal system.144 Since all BRI countries are the UN members, relevant issues can be addressed in accordance with the purposes and principles of the UN Charter. China is willing to “provide more international public goods for humanitarian purposes: for example, an international 138

Op. cit. 102, at 11. Khan and Khalid (2018). 140 Chaudhury (2017); Op. cit. 139, at 247. 141 Op. cit. 139, at 248–249. 142 Op. cit. 139, at 252. 143 The BRI may become one of the cornerstones of Asian economic growth and integration, and eventually a closer political and security cooperation framework among states. However, the pathway to this scenario is long and fraught with obstacles. See generally Ghiasy and Zhou (2017). 144 UN Charter arts. 1, 24–26 & 39–51. 139

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rescue team for natural disasters such as earthquakes, tsunami and typhoons or an international medical team for various major diseases and infectious diseases.”145 However, issues involving peacekeeping, counter-terrorism, anti-piracy activities, humanitarian assistance, and military security must be completed within the framework of the UN. If such issues become entangled with the aims of the BRI, it will inevitably dilute the economic cooperation and culture exchanges between China and the BRI countries, potentially even leading to political and military disputes. Therefore, China should insist that the cooperation fostered under the BRI does not involve security issues. In short, the ultimate goal of the BRI is not to create an economic community, a political community, a military security community, a customs union, or a single currency zone. Rather, it seeks to foster a regional human community of shared destiny,146 by “highlight[ing] a peaceful, consultative and commonly beneficial approach toward building a harmonious world.”147 In pursuing the BRI, China will not interfere in other countries’ internal affairs, export its own social system and model of development, or impose its will on others. It vows to neither resort to outdated geopolitical maneuvering, nor form any group detrimental to stability.148 The cooperation proposed under the BRI is intended to promote economic and cultural development, exclusive of military security, which is consistent with China’s long-standing policy of non-alignment.149

The Urgent Need for a Dispute Settlement Mechanism The most critical issue at this moment in the BRI’s implementation trajectory is the lack of a clear dispute settlement framework. China should make full use of bilateral investment treaties (BITs) to protect its overseas investment. Because China has currently a limited number of regional FTAs150 and their investment rules are as good as those of BITs, various BITs between China and other countries along the BRI comprise the main tools to protect China’s overseas investments.151 This process is already underway. Since 1982, China has negotiated and signed BITs with 145 countries, many of which are along the Belt and Road.152 China should undertake a systematic analysis of all BITs and modify, if necessary, their investment protection provisions. For example, it may be necessary to update the definition of “investment” 145

Op. cit. 102, at 17. Op. cit. 99, at p.538. 147 Op. cit. 119. 148 Op. cit. 132. 149 For details on China’s non-alignment policy, see Wang (2012). 150 China has concluded 19 FTAs with 26 countries and regions by August 2022. See Wang (2022). 151 Op. cit. 92. 152 UNCTAD China-Bilateral Investment Treaties. https://investmentpolicy.unctad.org/internati onal-investment-agreements/countries/42/china; Deng and Zhang (2016). 146

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and establish principles regarding indirect expropriation, fair and equitable treatment of investors, and umbrella clauses in order to strengthen treaty protection for China’s overseas investments.153 Additionally, China should actively engage in judicial cooperation and exchange with the BRI countries. As the Initiative progresses, more cases involving foreign parties will inevitably arise, which will involve a wide variety of matters, including criminal, civil, and commercial cases; maritime law; international commercial and maritime arbitrations; free trade zones, etc. In light of this extensive array of potential legal conflicts, it is difficult to establish a unified dispute settlement mechanism.154 The most feasible approach at present is to strengthen judicial cooperation between China and the BRI countries and to promote the convergence of national laws.155 To this end, China should conclude more bilateral judicial cooperation agreements and build a workable bilateral judicial assistance mechanism.156 To achieve this goal, China should first seek to conclude mutual judicial assistance agreements with each BRI country, working to improve the legal situation throughout the region. This could include re-examining systems for ascertaining the identities of parties, conducting overseas evidence reviews, and testifying in court by overseas witnesses, so as to facilitate smooth litigation between Chinese and foreign parties. China should emphasize the need for mutual recognition and enforcement of judicial decisions between the BRI countries. For those countries which have not yet concluded a judicial assistance agreement with China, Chinese courts should take the lead to grant judicial assistance to litigants from those countries with a view to promoting reciprocal judicial assistance in the future. For those countries which have concluded a judicial assistance agreement with China, Chinese courts should strictly follow that agreement, promptly handling requests for judicial assistance. The efficient, effective litigation practice will create a supportive rule of law environment to underpin the construction of the BRI.157 Moreover, Chinese courts should accurately and appropriately apply international treaties, conventions, and foreign laws. Chinese courts should undertake an in-depth study of the international treaties on trade, investment, finance, and maritime transportation concluded by the BRI countries, and interpret treaty terms in strict accordance with the provisions of the Vienna Convention on the Law of Treaties in order to strengthen the unity, stability, and predictability of international treaties and conventions applied at trial. In accordance with the provisions of the Law of the Application of Law for Foreign-Related Civil Relations, Chinese courts should comprehensively

153

Ibid; Huang (2016). Op. cit. 92. 155 Op. cit. 126. 156 By 25 December 2018, China had signed 121 treaties on mutual judicial assistance in criminal, civil and commercial matters and extradition. See PRC Ministry of Justice (25 Dec 2018) China’s Treaties on Judicial Assistance and Extradition. http://www.moj.gov.cn/pub/sfbgw/flfggz/flfggzflty/ fltymsssfxzty. 157 Op. cit. 23. 154

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consider foreign factors related to legal matters, fully respect the litigant’s right to choose applicable law, accurately identify, and apply foreign laws.158 Finally, China should support the development of diversified dispute settlement mechanisms when building the BRI. Complainants must have the right to resolve disputes through mediation, arbitration, and other non-litigation approaches based on their own political, legal, cultural, and religious backgrounds. China should pay special attention to settling disputes through mediation and arbitration. The SPC of China is already taking steps to address this need, stating that “Chinese courts should further promote the improvement of the joint working mechanism for commercial mediation, arbitration mediation, people’s mediation, administrative mediation, industrial mediation, and judicial mediation, give play to the advantages of various dispute resolution methods in resolving disputes and conflicts involved in the construction of the BRI.”159 Following this guidance, Chinese courts should strengthen the judicial review system and ensure the recognition and implementation of arbitral awards from the BRI countries, in accordance with relevant laws and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.160 China’s newly established international commercial courts and committee of international commercial experts can only be used to resolve international commercial disputes between equal commercial entities.161 However, the implementation of the BRI, whose infrastructure projects demand immense investments and decades-long construction projects, has already faced significant challenges, including several obstacles of agreements made by foreign governments. For example, Malaysian Prime Minister Mahathir Mohamad canceled two major BRI projects soon after he came into power.162 The only way to prevent Chinese enterprises from suffering significant losses due to political gamesmanship is to make each country bear legal responsibilities for its actions. Absent either a bilateral or multilateral dispute settlement agreement, China should appropriately resolve relevant disputes through consultation in accordance with the basic principles of international law. The “Five Principles of Peaceful Coexistence” is an example of China’s position to the basic principles of international law. These Principles are not only the cornerstone of the country’s diplomacy but also the basis for its great achievements in political, social, and economic reform and international engagement.163 Given the success fostered by the implementation of these ideals, China should codify the principles for a dispute settlement mechanism of the BRI, allowing it to serve as a basis for bilateral negotiations on related disputes.

158

Ibid. Ibid. 160 Ibid. 161 Op. cit. 41, arts. 2–3. 162 Op. cit. 117. 163 Op. cit. 102, at 12. 159

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Conclusion In fact, the US initiatives against the BRI are all failing. The New Silk Road Initiative (NSRI), an initiative aimed to facilitate its invasion of Afghanistan in the 2010s by “resuming traditional trading routes and reconstructing significant infrastructure links” in Central Asia,164 “never took off due to lack of political will.”165 As for two subprojects of the NSRI, the US had contributed USD 11.5 million, accounting only 1% of the cost of the CASA-1000 hydroelectricity grid project, before it pulled out166 and provided no funding to the TAPI (Turkmenistan-Afghanistan-PakistanIndia) natural gas pipeline at all.167 Obama’s Asia–Pacific Rebalancing Strategy has also failed as the CPTPP is “essentially dead in the water,” while the RCEP agreement entered into force on January 1, 2022.168 Trump’s FOIP strategy has been regarded to have the opposite effect, “driving the region toward a highly tense, zero-sum competition” and “make Asia less open and less free.”169 Biden’s B3W strategy plans on investing in “five to ten large infrastructure projects around the world,” which pales in comparison to the BRI infrastructure portfolio.170 Further, “it is unlikely for the US to have the desire, nor the domestic political means, to pursue a project.”171 The fundamental reasons for the US not to successfully conduct its counter initiatives are due to the lack of “unitary domestic and foreign policy [under] constitutional design,” immaturity “under competitive great power politics with their neighbors,” and the prone[ness] to selective “global engagement when it is worth it, instead of as a continuous imperative for security and wealth.”172 The BRI is making substantial contributions to the world economy and realizing the goals of the UN 2030 Agenda for Sustainable Development. More importantly, it has provided “a whole new direction for cooperation between East and West.”173 As a regional economic cooperation initiative for global development and the elimination of poverty, it abides by the principles of the rule of law and democracy; resorts to soft laws for the building of confidence and consensus for the future formulation of hard laws; is open to diversified participants, but confined to economic and 164

US Department of State (2009–2017) US Support for the New Silk Road. https://2009-2017. state.gov/p/sca/ci/af/newsilkroad/index.htm. 165 Chandran (2017). 166 Central Asia-South Asia (CASA-1000) Electricity Transmission Project. https://www.nsener gybusiness.com/projects/casa-1000-electricity-transmission. 167 Kertscher (2021). 168 Galace (2016). 169 Op. cit. 14. 170 (8 Nov 2021) US plans January rollout of projects to counter China’s Belt and Road Initiative, official says. CNBC. https://www.cnbc.com/2021/11/09/us-project-aims-to-counter-chinasbelt-and-road-initiative-official.html. 171 Op. cit. 5. 172 Op. cit. 5. 173 Op. cit. 3.

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cultural cooperation, thus avoiding geopolitical and military confrontation. It seeks no systematic construction of an international regime but chooses to work through consultation among equal sovereign countries for the common aims of development and co-prosperity. China’s promotion of the BRI is to achieve a win–win situation promoting increased economic development, infrastructure construction, employment, and interconnection among interested nations, thereby building “a human community with shared destiny.”174 The non-systematic BRI cooperation mechanism is deep-rooted in China’s successful path toward economic development. However, this non-systematic mechanism is not aligned with the conventional model of international cooperation mechanism development, which cannot adequately manage the many contradictions. The traditional approach to regional integration is to “use multilateral treaties to remove legal and institutional barriers to trade and investment, and to create legally binding rules, standards and dispute resolution mechanisms to create a flat open space for private sector actors.”175 As a new formula for global governance, the BRI should be pushed forward in an innovative and systematic way. First, it is imperative to establish a comprehensive legal mechanism at the national and international levels and a uniform institutional structure for the implementation and the continuing success of the BRI. China should negotiate with the BRI countries to synergize the BRI soft law with hard law and conclude a regional economic cooperation convention, according to which bilateral cooperation agreements for specific fields or projects may be concluded.176 Second, the BRI’s systematic construction should be confined to economic and cultural cooperation. It shall not extend to political, military, and security areas. Finally, China should develop diversified dispute settlement mechanisms for the construction of the BRI. In this regard, mediation and arbitration can be the first choice for international commercial disputes between equal commercial entities. Meanwhile, legally binding dispute settlement agreements entered into through consultation will be preferred for international disputes between the BRI countries. Then, the BRI will bring a brighter future to the world.

References Arase D (2015) China’s two silk roads: implications for Southeast Asia. ISEAS Perspect 2:4 Brawer S (2022) BRI: a pathway to a bright future for mankind. People’s Daily. http://en.people. cn/n3/2022/0712/c90000-10121803.html CEBR (2019) Belt and road initiative to boost world GDP by over $7 trillion per annum by 2040. https://cebr.com/reports/belt-and-road-initiative-to-boost-world-gdp-by-over7-trillion-per-annum-by-2040

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Chandran AR (2017) Why Afghanistan should join CPEC. The Diplomat. https://thediplomat.com/ 2017/05/why-afghanistan-should-join-cpec Chaudhury D (2017) China wants India in one-belt-one-belt meet: India remains wary. India Times. https://economictimes.indiatimes.com/news/politics-and-nation/china-wants-india-inone-belt-one-road-meet-india-remains-wary/articleshow/56383009.cms Clinton HR (2012) Press statement on Vietnam’s National Day. https://2009-2017.state.gov/secret ary/20092013clinton/rm/2012/08/197209.htm Deng T, Zhang M (2016) The treaty protection of Chinese overseas investment under the BRI [一 带一路倡议下中国海外投资的条约保护]. J Cent South Univ [中南大学学报] 22(6):36–45 Erickson A (2018) Malaysia cancels two Big Chinese Projects, Fearing They Will Bankrupt the Country. Washington Post. http://www.washingtonpost.com/world/asia_pacific/malaysiacancels-two-massive-chinese-projects-fearing-they-will-bankrupt-the-country/2018/08/21 Galace UN (2016) In retrospect: assessing Obama’s Asia rebalancing strategy. CIRSS Commentaries (Vol. III, No. 16). https://fsi.gov.ph/in-retrospect-assessing-obamas-asia-rebalancing-str ategy Geddie J (2018) Malaysia renegotiating terms of major belt-and-road rail project: PM Mahathir. Reuters. https://uk.reuters.com/article/us-malaysia-politics-projects/malaysia-renego tiating-terms-of-major-belt-and-road-rail-project-pm-mahathir-idUKKCN1IR0FM Ghiasy R, Zhou J (2017) The silk road economic belt: considering security implications and EU-China cooperation prospects. https://www.sipri.org/sites/default/files/The-Silk-Road-Eco nomic-Belt.pdf Guluzian C (2017) Making inroads: China’s new silk road initiative. Cato J 37(1):145 Guo R (2013) Legal basis of China’s claim over the Huangyan Island. J East Asia Int Law 6(2):531– 552 Guo R (2017) Sino-Vietnam dispute over hydrocarbon resources exploration in Nansha waters after the South China sea arbitration. Hong Kong Law J 47(3):951–985 He Z (2017) A Chinese plan on international rule of law: a perspective of global governance on one belt one road initiative [国际法治的中国方案:一带一路的全球治理视角]. Pac J [太平洋学 报] 25(5):1–12 Hofman B (2015) China one belt one road initiative: what we know thus far. China Go Abroad. http://www.chinagoabroad.com/en/article/china-s-one-belt-one-road-initiative-whatwe-know-thus-far Huang J (2016) Silk road economic belt: can old BITs fulfil China’s new initiative? J World Trade 50(4):733–754 Ikenson D (2022) Deglobalization will hurt the US economy and cripple many others. Forbes. https://www.forbes.com/sites/danikenson/2022/05/23/deglobalization-will-hurt-the-us-eco nomy-and-cripple-many-others/?sh=1dfd7a33c16e Jaipragas B (2017) Why is the US calling Asia-Pacific the Indo-Pacific? Donald Trump to “clarify.” South China Morning Post. http://www.scmp.com/week-asia/politics/article/2118806/why-uscalling-asia-pacific-indo-pacific-trump-clarify Kembayev Z (2016a) Towards a silk road Union. Chin J Int Law 15(3):691 Kembayev Z (2016b) Regional integration in Eurasia: the legal and political framework. Rev Cent East Eur Law 41(2):157–194 Kembayev (2014) The emerging Eurasian Union: problems and perspectives. https://static.uni-graz. at/fileadmin/rewi-zentren/Reees/Projekte/Zhenis_Kembayev.pdf Kertscher T (2021) No, Biden administration is not helping build a pipeline in Afghanistan. Politifact. https://www.politifact.com/factchecks/2021/feb/18/facebook-posts/no-biden-admini stration-not-helping-build-pipeline Khan H, Khalid I (2018) New Delhi response to Beijing “BRI” project: a lucid connection with Chinese “String of Pearls.” J Polit Stud 25:243–254 Kirton JJ et al (2016) Making global economic governance effective: hard and soft law intuitions in a crowded world. Routledge, p 3

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Kuo M (2018) CPTPP and leadership in the global trade system. Diplomat. https://thediplomat. com/2018/04/cptpp-and-leadership-in-the-global-trade-system. Larsen F (2021) What does the belt and road initiative mean for the future of the international integration system? Harv Int Law Rev. https://hir.harvard.edu/what-does-the-belt-and-road-ini tiative-mean-for-the-future-of-the-international-integration-system Li M (2016) International law and the study on the BRI [国际法与一带一路研究]. Law J [法学杂 志] 37(1):16 Li X (2017) Cooperation mechanism of the belt and road: legal defects, challenges and solutions [一 带一路的合作机制 : 法律缺陷、复杂挑战与应对策略]. Mon Theory [理论月刊] 421(1):5–9 Liu J (2017) Building fair and reasonable dispute settlement Mechanism of the BRI [构建公正合 理的一带一路争端解决机制]. Pac J [太平洋学报] 25(5):16 Liu Z (2020) China’s approach towards great power through international law competition in a New Era [新时代中国在国际法竞争中的大国进路]. Law Rev [法学评论] 223(5):140–153 Liu X (2022) Soft law governance in the construction of the belt and road initiative [论一带一路 建设中的软法治理]. Oriental Law [东方法学] 89(5):100–115 Martin E (2022) India Opts out of trade talks with US-Led Indo-Pacific Group. Bloomberg. https:// www.bloomberg.com/news/articles/2022-09-09/india-avoids-trade-negotiations-with-us-ledindo-pacific-group?leadSource=uverify%20wall Murphy P (2018) The United States and ASEAN: Forward Together. https://blogs.state.gov/stories/ 2018/11/13/en/united-states-and-asean-forward-together Mushkat R (2011) State reputation and compliance with international law: looking through a Chinese lens. Chin J Int Law 10(4):703–737 Naughton B (2015) What Will the TPP Mean for China?. Foreign Policy. http://www.foreignpolicy. com/2015/10/07/china-tpp-trans-pacific-partnership-obama-us-trade-xi NDRC (2016a) Guidelines on Construction of China-Mongolia-Russia Economic Corridor [ 建设中蒙俄经济走廊规划纲要]. http://www.yidaiyilu.gov.cn/wcm.files/upload/CMSydylgw/ 201702/201702150500007.pdf NDRC (2016b) The Cooperation Plan on Dovetailing the Silk Road Economic Belt and Nurly Zhol (Bright Road) [中华人民共和国政府和哈萨克斯坦共和国政府关于丝绸之路经济带 建设与光明之路新经济政策对接合作规划]. https://www.yidaiyilu.gov.cn/wcm.files/upload/ CMSydylgw/201702/201702160515014.pdf Office of the Leading Group for Promoting the BRI (2019) The Belt and Road Initiative Progress, Contributions and Prospects. https://www.yidaiyilu.gov.cn/wcm.files/upload/CMSydylgw/201 904/201904220254037.pdf Office of the Leading Group for Promoting the BRI (2017) Building the Belt and Road: Concept, Practice and China’s Contribution [共建一带一路带理念、实践与中国的贡献]. http://www. yidaiyilu.gov.cn/wcm.files/upload/CMSydylyw/201705/201705110537027.pdf Panda A (2016) How Obama Sees Asia. The Diplomat. https://thediplomat.com/2016/03/howobama-sees-asia PRC Ministries of Agriculture, Commerce, Foreign Affairs and the NDRC (2017) Vision and Action on Jointly Promoting Agricultural Cooperation on the Belt and Road [共同推进一带一路建设 农业合作的愿景与行动]. http://jiuban.moa.gov.cn/zwllm/zwdt/201705/t20170512_5604724. htm PRC General Office of the Communist Party Central Committee and the General Office of the State Council (2018) Opinion Concerning the Establishment of the Belt and Road International Commercial Dispute Resolution Mechanism and Institutions. http://cicc.court.gov.cn/html/1/ 219/208/210/819.html PRC Ministries of Environmental Protection, Foreign Affairs, Commerce and the NDRC (2017) Guidance on Promoting Green Belt and Road, Ministry of Ecology and Environment of China . http://english.mee.gov.cn/Resources/Policies/policies/Frameworkp1/201706/t20170628_416 864.shtml

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PRC Ministry of Commerce (2015). Notice of the Ministry of Commerce on Issuing the Model Service Guidelines for Overseas Economic and Trade Cooperation Zones [境外经贸合作区服 务指南范本]. http://www.yidaiyilu.gov.cn/zchj/zcfg/6063.htm PRC Ministry of Commerce (2018) China and Russia Sign the Joint Declaration of the Joint Feasible Studies on Completing Eurasian Economic Partnership Agreement. http://english.mofcom.gov. cn/article/newsrelease/significantnews/201806/20180602754961.shtml PRC Ministry of Environmental Protection (2017) The Belt and Road Ecological and Environmental Cooperation Plan. the Belt and Road Portal. http://www.yidaiyilu.gov.cn/wcm.files/upload/CMS ydylgw/201705/201705140543014.pdf PRC Ministry of Foreign Affairs (2017) Carry Forward Silk Road Spirit and Write a New Chapter for Cooperation. http://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1469852.shtml Rice S (2016) Explaining President Obama’s Rebalance Strategy. U.S. Department of State. https:// blogs.state.gov/stories/2016/09/06/explaining-president-obama-s-rebalance-strategy Ruta M (2018) Belt and Road Initiative. https://www.worldbank.org/en/topic/regional-integration/ brief/belt-and-road-initiative State Administration of Taxation (2017) Notice of the State Administration of Taxation on Further Improving Tax Services for the Construction of the Belt and Road [国家税务总局关于进一 步做好税收服务一带一路建设工作的通知]. http://www.chinatax.gov.cn/n810341/n810755/ c2584841/content.html Swaine MD (2018) A Counterproductive Cold War with China. Foreign Affairs. https://www.for eignaffairs.com/articles/china/2018-03-02/counterproductive-cold-war-china?cid=int-lea&pgt ype=%20hpg. The NDRC and the State Oceanic Administration of China (2017) Vision for Maritime Cooperation under the BRI, The Belt and Road Portal. http://www.yidaiyilu.gov.cn/wcm.files/upload/CMS ydylgw/201706/201706200153032.pdf. The SPC of China (2018a) Regulations on Several Issues regarding the Establishment of International Commercial Courts [最高人民法院关于设立国际商事法庭若干问题的规定]. http:// www.court.gov.cn/zixun-xiangqing-104602.html The SPC of China (2018b) Top court sets up international commercial expert. http://english.court. gov.cn/2018-08/27/content_36839651.htm The SPC of China (2015a) The Several Opinions of the SPC on Providing Judicial Services and Safeguards for the Construction of the Belt and Road by People’s Courts (SPC issuance No. 9). https://english.court.gov.cn/2021-10/23/c_761781.htm The SPC of China (2015b) Model Cases regarding Providing Judicial Services and Safeguards by the SPC for Construction of the Belt and Road [人民法院为一带一路建设提供司法服务和 保障的典型案例]. http://www.court.gov.cn/zixun-xiangqing-14897.html The SPC of China (2017) Second Group of Model Cases Involving Construction of the Belt and Road Published by the SPC [第二批涉一带一路建设典型案例]. http://www.court.gov.cn/zixun-xia ngqing-44722.html The White House (2022) Indo-Pacific Strategy of the United States. https://www.whitehouse.gov/ wp-content/uploads/2022/02/U.S.-Indo-Pacific-Strategy.pdf Veneziano A (2013) The soft law approach to unification of international commercial contract law: future perspectives in light of UNIDRIOT’s experience. Villanova Law Rev 58(4):524 Wang Q (2018) Explanation and construction of ‘one belt one road’ disputes resolution mechanism [一带一路争端解决机制的阐释与构建]. Law Sci Mag [法学杂志] 8:22 Wang L (2022a) Promoting the rule of law on the belt and road initiative: rationale and approaches [法治一带一路的内涵与构建路径]. Chin Rev Int Law [国际法研究] 2:3–20 Wang Y (2012) Should China abandon non-alignment? People’s Daily. http://en.people.cn/102774/ 8004263.html Wang W (2022) The quantity and quality of foreign trade and foreign investment signifying higher level of opening up [外贸外资量质齐升 高水平对外开放迈上新台阶]. Information Daily [ 经济参考报]. http://www.news.cn/fortune/2022b-08/26/c_1128948721.htm

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Weltman J (2022) EBRI Q2 2022 results: G7 Competes with China, Euromoney Country Risk. https://www.euromoneycountryrisk.com/article/b1z3pjrft2hgdf/ebri-q2-2022-results-g7competes-with-china Wu H (2017) The mode selection of the dispute settlement mechanism for the BRI [一带一路倡 议争端解决机制的模式选择与构建]. J Shenzhen Univ [深圳大学学报] 34(5):74–78 Xi J (2017a) Work Together to Build the Silk Road Economic Belt and the 21st Century Maritime Silk Road-Speech at the Opening Ceremony of the Belt and Road Forum for International Cooperation. Xinhwanet. http://www.xinhuanet.com/english/2017-05/14/c_136282982.htm Xi J (2017b) The report delivered at the 19th national congress of the communist party of China. China Daily. http://www.chinadaily.com.cn/interface/flipboard/1142846/2017-11-06/ cd_34188086.html Xiao Y (2015) The international law for the belt and road and the role of China’s courts [“一带一 路”战略需要的国际法及我国法院的作用]. China Trial [中国审判] 121(15):15–16 Xinhua (2018) Gwadar port creates economic magic with Chinese help. China Daily.http://www. chinadaily.com.cn/a/201811/12/WS5be8d62ba310eff303287f6c.html Xu W (2018) Russia, central Asia accept BRI gainful. China Daily. http://www.chinadaily.com.cn/ a/201808/23/WS5b7df4cba310add14f3873c6.html Yang T (2016) International law and the challenges faced by the belt and road [一带一路建设面 临的挑战及国际法思考]. J Kashgar Univ [喀什大学学报] 37(4):42–45 Yang Z (2017) Designing the energy community between china and its neighbors: legal fundamentals and achieving approaches [中国与周边能源共同体的构建: 法律基础与实现路径]. Wuhan Univ Int Law Rev [武大国际法评论] 1(5):27–37 Yeates L (2004) Thought experimentation: a cognitive approach (graduate diploma in arts dissertation, University of New South Wales), at p. 150. https://archive.org/details/TECA2004/mod e/2up Yu J, Wallace J (2021) What is China’s belt and road initiative (BRI)? In: Chatham house. https:// www.chathamhouse.org/2021/09/what-chinas-belt-and-road-initiative-bri. Zeng L (2016) Conceptual Analysis of China’s belt and road initiative: a road towards a regional community of common destiny. Chin J Int Law 15(3):538 Zhang X (2015) legal risk management of overseas investment under the BRI [解读一带一路新形 势下境外投资的法律风险管理]. Int Proj Contract & Labour Serv [国际工程与劳务] 1:35–36 Zhang C, Zhang X (2017) Study on international dispute settlement mechanism of belt and road strategy [一带一路战略的国际争端解决机制研究]. Southeast Asian Stud [南洋问题研究] 2:24–34 Zhang Z (2018) The belt and road initiative: China’s new geopolitical strategy? German Institute for International and Security Affairs. https://www.swp-berlin.org/publications/products/projekt_p apiere/Zhang_BCAS_2018_BRI_China_7.pdf Zou Z (2022) Cast aside pseudo-multilateralism. China Daily. http://www.chinadaily.com.cn/a/202 106/21/WS60cfd522a31024ad0baca3c3.html

Ran Guo Professor of International Law at Shanghai Maritime University, Shanghai, China. This research was supported by the research project titled “An Empirical Study of Evidence on Territorial Sovereignty of the Islands of the South China Sea” (Project No: 20AGJ004) sponsored by the National Social Science Fund of China (Key Project). This article is based on “Is China’s Belt and Road Initiative Moving towards a Silk Road Union? A Legal and Policy Consideration” (China and WTO Review, Vol. 6/1, 2020) under the demand of Professor Eric Lee, the Editor-in-Chief of both this book and CWR. The views expressed and errors are entirely those of the author and do not represent the views of any institution or government.

Chapter 3

The Past, Present, and Future of Investor-State Arbitration in East Asia Dae Un Hong

and Ju Yoen Lee

Abstract It is not easy to detect East Asia’s presence in the field of investor-state dispute settlement (ISDS), despite its large economy. In addition to having less active foreign direct investment (FDI) relative to gross domestic product (GDP) and fewer investment treaties, East Asian economies and societies seem to possess certain characteristics that have contributed collectively to the dearth of ISDS cases in East Asia. Examples are its short history of international arbitration, the avoidance of litigation, the high proportion of state-owned enterprises in outward FDI from China, and the concentration of FDI in industries in which investor-state disputes are less likely to occur. This trend, however, is likely to change gradually with the ongoing socioeconomic changes in the region, including the increase in both outward and inward FDI, the increasing number of investment treaties, the growing familiarity with international (investment) arbitration among legal experts, the diversification of FDI, and the decreasing fear of administrative litigation. Keywords Investor-state arbitration · East Asia · Foreign direct investment · Investment treaty · Administrative litigation

This chapter is based on and adapted from Hong, DU and Lee, JY (2018) Why Are There So Few Investor-State Arbitrations in China? A Comparison with Other East Asian Economies. China and WTO Review 4(1):35–65. D. U. Hong (B) Dongguk University, Seoul, South Korea e-mail: [email protected] J. Y. Lee Hanyang University, Seoul, South Korea e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_3

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Table 3.1 Population and gross domestic product (GDP) of East Asia China

Population (in thousands, 2019)

GDP (USD billion, 2020)

1,433,784 (18.6%)

14,723 (17.3%)

Japan

126,476 (1.6%)

5,058 (5.9%)

Korea

51,225 (0.7%)

1,638 (1.9%)

Taiwan

23,774 (0.3%)

668 (0.8%)

Hong Kong

7,436 (0.1%)

349 (0.4%)

Macau

640 (0.0%)

24 (0.1%)

East Asia

1,643,335 (21.3%)

22,461 (26.3%)

World

7,713,468

85,328

Sources UNCTAD

STAT3

Introduction Numerous foreign investors have been interested in the Chinese market1 since its launch in 1978. To attract foreign investment, China has signed many investment treaties with other countries. Since the International Centre for Settlement of Investment Disputes (ICSID) Convention entered into force in China on February 6, 1993, Chinese outward investment has attracted a great deal of attention. In this regard, one may assume that many investment arbitrations would have been brought by foreign investors against China or by Chinese investors against other countries. Neither is true, however, despite China’s large economy (see Table 3.1). Although the total number of known investor-state dispute settlement (ISDS) cases has continued to grow, reaching 1,190 as of October 1, 2022,2 China has been the respondent state in only 13 cases, and Chinese investors have initiated ISDS cases only nine times. This phenomenon is not restricted to mainland China; Hong Kong,4 Macau, Taiwan, and other East Asian economies such as Japan and Korea5 exhibit similar situations.6 Even though China became the world’s largest recipient of foreign direct investment (FDI) inflow in 2014,7 it is not often a party in ISDS cases. More broadly, East Asia accounted for 18.2% of the worldwide FDI outflow stock in 2021, following 1

‘China’ generally refers to mainland China in this paper. UNCTAD (2022c). 3 UNCTAD (2022d). 4 Hong Kong and Macau, the two special administrative regions of China, are independent from mainland China in terms of economy so that they are treated as separate economies in this paper. For more on the economic links between China and Hong Kong and between China and Macau, see Lei and Yao (2008). 5 ‘Korea’ refers to South Korea in this paper. 6 Not all six economies are covered with the same weight in this paper. China is given special attention due to the relatively large size and the importance of its economy. In addition, some economies are not covered in parts of this paper due to a lack of available data. 7 UNCTAD (2015). 2

3 The Past, Present, and Future of Investor-State Arbitration in East Asia

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Table 3.2 Number of ISDS cases by home region of investors (as of September 1, 2022) Region

Cases

Outward FDI stock (USD trillion) (2021)

Cases per outward FDI stock (per USD trillion)

Western Europe

696 (53.6%)

17.1 (40.9%)

40.7

North America

268 (20.6%)

12.1 (28.9%)

22.1

Asia, excluding East Asia

135 (10.4%)

2.8 (6.6%)

48.7

Eastern Europe

85 (6.5%)

0.5 (1.3%)

159.8

Latin America and the Caribbean

55 (4.2%)

0.7 (1.8%)

75.6

East Asia

29 (2.2%)

7.6 (18.2%)

3.8

Africa

22 (1.7%)

0.3 (0.7%)

73.0

Oceania

9 (0.7%)

0.6 (1.5%)

14.1

World outside of East Asia

1,270 (97.8%)

22.39 (81.8%)

37.2

Sources Compiled from UNCTAD Investment Dispute Settlement Navigator8 (cases) and UNCTAD STAT9 (FDI stock)

only after Western Europe and North America (Table 3.2), but investors are based in this region in only 29 known ISDS cases (2.2%). Far more claimants have come from the rest of Asia, Eastern Europe, Latin America, and the Caribbean, although these regions account for only 6.6%, 1.3%, and 1.8% of the global FDI outflow, respectively. The same applies to FDI inflow. Although East Asia accounts for 10.5% of the global FDI inflow stock as of 2021, again following only Western Europe and North America (Table 3.3), East Asian economies have been respondents in ISDS cases only 20 times (1.7%)—about four times per US$1 trillion in FDI inflow stock. The rate is far lower than the world average when East Asia is excluded (28.8 times) and lower than the average in Western Europe (6.4 times), where the rule of law is relatively more established and thus regulations are supposed to be less often imposed in an arbitrary manner. The primary purpose of this research is to explain why ISDS has been so rarely utilized in China and other East Asian economies despite East Asia’s large economy. This chapter is composed of six parts, including the introduction and conclusion. Part II discusses general factors applicable to both outward and inward FDI. Parts III and IV discuss specific reasons for the dearth of ISDS cases initiated by Chinese and other East Asian investors or brought against China and other East Asian economies. Part V will touch on the signs of change in the future.

8 9

UNCTAD (Investment Dispute Settlement Navigator), op. cit. UNCTAD (2022e).

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Table 3.3 Number of ISDS cases by respondents (as of September 1, 2022) Region

Cases

Inward FDI stock (US $ trillion)

Cases per inward FDI stock (per US $ trillion)

Latin America and the Caribbean

327 (27.5%)

2.1 (4.7%)

152.6

Eastern Europe

323 (27.1%)

1.4 (3.1%)

230.5

Asia, excluding East Asia

216 (18.2%)

5.1 (11.3%)

42.2 146.2

Africa

150 (12.6%)

1.0 (2.3%)

Western Europe

97 (8.2%)

15.0 (33.1%)

6.4

North America

54 (4.5%)

15.1 (33.1%)

3.6

East Asia

20 (1.7%)

4.8 (10.5%)

4.2

Oceania

2 (0.2%)

0.9 (2.0%)

2.2

World outside of East Asia

1,170 (98.3%)

40.7 (89.5%)

28.8

Sources Compiled from UNCTAD Investment Dispute Settlement Navigator10 (cases) and UNCTAD STAT11 (FDI stock)

Factors Applicable to the Few ISDS Cases in Both Outward and Inward FDI Less Active FDI Until recently, outward FDI has been relatively inactive in China and other East Asian economies. In 2005, the outward FDI stocks of China, Japan, and Korea accounted for less than 10% of their GDPs, far below the average for other economies (see Table 3.4). Although their stocks continued to grow (and more than quadrupled in 2020), they are still well below the average of other economies. The same applies to the inward FDI stocks of China, Japan, and Korea. Although inward FDI stocks comprise a larger percentage of the GDP in China than in Japan and Korea, this percentage is still well below the average of the Organization for Economic Cooperation and Development (OECD) countries outside East Asia and the world average (excluding China, Japan, and Korea). The low outward and inward FDI activity of these economies has presumably contributed to less utilization of ISDS in East Asia.

10 11

UNCTAD (Investment Dispute Settlement Navigator), op. cit. UNCTAD (UNCTAD Stat: Foreign direct investment), op. cit.

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Table 3.4 FDI stocks as a share of GDP Year

Outward FDI stock as a share of GDP

Inward FDI stock as a share of GDP

2005 (%)

2020 (%)

2005 (%)

2010 (%)

2015 (%)

2010 (%)

2015 (%)

2020 (%)

China

2.5

5.2

9.9

17.5

11.9

9.6

11.0

13.0

Japan

8.0

14.4

27.6

36.3

2.1

3.7

3.9

4.6

4.1

12.6

19.5

30.6

11.2

11.8

12.2

16.2

OECD, excluding Japan and Korea

32.0

41.9

46.3

65.8

27.4

34.2

42.2

70.3

World, excluding China, Japan, and Korea

29.0

35.9

41.0

57.7

27.8

35.5

42.9

61.5

Korea

Sources Compiled by the authors from OECD.Stat12 and UNCTAD STAT (FDI stock)13

Relatively Few Investment Treaties,14 Except in China and Korea According to the United Nations Conference on Trade and Development (UNCTAD), the total number of investment treaties in force is 2,543 as of September 1, 2022.15 Japan has been much less active in negotiating investment treaties than China and Korea, and Taiwan has faced difficulty negotiating treaties with other economies because of its special relationship with China (see Table 3.5). Currently, only 27 investment treaties are in force in Hong Kong, despite its huge inward and outward FDI. Macau has only four investment treaties in force. The small number of investment treaties in force may help to explain why there have been so few ISDS cases brought from or against Hong Kong, Macau, Taiwan, and Japan; fewer investment treaties will generally lead to less protection of investors and, therefore, a small number of ISDS cases. For example, Brazil has not yet signed the ICSID Convention and had no bilateral investment treaty (BIT) in force until June 2017.16 This seems to explain the absence of ISDS cases initiated by Brazilian 12

OECD (2022a). UNCTAD (Unctad Stat: Foreign direct investment), op. cit. 14 ‘Investment treaty’ in this paper refers to bilateral investment treaties (“BITs”) and other types of investment agreements, such as free trade agreements and the Energy Charter Treaty. It is a general trend to include an investment chapter in free trade agreements. 15 2,207 BITs and 336 treaties with investment provisions (“TIPs”). See UNCTAD (2022a). 16 Brazil signed fourteen BITs that were later withdrawn in 2002, apparently because treaty provisions for ISDS were unconstitutional. See Hawes (2017). None of the TIPs in force in Brazil provided for ISDS until June 2019. 13

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Table 3.5 Number of investment treaties in force (as of September 1, 2022) Rank

Economy

BITs

TIPs

Total

1

Germany

115

58

173

2

Switzerland

110

35

145

3

France

84

58

142

4

The Netherlands

76

58

134

5

China

106

22

128

15

Korea

87

21

108

21

The United Kingdom

90

7

97

37

Russia

63

6

69

50

Canada

37

18

55

52

Japan

32

20

52

98

Hong Kong

20

7

27

108

Taiwan

16

5

21

119

Brazil

2

15

17

180

Macau

2

2

4

Source UNCTAD International Investment Agreements Navigator17

investors or brought against the Brazilian government.18 This explanation, however, has obvious limitations for the cases of China and Korea. For example, Canada has far fewer investment treaties than China and Korea (see Table 3.5), but it has appeared in ISDS cases more frequently than all East Asian economies combined. Whereas 29 ISDS cases have been initiated by East Asian investors and 20 have been brought against East Asian economies, Canadian investors have initiated 63 ISDS cases, and 31 cases have been brought against Canada.19 It is also worth noting that China’s early BITs did not include an investor-state dispute option in line with the treaty practice at that time.20 These BITs tended to define investments narrowly and would only grant foreign investors most-favorednation treatment.21 It was not until the late 1990s that Chinese BITs started providing access to ICSID for all kinds of investor-state disputes.22 In addition, when China became a contracting party to the ICSID Convention, it stipulated the reservation that it “would only consider submitting to the jurisdiction of ICSID disputes over compensation resulting from expropriation or nationalization.”23 This practice would have been an obstacle to ISDS claims, although foreign investments in China, especially 17

Ibid. UNCTAD (Investment Dispute Settlement Navigator), op. cit. 19 Ibid. 20 Gallagher (2015). 21 Wang (2009), p 577. 22 Li (2015). 23 Wang (2009), op. cit. 577. 18

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infrastructure investments, have frequently become subject to forcible takeovers in the name of “public interest” as an alternative to expropriation.24

Factors Applying to the Few ISDS Cases in Outward FDI: Characteristics of Chinese and Other East Asian Investors Characteristics of East Asian Economies as the Home States of Claimants Unfamiliarity with Arbitration Among Legal Experts The rarity of ISDS cases in China and other East Asian economies is partly attributable to a lack of familiarity with the arbitration system in the region. International arbitration as we know it today developed mainly in the West, especially in Europe,25 and it has not been widely used in East Asia until recently. The history of modern arbitration is relatively short in China, as the Arbitration Law was first enacted in 1994 and came into force in 1995.26 Of the hundreds of cases that were filed with the China International Economic and Trade Arbitration Commission each year before 2005, the majority were not domestic but international.27 Arbitration acts were enacted earlier in other economies, first in Japan in 1890 as a part of the Code of Civil Procedure Act28 and then in Korea in 1965. Nevertheless, business disputes, especially domestic ones, are still rarely brought to arbitration in Japan29 and Korea.30 Lack of confidence in the integrity of the arbitration process is a persistent problem in Taiwan as well.31 In China, because no legal education system existed during the Cultural Revolution (the national bar examination was first implemented in 2002), lawyers have not had enough time to develop extensive experience in international litigation or 24

Li (2007). Li also notes that large-scale nationalization will not occur in China unless governmental institutions undergo a fundamental political change. 25 Greenberg (2011). 26 Li (2002). 27 Ali (2013); China International Economic and Trade Arbitration Commission, Statistics. http:// www.cietac.org/index.php?m=Page&a=index&id=40&l=en. Accessed 1 Oct 2022. 28 Cole (2007). 29 Tezuka and Kawabata (2018). See also Nakamura and Nottage (2013), op. cit. 223–7. 30 The Korean Commercial Arbitration Board (“KCAB”) hears both domestic and international business disputes in Korea. However, it reported administering only 405 arbitration cases (336 domestic cases and 69 international cases) in 2020, although the KCAB is de facto the only arbitration institution in Korea, and more than 1 million civil lawsuits are brought to court in Korea each year. See KCAB (2022). 31 Lin and Li (2013) Arbitration in Taiwan, the Republic of China. In: Ali and Ginsburg, op. cit. 534–5.

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arbitration. In Japan and Korea, the legal market has generally been dominated by a small number of judicial elites32 who are not very interested in international litigation or arbitration. Actually, most major Japanese and Korean law firms did not begin to establish overseas offices until recently, which helps to explain why they lag so far behind their Western counterparts in terms of globalization.33 As a result, there are far fewer arbitrators and arbitration experts in East Asia than in other major developed or developing economies, such as those of the United States, the United Kingdom, Argentina, Mexico, and Brazil.34 This situation has resulted in a lack of ISDS experts in the region. In fact, there were no arbitrators from either China or other East Asian economies participating in ICSID cases until December 2010.35 Of the 401 arbitrators, conciliators, and ad hoc committee members who had participated in ICSID cases by the end of 2016,36 only four were from East Asia: one each from China (although this arbitrator resigned during the proceedings), Hong Kong, Japan, and Korea.37 Consequently, the relatively short history of arbitration and the resulting lack of arbitration experts in East Asia have prevented many East Asian investors from utilizing ISDS.

32

Japan and Korea transformed their legal education systems and established US-style law school systems in 2004 and 2009, respectively. Prior to that, both featured highly selective national bar exams, which less than five percent of applicants typically passed. 33 Kim and Chang, e.g., based in Korea and the largest Asian law group outside of China with more than 1,100 attorneys, had only one overseas office in Hong Kong until September 2018. Nishimura and Asahi, Japan’s largest law firm with more than 700 attorneys, did not begin to establish its overseas offices until June 2010. 34 Kim (2007), pp 34-6. 35 Professor An Chen, although he later resigned from both cases, was the first Chinese co-arbitrator in two ICSID cases, Bernhard von Pezold and others v. Republic of Zimbabwe (ICSID Case No. ARB/10/15) and Border Timbers Limited, Timber Products International (Private) Limited, and Hangani Development Co. (Private) Limited v. Republic of Zimbabwe (ICSID Case No. ARB/10/25). 36 Hong and Lee (2018). 37 In 2011, Teresa Cheng, a Hong Kong-based arbitrator, was appointed president of the tribunal for Bawabet Al Kuwait Holding Company v. Arab Republic of Egypt. Professor Shin Hi-Taek was the first Korean ICSID arbitrator appointed in 2013 as the president of the tribunal for Fábrica de Vidrios Los Andes, C.A. and Owens-Illinois de Venezuela, C.A. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/12/21). Yasuhei Taniguchi is the only Japanese arbitrator to participate in ICSID cases and was appointed in 2013 as an ad hoc committee member by the chairman of the ICSID Administrative Council in the annulment proceeding of EDF International S.A., SAUR International S.A. and León Participaciones Argentinas S.A. v. Argentine Republic (ICSID Case No. ARB/03/23).

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Avoidance of Litigation Against the Government 38 International investment law deals with situations similar to those under domestic administrative law.39 It is widely agreed that East Asian technocrats have not been subjected to extensive judicial interference, at least compared to their American and European counterparts; the state has thus exercised great power vis-à-vis the regulated parties.40 In China, the Administrative Litigation Law was not implemented until October 1990. Even now, taking local officials to court is still like “throwing an egg against a stone” for victims of administrative malfeasance because the chances of a successful outcome are minimal.41 Considering that China is still dominated by a single party, it is no surprise that Chinese courts play a complementary role in political-administrative mechanisms for dispute resolution and an even more limited role in the making of key policies, particularly with respect to politically sensitive cases.42 Traditionally, Japan has had a powerful administrative branch with a relatively modest judicial branch,43 and thus it is difficult for plaintiffs to prevail in administrative litigation in Japan.44 For decades, until the 1980s, Korea was subject to authoritarian regimes with an imperial presidency through the de facto presumption of executive supremacy by the use of various law enforcement offices, such as the police, the prosecutors’ office, and the intelligence office.45 Moreover, there are even legal obstacles to overcome, such as statutes of limitation, for administrative litigation in Japan and Korea.46 Similarly, although the Administrative Court and the Administrative Litigation Act had been effective for a long time in Taiwan, bureaucracy was only checked in a limited manner before 1987, when the Martial Law Decree was lifted and political liberalization began.47 38

Administrative litigation commonly refers to lawsuits filed by individuals or companies against decisions of governments and governmental officials that allegedly infringe upon the rights and interests of the individuals or companies involved. In the common law system, the term ‘judicial review’ is used instead and generally refers to review of governmental actions by the judiciary. See Li and Ma (2014). 39 Hamamoto (2014). 40 Ginsburg (2001). 41 Li (2013). 42 Peerenboom (2009). 43 Ushijima (2009). 44 Uga (2011). 45 Kim (2009). 46 E.g., Article 14 (1) of the Administrative Case Litigation Act of Japan (amended in 2007) states that no action to revoke an administrative disposition may be filed when a period of six months has elapsed from the day on which the person who seeks revocation became aware of the fact that the original administrative disposition or administrative disposition on appeal was made. However, this shall not apply if there are justifiable grounds for failing to meet the time limit. Article 20 (1) o the Korean Administrative Litigation Act has a similar provision, but it is even more restrictive and requires the plaintiff to initiate an action within ninety days from the date a disposition is made known to the plaintiff. 47 Yeh (2009).

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Because many are still hesitant to bring a claim against the state, administrative litigation has not been widely used in East Asia. As a result, there exists a huge gap in administrative litigation between East Asia and many other regions.48 Moreover, state-owned enterprises (SOEs) account for a significant portion of the Chinese and Taiwanese economies. State-owned enterprises and entities directly controlled by SOEs comprise more than 40% of China’s nonagricultural GDP.49 Including the contributions of indirectly controlled entities, urban collectives, and public township and village enterprises, approximately 50% of GDP is owned and controlled by the state.50 Taiwanese authorities control many SOEs in various sectors as well.51 In general, SOEs are not likely to bring administrative action against the government, because they are supposed to share many common interests with the government and generally act in alignment with it. In short, limited experience with bringing a legal claim against the government has likely contributed to East Asian investors’ hesitation to initiate ISDS cases.

Legal Culture In many respects, Confucian societies such as China, Japan, and Korea have demonstrated a preference for resolving interpersonal conflicts outside the confines of formal law through relational networks.52 Legal sanctions were used only when no alternative existed, or the gains were thought to outweigh the costs of compromised relations and trust.53 In general, informal mechanisms rather than formal legal rules were used to resolve most civil disputes.54 Confucianism is still the basis of disdain for litigation in China55 and Japan.56 In a dispute about transnational energy pipelines, a Chinese scholar claimed that the best way to settle a dispute was through diplomatic or political means, such as negotiation and consultation, and that legal methods should always be a last resort.57 In general, Japanese investors are risk-averse and prefer to take a long-term view when disputes

48

Hong and Lee, op. cit. 42–43. Szamosszegi and Kyle (2011). 50 Ibid. 51 International Business Publications (2013). 52 Ali, op. cit. 14. 53 Ibid. 54 Ibid. 55 Kaufmann-Kohler and Kun (2008). This may be coupled with the improving—but still relatively uncertain—rule of law and the resultant distrust of the court system in China. 56 Nottage (2014). For a social-cultural analysis of why arbitration has not been widely used in Japan, see Cole, op. cit. 57 Yang (2008). 49

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arise.58 Japanese investors tend to negotiate amicable settlements directly with the host state or through the informal good offices of their own government.59 In brief, the traditional Confucian preference for amicable resolution60 of disputes through moral persuasion rather than legal processes in China, Japan, and Korea61 appears to be an important factor affecting the number of ISDS cases.

High Proportion of SOEs in Outward FDI from China According to the Chinese Ministry of Commerce, outward FDI from China’s SOEs accounted for 69.2% of total outward FDI stock at the end of 2009, whereas private firms accounted for only 1% of total outward FDI stock.62 In addition, the top 30 firms, ranked by overseas assets and overall firm size, are all SOEs.63 The proportion of SOEs involved in outward FDI is estimated to be higher if other types of companies under the Chinese government’s influence are included.64 Chinese investors have emerged from a strongly state-led economic model featuring a high level of state ownership in national enterprises.65 As China’s corporate engagement is based on its diplomatic strategy,66 SOEs may be discouraged from initiating ISDS claims due to the diplomatic concerns of their home state, although Beijing’s control mechanism may not always be direct or effective.67 For example, China relies heavily on the coordination of a complex array of corporations and government bureaucracies to achieve its policy objectives in Africa.68 Moreover, a conventional moral hazard problem may prevent Chinese SOEs from initiating ISDS cases. They may feel free to act in a fiscally irresponsible manner by relying on China’s state-controlled banks for financial support, regardless of their economic performance.69 In short, because SOEs are the primary source of outward FDI in China, Chinese investors initiate few ISDS claims.

58

Nottage, op. cit. Ibid. 60 Wu (2012). 61 Kim (2007), op. cit. 28–31. 62 The Ministry of Commerce of the People’s Republic of China (MOFCOM) (2022). Other types of companies, such as limited liability companies, account for the rest. 63 Song (2011). 64 The Chinese government often holds a significant stake in non-SOE companies, as classified by the Chinese government, and thus exerts a considerable influence on them. 65 Knoerich (2015). 66 Gill and Reilly (2007). 67 Ibid. 38–9 and 47–8. 68 Ibid. 44. 69 Ibid. 48–9. 59

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Other Industry (109) Other (2) 0% 12% Services & Trade (28) 3% Agriculture, Fishing & Forestry (32) 4%

Oil, Gas & Mining (221) 24%

Tourism (36) 4% Water, Sanitation & Flood Protection (39) 4% Information & Communication (63) 7% Finance (65) 7% Transportation (74) 8%

Electric Power & Other Energy (154) 17% Construction (87) 10%

Fig. 3.1 ICSID cases by economic sector (as of September 1, 2022). Source The ICSID72

Concentration of Outward FDI in the Japanese, Korean, and Taiwanese Manufacturing Industries Industry-specific analysis is appropriate because investor-state disputes are more likely to occur in some industries (e.g., oil exploration) than in others (e.g., light industry).70 For instance, it is hardly expected that a foreign investor in a T-shirt factory would be concerned about the kind of mistreatment of investors unambiguously outlawed by BITs.71 Indeed, of the 910 cases in which the economic sector was identified by the ICSID as of September 1, 2022, investor-state disputes were most frequent (24%) in the oil, gas, and mining sectors, followed by the energy sector (see Fig. 3.1). Manufacturing is one of the least litigated industries in ISDS and belongs to the category of “other industry.” East Asia has highly manufacturing-oriented economies. The percentage of GDP produced by the manufacturing industries in China (incl. Taiwan) and Korea is higher than double the average in non-East-Asian economies.73 This economic structure has resulted in an unusually high degree of concentration of outward FDI in manufacturing, at least among the OECD members, although the degree of concentration has decreased in recent years (see Fig. 3.2). The same applies to Taiwan. By the end of 1995, 65.9% of Taiwanese outward investments were

70

Yackee (2010). Ibid. 72 ICSID (2022a). 73 Hong and Lee, op. cit. 46. 71

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70% 60%

58.4% 51.3%

50%

41.0%

40%

37.4%

26.0%

30%

21.7%

20% 10% 0% 2006 Japan

Korea

2019 OECD average, excluding Japan and Korea

Fig. 3.2 Proportion of outward FDI stocks in the manufacturing industry. Source Compiled from OECD.Stat76

directed at manufacturing activities,74 and manufacturing was the target industry of about half of Taiwan’s outward investment flow in 2013.75 To summarize, outward FDI from Japan, Korea, and Taiwan has been concentrated not only in the resource extraction and energy sectors (where ISDS is most frequently used) but also in the manufacturing industry (where ISDS is very rarely used). This seems to have contributed to the dearth of ISDS cases initiated by investors from those economies.

Factors Applying to the Few ISDS Cases in Inward FDI: Who Invests in East Asia, and Where Do They Invest? As indicated above in Table 3.3, East Asian economies have been respondents in ISDS cases far less often than other economies, including their counterparts in Western Europe and North America. What brought East Asia to this dearth of claims against their economies?

Investments from East Asia The characteristics of East Asian economies, as discussed in Part III—unfamiliarity with arbitration, avoidance of litigation (against the government), and the predominance of investment in the manufacturing industry—are still applicable to inward 74

Hoesel (2013). Megyeri (2014). 76 OECD (2022b). Data on Latvia, Mexico, and New Zealand are not available for 2006 and data on Mexico and the United Kingdom are not available for 2019. 75

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investment, because East Asian economies themselves are the primary sources of foreign investment in East Asia.77 For example, FDI from Hong Kong accounted for 70% of China’s inward FDI for a long period.78 In the case of China, “round-tripping” must be mentioned. In the past, it was a rather common practice for Chinese companies to set up so-called special purpose vehicles (SPVs) abroad for reinvestment on the Chinese mainland.79 Before 2008, one of the main goals of Chinese round-trip investment structures was to utilize special tax holidays for foreign-invested enterprises.80 Although the 2008 reform of China’s enterprise income tax system abolished this opportunity, round-tripping is still used to gain access to overseas financing and to avoid regulatory as well as practical problems with onshore listings.81 As a result, some have speculated that inward FDI in China may be overstated by between 25 and 50%.82 To summarize, this high proportion of intra-region FDI helps to explain why foreign investors in East Asia are generally wary of bringing ISDS claims.

Investments from Outside East Asia Concentration of Inward FDI in the Manufacturing Industry in China, Japan, Korea, and Taiwan As discussed in Part III, investor-state disputes are most likely to occur in the resource extraction and energy sectors but have little likelihood of occurring in the manufacturing industry. Foreign direct investment in the primary sector (mostly the extraction industry) has been quite sluggish in East Asia as a whole. Comparing the composition of the FDI inflow into China to that of the FDI inflow into other economies, foreign investors invest disproportionately more in the secondary sector (mostly manufacturing) than in the primary sector in China. Indeed, China’s mining industry received only 0.5% of the total inward FDI stock, far below that of many other economies.83 The share is even lower in Japan and Korea. By comparison, the primary sector in Latin America and the Caribbean received 23% of FDI inflows in 2005,84 and the

77

Hong and Lee, op. cit. 47–48. Zhang (2011), p 226. 79 Wolff (2011), p 22. 80 Ibid. Other goals of routing investment to China through Hong Kong include utilizing the Mainland and Hong Kong Closer Economic Partnership Arrangement or keeping investors’ identities secret. 81 Wolff (2011), op. cit. 22. 82 Poncet (2010). 83 Hong and Lee, op. cit. 49. 84 UNCTAD (2007). 78

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primary sector accounted for nearly 50% of FDI inflows between 1996 and 2000 in 24 African economies.85 By contrast, 70% of the FDI in China was concentrated in the manufacturing sector before 2002,86 partly due to the supply of cheap labor and the relatively low cost of materials.87 Inward FDI is highly concentrated in the manufacturing industry in Japan and Korea as well.88 In Taiwan, 61.5% of inward FDI flowed into the manufacturing industry in 2016.89 Although China is rich in natural resources, it has either discouraged or banned foreign investment in many areas of the extraction industry. From 1995 to 2017, the Chinese government promulgated the Catalog for Industry Guidance of Foreign Investment (hereinafter “the Catalog”), which determined the primary source of control over the industries in which foreigners may invest.90 For example, the 2011 Catalog restricted foreign investment in ten categories of mining and prohibited foreign investment in three categories of mining.91 Unlike those of China, the mining industries of Japan, Hong Kong, Korea, and Taiwan are not attractive to foreign investors. The mining industry does not play a significant role in these economies because natural resources are scarce and labor costs are high. Japan’s mining sector did not account for more than 0.2% of its GDP during any year from 1994 to 2013.92 In Hong Kong, the primary industry, including the mining and quarrying sectors, accounted for 0.1% of GDP from 2012 to 2016.93 In Korea, mining and quarrying activity accounted for just 0.2% of GDP in 2013 and 2014.94 In Taiwan, the mining and quarrying sectors accounted for 0.1% of GDP in 2014.95 To summarize, the concentration of inward FDI in the manufacturing industry and the lack of inward FDI in the resource extraction industry, where ISDS is most likely

85

United Nations Economic Commission for Africa (2006). Zhang (2011), op. cit. 231. 87 Liu (2011). 88 Hong and Lee, op. cit. 49. 89 See Taiwan: Foreign Investment, Santander Trade. https://en.portal.santandertrade.com/establ ish-overseas/taiwan/foreign-investment. Accessed 1 Oct 2022. 90 Bath (2011). The Catalog was divided into three parts: (1) encouraged industry, (2) restricted industry, and (3) prohibited industry. The last one was promulgated in 2017, and previous amendments were made in 1997, 2002, 2004, 2007, 2011, and 2015. See Catalogue of Industries for Guiding Foreign Investment (2017 Revision). 91 MOFCOM Catalogue for the Guidance of Foreign Investment Industries (外商投资产业指 导目录). http://english.mofcom.gov.cn/article/policyrelease/aaa/201203/20120308027837.shtml. Accessed 1 Oct 2022. In practice, there were a number of cases in which foreign investors made investments in China via a nominal shareholder for various reasons, such as circumventing the industry restrictions of the Catalog, foreign exchange rules, government formalities, etc. See Tian (2011). In such cases, investors were not eligible for standing in investment arbitration. 92 Wacaster (2016a). 93 HKSAR Census and Statistics Department (2022). 94 Wacaster (2016b). 95 Shi (2016). 86

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to be used, appear to have contributed to the dearth of ISDS cases brought against East Asian economies.

Preference for Informal Dispute Settlement with the Chinese Government It is not only Chinese individuals who are wary of legally challenging the Chinese government. Even foreigners in China would generally regard administrative litigation as hopeless, costly, and dangerous to their relationship with the state.96 Only a handful of foreign litigants have directly challenged the Chinese state in court, mainly in regard to patent or trademark litigation initiated by multinational companies.97 Multinational corporations regularly challenge government actions in the United States or the European Union courts, as well as in developing economies such as Mexico, Brazil, and India.98 For foreign companies in China, “tread carefully” continues to be the mantra of lawyers and businesspersons alike.99 Foreign investors in China—both from Asia and the West—have often relied on guanxi, special relationships with the relevant government agencies, to do business in China.100 They are often advised to hire local consultants who can provide information about the internal workings of the Chinese government. The local consultants, who are usually former government officials, may have guanxi that is useful in setting up and coordinating meetings.101 These local government relations staff will always want to resolve such disputes by negotiation,102 not through a legal process (e.g., administrative litigation or arbitration). Even a prominent foreign lawyer who has practiced in China for decades will strongly advocate for a nonconfrontational resolution of disputes with government agencies.103

Signs of Change: Why We Are Likely to See More Investor-State Arbitrations in East Asia in the Future It will become increasingly easier for both East Asian investors and foreign investors in East Asia to invoke investment treaties. As mentioned above, since the late

96

Givens (2012). Ibid. 9. 98 Santoro (2009), p 113. 99 Ibid. 100 Luo (2007). 101 Norton (2007). 102 Ibid. 103 Santoro (2009), op. cit. 114. 97

3 The Past, Present, and Future of Investor-State Arbitration in East Asia Table 3.6 Outward FDI stock from major countries and regions (2005–2020)

Economy/region China

2005

2020

57.2

71 Growth rate (2005–2020) (%)

2,580.7 4411.6

Hong Kong

476.2

1,920.7

303.3

Japan

386.6

1,837.1

375.2

Korea

38.7

500.9 1194.3

Macau

0.5

Taiwan

103.3

400.5

287.7

1,062.5

7,248.6

582.2

East Asia

8.8 1650.4

European Union

5,060.7 13,416.0

165.1

The United States

3,638.0

8,240.8

126.5

World outside of East 10,840.0 39,538.4 Asia

264.7

Source Compiled by the authors from UNCTAD Stat106

1990s, Chinese BITs have provided access to the ICSID for all kinds of investorstate disputes, not just those arising from expropriation. In addition, there has been competition among East Asian economies to sign more investment treaties.104 On the claimants’ side, it is likely that more East Asian investors will avail themselves of ISDS in the future for the following reasons. First, there have been fast and steady increases in outward FDI from East Asia, especially from China because its outward FDI stock grew by more than 44 times from 2005 to 2020 (see Table 3.6). This number is far above that of the European Union (165.1%) and the United States (126.5%). Chinese companies have increased their outward FDI because domestic markets have become increasingly competitive and saturated, especially after 2000.105 Such a trend is likely to continue for the foreseeable future because China’s outward FDI stock still accounts for a far smaller percentage of its GDP than the world average (see Table 3.4). Outward FDI stock from the rest of East Asia has grown substantially as well, far more than quadrupling from 2005 to 2020. By contrast, outward FDI stock from the rest of the world has grown only 264.7% during the same period. Second, international (investment) arbitration is becoming a more viable option for East Asian investors. The Chinese and Korean arbitration communities are becoming increasingly familiar with the ICSID proceedings,107 as the Chinese and Korean governments have been promoting international arbitration. For example, the Chinese government has increased its legal diplomacy efforts in Africa to promote

104

See Nikkei Asian Review (2016). Voss (2011). 106 UNCTAD (Unctad Stat: Foreign direct investment), op. cit. 107 Wu, op. cit. 8. In Korea, ISDS emerged as such a hot political issue in 2011 that even taxi drivers often talked about it. 105

72 200 180 160 140 120 100 80 60 40 20 0

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84

17 2002-06

2007-11

2012-16

2017-21

Fig. 3.3 Number of academic journal articles on ISDS in Korea. Source Compiled from KCI115

joint dispute arbitration mechanisms by establishing the China–Africa Joint Arbitration Centre.108 At the same time, the Korean government played a key role in establishing the Seoul International Dispute Resolution Center in 2013 and in the enactment of the Arbitration Industry Promotion Act in 2016. As Chinese lawyers are becoming more professional,109 arbitration has been increasing steadily in China.110 The capacity of corporate legal departments in Japan and Korea is improving partly due to the growing number of staff members who are practicing lawyers.111 The number of local arbitration experts who have participated in ICSID proceedings has more than doubled since 2017.112 In addition, more international law scholars in the region are studying and teaching ISDS. For example, only three scholarly articles on ISDS were published in Korean academic journals in 2005, but that number jumped to 16 in 2008 and has been more than 20 each year since 2012 (see Fig. 3.3). Moreover, it is now much easier than before for future lawyers in the region to obtain international arbitration experience, including ISDS, by participating in international competitions based in East Asia, such as Vis Moot (East), which was launched in 2004,113 and the FDI International Arbitration Moot Asia Pacific Regional Round, which was launched in 2009.114 Third, administrative litigation has been increasing in East Asia.116 Compared to 2008, the number of administrative litigations per capita in China had increased by 108

Osman (2017). Zhu (2014). 110 The number of arbitration cases reached 415,889 in 2021. See Global Times (2022). 111 Nakamura and Nottage (2013), op. cit. 225. 112 As of October 1, 2022, ten arbitration experts from East Asia have participated in ICSID proceedings as panels: Three from China, one from Hong Kong, four from South Korea, and two from Japan. ICSID (2022b). 113 Vis East Moot (2022). 114 Foreign Direct Investment Moot (2022). 115 Korea Citation Index (2022). 116 Hong and Lee, op. cit. 43. 109

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99.3% by 2016.117 Over the same period, the number of administrative litigations increased by 15.2% in Japan, by 27.7% in Korea, and by 142.5% in Macau.118 This trend suggests that East Asian investors will be more willing to sue foreign governments in the future.119 Fourth, the legal culture in the region is likely to change in the medium to long term. In China, Confucianism is weakening, while individualism is gaining strength among younger generations.120 The same applies to Japan,121 Korea,122 and Taiwan,123 although the degree of individualism may differ from region to region. Fifth, SOEs in China held over 80% of total overseas investment stock in 2006 but only 46.3% in 2020.124 Such a change will likely result in more ISDS claims by Chinese investors because Chinese private companies are expected to be less hesitant to resort to confrontational dispute resolution measures. Sixth, outward FDI is becoming increasingly diversified and less concentrated in the manufacturing industry, at least in Japan and Korea (see Fig. 3.2). This means that more will be invested in sectors in which ISDS is much more frequently used. On the respondent’s side, more ISDS cases are likely to be brought against East Asia. First, the primary and energy sectors—where investor-state disputes are most likely to occur—in East Asia are increasingly open to foreign investment. China has opened many areas of the primary sector to foreign investors. For example, special administrative measures applied by the 2015 Catalog to the exploration and development of unconventional oil and gas resources, such as oil shale, oil sands, and shale gas, were removed from the 2017 Catalog.125 Since 2018, the Chinese government has released the Negative Lists, which only prohibit foreign investment in rare earth, and the reconnaissance, mining, and beneficiation of radioactive minerals and tungsten in the mining sector.126 AsiaPhos v. China,127 the first known ISDS case brought in the mining sector against China, seems to signal an increase in similar cases in the future. In the energy sector, China relocated “construction and operation of power grids” from the restricted category to the encouraged one. Several types of power plants have also been included in the encouraged category in the 2015 Catalog. In addition, the 1994 Energy Charter Treaty (hereinafter the 1994 ECT), 117

Ibid. 54. Ibid. 119 Ibid. 120 Zhao and Du (2013). 121 Powell (2016). 122 Park (2017). 123 Yu and Miller (2003). 124 G:HUB (2014); Textor (2021). 125 Zhang (2017). 126 In 2018, the Catalog was replaced by the Negative Lists, which set out restrictive measures or bans with respect to access of foreign investment in certain special business sectors in China. Foreign investment in sectors not specified in the negative lists is subject to the same administrative measures as Chinese domestic investment. Garrigues (2022). 127 UNCTAD (2022b). 118

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the most frequently invoked treaty in ISDS cases,128 has been expanded to East Asia.129 Although Japan is the only East Asian member country of the 1994 ECT, China and Korea signed the 2015 International Energy Charter, a nonbinding set of principles for international energy cooperation that was intended as a first step toward accession to the legally binding 1994 ECT.130 Moreover, Japan’s electricity and gas markets were liberalized in 2016 and 2017, respectively, decades behind efforts in the European Union and the United States.131 Second, inward FDI in East Asia is becoming increasingly diversified, in accordance with fundamental changes in the economic structure of the region. International experience has demonstrated that the services sector becomes more attractive to foreign investment as an economy matures.132 In East Asia, the industrialization process has generally continued for quite some time, and the scope for further growth of the manufacturing sector is becoming increasingly limited.133 Overall, there is a general perception that, in East Asia, a weak services sector is less productive than a strong, internationally competitive manufacturing sector.134 China’s services sector is lagging behind that of other economies at a similar stage of development.135 Foreign direct investment in China is moving away from low-cost processing sectors to more value-added services.136 As a result, the proportion of FDI stock in the manufacturing industry has been steadily declining in recent years.137 This trend is likely to continue as Chinese policies attempt to direct more investment to the services sector.138 Similar situations have been observed in other East Asian regions. The share of the services sector in the market has been steadily increasing in Japan.139 In Korea, there has been a recent shift toward the services industry, which still has great potential for development.140 In Taiwan, industrial production declined from more than 50% of GDP in 1986 to 24.78% in 2009.141

128

According to data from UNCTAD, 145 out of 1190 known cases were based on the Energy Charter Treaty. The second most frequently invoked treaty was the North American Free Trade Agreement, which was invoked in 76 cases. See UNCTAD (Investment Dispute Settlement Navigator), op. cit. 129 Bernasconi-Osterwalder (2017). 130 Florini (2017). 131 Inajima and Urabe (2017). 132 Broadman and Sun (1997). 133 Noland (2012). 134 Ibid. 135 Wu (2016). 136 Jin and Li (2016). 137 Hong and Lee, op. cit. 55. 138 Ibid. 139 Kyoji (2010). 140 Phan and Jeong (2013). 141 Veeck (2011).

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Conclusion To conclude, many of the characteristics of East Asia have contributed to the dearth of ISDS cases. These factors, however, are changing, although the degree of change may differ from region to region. The differences between East Asian and international investors appear to be decreasing, as are differences in the industry structures between East Asia and many other parts of the world. This trend will likely lead to more active utilization of ISDS in East Asia in the future.

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Lin A, Li N (2013) Arbitration in Taiwan, the Republic of China. In: Ali, Ginsburg, op. cit. 534–5 Liu K (2011) Foreign direct investment in China manufacturing industry-transformation from a low-tech to high-tech manufacturing. Int J Bus Manag 6:15 Luo Y (2007) Guanxi and business. World Scientific, River Edge, pp 194–198, 206–208 Megyeri A (2014) Taiwan’s outward foreign direct investment (OFDI) into the European Union and its member states: quantitative research. European Institute for Asian Studies, p 11. https://www. eias.org/wp-content/uploads/2016/02/Taiwan_2014_Qualitative.pdf. Accessed 1 Oct 2022 Nakamura T, Nottage L (2013) Arbitration in Japan. Ali & Ginsburg Nikkei Asian Review (2016) Japan looks to more than double investment treaty partners by 2020. https://asia.nikkei.com/NAR/Articles/Japan-looks-to-more-than-double-investmenttreaty-partners-by-2020. Accessed 1 Oct 2022 Noland M (2012) Developing the service sector as engine of growth for Asia: an overview, p 1. https://www.adb.org/sites/default/files/publication/30080/economics-wp320.pdf. Accessed 1 Oct 2022 Norton P (2007) Informal dispute settlement approaches. In: Moser M (ed) Managing business disputes in today’s China: duelling with dragons. Kluwer Law International, The Hague, pp 19, 21 Nottage L (2014) Why no investor-state arbitration in the Australia–Japan FTA? East Asia forum. http://www.eastasiaforum.org/2014/04/09/why-no-investor-state-arbitration-in-the-aus tralia-japan-fta. Accessed 1 Oct 2022 OECD (2022a) OECD.Stat. http://stats.oecd.org/Index.aspx?DataSetCode=FDI_AGGR_SUMM. Accessed 1 Oct 2022a. OECD (2022b) FDI positions by industry. http://stats.oecd.org/Index.aspx?DataSetCode=FDI_POS ITION_INDUSTRY. Accessed 1 Oct 2022b Osman A (2017) China’s maritime silk road and the future of African arbitration. Transnatl Disput Manag 3. http://www.transnational-dispute-management.com/article.asp?key=2485. Accessed 1 Oct 2022 Park H (2017) Administrative culture. In: Namkoong K (ed) Public administration and policy in Korea: its evolution and challenges. Routledge, Abingdon, p 153 Peerenboom R (2009) More law, less courts: legalized governance, judicialization, and dejudicialization in China. In: Ginsburg T, Chen A (eds) Administrative law and governance in Asia: comparative perspectives. Routledge, London, New York, pp 175–176 Phan TH, Jeong JY (2013) The development of Korea’s service industry from a global historical perspective. Int Area Stud Rev 16:184 Poncet S (2010) Inward and outward investment in China. In: Greenaway D (ed) China and the world economy. Palgrave Macmillan, London, p 115 Powell M (2016) Human resource management practices in Japan: are they really changing? Merici 2:86. http://press-files.anu.edu.au/downloads/press/n2328/pdf/ch09.pdf. Accessed 1 Oct 2022 Santoro M (2009) China 2020: how western business can—and should—influence social and political change in the coming decade. Cornell University Press, Ithaca Shi L (2016) The mineral industry of Taiwan. U.S. Geological Survey, op. cit. 25.1. https:// www.usgs.gov/centers/national-minerals-information-center/asia-and-pacific#twn. Accessed 1 Oct 2022 Song L (2011) State-owned enterprises’ outward investment and the structural reform in China. Chin World Econ 19:39 Szamosszegi A, Kyle C (2011) An analysis of state-owned enterprises and state capitalism in China: U.S.–China economic and security review commission report. http://www.uscc.gov/sites/def ault/files/Research/10_26_11_CapitalTradeSOEStudy.pdf. Accessed 1 Oct 2022 Textor C (2021) Share of state-owned and private enterprises in outward FDI stock from China between 2010 and 2020. Statista. https://www.statista.com/statistics/730083/china-share-ofstate-owned-and-private-enterprises-in-outward-fdi-stock. Accessed 1 Oct 2022

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Chapter 4

Unveiling the Imperative of Distributive Justice in Science, Technology, and Development: A Legal Analysis Ridoan Karim

Abstract The collective social purpose and the idea of justice derived from the desire for equality in opportunity, one of the oldest political ideals that have been pursued by reformists and initiated numerous social movements. Inequality can manifest in different ways, but the lack of equal access to resources for development is a key factor and can lead to other forms of inequality. Developed economies based on science and technology hold more sway in international politics than developing and underdeveloped countries. Hence, equal access to science and technology is crucial in determining political power. The chapter explores theories of distributive justice to guide science and technology policies and suggests the need for an international framework to ensure equal opportunity in scientific advancement for all people. This framework can be achieved through utilizing different aspects of international law for just science and technology development. Keywords Distributive justice · International law · Science · Technology · Development

All the websites cited in this article were last visited on February 15, 2023. R. Karim (B) Department of Business Law and Taxation, School of Business, Monash University, Sunway Campus, 47500 Subang Jaya, Selangor, Malaysia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_4

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Introduction The history of justice may be traced to the moment when humans discovered that living in solitude was not a viable choice and interactions were required for existence.1 The notion of equal status and entitlements also dates back to the beginning of human coexistence, which is also regarded as one of the earliest steps towards civilization.2 People searched for a notion or framework that satisfied their needs because they needed to evaluate themselves concerning other members of society from an economic and social standpoint. As such, with an inherently desirable objective, the term “justice” aims to alleviate unfavourability, injustice, or inequality.3 The collective social purpose and the idea of justice derived from the desire for equality in opportunity, which is one of the oldest political ideals that has been pursued by reformists and initiated numerous social movements.4 Inequality is the most crucial problem that justice deals with.5 The issue of inequality in several spheres of social life has compelled society to implement change by making justice an integral part of their lives.6 Although inequality can be viewed and experienced from social, political, and economic perspectives, this chapter focuses on inequality in science and technology developments and connects it with justice. The most significant aspect of or contributor to inequality is not having equal access to the tools of development; this type of inequality has the potential to be highlighted as the facilitator or even the origin of various other inequalities.7 A sophisticated and developed economy based on scientific and technological developments increases one’s position in political negotiations and decision-making over other undeveloped and developing countries.8 That is why the equal opportunity of science and technology development plays a significant role in deciding political stance. Therefore, science and technology inequality must be addressed and resolved before political and social inequality can be addressed and resolved in this digital era. A recent example of such can also be seen in the vaccination process for COVID-19. Within the first year of distribution of vaccines against COVID-19, high-income countries (HICs) have achieved 75–80% vaccination rates, while low-income countries (LICs) are vaccinated below 10%.9 This disparity in 1

Frohlich (2007). Ibid, 256. 3 Reis (1984). 4 Tyler (1984). 5 The theme of inequalities and justice is proposed as an inclusive intellectual framework that captures a variety of issues concerning differences in society. Equality and justice both represent egalitarianism and fairness. Without equality, true justice cannot exist; and without a way to deliver just verdicts that ensure impartial treatment, the meaning of equality is nothing more than an unenforced altruism. See Yue (2019). 6 Ibid. 7 Hess et al. (2016). 8 Karim et al. (2018): 163–181. 9 Van Wyngaard (2022). 2

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access has been one of the most significant failures of international cooperation during the SARS-CoV-2 pandemic.10 The highly advanced countries in science and technology ushered with the resources to develop the vaccines and capped them only for the usage of their own citizens. In contrast, the under-developed or developing countries were struck down at the negotiation tables with a call to waive the intellectual property (IP) claim over the vaccine development process. The nationalistic approach during this time showed how inequality affected not only a particular society but also the whole world. Hence, it is a call for time to look into the development of science and technology from the justice perspective. With such an aim to analyse the justice-based approach to science and technology developments, this essay examines the distributive justice concepts that underpin shared justifications and objectives in science and technology policy. Although various nations use different policy instruments for national science and technology development, there should be an international construct to reflect comparable underlying justifications of equal opportunity to use scientific advancement for all humankind and clear objectives that can be implemented worldwide. To implement such an international construct, I look into different aspects of international laws that might be utilized for achieving distributive justice-based science and technology development.

Theoretical Contest Over Justice, Science, and Technology As human social lives have developed and become more complicated, several new challenges have arisen. In this connection, numerous philosophies and interpretations of theories have been advanced to evaluate the merits of certain situations, acts, and the lack or omission of particular activities. Many social movements and social reformers sought to bring justice to what they saw as an unfair system.11 However, such theories have not often looked beyond society, with a standpoint of international peace-making, law, state morality, and so on.12 Economic disparity is significant between developed and under-developed countries, emphasizing the need to address it quickly since the longer it is left unattended, the wider the gap between the affluent and the poor will be.13 10

Kim (2020). Shavit and Westerbeek (1998). 12 Crocker (1998). 13 For example, according to research by Action Aid, hunger might be costing under-developed and developing countries USD 11 billion annually in the coming days, and the so-called international organizations have failed so far to find an equitable solution to that. The most horrific fact is that the developed world has not yet taken this into account to address. See International Institute for Sustainable Development (2016). It seems that they do not feel that the African or Asian problem is not their problem, but the American, Europe, or West problems are the world’s problems. Similar connotation is drawn by the External Affairs Minister of India S. Jaishankar at the Howard University Founders Library in Washington. See Europe has to grow out of mindset that its problems are world’s 11

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Nevertheless, what about addressing the reasons that affect economic inequality? Although today’s digital era poses significant difficulties to de facto denationalization, which is primarily attributable to globalization,14 the conscience of world leaders seems ignorant about it.15 Undoubtedly, globalization has numerous benefits, as well. However, one of the highly topical issues that has been worse throughout the years of globalization is the inequality.16 Numerous worldwide initiatives have been made to address the inequality issue, particularly as a larger set of global challenges.17 As international agreements have been set up to guide the efforts to address these issues, several solutions have been proposed.18 However, all the suggestions and solutions should be discussed within a theoretical context and need to be relooked beyond the manifestation of international politics. Digitization worked as a catalyst for globalization, and the multidisciplinary field of science and technology should also be scrutinized from ethical viewpoints.19 Without philosophical discourse, no one can comprehend the realm of modern life sciences and technology policies. There are so many scientific and technological concerns with moral implications. For example: how should humans treat the environment?; In the case of technology development, what interests need to take precedence?; What moral standing must humans have before utilizing a particular technology?; Will we only use technology for peace and development; or can we use it for protection and destruction as well? It is not surprising that ethics training is encouraged in the biological sciences. Health practitioners unquestionably need the ability to approach ethical problems methodically. Health science is a category that must make morally challenging decisions. Scientists and researchers also encounter moral dilemmas.20 With the preparation in ethics, the science and technology policy arguably can be more prepared with a thorough and comprehensive set of moral concerns.21 Among different theories, I emphasized the distributive justice principles to promote equitable science and technology development. Studying ethics, morality, and equality and understanding the interconnections between them is becoming more important for studying the science and technology policy, while the general scientific and engineering research community is becoming more interested in using research to address issues like gender and poverty inequality, among others.22 However, occasionally it seems as though this moral ship never had problems: Jaishankar. https://indianexpress.com/article/india/europe-has-to-grow-out-of-mindsetthat-its-problems-are-worlds-problems-jaishankar-7951895. 14 Mandle (2000). 15 Allen-Handy et al. (2021). 16 Huh and Park (2021). 17 Ibid. 18 See generally Bohman (1999). Also see Druckman and Albin (2011). 19 Royakkers et al. (2018). 20 Resnik and Elliott (2016). 21 Albrechtslund (2007). 22 Van Dijk (2006).

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a compass.23 Whatever waters it is venturing into, distributive justice as a moral tool must guide the philosophers to explore the scientific world. Again, justice is nothing but actually the application of equality.24 So, when talking about justice, I refer to equal opportunities to gain the fruit of science and technology developments. A Nobel Laureate, Amartya Sen points out that equality is a multidimensional space where various observers attach certain aspects (their “focal variables”) to it.25 Sen points out that increasing equality in one dimension almost always entails decreasing it in another.26 The quest for equality is inherently a decision- and trade-off-based process.27 In fact, the concept of distributive justice frequently brings up conflicts between the terms inequality and injustice, which are used to describe any uneven distribution, whether good or wrong.28 Depending on one’s distributive morality, equality might be unjustified and inequality can be just. In practice, many science and technology policies and initiatives seek justice, for instance, by providing chances to women and underrepresented ethnic minorities who have been unjustly barred from jobs in science and engineering. In these situations, advancing inequality (through a quota or something beneficial for minorities) is anticipated to result in equality. Other policies and initiatives try to lessen inequality by emphasizing economic development in rural regions or creating well-paying employment that will widen the centre of income distribution. Living together in a world of increasing economic disparity is difficult to maintain, but it is simpler to foresee a peaceful future in an environment of shared wealth. In many situations, diminishing disparity is sufficient; achieving complete equality is not the aim. Science and technology policy may be broken down analytically into four subareas: research, innovation, human resources, and regulatory policies.29 These areas call for an international commitment to reflect comparable underlying justifications for equal opportunities. Equality, diversity, and inclusion should be embedded in research culture and processes. Similarly, the research workforce (scientists) should considerably calculate the impact of their work with more diversification, so that the research is accessed and benefits far wider communities. In this age of widespread disruption, developed countries innovate continuously, creating new markets, experiences, products, services, content, or processes.30 Nevertheless, the international scientific community should cherish a culture of equality—providing access to knowledge and innovation that helps every community advance. If the world can lead to such regulatory policies over the distributed justice towards science and

23

Vaandering (2011). See Ake (1975). 25 Sen (1992). 26 Ibid, 16–19. 27 Ibid. 28 Ibid, 13–23. 29 Cozzens (2007). 30 Sharif (2012). 24

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technology developments, then it can lead to equality in which every country will be a powerful multiplier of innovation and growth.31

The Concept of Justice, Science, and Technology Development Under International Law Law has been built on two main tenets: order and justice.32 Laws are generally a set of rules and regulations that tries to control the interactions between social actors and resolve their problems.33 The advancement of human society and civilization into increasingly complex environments has given rise to numerous branches and subfields within the science of law,34 leading to a perceived insufficiency in the conventional definition and understanding of justice to guide the various legal subjects. The concept of justice has a rich and well-documented history across both public and private law, with numerous legal scholars exploring its various interpretations and applications. In tort, for instance, the principles and rules of liability are frequently subjected to scrutiny through the prism of justice, with corrective justice being the traditional basis for liability. Nevertheless, there remains ongoing debate among legal experts as to whether tort should also incorporate principles of distributive justice.35 A significant number of legal experts believe that tort law reflects a fusion of both corrective and distributive justice, offering a nuanced and comprehensive approach to addressing liabilities and grievances within the legal system.36 Here, the calculation of compensation is centred around re-establishing the autonomy of the victim who has been impacted by the wrongful actions of the wrongdoer.37 The distributive justice-based capability approach represents a robust method of establishing a baseline standard of protection in tort law, establishing not only a comprehensive catalogue of safeguarded interests but also a standard for rectifying any wrongful breaches of those interests. As a theory of social justice, this approach guarantees a minimum level of protection for both the victim and the wrongdoer, promoting fairness and equity in the legal system.38 A few implications of the notion of justice are also considered in contract law39 and property law,40 but it has a significant impact on areas of public law like tax law.41 31

Cozzens (2007). See Allan (1988). 33 Ibid. 34 Van Krieken (2019). 35 Wells (1989). 36 For example: Schwartz (1996); Cane (2001); Coleman (1991); Shmueli (2014). 37 Loth (2015). 38 Ibid, 804–808. 39 Kronman (1979). See also Jimenez (2015). 40 Scheffler (2015). 41 Sugin (2003). 32

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The justice method has also been one of the most significant academic discussion in criminal law.42 However, the situation is different under international law. Due to its origin, international law has not invoked a true and unified justice approach in the political and economic order; it rather anticipates many conflicts between various theoretical schools.43 The application of justice-based principles has faced numerous obstacles within the realm of international law, with some highly regarded justice-oriented thinkers challenging the relevance, impact, and preeminence of justice within the world order.44 The core theory of justice acknowledges the practical difficulty of implementing justice principles in the global arena in the absence of a centralized governing structure but recognizes the critical significance of justice standards in all human-related dealings and exchanges.45 For example, in the case of ensuring freedom and justice, the reference of international law can be traced back during the era of the Universal Declaration of Human Rights (UDHR).46 The Universal Declaration of Human Rights in its Article 27(1) protects the liberty of scientists to pursue scientific exploration and disseminate their discoveries without interference, fostering a human rights-oriented approach to science that strives to facilitate equitable collaboration and unhindered access to scientific advancements and information.47 Aside from the UDHR, two other pivotal international human rights instruments play a key role in fostering human rights-oriented approach in science and technology, while ensuring their safe and ethical application. These are the 1994 UNESCO Recommendation on the Status of Scientific Researchers and the 1999 UNESCO Declaration on the Use of Scientific Knowledge, both of which uphold the principle of responsible and ethical conduct in the field. The UNESCO Recommendation on the Status of Scientific Researchers 1974 asserts through Article 4 that all progress in scientific and technological knowledge should serve to enhance the welfare of the global community and mandates that member nations establish the necessary policies, protocols, and strategies to fulfil this purpose. Moreover, the UNESCO Declaration on the Use of Scientific Knowledge in 1999, underscored the paramount importance of science and its applications in propelling growth, and emphasized the critical need for enhanced support from both government and private sectors, at all levels. This support is crucial in cultivating a dynamic and equitable scientific capacity through a comprehensive framework of education and research programs. These initiatives form the bedrock of sustainable socioeconomic and environmental progress, providing a solid foundation for a brighter future that embraces inclusivity and innovation.

42

Sadurski (1985). Koskenniemi (2001). 44 See generally Paulsson (2005). 45 Ibid. 46 Waltz (2001). 47 Karim et al. (2018): 163. 43

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Additionally, the International Covenants on Economic, Social, and Cultural Rights48 and International Covenants on Civil and Political Rights, both adopted in 1966, highlight the fundamental rights that secure the overall protection of all human individuals.49 The bedrock of individual rights has been firmly secured through these international human rights agreements. These pivotal accords have enshrined fundamental rights that are essential to the dignity and well-being of all human beings, such as the right to life, bodily and spiritual security, privacy, freedom of thought and expression, and unfettered access to information. By upholding these rights, we create a world where all individuals can thrive, empowered by their innate potential and unfettered by oppressive forces. It is a vision of a just and equitable society, where the human spirit can soar and flourish.50 The International Covenant on Civil and Political Rights enshrines the right to information, as outlined in Article 19, acknowledging the importance of freedom of expression in all forms of communication. This right guarantees the ability to seek, receive, and disseminate information and ideas without boundaries. Additionally, the Convention on the Prevention and Punishment of the Crime of Genocide, adopted by the General Assembly in 1948, provides specific provisions to safeguard the right to life from the harmful exploitation of science and technology. However, despite these significant advancements, the pressing need to protect the “right to know” has yet to be addressed through the creation of a global instrument. This critical right remains in jeopardy, underscoring the urgent need for concerted efforts to safeguard it at all costs.51 During the 1986 Seville Colloquium, the issue of the “right to know” was discussed, particularly in relation to the “necessary restrictions in a democratic society” clause in Article 11(d) of the Convention on the Prevention and Punishment of the Crime of Genocide. It was proposed that this right could be encompassed within the right to freedom of expression, as it is firmly established in the judicial precedents set by the European Court of Human Rights.52 A prime example of the affirmation of the public right to access information and the media’s responsibility to facilitate it can be seen in the landmark decision by the European Court of Human Rights in the case of Sunday Times.53 This particular case serves as a compelling testament to the far-reaching impact of scientific progress on human rights. It underscores the potential negative consequences that can arise from medical advancements, such as the thalidomide tragedy, and highlights the critical importance of ensuring the public’s access to information. The media, in turn, has an equally vital role to 48

International Covenant on Economic, Social and Cultural Rights Adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16 Dec. 1966 (entry into force 3 Jan. 1976, in accordance with article 27). https://www.ohchr.org/en/instrumentsmechanisms/instruments/international-covenant-economic-social-and-cultural-rights. 49 Smith (2022). 50 Ibid, 166. 51 Sand (2011). 52 Impacts of Scientific and Technological Progress on Human Rights: Normative Response of the International Community. http://archive.unu.edu/unupress/unupbooks/uu06he/uu06he0c.htm. 53 Ibid.

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play in upholding this right, as affirmed by the European Court of Human Rights.54 The European Court of Human Rights determined that the Article 10 of the European Convention on Human Rights encompasses both the public’s right to access information about the consequences of consuming pharmaceutical products and the responsibility of the media to disseminate this information.55 Therefore, it becomes a fundamental right of individuals to be informed of the potential harm they may experience as a result of scientific actions/advancements, and the media has a crucial role in facilitating this information dissemination. To compare this right in today’s world, we may simply say that a professional painter must be aware of the dangers of lead inhalation, and a software developer must be aware of the risks associated with prolonged exposure to a computer screen. Additionally, the Covenant on Economic, Social, and Cultural Rights briefly mentions the state’s responsibility to harness scientific and technological advancements for the benefit of society.56 The closest legal framework to promoting fairness and equity in the realm of science and technology is the Declaration on the Establishment of a New International Economic Order, adopted by the General Assembly on May 1, 1974. This Declaration outlines the collective effort to establish a new international economic order that is grounded in principles such as equity, interdependence, and co-operation among all nations. Article 4(p) of the Declaration emphasizes the importance of giving developing countries access to modern scientific advancements and promoting the transfer of technology that can benefit their economies, in a manner that is tailored to their unique circumstances.57 The United Nations’ paramount focus on growth and development not only promotes economic progress but also brings with it new rights for developing and underdeveloped nations. By prioritizing the development of these nations, the UN recognizes that access to fundamental human rights such as education, healthcare, and technology are essential to building thriving societies. Through this focus on growth and development, the UN seeks to empower individuals and communities, promoting greater equity and justice on a global scale. This underscores the critical importance of ensuring that all individuals, regardless of their socioeconomic background, have access to the resources and support needed to lead fulfilling lives and contribute to the overall progress of their communities and the world at large. Back in 1974, the UN General Assembly took a historic step by adopting the Charter of Economic Rights and Duties of States. This landmark document granted states the authority to regulate and oversee the activities of transnational corporations within their borders, as outlined in Article 2, paragraph 2(b). Additionally, it recognized the crucial importance of leveraging advances in science and technology to drive economic and social progress, as articulated in Article 13, paragraph 1. Five years later, the UN Conference on Science and Technology for Development was held in Vienna, where a similar stance was taken. The conference produced a Declaration 54

Ibid. Ibid. 56 Karim et al. (2018): 163. 57 Ibid. 55

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that called for further exploration of alternative technologies and emphasized the critical role that science and technology can play in advancing development goals.58 However, realizing the human rights discussed above necessitates a favorable social environment across all aspects of life. It’s important to note that a state undergoing social upheaval may not be a reliable indicator of progress in implementing human rights or technological advancement. For individuals to exercise their right to benefit from scientific and technological progress and to enjoy a decent standard of living, more than just national transformations are required. A shift in the global order is also essential. Although the idea of justice-based science and technology development has been discussed in various international law and policy circles, it has not gained significant outcome. This could be due to several reasons. Firstly, there has been a shift towards a more neoliberal approach to development, which emphasizes market-based solutions and private sector involvement over government-led initiatives. This has resulted in a focus on economic growth and efficiency rather than equitable and just development. Secondly, there has been a trend towards technocratic approaches to development, where technical and scientific solutions are given greater priority than social and political considerations. This has led to a neglect of the social and political dimensions of development and a lack of attention to issues of justice and equity. Lastly, there has been a lack of political will and leadership to prioritize justice-based science and technology development in international institutions and initiatives. This may be due to competing priorities, limited resources, or a lack of consensus on the importance of justice-based approaches to development. This has made a basis for my argument that there remains an absence in the practice of justice in the basic structure of today’s international law. The necessity to include the practice of justice in international law is more evident than ever in light of the current world situation. Many scholars consider that many injustices and inequities have been passed down through international law by itself, which serves as the foundation for controlling the behaviour of international players.59 The shady past of colonialism, as well as the huge and persistent violations of human rights throughout the subsequent industrial revolution have unfairly influenced the structure of the contemporary international order.60 Additionally, the development of international institutions during the Second World War brought forth a new system of international law that, in some ways, impacted the process of wealth distribution on a global level.61 Recent academics and practitioners have been more driven than ever to use justice theories due to the inherent disparities in international law.62 Even if people are divided by national borders, economic interactions derived from global technology usage have allowed them to influence one another’s welfare. The notion of justice has been thus stimulated by this connection, its ramifications, and the significant 58

Crane et al. (2009). Berman (2004). 60 Lu (2011). 61 See generally Benvenisti and Downs (2007). 62 Caney (2001). 59

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inequalities brought on by globalization. As a result, the justice approach to international law is currently undergoing evolution, having passed through its infancy and associated immaturity to reach a position that is both acceptable and better evolved. Some academics, particularly those who adhere to Rawls’ theory of justice, have sought to draw a line for implementing equality under the umbrella of international law.63 In the next section, I will further explain how Rawls theory of justice be used for the sake of equal science and technology development. While I address the concept of justice, I advocate for a broader, moral and philosophical application of justice beyond political borders. I contend that the examination of justice should focus on the rights and equality of all individuals and that political borders should not restrict the application of justice in both individual and international contexts. In reality, many international boundaries are divides that resulted from colonial periods; in some cases, they combined multiple populations and cultures into one state, while, in others, they divided a single community across several states. National borders are becoming less significant as a result of globalization, even in places like Europe, where the governments often represent nations with similar cultures, languages, or histories. Therefore, while political borders are an existent fact that cannot be ignored in this process, justice does possess the necessary legitimacy and reason to be implemented internationally as an important notion and significant theory.64 In other words, the principles of justice enjoy the legitimacy and essential rationale to be applied worldwide and globally. With the notion of national and political boundaries already in place, however, the actual question is: how can the justice theory enter the international domain?

Rawls’ Theory of Justice and Its Implication Any simple explanation of Rawls’ theory will not be able to do justice to its richness and complexity. I can only strive to briefly describe the elements that are crucial to my arguments. At the heart of Rawls’ philosophical viewpoint lies the concept of “justice as fairness.” This idea posits that principles of justice will only be deemed fair if they are agreed upon in an environment where relevant ethical and practical considerations are the sole factors that influence the decision-making process.65 Rawls’ aims to attain fairness in decisions regarding justice by removing any bias and personal benefit through his method of eliminating prejudice and self-interest from the process.66 Rawls’ approach to establishing principles of justice is rooted in the concept of a rational agreement reached between individuals.67 Rawls aimed 63

See generally Jackson (2006). Fraser (2009). 65 Rawls (1971). 66 Ibid. 67 Ibid. 64

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to tackle the challenge of ensuring equitable distribution of justice in society by challenging the conventional philosophical perspectives on defining a just society and the reasoning behind social actions and policies.68 The utilitarian philosophy posits that the collective good should be prioritized, referring to the welfare and happiness of the majority over that of the minority. This idea is founded on the belief that the greatest happiness for the greatest number should be the ultimate objective of society.69 Rawls sought to create a fair and impartial concept of social justice by challenging utilitarian arguments through his application of the social contract theory.70 The social contract approach regards society as a delicate tapestry that is intricately woven together from the threads of agreements and mutual understanding between all of its members. This concept finds its origins in the brilliant minds of the Age of Enlightenment, a time of boundless intellectual and philosophical exploration in the eighteenth century.71 The philosophy of the social contract posits that individuals within a society have willingly relinquished certain liberties and accepted the authority of their ruler in exchange for the safeguarding of their remaining rights and the preservation of social rights.72 Rawls posits the concept of “justice as fairness” and prioritizes social justice as the fundamental attribute of social institutions.73 Rawls rejects the idea of going back to an imaginary past to determine the foundation of society, as Locke and Rousseau did in their social contract theories. Instead, he uses “the original position” to envision a just social organization. The original position represents the perspective of the “noumenal self,” a rational being whose choices are free from bias.74 Rawls’ concept of the original position is rooted in Kant’s distinction between the phenomenal self (the physical self) and the noumenal self (the non-physical, rational being). Rawls also introduces the concept of the Law of Peoples, which provides a moral framework for global order and restricts state autonomy and sovereignty in favor of preserving peace and human rights.75 Rawls bases his theory on peoples, rather than states, as they have a “common moral nature”.76 The principles he proposes require peoples to be organized in their own states, observe treaties and undertakings, and refrain from intervening in each other’s affairs.77 Hence, the Law of Peoples will limit the national right to wage war in the cause of preserving peace and human rights.78 68

Cohen (1997). Majtényi (2004). 70 Castiglione et al. (1995). 71 Ibid, 18. 72 Ibid, 24–25. 73 Rawls (1993a). 74 Rawls (1971), pp 255–256. 75 Rawls (1993c). 76 Ibid, 3. 77 Ibid. 78 Wilkins (2007). 69

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Rawls proposed an analytical tool that requires representatives of the world’s population to select the moral principles that would ensure a fair global system. The question arises as to how these representatives would be chosen. One possibility is that they represent all of humanity, while another is that they represent certain peoples. Rawls himself favors the second option. His objective is to build on his earlier notion of justice within a nation. Critics of the former alternative argue that letting individuals represent the global population is flawed since it assumes that each person is a decision-maker and presupposes a particularly liberal, individualistic conception of a person.79 Does that mean Rawls supported individualistic approach? The answer to this is illustrated by Peter de Marneffe in the Chapter “Individualism”: RAWLS’S THEORY OF justice is individualistic in one sense, but, according to him, not in another. The sense in which it is individualistic can be gleaned from the passage in which Rawls writes that although “it is customary to think of utilitarianism as individualistic. utilitarianism is not individualistic” because it does not “take seriously the plurality and distinctness of individuals” (TJ 29). The principle of utility directs us to evaluate a government policy by considering only whether it would result in the greatest aggregate sum of utility. Parties in the original position would therefore choose the principle of utility to govern their society only if they assume that a big loss to one person is compensated for by small gains to many people. But to assume this, Rawls argues, is to apply the principle of rational choice for one person to all of society, which fails to take seriously the separateness of persons. Parties in the original position, according to Rawls, do not assume this. Rather they rank systems of principles by considering whether the best possible outcome for them under a system (for example, the outcome of being super rich) is good enough to justify accepting the worst possible outcome under this system (for example, the outcome of being terribly poor), or whether they should choose another system which has a less desirable best possible outcome (being well off but not super rich) but also a more desirable worst possible outcome (having relatively modest means but not being poor).80

How would then a theory of global justice based on Rawls’ contract theory look like? A theory of global justice based on Rawls’ contract theory would involve representatives of the world’s population coming together to choose the moral principles for a fair global system. The representatives could either represent all of humanity or certain peoples. The representatives would operate from an original position, which aims to convey the perspective of the “noumenal self”—the free and equal rational being whose choices are untouched by prejudice and other factors. They would select principles of justice and rights that apply to the global order and establish the principles of rights, justice, and the common good for the global order. Overall, a theory of global justice based on Rawls’ contract theory would prioritize fairness, equality, and the protection of human rights for all individuals and peoples in the global community. I believe global justice on the basis of Rawls theory should incorporate a principle of equal distribution of social goods unless an unequal distribution is to the benefit of the least advantaged. This principle has a global application and implies institutionalized global redistribution in favour of undeveloped or developing countries. In A Theory of Justice, Rawls argues that it is “…circumstances, institutions, and historical traditions…” that decide which economic system and which social 79 80

Collste (2005). Marneffe (2014).

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institutions best serve the realization of justice.81 This also applies to global justice. However, global justice is probably incompatible with unregulated technological globalization. The democratization of global governance institutions is important for institutionalized science and technology redistribution mechanisms. Therefore, the principles of global justice also call for stronger institutional and political control, but at the same time, it provides a ground for equal opportunity to access scientific and technological development. Today’s world calls for addressing climate change, geopolitical insecurity, and other institutionalized regional and global problems.82 Access to science and technology development has at least two important implications for a discussion about justice. First, it implies that there are new and positive political control and accountability over the development of technologies. Secondly, it implies global interdependence, which challenges the “methodological territorialism” of earlier theories of justice. Hence, in the age of globalization, science and technology advancements demand more than a Society of People in Rawls’ terms. Global justice demands a democratic influence and a global application of the access to science and technology principle. Hence, the theory of global justice based on Rawls’ contract theory would likely include provisions for ensuring equal access to scientific and technological resources for all individuals, regardless of their socioeconomic status or geographic location. This can help address the global digital divide and ensure that all individuals have equal opportunities to benefit from scientific and technological progress. Nevertheless, the question remains whether it is possible to realize true access to science and technology worldwide? Is it not just a utopian dream? This issue cannot be fully discussed here. Instead, I will just quote Rawls himself in reference to the notion of what he refers to as a realistic utopia: While realization is, of course, not unimportant, I believe that the very possibility of such a social order can itself reconcile us to the social world. The possibility is not a mere logical possibility, but one that connects with the deep tendencies and inclinations of the social world. For as long as we believe for good reasons that a self-sustaining and reasonable just political and social order both at home and abroad is possible, we can reasonably hope that we or others will someday, somewhere, achieve it; and we can then do something towards this achievement. This alone, quite apart from our success or failure, suffices to banish the dangers of resignation and cynicism.83

Distributive Justice in Science, Technology, and Development: The Way Forward Should science and technology policies try to achieve equality or reduce inequality? If yes, how? Following Rawlsian reasoning, fairness includes providing an advantage to one culturally-defined group over another, depending on the need of that particular 81

Rawls (1971), p 280. Held (1995). 83 Rawls (1993b). 82

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group, ultimately leading to a just society. Although these are lengthy processes, there is no reason to presume that they will not result in justice and equality. It is clear from historical precedent and analyses of modern civilizations that eliminating inequality is a feasible objective by allowing the global community to gather and distribute scientific information and its benefits.84 Fundamental rights in intellectual property (IP) must be safeguarded, as well. Nevertheless, justification for IP should follow utilitarian principles, which advise that certain scientific and technological information must be regarded as universal to provide the greatest amount of public benefit.85 Nevertheless, a completely utilitarian policy approach would put the actual distribution of benefits out of the hands of people who create knowledge and rest it in the hands of social policy and the market to exploit.86 This is where the principle of justice as fairness comes into being. Science and technology policy must determine if it serves both the underprivileged and the privileged since it has a moral obligation to ensure that everyone benefits. So, how should it go about fulfilling this obligation? The goal can be accomplished at the level of international programmes or policies by directing innovative efforts towards underprivileged groups, by utilizing public procurement to drive innovation towards their needs, or by establishing international regulatory requirements that safeguard them. Such initiatives and regulations already exist in several situations and may be developed in others. A universal evaluation of the balance of benefits would be more challenging to put into practice, but maybe the science indicators should view this measurement as its unique moral obligation.87 All science and technology policies should drive to maximize the public benefit to cater to the underprivileged groups and undertake initiatives that foster participation in research of global communities with a distributive justice approach.88 Many components of the distributive justice approach have different purposes, yet they work together.89 This coexistence highlights the variety of alternatives accessible to science and technology policymakers to combine, contrast, and develop international regulations for the more significant benefit. Equal access to science and technology will address the inequalities raised by the “digital divide” between those who have access to information technology and those who do not. These concerns can be addressed when the access and use of technology and information devices will follow the principles of justice. However, we cannot ignore that international justice, which is essential for tackling issues with science and technology regulation, is not included in Rawls’ definition of social justice. In contrast to assessing fairness across civilizations, Rawls limits this paradigm to evaluating justice inside one community.90 It solely does business 84

Doyle and Stiglitz (2014). Devlin and Sukhatme (2009). 86 Lemley (2015). 87 Karim et al. (2018): 163–181. 88 Cozzens (2007). 89 Mitchell et al. (2012). 90 Scott et al. (2011). 85

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on a national basis, not internationally. According to Rawls, “modern constitutional democracies” are the only ones to which his theory of justice for institutions is applicable.91 Given the global challenges it highlights, this poses a serious obstacle to utilizing this approach to investigate issues of justice pertaining to science and technology.92 Although this issue may be addressed using Rawls’ methodology, many authors have utilized Rawls’ framework as a springboard for creating theories of global justice.93 Participants in discussions regarding international science and technology regulation would represent the people of many nations without being aware of whose nation they are speaking for. They will gain knowledge about the overall conditions and social customs of many nations, as well as the relative disparities in income and power among them. Then again, there remains the problem of governments that disagree with the liberal assumptions that underpin Rawls’ theory and his conception of primary goods and basic liberties. The concept of “overlapping consensus” that Rawls develops in his later work “Political Liberalism” offers a possible response to this problem.94 Overlapping consensus seeks acceptance of the institutions themselves and how they operate from various perspectives.95 John Rawls’ concept of “overlapping consensus” is a political theory that seeks to provide a framework for political stability and legitimacy in pluralistic societies. Rawls argues that in a pluralistic society, individuals and groups hold diverse and conflicting views about the good life and what is just. However, he contends that it is possible to achieve a stable and just society by focusing on an “overlapping consensus” of values that all reasonable people can accept. In the context of international access to science and technology policy, the concept of overlapping consensus offers a way to reconcile the conflicting interests and values of different nations and cultures. In particular, it suggests that a global consensus can be reached on the value of science and technology as a means of promoting human welfare and progress. Rawls argues that the overlapping consensus can be achieved by focusing on the shared values and principles that are essential to a just and democratic society. These values include political liberties, equal basic rights, and fair equality of opportunity. In the context of science and technology policy, these principles could be extended to include access to information, freedom of scientific inquiry, and equitable distribution of the benefits of scientific and technological advances. To achieve the overlapping consensus in science and technology policy, Rawls suggests that it is necessary to engage in a process of public reasoning and dialogue. This process involves open and democratic discussions among different stakeholders, including scientists, policymakers, and members of civil society. Through this process, it is possible to identify the values and principles that are shared by all reasonable people and to develop policies that reflect these values and principles. 91

Rawls (1985). Douglas (2015). 93 Blake and Smith (2013). 94 Rawls (2005). 95 Ibid. 92

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Although it appears that such a consensus will be challenging to achieve in light of the debates surrounding international science and technology policy, it still provides a way for nations and organizations with varying political and social values to come together despite their differences.

Conclusion In this paper, I have outlined how Rawls’ Theory of Justice can be applied to questions about the just international regulation of science and technology development. I have argued that science and technology policy should determine if it serves both the underprivileged and the privileged since it has a moral obligation to ensure everyone benefits. All science and technology policies should maximize the public benefit to cater to underprivileged groups and undertake initiatives that foster participation in research of global communities with a distributive justice approach. Many components of the distributive justice approach have different purposes, yet they work together. This coexistence highlights the variety of alternatives accessible to science and technology policymakers to combine, contrast, and develop international regulations for the greater benefit.

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Crocker D (1998) Transitional justice and international civil society: toward a normative framework. Constellations 5(4):492–517 Devlin A, Sukhatme N (2009) Self-realizing inventions and the utilitarian foundation of patent law. William Mary Law Rev 51:897 Douglas DM (2015) Towards a just and fair Internet: applying Rawls’ principles of justice to Internet regulation. Ethics Inf Technol 17(1):57–64 Doyle MW, Stiglitz JE (2014) Eliminating extreme inequality: a sustainable development goal, 2015–2030. Ethics Int Aff 28(1):5–13 Druckman D, Albin C (2011) Distributive justice and the durability of peace agreements. Rev Int Stud 37(3):1137–1168 Fraser N (2009) Scales of justice: reimagining political space in a globalizing world. Columbia University Press Frohlich N (2007) A very short history of distributive justice. Soc Justice Res 20:250–262. https:// doi.org/10.1007/s11211-007-0039-7 Held D (1995) Democracy and the global order: from the modern state to cosmopolitan governance. Stanford University Press Hess DJ, Amir S, Frickel S, Kleinman DL, Moore K, Williams LD (2016) Structural inequality and the politics of science and technology. The handbook of science and technology studies, 4th edn. MIT, London, pp 319–347 Huh HS, Park CY (2021) A new index of globalisation: measuring impacts of integration on economic growth and income inequality. World Econ 44(2):409–443 International Institute for Sustainable Development (2016) Ending world hunger is within reach: study finds it will cost only USD 11 billion more a year. https://www.iisd.org/articles/press-rel ease/ending-world-hunger-within-reach-study-finds-it-will-cost-only-usd-11 Jackson JH (2006) Sovereignty, the WTO, and changing fundamentals of international law. Cambridge University Press, Cambridge Jimenez M (2015) Distributive justice and contract law: a Hohfeldian analysis. Fla State Univ Law Rev 43:1265 Karim R, Newaz MS, Chowdhury RM (2018) Human rights-based approach to science, technology and development: a legal analysis. J East Asia Int Law 11 Kim JH (2020) SARS-CoV-2 vaccine development, access, and equity. J Exp Med 217(11). https:// doi.org/10.1084/jem.20201288 Koskenniemi M (2001) The politics of international law. In: Simpson G (ed) The nature of international law, 1st edn. Routledge, London, pp 355–384 Kronman AT (1979) Contract law and distributive justice. Yale Law J 89:472 Lemley MA (2015) Faith-based intellectual property. UCLA Law Rev 62:1328 Loth MA (2015) Corrective and distributive justice in tort law: on the restoration of autonomy and a minimal level of protection of the victim. Maastricht J Eur Comp Law 22(6):788–811 Lu C (2011) Colonialism as structural injustice: historical responsibility and contemporary redress. J Polit Philos 19(3):261–281 Majtényi B (2004) Utilitarianism in minority protection?: status laws and international organisations. Cent Eur Polit Sci Rev 5(16):68 Mandle J (2000) Globalization and justice. Ann Am Acad Pol Soc Sci 570(1):126–139 Marneffe P (2014) Individualism. In: Mandle J, Reidy DA (eds) The Cambridge Rawls Lexicon. Cambridge University Press, New York, p 365 Mitchell JI, Gagné M, Beaudry A, Dyer L (2012) The role of perceived organizational support, distributive justice and motivation in reactions to new information technology. Comput Hum Behav 28(2):729–738 Paulsson J (2005) Denial of justice in international law. Cambridge University Press, New York Rawls J (1971) A theory of justice. Harvard University Press, Cambridge, MA Rawls J (1993a) Political liberalism. Columbia University Press, New York Rawls J (1993b) The law of peoples. In: Shute S, Hurley S (eds) Oxford Amnesty lectures. BasicBooks, Oxford, p 60

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Rawls J (1993c) The law of peoples. Crit Inq 20(1):36–68 Rawls J (2005) Political liberalism. Columbia University Press, New York Rawls J (1985) Justice as fairness: political not metaphysical. Philos Public Aff 14(3):223–251, 224 Reis HT (1984) The multidimensionality of justice. In: Folger R (ed) The sense of injustice. Springer, Boston, MA, pp 25–61. https://doi.org/10.1007/978-1-4613-2683-0_2 Resnik DB, Elliott KC (2016) The ethical challenges of socially responsible science. Account Res 23(1):31–46 Royakkers L, Timmer J, Kool L, van Est R (2018) Societal and ethical issues of digitization. Ethics Inf Technol 20(2):127–142 Sadurski W (1985) Distributive justice and the theory of punishment. Oxf J Leg Stud 5:47 Sand PH (2011) The right to know: freedom of environmental information in comparative and international law. Tulane J Int Comp Law 20:203 Scheffler S (2015) Distributive justice, the basic structure and the place of private law. Oxf J Leg Stud 35(2):213–235 Schwartz GT (1996) Mixed theories of tort law: affirming both deterrence and corrective justice. Texas Law Rev 75:1801 Scott L, Williams JD, Baker SM, Brace-Govan J, Downey H, Hakstian AM et al (2011) Beyond poverty: social justice in a global marketplace. J Public Policy Mark 30(1):39–46 Sen A (1992) Inequality reexamined. Harvard University Press, Cambridge, MA Sharif MN (2012) Technological innovation governance for winning the future. Technol Forecast Soc Chang 79(3):595–604 Shavit Y, Westerbeek K (1998) Reforms, expansion, and equality of opportunity. Eur Sociol Rev 14(1):33–47. https://doi.org/10.1093/oxfordjournals.esr.a018226 Shmueli B (2014) Legal pluralism in tort law theory: balancing instrumental theories and corrective justice. Univ Mich J Law Reform 48:745 Smith RK (2022) International human rights law. Oxford University Press, New York Sugin L (2003) Theories of distributive justice and limitations on taxation: what Rawls demands from tax systems. Fordham Law Rev 72:1991 Tyler TR (1984) Justice in the political arena. In: Folger R (ed) The sense of injustice. Springer, Boston, MA, pp 189–225. https://doi.org/10.1007/978-1-4613-2683-0_7 Vaandering D (2011) A faithful compass: rethinking the term restorative justice to find clarity. Contemp Justice Rev 14(3):307–328 Van Dijk JA (2006) Digital divide research, achievements and shortcomings. Poetics 34(4–5):221– 235 Van Krieken R (2019) Law and civilization: Norbert Elias as a regulation theorist. Annu Rev Law Soc Sci 15:267–288 van Wyngaard A (2022) A pandemic of inequality: reflections on AIDS and COVID-19 in the southern African context. Afr J AIDS Res 21(2):152–161 Waltz S (2001) Universalizing human rights: the role of small states in the construction of the universal declaration of human rights. Hum Rights Q 23:44 Wells CP (1989) Tort law as corrective justice: a pragmatic justification for jury adjudication. Mich Law Rev 88:2348 Wilkins BT (2007) Principles for the law of peoples. J Ethics 11(2):161–175 Yue C (2019) Equality and justice: history and ideals. Equal Justice Law. https://equaljusticeund erlaw.org/thejusticereport/2018/8/29/equality-and-justice-history-and-ideals

Ridoan Karim Lecturer in Business Law at the Department of Business Law & Taxation, Monash University, Malaysia. LL.B. (Brac U.), MCL (IIUM), MBA (Chichester), Ph.D. (Malaya). Address: School of Business, Department of Business Law & Taxation, Monash University, 47500 Subang Jaya, Selangor, Malaysia. All the websites cited in this article were last visited on February 15, 2023.

Chapter 5

Rethinking Twenty Years of American Unilateralism in the Middle East: A Critical Evaluation of the War on Terror Eric Yong Joong Lee Abstract The War on Terror launched by the US against Islamic terrorist groups persisted through the Bush–Obama–Trump administrations for nearly 20 years before President Biden completely withdrew the US forces from Afghanistan by the end of August 2021. These military interventions are noticeable examples of American unilateralism in the Middle East. The War on Terror has been severely criticized by the global community as military actions without just cause and lacking grounds under international law. This research aims to critically evaluate the War on Terror in terms of legal and political theories of war now that twenty years of American unilateralism in the Middle East is over. In this article, the author examines other underlying reasons for, and the outcomes of, the war against terrorist groups. He will also suggest peaceful means to fundamentally resolve the Middle East conflict with a view to preventing war in other world regions. Keywords The War on Terror · 9/11 · Just War Theory · American unilateralism · Middle East · Terrorism · US Middle East policy

Introduction More than twenty years have passed since the terror attacks on September 11 (hereafter, 9/11 incident). On the morning of September 11, 2001, the World Trade Center in New York City and the Pentagon (US Department of Defense) in Washington, D.C. were suddenly attacked by hijacked airliners, which killed about 2,996 and injured This book chapter is based on Eric Yong Joong Lee, Rethinking Twenty Years of American Unilateralism in the Middle East: A Critical Evaluation of the War on Terror, Journal of East Asia and International Law 15(1), under the official permission of YIJUN Press, Ltd. E. Y. J. Lee (B) Dongguk University College of Law-Seoul, YIJUN Institute of International Law, Seoul, Korea e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_5

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more than 6,000 people.1 The US identified these terrorist attacks as committed by the Islamic fundamentalist group, Al-Qaeda, led by Osama Bin Laden. Shortly thereafter, in December 2001, the US bombarded Afghanistan, which it thought was the stronghold of Osama Bin Laden, and consecutively invaded Iraq in March 2003. These armed interventions (War on Terror) launched by the US against Islamic terrorist groups had been continuing through the Bush–Obama–Trump administrations for nearly 20 years, before President Biden completely withdrew the US forces from Afghanistan by the end of August 2021. During the Cold War, the US engaged in the Middle East in a political or economic sense. In the post-Cold War period, however, it began a full-scale armed intervention. The two wars against Afghanistan and Iraq are noticeable examples. In the beginning of the War on Terror, the US armed forces easily defeated the Taliban group in Afghanistan and Saddam Hussein’s regime in Iraq, which were blamed for terrorism. These military victories, however, did not expel the terrorist groups ultimately due to the complex political and religious situation inside the Middle East and conflicting interests over the regional issue with other major powers including France and Russia. Without finding a cause for ending the war, the subsequent US administrations were swamped with political and military deadlock in Afghanistan and Iraq for nearly 20 years. The War on Terror has resulted in disastrous human losses with material damages on both sides. In the Afghanistan War alone, as many as 2,448 American servicemen were killed up to April 2021 and there was around USD 2.26 trillion in military expenditure.2 Nonetheless, these efforts were totally frustrated. Immediately after US military forces withdrew in August 2021, Kabul, Afghanistan’s capital city, was taken over by the Taliban regime. Even worse, a drone strike in retaliation for the terrorist attack of the Islamic State (ISIS) at Kabul Airport on August 26, 2021, resulted in serious civilian casualties by error, and the US government issued an official apology.3 In the Iraq War that ended in 2011, an estimated 4,337 American soldiers and innumerable Iraqi civilians were killed.4 The US government simply ended the war without any convincing statement. The War on Terror is different from other armed conflicts in human history because it is a conflict between a State and a “terrorist group” which is not defined under international law.5 In fact, many terrorist groups, especially across the Middle East, including the Mujahedeen and later the Taliban, were funded and fostered by the US in response to Soviet intervention in this region during the Cold War period.6 These terrorist groups were an outpost for armed struggle against the then Soviet Union.

1

Plumer (2013). Knickmeyer (2021). 3 BBC (2021). 4 Reuters (2009). 5 Stahn (2002); Greenwood (2003); O’Connell (2004); Gray (2018). 6 Fisk (1998). 2

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The War on Terror has been severely criticized by the global community as military actions without just cause and international legal grounds.7 As the War on Terror is now over, it is necessary for human society to seriously look back at the US’ military interventions in the Middle East. Against the background, this research will critically evaluate the War on Terror now that twenty years of American unilateralism in the Middle East is over.8 In this study, the author will examine the real reason why the US launched its all-out war against terrorist groups as well as its outcome. The War on Terror was not only retaliation against terrorist organizations such as Al-Qaeda, which was responsible for the 9/11 attacks, but also implicating complex aspects of twenty-first century’s international society, such as good/evil, terrorism/anti-terrorism, Christianity/Islam, oil dominance, etc. It is thus significant to analyze the US military interventions in the Middle East in terms of theories of war which have long been discussed in philosophy, ethics, politics, and international law. The author will also look for a peaceful way to fundamentally resolve the Middle East conflict. This analysis is expected to give a way to prevent war in other global regions. This paper is composed of five parts including Introduction and Conclusion. Part two will review the origin and evolution of American unilateralism for the past 20 years in the Middle East. Part three will critically re-examine the causes and outcomes of the War on Terror. Part four will evaluate the American military interventions in the Middle East.

American Unilateralism in the Middle East Geopolitical Overview of the Middle East The Middle East refers to an area “around the southern and eastern shores of the Mediterranean Sea, encompassing at least the Arabian Peninsula and, by some definitions, Iran, North Africa, and sometimes beyond.”9 The Middle East had been closed to the outside world before the Middle Ages. It is not until the Crusades (1095–1291) that the Middle East opened to European society.10 Entering the nineteenth century, the Middle East received attention because of the construction of the Suez Canal and the discovery of petroleum. In 1869, when the Suez Canal connecting the Mediterranean Sea and the Indian Ocean opened, and petroleum, called “burning oil,” was found in the Middle East in large quantities, Britain and France began political and military interventions there to secure supremacy. Both countries maintained 7

On the legal aspects of the War on Terror, see Cassese (2001); McDonald (2007); Bothe (2003). For details on American unilateralism, see Sands and Robinson (2002); Skidmore (2005); Malone and Khong (2003); Higgott (2003). 9 ‘Middle East’ in Britannica Encyclopedia (online). https://www.britannica.com/place/MiddleEast. 10 ‘Crusades’ in Britannica Encyclopedia (online). https://www.britannica.com/event/Crusades. 8

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their hegemony in the Middle East in the early twentieth century, but this power politics was reshuffled by the US, which rapidly emerged after World War II.11 The US as a new hegemony inherited Britain’s political and economic privileges in the Middle East and competed with France. When the Cold War began, the region became the front line of the US–Soviet confrontation.12 The Middle East then became a tragic land through four wars between Arab countries and Israel from 1948 to 1973. In this course of hegemonic competition, the US has become the premier superpower with a huge regional influence.13

US Hegemony Building in the Middle East The US hegemony building in the Middle East had two major turning points. One is the Carter Doctrine in 1980 for selective military intervention in the Middle East. The other is the Bush Doctrine, which authorized a full-scale military intervention for a fundamental change of Middle East politics and society in 2003. Today, the US Middle East policy is taking a new turn as President Biden completed the withdrawal of the US troops from Afghanistan in August 2021. The following section will discuss in more detail the background of the US hegemony in the Middle East.

Carter Doctrine Until the late 1970s, the US did not actively consider direct military intervention in the Middle East. The US troops were stationed in Turkey only to contain the Soviet Union and operated military facilities in Iran. At that time, the US focused on Iran as its strategic location to control the Persian Gulf. The US regarded Iran as a bridgehead for the Middle East and tried to control the Middle East indirectly by supporting the pro-American Pahlavi dynasty.14 When the anti-American regime led by religious leader Ayatollah Ruhollah Khomeini was launched in Iran in 1979, however, the US position in the Middle East was shaken, followed by the hostage crisis at the US Embassy in Tehran in 1980. As a result, President Carter announced his doctrine toward selective military

11

Danforth (2016). ‘The Cold War in the Middle East and Asia’ in Britannica Encyclopedia (online). https://www. britannica.com/topic/20th-century-international-relations-2085155/The-Cold-War-in-the-MiddleEast-and-Asia. 13 ‘Arab-Israeli wars’ in Britannica Encyclopedia (online). https://www.britannica.com/event/ArabIsraeli-wars. 14 Tristam (2019). 12

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intervention as a Middle East policy. The Carter Doctrine implied the “containment of Iran.”15 It eventually led to the Iran–Iraq War, Saddam Hussein’s invasion of Kuwait and, in response, the US First Gulf War, and further the September 11 attacks launched by Osama Bin Laden in Al-Qaida.

Bush Doctrine After the 9/11 terrorist attacks, President Bush declared a new doctrine for active military intervention in the Middle East. The Bush Doctrine was a more hawkish Middle East policy than the Carter Doctrine. The Bush Dctrine involved fundamental change of political and social order of the Middle East beyond the selective military engagement on a case-by-case basis, following the needs of the US. With his doctrine, President Bush, dividing the world into good (pro-American) and evil (anti-American), announced indiscriminate attacks on terrorist groups and their sponsoring Islamic regime in the Middle East based on the overwhelming military and economic power of “the only super hegemony” in the post-Cold War period.16 The Bush Doctrine was the prelude of the twenty-year of American unilateralism in the Middle East through the armed interventions in Afghanistan and Iraq. These armed actions, however, did not represent easy going for American dominance in the Middle East. In the following course, the US would confront many impediments in the region, despite initial victories, such as the rise of the Islamic State (ISIS) and its repelling war in Afghanistan, the escalation of terrorism, and the Syrian Civil War.

Post-Bush Initiative of the US (Biden Doctrine) As the War on Terror fell into a deadlock, President Obama pursued a strategic rebalance between the Middle East and the Asia–Pacific regions with the “Pivot to Asia” policy.17 He shifted the US strategic focus from the Middle East to the Asia–Pacific. President Obama finally withdrew the US forces from Iraq, but failed to stop the US intervention in the Middle East due to the Syrian Civil War, ISIS, and the Afghanistan War.18 Meanwhile, President Trump publicly vowed to end the Middle East War because he thought it was a meaningless “investment.”19 However, President Trump took measures contradictory to his announcement. He unilaterally withdrew from the “Joint Comprehensive Plan of Action,” a nuclear deal with Iran in 2018 and escalated confrontation with Iran, which aggravated the circumstances 15

Brands et al. (2019). Beaumont (2022). 17 Green (2016). 18 Cordesman (2016). 19 Al Jazeera (2018). 16

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in the Middle East.20 Even long after President Bush left the White House, the Bush Doctrine remained like a haunting phantom and bogged the US down in the Middle East swamp. Since President Biden finally ended the longstanding wars through withdrawal from Afghanistan in August 2021, the US has been leaving the quagmire. However, it remains to be seen whether the deep-rooted conflict in the Middle East can be easily sealed over only by discontinuing military intervention.

The War on Terror: Causes and Outcomes Afghanistan War: Operation Enduring Freedom On September 11, 2011, the US mainland experienced the first air attacks in its history. These terrorist attacks were a turning point, causing fundamental reform of the US Middle East policy. American pride as the only superpower reigning over the international community in the post-Cold War period was seriously encroached due to the 9/11 incident. In response, President Bush vehemently announced retaliation against the terrorist groups, recognized as fulfilling the role and calling of the US.21 The Bush administration divided the world into “allies” and “enemies.” Such extreme divisions based on “good or evil” dominated American society, as well. Finally, the Bush administration launched a new policy stance to fundamentally change the Middle East through slogans, such as moral absolutism, hegemonic unilateralism, and offensive realism, that liberal democracy and the market economy system should spread to this region.22 Immediately after the 9/11 incident, the US, who suspected Al-Qaida of planning and implementing these attacks, demanded that Afghanistan extradite Osama Bin Laden, the leader of Al-Qaida.23 When the Taliban regime rejected these demands, the US and the UK allied forces finally launched “Operation Enduring Freedom,” bombing Kabul, the capital city of Afghanistan on October 7, 2001.24 This operation aimed to dismantle Al-Qaida’s base in Afghanistan, oust the Taliban regime, and demolish terrorist groups in the Middle East.25 The US–British allied forces took over the capital Kabul on November 13 and the Taliban regime ended completely on December 9, 2001. Subsequently, the US and Afghan forces conducted “Operation Anaconda” in Paktia Province in March 2002. On May 1, 2003, the US officials

20

Landler (2018). The Washington Post (2001). 22 See Gurtov and Ness (2004). 23 Lev (2001). 24 See History (2001). 25 Ibid. 21

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declared an end to “major combat.”26 In December 2001, the UN Security Council established the International Security Assistance Force (ISAF) to support Afghan authorities in various missions such as securing Kabul.27 However, the Taliban reorganized its power around Muhammad Omar and rebelled against the ISAF in 2003. Despite inferior weapons and numerical disadvantages, rebels from various armed groups, including the Taliban, Haqqani Network, and Hezb-e Islami Gulbuddin, resisted through guerrilla warfare, suburban ambush, suicide terrorism in downtown areas, and murder of renegades. Through this resistance, the Taliban began to exert influence again in the Southern and Eastern suburbs.28 Meanwhile, the Northwest Pakistan War broke out while ISAF was confronting Taliban rebels.29 Despite the rebellion, Navy Seals, US special forces, terminated Osama Bin Laden in Abbottabad, Pakistan on May 1, 2011.30 While the frontline was stalled due to guerrilla warfare inside Afghanistan, the US declared the operation’s end and withdrew its remaining troops by December 2014, at the beginning of a peace conference between the Afghanistan government and the Taliban in May 2012.31 In fact, on December 28, 2014, NATO officially ended the ISAF combat operation in Afghanistan and completely transferred responsibility to the Afghan government. Subsequently, the US signed a conditional agreement with the Taliban in September 2019 and the “Doha Agreement,” which ended the 18-year armed conflict on February 29, 2020. According to the Doha Agreement,32 President Biden announced that the US military forces would withdraw from Afghanistan on May 1, 2021.33 As soon as the US military withdrew, however, the Taliban began to take control over major Afghan cities such as Herat and Kandahar. Eventually, on August 15, the Taliban entered Kabul without bloodshed as the Afghanistan government surrendered.34 “Operation Enduring Freedom” (Afghanistan War), which began in 2001 as retaliation for the 9/11 terrorist attacks, virtually ended in 2021 after 20 years of armed intervention, with the withdrawal of the US forces. During this war, 3,600 multinational military personnel were killed or missing and 27,000 people were injured. The US has been estimated to have spent at least USD 2.26 trillion. In addition, the war caused 230,000 civilian deaths, five million refugees, and an astronomical amount of property damage in Afghanistan. However, the US failed to achieve its intended goal to eradicate terrorist organizations such as Al-Qaida. 26

Katzman and Thomas (2017). ISAF’s mission in Afghanistan (2001–2014). In: North Atlantic Treaty Organization. https:// www.nato.int/cps/en/natohq/topics_69366.htm. 28 Harding (2003). 29 Yowell (2017). 30 Taylor (2011). 31 Timeline: The U.S. War in Afghanistan. In: Council on Foreign Relations. https://www.cfr.org/ timeline/us-war-afghanistan 32 Farr (2020). 33 Williams and Parkin (2021). 34 Ishak (2021). 27

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Iraq War The US originally established a policy to check Iran’s Khomeini regime by using Iraq’s Saddam Hussein. In the 1980s, Iraq was a pro-American Middle Eastern country. When Saddam Hussein invaded Kuwait in 1991, however, the friendly relationship between the US and Iraq ended. In January 2002, President Bush pointed to Iraq as part of an “axis of evil” threatening world peace along with Iran and North Korea.35 In addition, in September of the same year, President Bush delivered a speech at the UN General Assembly making five demands, including the immediate abolition of WMDs, suspension of terrorist aid and public oppression and expressed his willingness to oust the Saddam Hussein regime.36 Neo-conservatives and rightwing Christian fundamentalists encouraged the war, referring to the evangelization of the Middle East and the Second Crusade despite concerns from the international community.37 On March 20, 2003, the US launched “Operation Iraq Freedom” with an air strike on Baghdad and a drive attack with 300,000 multinational forces.38 The US condemned Saddam Hussein’s Iraq as an illegal regime threatening world peace.39 President Bush declared that the Hussein regime illegally developed WMDs, supported terrorism, threatened world peace, and oppressed its people.40 Baghdad eventually fell on April 9, two weeks after the operation was launched. The Saddam Hussein regime finally collapsed through this short period of operation. Up to April 30, about 9,200 Iraqi soldiers, 7,299 civilians, 139 US troops, and 33 UK troops were killed.41 When Baghdad was conquered about 20 days after the invasion, the war ended with the victory of the allied forces. However, such easy success did not immediately lead to achieving the ultimate political goals of the US. As resistance in Iraq continued even after the fall of Baghdad, the US forces faced another aspect of postwar terrorism all over Iraq. Operation Iraqi Freedom was virtually over in 2006 when Saddam Hussein was arrested by US troops and executed by the Iraqi Special Tribunal on December 30, 2006.42 The US military broke down the support base of dictatorships through a military operation in Iraq, but this led to a breakdown in security in Iraq, which had been barely maintained until then. Under these conditions, sectarian disputes such as retaliation and murder occurred and the armed resistance resulted in thousands of American soldiers being killed. The US belatedly began stabilizing Iraq by increasing force numbers, but this was also in danger due to the 35

Glass (2019). See The Guardian (2002). 37 Berger (2021). 38 See ‘Iraq War’ in Britannica Encyclopedia (online). https://www.britannica.com/event/Iraq-War 39 See The New York Times (2003); Bush (2002). 40 See The Guardian (2003). 41 Hamasaeed and Nada (2020). 42 The Iraq War. In: Council on Foreign Relations. https://www.cfr.org/timeline/iraq-war 36

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complicated situations inside and outside of Iraq. As a result, combat forces began to be withdrawn on August 20, 2010, seven years after the war started.43 Despite the end of the war, there are currently about 2,500 US troops stationed in Iraq. President Biden declared that the US military’s combat mission in Iraq would be over by the end of 2021. However, the US military support for Iraq is continuing, including training and advice to defeat the Islamic State (ISIS). If this initiative is fulfilled as planned, President Biden would be the one who finally ends the US military’s mission in both Afghanistan and Iraq, which have bogged down the US in the mire of the Middle East. After twenty years of War on Terror, he is expected to focus on checking Russia and containing China.

The Evaluation of the War on Terror: A Critique of American Unilateralism Theories of War Human history can be regarded as a history of war. According to a study of war, mankind has only lived without war for 268 years during the past 3,400 years.44 As constant war seriously threatens the survival of the state and individuals, people have developed the way to prevent war involving terrible violence as well as to effectively control and carry out war if inevitable. In China, the origin of war research can be found in “The Art of War” written by Sun Tzu. In this book, Sun Tzu approached war from an empirical point of view. He thought that the attitude of just trying to avoid wars would not help protect people and keep the country intact because wars or armed aggressions are constantly and inevitably occurring. In this regard, Sun Tzu valued how to achieve victory in war more than moral judgment on the war itself. Sun Tzu said: “To win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.”45 In the West, the theory of war began in ancient Greece. Aristotle said in his Politics: “The art of war is a natural art of acquisition, for the art of acquisition includes hunting, an art which we ought to practice against wild beasts, and against men who, though intended by nature to be governed, will not submit; for war of such a kind is naturally just.”46 Aristotle’s theory of war developed into a “just” war theory in the thirteenth century by theologian St. Thomas Aquinas. Based on the Christian concept of holy war, Aquinas said:

43

Ibid. See generally Hedges (2003). 45 Griffith (1963). 46 Jowett (1999). 44

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Table 5.1 Requirements for Just War presented by Hugo Grotius49 Subject

Waging a war by authorized public authority

Object

Just cause for waging a war and the existence of a corresponding object

Means

Proportionality between means and purpose

Purpose

Beginning from the just intention

So just as the rulers are permitted to defend the republic by the material sword against internal disturbances when they punish malefactors-so, too, it belongs to them to protect the republic from external enemies with the sword of war. … When someone who uses the sword (a) on the authority of a ruler or judge (in the case of a private person) or (b) out of a zeal for justice and, as it were, by God’s authority (in the case of a public person), he is not ‘taking up’ the sword himself but is using the sword that has been commissioned to him by someone else.47

Aquinas understood war as an act of restoring the Christian moral order by punishing their enemy—other religious groups like Islam. The Christian theory of war in the West, which distinguished war from the perspective of good and evil, developed into a rigorous discussion of just war during the Thirty Years’ War (1618–48). In this period, an outstanding thinker on war was Hugo Grotius, the founder of modern international law. In his masterpiece, On the Law of War and Peace [De jure belli ac pacis] (1625),48 Grotius attempted to analyze war within a normative framework, presenting specific rules for just war through it. He suggested the requirements for just war are as follows (Table 5.1). The theory of war in the contemporary sense was embodied by Michael Walzer. In his book, Just and Unjust Wars (1977), he elaborately refined the requirements for a just war. Walzer considers that justice in war can be divided into two. One is jus ad bellum (justice related to the conditions under which a state wages war), and the other is jus in bello (justice related to a state’s conduct in carrying out a war).50 Jus ad bellum may be conditioned as follows: just cause; just intention; proper authority and public declaration; last resort; probability of success; proportionality.51 Although a war is waged based on the rule of jus ad bellum, however, it is not a just war if a state violates the jus in bello such as committing war crimes through, for example, using Weapons of Mass Destruction (WMDs) to quickly end the war without careful consideration.52 Meanwhile, Brian Orend argued that legitimate postwar settlement is a requirement for just war. This condition, referred to as Jus Post Bellum, presents five rules. First, there must be a cause for termination. Second, war must be finalized with the right intention; in other words, retaliation against the defeated country is not 47

Aquinas T. Summa Theologiae (Summa Theologica) (trans: Freddoso AJ). https://www3.nd.edu/ ~afreddos/summa-translation/TOC-part2-2.htm 48 Grotius (2001). 49 Ibid. 50 Walzer (2015). 51 Aloyo (2015); For details, see ibid. at 80–81; Fabre (2012); Mcmahan (2017); Pattison (2010). 52 For simple division between jus ad bellum and jus in bello, see Walzer op. cit. 50. at 21.

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Table 5.2 Requirements for just war Cause

Cause for the war must be just

Procedure of declaration It should be publicly promulgated by a legitimate authority Intention

The intention of war must be justified. For example, if going to war is based on racial disgust or the glory of the country, this is not a just intention

Proportionality

The overall loss caused by carrying out the war must be less than the overall loss caused by not carrying out the war

Postwar processing

Postwar processing must be legitimately performed

Source Compiled by the author

permitted. Third, peace must be declared by legitimate authorities. Fourth, unfair pain to ordinary citizens should be prohibited. Fifth, excessive attacks and recklessly killing enemy casualties should be prevented to the extent necessary.53 Considering the theories discussed above, the requirements for just war under international law are approximately as follows (Table 5.2).

Evaluation of the Afghanistan War The Afghanistan War (2001–21) is the longest armed conflict in American history, lasting for 20 years. This period is longer than twice that of the US intervention during the Vietnam War (1964–73). It was catastrophic, as well. The US spent USD 2.26 trillion. In addition, more than 2,448 US soldiers, 47,245 civilians, and 66,000 Afghan national military and police were killed.54 Despite these terrible human and material losses, it turned out that this war was waged and carried out through the manipulation of information. The Washington Post reported on December 9, 2019, that the cause of the Afghan War was fabricated and had been packaged with all kinds of false information.55 According to testimony from senior American officials, the US government failed to tell the truth about the Afghanistan War, made rosy pronouncements, and concealed clear evidence that there was no possibility of winning the war. General Douglas Lute, interviewed by the Washington Post, said: “We were devoid of a fundamental understanding of Afghanistan,” adding, “we didn’t know what we were doing.” Other senior officials interviewed also confessed that it was not clear what the US had planned and targeted in Afghanistan after driving out Al-Qaida and ousting the Taliban. The US government distorted statistical data to continue the war.56 53

Orend (2000); For details, see also Orend (2007). Knickmeyer (2021). 55 Whitlock (2019). 56 Ibid. 54

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Analyzing the Afghanistan war based on disclosed evidence, it was far from a just war. First, the war was caused by the Taliban regime in Afghanistan reportedly protecting Osama Bin Laden, the head of Al-Qaida known to be behind the 9/11 terrorist attacks. However, Osama Bin Laden was not confirmed to be located inside Afghanistan at the time. He was hiding in Pakistan when he was shot by special US troops on May 1, 2011. Second, the war’s intention was unclear. This is a natural consequence of the ill-defined cause of the war. Nevertheless, the US military stayed in Afghanistan for 20 years at the expense of enormous human and material damage, even after driving out the Taliban regime through their initial military operations. After the successful removal of Osama Bin Laden in 2011, a key justification for this war, the intention to continue the war is questionable. This may be understood just as an intention to achieve the US strategic interests in Central Asia and the Middle East. Third, the overall loss caused by the Afghanistan War is incomparably greater than other possible measures to resolve the conflict. The number of victims of the US troops alone has reached that of the victims of the 9/11 terrorist attacks. In addition, tens of thousands of US soldiers were injured, and countless innocent Afghani civilians were sacrificed. Nevertheless, Afghanistan returned to its prewar situation just three months after the US military began its withdrawal. Fourth, the postwar settlement was even more disastrous. The US has injected USD 100 billion in aid to rehabilitate Afghanistan, but most of the aid allegedly went to corrupt Afghani officials.57 This astronomical cost would have produced desirable results if it had been used for the victims of the 9/11 terrorist attacks and their families. Moreover, most of the victims of drone attacks at Kabul airport were innocent civilians.58 The US drone pilots cited mental distress caused by the guilt over such killing and raised the problem of drone attacks.59 In the end, the US military followed the same route taken by the Soviet army decades ago. Regarding the Afghanistan War, the only factor that meets the requirements of just war was that it was declared by legitimate authorities. The Taliban said: “You [US] may have the watches, but we have the time.”60 This suggested what the Afghanistan war was like. Their message reminds us of the lesson from the Vietnam War that the superiority of weapons and technology becomes meaningless in the face of a war of attrition.

Evaluation of the Iraq War The Iraq War is even further from a just war. While the Afghanistan War was due to the errors in decision-making based on information, the Iraq War resulted from 57

Ibid. BBC (2021). 59 Saini et al. (2021). 60 Walsh (2007). 58

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blatant manipulation and intentional distortion of such information. While the attack on Afghanistan is usually referred to as a “war,” the armed intervention in Iraq is called an “invasion.” Moreover, from the beginning of the Iraq War in 2003, the US ignored basic principles of international law such as the prohibition of the use of force as laid down under Article 2(4) of the UN Charter; it did not even seek a UN Security Council resolution. The then-UN Secretary-General, Kofi Atta Annan, said the US-led Iraq war was illegal and breached the UN Charter.61 Michael Walzer also concluded that the Iraqi War began with unjust cause and intention.62 Above all, the claim regarding Iraq’s development of WMDs turned out to be false, which was a key justification for the invasion. Inspectors, led by intelligence agencies from the US, the UK, and Australia, searched all over Iraq, but failed to find WMDs. After more than a year of activity, the inspectors submitted a final report of over a thousand pages to the US Senate’s Military Commission in October 2004 and concluded that: “There were no weapons of mass destruction in Iraq during the US invasion last year.”63 Even before the outbreak of the Iraq War, the UN and the IAEA inspectors confirmed neither existing WMDs nor signs of developing WMDs in Iraq.”64 On January 28, 2003, just before the Iraq War, President Bush argued in his State of the Union speech: “The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa. Our intelligence sources tell us that he has attempted to purchase high-strength aluminum tubes suitable for nuclear weapons production.”65 However, this information turned out to be unconvincing. Shortly after the Iraq war, the British House of Commons’ Foreign Affairs Committee released a report that the information lacked credibility.66 Although the US military announced that it had discovered two trailers for mobile biological weapon laboratories, even this turned out to be a hydrogen production facility for weather observation hot-air balloons.67 In this regard, Donald Rumsfeld, Secretary of Defense in 2003, said: “There are known knowns… there are unknown unknowns.”68 This was an inappropriate statement to be made by the Secretary of Defense, who was authorized to control policy regarding the authenticity of key information, which was the cause for initiating the war. Eventually, in December 2005, President Bush made a speech acknowledging responsibility for the overconfidence of information provided by intelligence agencies and announced he had commenced reforming the intelligence agencies.69

61

MacAskill and Borger (2004). Peterson (2018). 63 Global Security (2004). 64 United Nations Security Council (2003). 65 See The Washington Post (2003). 66 UK Parliament (2003). 67 See The Sunday Times (2003). 68 Shermer (2005); Zak (2021). 69 Selected Speeches of President Bush (2001–2008). 62

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Meanwhile, the UK government also formed the “Iraq Inquiry” Committee led by Prime Minister Gordon Brown in 2009. This Committee analyzed 150,000 government documents and listened to testimony from more than 200 persons, including the then-Prime Minister Tony Blair, to evaluate the UK’s policy-making process and combat performance during its participation in the Iraq War.70 The Committee released a vast report (Chilcot Report: Iraq Inquiry) which concluded the following.71 First, Iraq was not an imminent danger to the UK, and all information regarding WMD in Iraq was exaggerated or fabricated. Therefore, the UK’s decision to participate in this war was legally inappropriate. Second, Prime Minister Tony Blair uncritically followed Bush, who was determined to wage the war, even though there were peaceful solutions available. Third, Blair’s decision to participate in war escalated the threat of Islamic fundamentalism and Al-Qaida (to the UK).72 In the Iraq War, the US lost justification and utility. Despite numerous military and civilian sacrifices and astronomical war expenditures, it has resulted in a model of failed armed intervention. As a consequence, the US had to quickly leave behind its status as “the only superpower” in the post-Cold War period, leaving a disgraceful stain on its morality as the leader of the international community, with 500,000 protesters who gathered in London for anti-American protests. The invasion of Iraq was definitely an unjust war in which the cause and intention of the war were unclear; the loss from the war was incomparable to the gains; and the postwar settlement was worse than any other military interventions. The Bush administration ignored sound criticism from global civic society as well as domestic public opinion. Instead, it only depended on neo-conservatives and extreme right-wing Christian fundamentalists, and disrespected the principles of international law. This position proved a typical example of military intervention by a rogue state, which will be remembered as a dark period in the American history. In addition, the casualties of the Iraq War dissolved American unity and solidarity and deepened the gap between the rich and the poor in domestic society. More seriously, both the US external credibility and its influence fell due to severe fiscal deficits from the enormous amounts of defense expenditures for the war, as mentioned above. The US tried to secure minimal legitimacy by arresting and executing Saddam Hussein, but this resulted in another tragedy of the Iraqi civil war. In a sense, the execution of Saddam Hussein during the Iraq War appears to be a mistake because the Hussein regime in Iraq was a useful cause for the US to intervene in the Middle East. During the first Gulf War in 1991, such a strategic consideration might be applied to the fact that the US easily won the war but maintained the Saddam Hussein regime. This is in line with the US position toward, for example,

70

House of Commons Public Administration and Constitutional Affairs Committee (2017). The Report of the Iraq Inquiry: Executive Summary (Report of a Committee of Privy Counsellors, HC 264). In UK Government Web Archive. https://webarchive.nationalarchives.gov.uk/ukgwa/ 20171123123237/http://www.iraqinquiry.org.uk//media/246416/the-report-of-the-iraq-inquiry_e xecutive-summary.pdf. 72 Ibid. at 44. 71

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North Korea’s Kim Jong Un regime. Also, this may be a reason why the Assad regime in Syria was recognized by the Obama administration.

Conclusion In this research, the author has critically evaluated the War on Terror over the past 20 years and analyzed these armed interventions through legal and political theories of war. As discussed above, even though the US armed attacks against Afghanistan and Iraq were retaliation for the 9/11 terrorist attacks, these military actions cannot be called “just” considering the basic requirements for war to be legitimate, including its cause, intention, means, and postwar processing. The US launched armed attacks against the Taliban regime in Afghanistan on the premise of eradicating Al-Qaida’s base (even though it turned out to be an error), but the Iraq War was truly absurd, based on distorted information that Iraq was developing WMDs. In fact, the Saddam Hussein’s regime had nothing directly to do with the 9/11 terrorist attacks. This war resulted in an enormous number of human losses and military costs on both sides. Statistics show that US forces spent USD 250,000 per minute on initial war expenses in Iraq. Converting this into a month, it is around USD 10 billion, which is about as much as five percent of the Republic of Korea’s (a solid mid-sized country) budget for a year (2007). The New York Times estimated the cost of the Iraq War at USD 1.2 trillion from 2003 to 2009; if spending only USD 100 billion, half of the annual war budget (USD 200 billion), free medical services could be provided for Americans without medical insurance. In comparison, the annual cost of the Iraq War was more than the sum of all the costs incurred for free “pre-school education” for children aged 3–4 in the US (USD 35 billion), various security projects (such as strengthening cargo inspection systems) recommended by the 9/11 terrorist investigation committee (USD 10 billion), and the annual budget of US National Cancer Institute (USD 6 billion), the best in the world. The New York Times further reported that if the cost of the war in Iraq had provided a little more support for the Afghanistan War, the Taliban’s terrorist activities could have been effectively prevented.73 The outcome of this absurd war was disastrous for America, as well. Currently, more than 40 million people, far exceeding 10 percent of the US population, are suffering from poverty; in 2020, about 28 million people did not have health insurance at any point during the year.74 The situation in some poor groups’ residential areas is reportedly becoming worse than that of Syrian refugee camps. It is an uncomfortable reality of the world’s strongest and richest country in the twenty-first century, which has never before been second-guessed. Nevertheless, some argue that the War on

73 74

Leonhardt (2007). Keisler-Starkey and Bunch (2021).

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Terror was a just war.75 However, such justification is only based on Thomas Aquinas’ view of war, which originates from the dichotomous view of good (Christianity) and evil (Islam) in the medieval religious sense. Because war essentially leads to violence and murder, armed invasion cannot be “justice” inherently. Mencius said: “In the ‘Spring and Autumn [Human History]’ there are no righteous wars. Instances indeed there are of one war better than another.”76 Just war can be thus applied to an act of aggression in which one country unilaterally attacks another country. Only a defensive war can be just and legitimate. Contemporary international law does not recognize any exercise of armed force as a way of resolving disputes between countries. The use of armed forces is restrictively permitted under the following conditions. First, with the approval of the UN Security Council, the exercise of armed forces for defensive purposes against an invasion is justified. Second, even before the approval of the UN Security Council, the limited exercise of self-defense in response to an invasion from another country is justified. Third, in accordance with Chapter VII of the UN Charter, collective armed measures can be exercised as a legitimate response to the threats to peace, breaches of the peace, and acts of aggression. However, even on such legitimate grounds, the principle of proportionality between purpose and means (concept of retribution where the punishment must fit the crime) should be adhered to. Korea’s most respected Buddhist monk, Beop Jeong, warned that: “The vicious cycle of hatred will eventually cause more terrorism” at the scene of the 9/11 terrorist attacks in New York shortly after the Iraq War.77 The US launched the War on Terror to retaliate against the 9/11 terrorist attacks. During the war, ironically, it created a larger terrorist group: the Islamic State (ISIS). In 2014, 33,658 people died because of terrorism, an increase of up to 80 percent compared with a year before. This number is nearly 10 times more than that in 2000. There were 26 massive terrorist attacks in 2014, 4.2 times more than the annual average from 1978–2013.78 The number of terrorist attacks went down a little in 2015–18, but resumed escalating from 2019.79 These statistics clearly show that the War on Terror has not succeeded. The rapid increase in terrorism requires more efficient counter-terrorism strategies between the US and its alliance. For example, ISIS was able to grow rapidly because it absorbed Syrian rebels who were nurtured with the US military funds. It is time for the international community to develop a consensus on counter-terrorism strategy prior to more armed interventions. Some might argue that mercy is useless in harsh international relations dominated by power politics and that national survival and prosperity can be maintained only 75

Jenkins and Godges (2011). The Chinese Classics: Vol. 2 The Life and Teachings of Mencius. https://oll.libertyfund.org/title/ legge-the-chinese-classics-vol-2-the-life-and-teachings-of-mencius. 77 See KBS (2003). 78 Cordesman (2016). 79 In 2020, 10,172 terrorist attacks were recorded globally increasing from the previous three years. See Number of terrorist attacks worldwide between 2006 and 2020. In: Statista. https://www.sta tista.com/statistics/202864/number-of-terrorist-attacks-worldwide. 76

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by the principle of retaliatory response—lex talionis, “Eye for an Eye, tooth for a tooth.” However, if solely relying on the logic of this law of the jungle, as Gandhi said: “An eye for an eye will make the whole world blind.”80 The US failed to escape the Middle East swamp for the past 20 years. When President Biden announced the withdrawal of the US from Afghanistan, only disastrous results remained. Indiscriminate armed intervention can never prevent terrorism. The global community took the lesson that the war, which began in the name of suppressing terrorism by force, was not fully justified. Sincere reflection on the tragedies of the past 20 years is the starting point for rebuilding a world without terrorism. The tragedy of the War on Terror is mainly due to the unilateralism of the US, which tried to realize its values and hegemony without acknowledging differences and diversity between regions and countries around the globe. The Bush administration may have launched the War on Terror to suddenly change the world’s extant normative ground, based on European tradition, to a new fundamentally America-led antiterrorist framework. However, the US should acknowledge the same lesson that Qing Dynasty (China) did in the mid-eighteenth century: “arrogance is more disastrous than opium.” If humankind admits differences without prejudice and seeks an order based on harmony and co-existence under international law, people will soon be able to live in a more peaceful world far from the fear of terrorism.

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KBS (2003) Meeting hum in Mountain. https://www.youtube.com/watch?v=G1O3o-GjDaw Leonhardt D (2007) Cost of Iraq war ($1.2 trillion) changes economic perspectives. Business International Herald Tribune. The New York Times. https://www.nytimes.com/2007/01/16/business/ worldbusiness/16iht-leonhardt.4227732.html Landler M (2018) Trump abandons Iran nuclear deal he long scorned. The New York Times. https:// www.nytimes.com/2018/05/08/world/middleeast/trump-iran-nuclear-deal.html Lev MA (2001) Taliban maintains refusal to turn over bin Laden. Chicago Tribune. https://www. chicagotribune.com/nation-world/sns-worldtrade-taliban-chi-story.html MacAskill E, Borger J (2004) Iraq war was illegal and breached UN charter, says Annan. The Guardian. https://www.theguardian.com/world/2004/sep/16/iraq.iraq Malone DM, Khong YF (2003) Unilateralism and US foreign policy: international perspectives. In: Malone DM, Khong YF (eds) Unilateralism and US foreign policy: International Perspectives. https://www.rienner.com/uploads/47d832b1257af.pdf McDonald A (2007) Declarations of war and belligerent parties: international law governing hostilities between states and transnational terrorist networks. Netherlands Int Law Rev 54(2):279–314 Mcmahan J (2017) Just war. In: Goodin RE et al (eds) A companion to contemporary political philosophy. Blackwell Publishing, p 673 O’Connell ME (2004) The legal case against the global war on terror. Case Western Reserve J Int Law 36(2):349–357 Orend B (2000) War and international justice: a kantian perspective. Wilfrid Laurier University Press, p 232 Orend B (2007) Jus post bellum: the perspective of a just-war theorist. Leiden J Int Law 20(3):580– 581 Pattison J (2010) Humanitarian intervention and the responsibility to protect: who should intervene? Oxford University Press, p 34 Peterson M (2018) Did Iraq ever become a just war?. The Atlantic. https://www.theatlantic.com/ international/archive/2018/03/iraq-war-ethics/556448 Plumer B (2013) Nine facts about terrorism in the US since 9/11. The Washington Post. https://www.washingtonpost.com/news/wonk/wp/2013/09/11/nine-facts-about-terrorismin-the-united-states-since-911 Reuters (2009) FACTBOX-military and civilian deaths in Iraq. Reuters. https://www.reuters.com/ article/idUSB409544 Saini RV et al (2021) Cry in the sky: psychological impact on drone operators. Ind Psychiatry J 30(Suppl 1):15–19 Sands P, Robinson D (2002) American unilateralism. In: Proceedings of the Annual meeting. American Society of International Law, vol 96. Cambridge University Press, pp 85–94 Shermer M (2005) Rumsfeld’s Wisdom: where the known meets the unknown is where science begins. Sci Am. https://www.scientificamerican.com/article/rumsfelds-wisdom Skidmore D (2005) Understanding the unilateralist turn in the US foreign policy. Foreign Policy Anal 1(2):207–228 Stahn C (2002) International law at crossroads: the impact of September 11. Zeitschrift Für Ausländisches Öffentliches Recht Und Völkerrecht 62:183–256 Taylor A (2011) Osama Bin Laden killed: worldwide reactions. The Atlantic. https://www.theatl antic.com/photo/2011/05/osama-bin-laden-killed-worldwide-reactions/100058 The Guardian (2002) George Bush’s speech to the UN general assembly. The Guardian. https:// www.theguardian.com/world/2002/sep/12/iraq.usa3 The Guardian (2003) Full text: Bush’s speech. The Guardian. https://www.theguardian.com/world/ 2003/mar/18/usa.iraq The New York Times (2003) Threats And Responses; Bush’s Speech on Iraq: ‘Saddam Hussein and his sons must leave’. The New York Times. https://www.nytimes.com/2003/03/18/us/threatsresponses-bush-s-speech-iraq-saddam-hussein-his-sons-must-leave.html

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The Sunday Times (2003) World in brief: bio-labs ‘were hydrogen plants’. The Sunday Times. https://www.thetimes.co.uk/article/world-in-brief-s8mzcxlfvts The Washington Post (2001) Text: president Bush addresses the nation. The Washington Post. https://www.washingtonpost.com/wp-srv/nation/specials/attacked/transcripts/bus haddress_092001.html The Washington Post (2003) Text of president Bush’s 2003 state of the union address. The Washington Post. https://www.washingtonpost.com/wp-srv/onpolitics/transcripts/bushtext_012803. html Tristam P (2019) U.S. policy in the Middle East: 1945 to 2008. In: ThoughtCo. https://www.tho ughtco.com/about-us-4779650 United Nations Security Council (2003) UN inspectors found no evidence of prohibited weapons programmes as of 18 March Withdrawal, Hans Blix Tells Security Council. https://press.un.org/ en/2003/sc7777.doc.htm UK Parliament (2003) Memorandum from basic and Saferworld. In: UK Parliament. https://public ations.parliament.uk/pa/cm200203/cmselect/cmfaff/813/813we20.htm Walsh D (2007) Relief at last for hard-pressed Fusiliers. The Guardian. https://www.theguardian. com/world/2007/apr/11/afghanistan.foreignpolicy Walzer M (2015) Just and unjust wars, 5th edn. Basic Books Whitlock C (2019) At war with the truth. The Washington Post. https://www.washingtonpost.com/ graphics/2019/investigations/afghanistan-papers/afghanistan-war-confidential-documents Williams A, Parkin B (2021) US withdraws from Afghanistan, bringing an end to 20-year war. Financial Times. https://www.ft.com/content/b2ba76a1-694b-47f9-b077-d48ad88a8cb5 Yowell B (2017) Top 10 facts about the war in Northwest Pakistan. In: The Borgen Project. https:// borgenproject.org/war-in-northwest-pakistan Zak D (2021) ‘Nothing ever ends’: sorting through Rumsfeld’s knowns and unknowns. The Washington Post. https://www.washingtonpost.com/lifestyle/style/rumsfeld-dead-words-known-unk nowns/2021/07/01/831175c2-d9df-11eb-bb9e-70fda8c37057_story.html

Eric Yong Joong Lee Professor of International Law at Dongguk University-Seoul, Korea; President of YIJUN Institute of International Law. B.A. (U. Washington), M.P.A. (Seoul N. U.), LL.M. (Leiden), Dr. iur. (Erasmus). Address: 30, Pildong-ro 1-gil, Jung-gu, Seoul 04620 Korea.All the websites cited in this article were last visited on February 1, 2023.

Chapter 6

A Call to MNCs to Be a Key Part of Climate Solutions Through the CHM Principle Tsung-Sheng Liao

Abstract Global warming is a result of human influence. However, little has been done to stabilize greenhouse gas concentrations in the atmosphere to a safe level. It is an important factor for such a dismal state of affairs that the international community has emphasized far too much on the State-centric approach to combating climate change. The international legal regime does not directly control major emitters or MNCs. This article recognizes the atmosphere as a part of the global commons and the “atmospheric absorptive capacity” as the common heritage of mankind. Therefore, we can pave the way to link international climate change regime and MNCs. Those common interests of the international community can be protected when MNCs turn their production processes green, by redirecting their investment into green technology, and try to alter the negative status quo.

Introduction The scientific debate of climate change is conclusory. The Inter-Governmental Panel on Climate Change (IPCC) states that global warming is unequivocal and “human influence has warmed the atmosphere, ocean and land.”1 Policymakers, however, have staggered since the United Nations Framework Convention on Climate Change (UNFCCC) was adopted in Rio de Janeiro in 1992. Atmospheric concentrations of carbon dioxide are increasing at an accelerating rate. The concentration was 356 ppm in 1992 and has increased to 387 ppm in 2009, to 398 ppm in 2014, and to 416 ppm in 2021.2 More seriously, as the international community has placed much emphasis on the State-centric approach to combat climate change, the international legal regime does not directly apply greenhouse gas emissions reduction regulations to real and major 1 2

IPCC (2021). (2022) Annual CO2 Data. In: CO2.earth. https://www.co2.earth/annual-co2.

T.-S. Liao (B) National Chung Cheng University, Chiayi, Taiwan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_6

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emitters, multinational corporations (MNCs).3 Not only the UNFCCC but also the Kyoto Protocol to the UNFCCC (Kyoto Protocol) divides countries into two major groups, i.e., Annex I Parties and non-Annex I Parties. Both categories bear different emissions reduction obligations on the basis of common but differentiated responsibility with respective capabilities (CBDR).4 Nevertheless, the CBDR principle requires that only Annex I Parties cut greenhouse gas emissions, without proportionate burden over non-Annex I Parties. In order to redress that problem, the Paris Agreement to the UNFCCC (Paris Agreement) adopted at COP 21 in December 2015 requests all Parties to take measures to deal with global warming on the basis of their nationally determined contributions (NDCs). NDCs are submitted by Parties in the context of their own circumstances, capabilities, and priorities. In a different aspect, however, those commitments are voluntary declarations based on intended different emission reductions. NDCs could turn out to be a mess because of each Party’s political calculation or the lack of a strong and effective compliance mechanism. In this battle on climate change, MNCs should not be overlooked because they would often influence on global affairs with significant power as major greenhouse gas emitters. Of the world’s 100 largest economic entities in 2000, 51 were corporations, while 49 were countries.5 In 2017, the percentage of corporations of the world’s 100 largest economic entities increased—69 were corporations.6 The annual revenue of one big MNC is much higher than the combined annual income of each medium size country. Furthermore, these MNCs are hurdles to climate change activism. They have emitted nearly two-thirds of the greenhouse gases since the industrial revolution. It is worse that MNCs can evade responsibility and produce emissions in the course of business in different jurisdictions. If MNCs are crucial emitters and are responsible for climate change, bringing MNCs under the global climate change governance regime will be the cornerstone to taking up the challenge of global warming. In this article, the author argues that recognizing the atmosphere as the global commons and the atmospheric absorptive capacity as the common heritage of mankind (CHM) can pave the way to link international climate change legal regimes with MNCs. This will lead MNCs to green processes, redirect their investment into green technology, and address the status quo. The primary purpose of this research is to incorporate MNCs into the international climate change regime. This article is composed of five parts including Introduction and Conclusion. Part two will discuss the definition of MNCs in terms of addressing the climate change question and the failure of legal regimes to regulate MNCs and their emissions. Part three will elucidate the concept and types of CHM and lay out the atmospheric absorptive capacity as CHM. Part IV will suggest that the framework of the International Sea-Bed Authority (ISA) be a good model to govern CHM for the atmospheric governance structure. Part V will propose to establish the International Atmosphere Authority (IAA) to link the international legal regime to MNCs by way of 3

Adelman (2010). Art. 3.1. of UNFCCC. 5 Anderson and Cavanagh (2000). 6 Chapman (2018). 4

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contracts between them. Thus, the atmospheric common interests of the international community as a whole, including States and non-State actors, will be protected and shared.

Multinational Corporations and Climate Change Definition of Multinational Corporations and Their Greenhouse Gas Emissions MNCs do not have a common definition due to their freedom from effective international control. E.g., the 1977 Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy of International Labour Organization provides: “Multinational enterprises include enterprises, whether they are of public, mixed or private ownership, which own or control production, distribution, services or other facilities outside the country in which they are based.”7 The 2003 Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights, prepared by the United Nations Sub-Commission on the Promotion and Protection of Human Rights, stipulates: “The term ‘transnational corporation’ refers to an economic entity operating in more than one country or a cluster of economic entities operating in two or more countries—whatever their legal form, whether in their home country or country of activity, and whether taken individually or collectively.”8 For the purposes of this article, however, a MNC may be defined as a group of economic entities established in more than one country and cooperating with each other in various ways to conduct economic activities. MNCs have proven to be crucial actors contributing to greenhouse gas emissions. An Oxfam9 report indicates that there are ten big food companies that produce and control most of the food and drinks in grocery stores.10 These big 10, having revenues that are more than a billion dollars per day,11 “emit so much greenhouse gas through their supply chains that, if they were a single country, they would be the 25th most polluting in the world.”12 According to the report of the Recapture, Fortune 500 companies emitted 8.04 billion metric tons of carbon dioxide equivalent in 2018 and 7.56 billion metric tons 7

International Labour Office (2017). Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights. In: United Nations Digital Library. https://digitallibrary.un.org/rec ord/498842. 9 Oxfam is an international confederation of 21 organizations aiming to end global and local injustice and poverty. About us. In: Oxfam International. https://www.oxfam.org/en/what-we-do/about. 10 They are as follows: Nestle, Coca-Cola, General Mills, Kellogg, Mars, Unilever, PepsiCo, Danone, Mondelez, and Associated British Foods. Kramer (2014). 11 Ibid. 12 Ibid. 8

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in 2019.13 The Fortune 500 was estimated to be responsible for 27 percent of the world’s total greenhouse gas emissions.14 Furthermore, from Heede’s analysis based on historic fossil fuel and cement production records from 1854 to 2010, some 914 billion metric tons of carbon dioxide equivalent have been traced to 90 international corporations.15 These 90 carbon major corporations,16 including 50 investor-owned, 31 State-owned, and 9 nation-state producers of fossil fuel and cement, emitted 63 percent of the world’s cumulative carbon dioxide and methane emissions between 1751 and 2010.17 Therefore, it goes without saying that these gigantic MNCs need to do more to reduce emissions and take proactive measures to combat climate change based on the polluter and user pays principles.

Regulations Governing Multinational Corporations As the main actors engaged in today’s global economy, MNCs control most trade and investment activities. However, they have traditionally been in the regulatory gray zone between domestic and international law. Without appropriate regulations, MNCs can evade legal responsibility through the manipulation of their characteristics after creating local or global externalities. Theoretically, a State has effective jurisdiction over an MNC through its domestic laws, especially through corporation-related regulations. All actions of MNCs within a State’s jurisdiction should comply with the host State’s regulations and its enforcement system. When MNCs violate domestic laws, they should be responsible for what they have done. Nonetheless, domestic laws treat sub-holding corporations and subsidiaries as independent legal entities with their rights and obligations distinct from the parent corporation.18 Although subsidiaries usually conduct assigned segments of one single business arranged by the parent corporation, the traditional view of domestic laws shields parent corporations from vicarious liability.19 Meanwhile, MNCs and individuals are non-State actors, which are not subjects under international law.20 Ian Brownlie considers the law governing MNCs to be still within the jurisdiction of domestic law, because MNCs are entities established 13

Barbato and Kenny (2021). Ibid. 15 Heede (2013). Oppenheimer and Yohe (2014). 16 Top 20 carbon major corporations are as follows: Chevron, Exxon Mobil, Saudi Aramco, BP, Gazprom, Royal Dutch/Shell, National Iran Oil Company, Pemex, Conoco Phillips, Petroleos de Venezuela, Coal India, Peabody Energy, Total, Petro China, Kuwait Petroleum, Abu Dhabi NOC, Sonatrach, Consol Energy Inc., BHP-Billiton, and Anglo American. 17 Heede, op. cit. 15. 18 Blumberg (2001). 19 Paul (2001). 20 Positivists tend to view States as the only subjects of international law. Kelsen (1966); Eshanov (2008). 14

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in accordance with domestic law.21 In the Anglo-Iranian Oil Company case in 1951, the International Court of Justice (ICJ) that: “… the contract signed between the Iranian Government and the Anglo-Persian Oil Company … is nothing more than a concessionary contract between a government and a foreign corporation.“22 The Court did not accept that a corporation was a subject of international law. It is still a mainstream idea of contemporary international law. Only treaties can be applied in the ICJ, and contracts between governments and corporations are not equivalent to treaties.23 Hence, the ICJ has no jurisdiction over MNCs or their contractual disputes. Further, the International Law Commission’s Draft Articles on the Responsibility of States for Internationally Wrongful Acts tried assigning vicarious responsibility of MNCs to their States, but it was not successful.24 Because MNCs are not a subject of international law, the international community attempted to exercise control directly through the UN resolutions and indirectly through international law as absorbed into domestic law in recent years. MNCs are two-faced. They not only destroy the environment, but also promote sustainable development. As direct obligations should be imposed on MNCs, they are able to provide new technologies, financial and human resources to improve the environment. Hence, it is necessary to bring MNCs under the international legal regime on climate change.

Atmospheric Absorptive Capacity as CHM When combating climate change, MNCs can pose to be the solution as well as the problem. While recognizing the atmosphere as the global commons, the atmospheric absorptive capacity can be deduced as CHM. Further, the international climate change regime can “extend an olive branch” to MNCs.

Global Commons’ Resources as CHM Terms of the global commons and CHM appeared decades ago as an indication of areas and natural resources beyond the control of any national sovereignty. The difference and application between these two important definitions, however, are not always united or clearly distinguished. The areas or regions out of any State’s jurisdiction are referred to as the global commons, such as the high seas and outer space.25 In other words, the global commons may be described as the space where no 21

Brownlie (2008). Anglo-Iranian Oil Co. (U.K. v. Iran), Preliminary Objection, 1952 I.C.J. 112 (June 22). 23 Ibid. 24 Article 5 of the Draft Articles on Responsibility of States for Internationally Wrongful Acts. 25 Hunter et al. (2015). 22

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distinct State sovereignty is applied. All human beings can conduct some activities freely on or within this global space.26 Instead of claiming ownership, States could access the global commons for exploration and exploitation. The CHM institution was created to deal with resources in the global commons, such as the sea-bed and the moon.27 CHM consists of three main features, including equitable sharing, equal participation, and peaceful usage.28 Resources discovered in the global commons belong to the whole of mankind, without individual States’ ownership.29 The benefits deriving from CHM should thus be equally distributed to every State. Yet, which international institutions are in charge of “sharing the benefits in an equitable manner” is not always obvious.30 Global adjudicative bodies like the ICJ could be possible instruments addressing benefit-allocation issues.31 In addition to equitable sharing, equal participation is another essential element to guarantee all States’ interests in CHM.32 Since every State has equal rights to CHM, not only the developed, but also developing States could have secured their right to participate. In other words, the institution prohibits any monopolistic activities of CHM and requires technology transfer.33 Finally, CHM can only be used for peaceful purposes. Take Article 3 of the Agreement governing the Activities of States on the Moon and Other Celestial Bodies (hereinafter Moon Treaty) as example. It stipulates that the moon “shall be used by all States Parties exclusively for peaceful purposes.”34 This article also prohibits “any hostile or threat of hostile act on the moon” and the weapons of mass destruction, inclusive of nuclear weapons, in the orbit and military constructions around.35 It is believed that the exploitation and utilization of CHM should live up to the principle of sustainable development respecting social development, economic development, and environmental protection for the future generations.36 Thus, the peaceful utilization of CHM becomes a crucial global mandate although some treaties may not clearly articulate this emerging principle of international environmental law.37

26

Joyner (1986). Franckx (2007); Tanaka (2011). 28 Van Dyke (2000). 29 Joyner, op. cit. 26. 30 Williams (1987). 31 Ibid. 32 Wolfrum (1983). 33 Ibid. 34 Article 3(1) of the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies. 35 Ibid. art. 3(3). 36 Joyner, op. cit. 26. 37 Baslar (1997). 27

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Types of CHM The concepts of the global commons and CHM are tightly but differently connected to each other. The global commons is the area to which State sovereignty does not apply, while CHM is the resources that exist in the global commons. Following this difference, types of CHM can be clearly identified and regulated effectively through the objectives of environmental sustainability. Areas like the high seas and outer space have already been identified as part of the global commons by the international community. Simultaneously, the sea-bed, the moon, and other celestial bodies appearing in outer space are recognized as CHM. Yet, there are some areas and resources that are still ambiguous in their status and require further discussion. As for the sea-bed, the UNCLOS proclaims: “The Area and its resources are the common heritage of mankind.”38 (The Area is defined as “the sea-bed and ocean floor and the subsoil thereof, beyond the limits of national jurisdiction.”)39 Part XI of the UNCLOS stipulates the rules of the Area, including general provisions in Sect. 1 (Articles 133–135), principles governing the Area in Sect. 2 (Articles 136– 149), development of resources of the Area in Sect. 3 (Articles 150–155), and the Authority in Sect. 4 (Articles 156–191). The implication and legal status of the sea-bed can mainly be derived from the UNCLOS. Article 137 regulates the legal status of the sea-bed and its resources. States shall not “claim or exercise sovereignty or sovereign rights over” any part of the sea-bed or its resources, nor shall any State or person “appropriate any part thereof.”40 All rights in the sea-bed resources “are vested in mankind as a whole.”41 Article 140 rules the benefits of the sea-bed. Activities in the sea-bed shall be “carried out for the benefit of mankind as a whole.”42 The Authority shall provide mechanisms for the equitable sharing of benefits derived from activities in the sea-bed.43 Article 140 says “the sea-bed shall be open to use for peaceful purposes by all States.” The concept of CHM has been also applied to the moon. Articles 11.1 and 11.2 of the Moon Treaty say that: “The moon and international natural resources are the common heritage of mankind…,” which is “not subject to national appropriation by any claim of sovereignty, by means of use or occupation, or by any other means.” Also, the exploration and utilization of the moon are articulated in Article 4 of the Moon Treaty: 1. The exploration and use of the moon shall be the province of all mankind and shall be carried out for the benefit and in the interests of all countries, irrespective of their degree of economic or scientific development. Due regard shall be paid 38

Article 136 of the United Nations Convention on the Law of the Sea of 1982. Ibid. art. 1. 40 Ibid. art. 137(1). 41 Ibid. art. 137(2). 42 Ibid. art. 140(1). 43 Ibid. art. 140(2). 39

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to the interests of present and future generations as well as to the need to promote higher standards of living and conditions of economic and social progress and development in accordance with the Charter of the United Nations. 2. States Parties shall be guided by the principle of co-operation and mutual assistance in all their activities concerning the exploration and use of the moon. International co-operation in pursuance of this Agreement should be as wide as possible and may take place on a multilateral basis, on a bilateral basis or through international intergovernmental organizations. As to Antarctica, Australia, British, Chile, France, New Zealand, and Norway have claimed sovereignty on this continent.44 As none could continuously occupy Antarctica, however, these territorial claims are largely symbolic.45 The remote, frozen, isolated, and uninhabitable character of Antarctica makes it retain the status of the global commons as well as CHM.46 In addition, resources in or on Antarctica are still mysterious to mankind. The Antarctica Treaty adopted in 1959 has put territorial disputes into abeyance and pressed for international cooperation on scientific research.47

Recognizing Atmospheric Absorptive Capacity as CHM The Earth’s atmosphere, comprised by the mixture of gases and vital elements necessary for human survival, is not fully categorized as the global commons because of the dominance of State sovereignty.48 From a scientific perspective, however, the atmosphere is circulative, dynamic, and fluctuating, which can never be effectively subject to the sovereignty of any State through territorial claims.49 Finally, recognizing the atmosphere as part of the global commons and regarding its resources as CHM is the key to overcoming the problem of the ineffective, inequitable, and adverse use of its resources.50 The atmosphere is a layer of gases mixed with water vapor and aerosols surrounding the Earth and retained in place by its gravity.51 The major gases of the atmosphere are nitrogen (78%), oxygen (21%), argon (0.9%), and carbon dioxide (0.03%).52 The atmosphere can be divided into four primary layers, named atmospheric stratification. The first layer, the Troposphere, is 0 to 10 miles; the second layer, the Stratosphere, is 10 to 31 miles; the third layer, the Mesosphere, is 31 to 53 44

Buck (1998). Sands and Peel (2012). 46 Vogler (1995). 47 Buck, op. cit. 44. 48 Ibid. 49 Vogler, op. cit. 46; Shelton (2010). 50 Cullet (2010). 51 Shipman et al. (2015. 52 Ibid. 45

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miles; and the fourth layer, the Thermosphere, is 53 to 375 miles.53 All these layers protect the Earth by absorbing radiation.54 Traditionally, the atmosphere contains two parts in terms of sovereignty, namely, territorial airspace and non-territorial airspace. The former represents airspace which is above a State’s land territory and territorial sea. It forms part of the State’s jurisdiction. The extent of territorial airspace reaches at the Karman Line, at the altitude of 62 miles, which is the boundary between outer space and airspace.55 Outer space is the global commons outside territorial airspace. When considering the whole atmosphere (both territorial airspace and nonterritorial airspace) as the global commons, however, it appears more reasonable and convincing in a legal manner. The nature of the atmosphere differs greatly from the territory as we understand it. The territory is fixed on a specific region and more controllable by a State’s sovereignty. In contrast, the atmosphere is dynamic, circulating, and beyond a States’ boundary that prevents it from being subject to real sovereign dominion. Meanwhile, the circulating property of the atmosphere forces all human beings in different States to endure environmentally negative effects, such as transboundary air pollution and global warming, caused by activities in various States. In order to prevent transboundary air pollution, international cooperation is a key strategy, but it does not work effectively most of the time. Basic principles of international law provide that a State has permanent sovereignty over natural resources. The Stockholm Declaration affirms that: “States have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to exploit their own resources pursuant to their own environmental policies.”56 Neither developed nor developing countries are willing to give away resources which are derived from sovereignty and allocated to them.57 Sovereignty still exists in all international cooperation plans and guarantees, to some extent, States’ “right of pollution.”58 It means that States have a right to pollute the atmosphere over their territory by their economic activities. The Kyoto Protocol, e.g., sets up quantified emission limitations and reduction commitments for Annex I Parties of the UNFCCC. It diminishes the responsibility of atmospheric polluters by the grandfathering mechanism.59 With this mechanism, industrialized Parties that have had previously higher polluting levels are imposed lesser reduction obligations than industrializing Parties. Thus, former States are still allowed to discharge large amounts of greenhouse gases, while latter States could be blocked from taking the traditional path of economic development because of tighter

53

Zell (2013). Ibid. 55 Henkin (1995). 56 Principle 21 of Stockholm Declaration. 57 Henkin, op. cit. 55. 58 Cullet, op. cit. 50. 59 Ibid. 54

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greenhouse gas emission obligations.60 Clearly, permanent sovereignty over natural resources still has a great impact on air pollution. It is thus reasonable to define the atmosphere as a sort of global commons, such as the high seas and outer space. Here, States cannot abuse their territorial sovereignty of the atmosphere.61 Further, the “atmospheric absorptive capacity” can be recognized as CHM, because the absorptive ability neutralizes different gases to prevent adverse effects on human beings.62 In terms of greenhouse gases, this natural ability maintains a finite amount of greenhouse gases and guarantees a healthy global climate.63 However, since the industrial revolution, States and MNCs have continuously and increasingly overshot the “atmospheric absorptive capacity.” The cumulative effects of overconsumption of resources have finally led to the global climate crisis.64 In order to deal with the crisis, governance principles of CHM should be adopted when allocating “atmospheric absorptive capacity.”

Atmospheric Governance: From ISA to IAA The UNCLOS is arguably the most robust treaty that lays out the managerial framework for the sea-bed as CHM. For the realization of the CHM concept, the UNCLOS provides: “All rights in the resources of the Area are vested in mankind as a whole, on whose behalf the Authority shall act. These resources are not subject to alienation. The minerals recovered from the Area, however, may only be alienated in accordance with this Part and the rules, regulations and procedures of the Authority.”65 ISA is a well-designed institution with extensive competence. The framework of ISA is appropriate for imitation to ensure equitable sharing of the whole benefits deriving from the “atmospheric absorptive capacity” and its sustainable exploitation.

Lessons from the International Sea-Bed Authority Structure of ISA ISA is an intergovernmental organization created by the UNCLOS.66 The Authority is composed of three core organs: Assembly, Council, and Secretariat. ISA is in

60

Ibid. Harrison and Matson (2001); Vanderheiden (2008). 62 Arnold (2011). 63 Vanderheiden, op. cit. 61; Sachs (2014). 64 Ibid. 65 Article 137(2) of UNCLOS. 66 Armas-Pfirter (2009). 61

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charge of economic benefits, sustainable exploitation, and equitable distribution of the sea-bed on behalf of the whole of humanity, present or future. The ISA Assembly acts as the supreme organ to make its decisions and to elect the crucial policymakers.67 By and large, other organs of ISA need to take their agendas to the Assembly for approval. Meanwhile, the Assembly is required by the 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea (1994 Implementation Agreement) to collaborate with the Council when making policies and decisions.68 The Council, composed of 36 elected Parties, is considered as an executive organ.69 With four key tasks authorized by Article 162 of the 1994 Implementation Agreement, the Council appears to be the most powerful executive organ of the Authority in charge of supervising and coordinating the implementation of the UNCLOS, approving sea-bed mining plans, making recommendations, and adopting and applying rules for exploration and exploitation in the sea-bed.70 The Secretariat functions as the administrative organ of the Authority. It provides the Assembly and the Council with legal, technical, and financial services.71 As subsidiary organs, ISA maintains the legal and technical commission and the finance committee. The Legal and Technical Commission (LTC) is an influential supporting organ for the operation of the Authority. LTC makes recommendations to the Council for signing and licensing the sea-bed mining contracts, drafts rules, and mining regulations, and supervises and assesses exploitation activities of sea-bed mining contractors.72 In addition, obligation fulfillment and environmental protection are two primary criteria for LTC to assess and to deliver approval recommendations to the Council. For obligation Statements in applicants’ proposals, LTC needs to appraise whether applicants can comply with mining regulations and possess requisite financial and technical abilities.73 As to environmental protection, LTC focuses on assessing if exploration plans can benefit human beings and protect the marine environment under sustainable development principles.74 LTC also sets guidelines for contractors including environmental impact assessment, exploration expenditure report, and training program design.75

67

Franckx (2010). Churchill and Lowe (1983). 69 Franckx, op. cit. 67. 70 Churchill, Lowe, op. cit. 68. 71 Franckx, op. cit. 67. 72 Wolfrum (1990). 73 Reg. 23 of the Decision of the Assembly of the International Seabed Authority relating to the Regulations on Prospecting and Exploration for Polymetallic Sulphides in the Area ISBA/16/A/12/Rev.1. International Seabed Authority. https://www.isa.org.jm/decision-assemblyinternational-seabed-authority-relating-regulations-prospecting-and-exploration. 74 Ibid. 75 Ibid. 68

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The Finance Committee is established on the basis of the 1994 Implementation Agreement.76 The membership of the Finance Committee follows the principle of equitable geographical distribution to ensure State Parties’ equal participation. The Finance Committee is in charge of making recommendations for ISA on three aspects, including financial rule drafting, Authority budgeting, and economic benefit sharing.77

Contracts Between ISA and Other Parties Contracts between ISA and other parties are the key to equitably exploring and managing the sea-bed. Contractors can be enterprises, States parties, State enterprises, or natural or juridical persons which possess the nationality or are effectively controlled by them or their nationals.78 According to the Mining Code issued by ISA, applicants who plan to prospect, explore, and exploit specific parts of the sea-bed Area are required to make application and sign contracts with the Authority. So far, State enterprises and juridical persons are the two main entities of contractors, which pursue win–win goals with the international community.79 Under the 15-year exploration contract,80 both ISA and the contractor have specific rights and bear specific obligations. ISA needs to establish scientific databases and redistribute the benefits with lower cost and higher efficiency when the contractor makes annual scientific reports and relinquishes its exploring areas. Also, the Authority needs to conduct periodic reviews every five years to monitor the progress and environmental impact of the contractor’s activities.81 The contractor, during the contracting time span, has the exclusive right to carry out its research and exploration plan in the allocated areas.82 The contractor is allowed to retain 25 percent of its exploring areas for further exploitation after the expiration of the contract.83 Meanwhile, obligations imposed on the contractor include studying environmental baselines, updating scientific reports, protecting the environment, reporting emergent incidents, and relinquishing allocated areas.84 In order to meet the objective of sustainable utility of the sea-bed, there is also a need for the contractor as a partner to make significant contributions to the scientific research and risk analysis.

76

Annex Sect. 9 of the 1994 Implementation Agreement. Churchill, Lowe, op. cit. 68. 78 International Seabed Authority, op. cit. 73, reg. 9. 79 International Seabed Authority (2022). 80 International Seabed Authority, op. cit. 73, reg. 28. 81 Ibid. regs. 30 & 34. 82 Ibid. reg. 2. 83 Ibid. reg. 27. 84 Ibid. regs. 27, 30, 34 & 35. 77

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Establishing ISA and Enlisting MNCs “Atmospheric absorptive capacity” is a vital CHM, but it lacks an international managerial mechanism. ISA’s experience provides a useful model for regulating this significant resource. After reviewing the structure and operation of ISA, it is recommended to establish a similar institution for the atmosphere, namely, the International Atmosphere Authority (IAA). Setting up IAA could be an effective way to avoid severe air pollution, to reach balance between economic growth and air quality, and to enlist MNCs in the battle against global warming.

Declaration of Principles Governing the Global Atmosphere In order to recognize “atmospheric absorptive capacity” as CHM and secure MNCs, in an effort to make them pay royalties and share benefits from using their capacity, the UN General Assembly should firstly make a declaration for establishing the atmospheric regulatory framework.85 Such a declaration can not only raise the awareness of the international community, but also ensure new principles for atmospheric management. By referring to the 1970 Declaration of Principles Governing the Seabed and the Ocean Floor, and the Subsoil Thereof, beyond the Limits of National Jurisdiction,86 key principles of the declaration shall deal with status identification, rules for the atmosphere, and the Authority Governing atmospheric absorptive capacity. The declaration could read as follows. 1. The atmosphere is one of the global commons. The resource of the atmosphere, the atmosphere’s absorptive capacity, is the common heritage of mankind. 2. The atmosphere shall not be subject to appropriation by any means by States or persons, natural or juridical. States shall not claim or exercise sovereignty or sovereign rights over any part thereof. 3. No State or person, natural or juridical, shall claim, exercise, or acquire rights with respect to the atmosphere or its resource incompatible with the international regime to be established and the principles of this Declaration. 4. All activities regarding the exploitation of the resource of the atmosphere and other related activities shall be governed by the international regime, the International Atmosphere Authority, to be established. 5. The exploration of the atmosphere and the exploitation of its resource shall be carried out for the benefit of mankind as a whole, and take into particular consideration the interests and needs of the developing countries.

85

Antrim (2005). UN Declaration of Principles Governing the Seabed and the Ocean Floor, and the Subsoil Thereof, beyond the Limits of National Jurisdiction.

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6. On the basis of the principles of this Declaration, an international regime applying to the atmosphere and its resource and including appropriate international machinery to give effect to its provisions shall be established by an international treaty of a universal character, generally agreed upon. The regime shall, inter alia, provide for the orderly and safe development and rational management of the atmosphere and its resource and for expanding opportunities in the use thereof and ensure the equitable sharing by States in the benefits derived therefrom, taking into particular consideration the interests and needs of the developing countries, the atmosphere and its resource. Structure of IAA Without an international-level authority in charge of atmospheric management, a variety of environmental problems, such as toxic gas emissions and global warming would become worse. In order to resolve those problems, IAA could be the key in international regime for regulating exploitation of atmospheric absorptive capacity. The basic operational system of IAA could be modeled after the ISA structure. The IAA structure could be composed of core organs and subsidiary organs taking different responsibilities. There are three core organs—Assembly, Council, and Secretariat. The Assembly will be the supreme organ, with the power to make final decisions and structure policies for IAA. The Council will be the executive organ composed of State Parties elected by the Assembly. The Council controls substantive powers of IAA by approving atmospheric exploration and exploitation plans and the financial decision-making. The Secretariat will be the administrative organ in charge of internal administrative work and the management of public relationships with NGOs, external international organizations, and State Parties. LTC as a subsidiary organ would exercise an influential status in the IAA decisionmaking processes. LTC’s recommendations would be the bases for the Council’s final decisions. LTC would draft rules relating to “atmospheric absorptive capacity.” It would undertake the monitoring and assessment of exploration and exploitation activities. The Finance Committee would be the other subsidiary organ in charge of financial issues.

Contracts Between IAA and MNCs MNCs are major producers of global greenhouse gases. These big firms are consuming most of the “atmospheric absorptive capacity.” However, MNCs are out of international conventions because they are not the subject of international law. MNCs would thus take advantage of the ambiguous status and poor legal regimes (usually as in developing States) to create tremendous wealth by emitting unrestrained greenhouse gases when producing their goods. Signing contracts regarding “atmospheric absorptive capacity” can be an effective strategy and instrument for the IAA to lay out rights and duties for MNCs

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and to ensure three requirements of CHM: equitable sharing, equal participation, and peaceful usage. Equitable sharing forces MNCs to share benefits deriving from the consumption of “atmospheric absorptive capacity.” Equal participation guarantees each MNC access to utilize “atmospheric absorptive capacity.” Finally, peaceful usage requires the safe and sustainable exploration and exploitation of the atmosphere. The international legal regime is able to balance interests between MNCs and the stakeholders of the atmosphere, such as States, local governments, communities, and individuals, through the design of the contract. MNCs gain significant profits from business activities which consume large portions of “atmospheric absorptive capacity.” With the royalty paid by MNCs, IAA can redistribute benefits to the stakeholders and especially climate victims.87 While paying for the right to consume “atmospheric absorptive capacity,” MNCs should take necessary actions to monitor and protect the atmosphere from irreversible impacts caused by their activities. Under the contracts, MNCs would be required to provide annual scientific reports concerning their consumption of “atmospheric absorptive capacity” to IAA. Following the reports, the Authority can establish a worldwide database for its decision-making. The contract should articulate the scientific reports to be measurable, reportable, and verifiable (MRV).88 The process of measurement can help MNCs to establish baselines and exactly calculate their consumption of “atmospheric absorptive capacity.”89 The MNCs’ activities and data report can allow IAA to collect all the facts, evidence, and information needed for scientific atmospheric governance, i.e., equitable sharing, equal participation, and peaceful usage.90 If verified, MNCs’ reports can improve MNCs’ ability to facilitate the reduction of their consumption of “atmospheric absorptive capacity.”91 It is considered essential to have technology transfer clauses in the contract. MNCs are required to transfer their technologies to IAA, which will be more effective and economical to combat global warming. MNCs are the main patent holders of environmentally sound technologies, including the key skills and knowledge to reduce greenhouse gas emissions. However, patent licensing is frequently abused or impeded when MNCs fear the creation of potential competitors among developing States.92 Acquiring high-tech patent licensing through the contract process, IAA can take advantage of managing the atmosphere and support stakeholders with lower costs.

87

Bhatia and Chugh (2015). Genest (2012). 89 Breidenich and Bodansky (2009). 90 Ibid. 91 Ibid. 92 Hutchison (2006). 88

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A Model Contract for Exploitation of “Atmospheric Absorptive Capacity” The ISA Assembly adopted the decision relating to the Regulations on Prospecting and Exploration for Polymetallic Sulphides in the Area on May 7, 2010, which had been adopted one day prior by the Council. The regulations incorporate a contract for exploration documents in Annex 3 and the standard clauses for exploration contract document in Annex 4.93 Both documents can be tailored and revised to become a model contract for the exploitation of atmospheric absorptive capacity as follows. THIS CONTRACT made the—day of—; By and Between the International Atmosphere Authority represented by its Secretary-General, with full powers, (hereinafter referred to as “the Authority”) and—represented by—(hereinafter referred to as “the Contractor”), as duly authorized; WITNESSETH; WHEREAS—,—as follows: Incorporation of Clauses A. The standard clauses set out in Annex 1 to the Regulations on the Exploitation of atmospheric absorptive capacity of the Area shall be incorporated herein and shall have effect as if herein set out at length. Resource Exploitation B. For the purposes of this contract, “resource exploitation” means that part of atmospheric absorptive Capacity of the Area allocated to the Contractor for exploitation, defined by the coordinates listed in Schedule 1 hereto, as reduced from time to time in accordance with the standard clauses and the Regulations. Grant of Rights C. In consideration of: (1) Their mutual interest in the conduct of resource exploitation in the Area pursuant to the Convention and the Agreement; (2) The responsibility of the Authority to organize and control resource exploitation in the Area in accordance with the legal regime established in Article—of the Convention and the Agreement; and (3) The interest and financial commitment of the Contractor in conducting resource exploitation in the Area and the mutual covenants made herein, the Authority hereby grants to the Contractor the right to exploit atmospheric absorptive capacity of the Area in accordance with the terms and conditions of this contract. Entry into Force and Contract Term D. This contract shall enter into force on signature by both parties and, subject to the standard clauses, shall remain in force for a period of five years thereafter. Schedules E. This contract expresses the entire agreement between the parties, and no oral understanding or prior writing shall modify the terms hereof. Entire Agreement F. This contract expresses the entire agreement between the parties, and no oral understanding or prior writing shall modify the terms hereof.

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Regulations on Prospecting and Exploration for Polymetallic Sulphides in the Area. International Seabed Authority. https://www.isa.org.jm/files/documents/EN/Regs/PN-en.pdf.

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IN WITNESS WHEREOF the undersigned, being duly authorized thereto by the respective parties, have signed this contract at , this day of Schedule 1 [Coordinates and illustrative chart of the resource exploitation]

Conclusion Most people are not aware that the world is changing and most of those, who are cognizant of such change, often choose to ignore or are afraid of recognizing the situation. However, the world keeps changing just as surely as the Earth rotates. It has been shown that the world is networked and the State-centric system is diffused in the twenty-first century. Anne-Marie Slaughter writes94 : We live in a networked world. War is networked. … Diplomacy is networked. … Business is networked. … Media are networked. … Society is networked. … Even religion is networked. … In this world, the measure of power is connectedness…. The twentieth-century world was, at least in terms of geopolitics, a billiard-ball world, described by the political scientist Arnold Wolfers as a system of self-contained States colliding with one another. The results of these collisions were determined by military and economic power. … The emerging networked world of the twenty-first century, however, exists above the State, below the State, and through the State. In this world, the State with the most connections will be the central player, able to set the global agenda and unlock innovation and sustainable growth…

Similarly, the State-centric approach to combat climate change has proven deficient. There are few existing incentives for Annex I Parties and non-Annex I Parties to fight against climate change. The status quo does not incorporate MNCs into the international climate change legal regime, either. So far, the real and major greenhouse gas emitters, MNCs, are still outside the global regulatory framework and bear little responsibility in the global warming networks. MNCs, as private actors without Statehood, are free from international legal obligations to reduce greenhouse gas emissions and allowed to discharge those gases “legally” in the States who take light measures to tackle global warming. Since MNCs make tremendous profits at the expense of all mankind, it is urged to recognize “atmospheric absorptive capacity” as CHM and place MNCs on the networked track for global environmental and equitable sustainability.

94

Slaughter (2009); Wiener (2013).

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Annex Standard Clauses Section 1—Definition 1.1 In the following clauses: (a) “Area” means the atmosphere of the Earth. (b) “Resource Exploitation” means that part of Atmospheric Absorptive Capacity of the Area is allocated to the Contractor for exploitation. (c) “Regulations” mean the Regulations on the Exploitation of Atmospheric Absorptive Capacity of the Area, adopted by the Authority. 1.2 Terms and phrases defined in the Regulations shall have the same meaning in these standard clauses. 1.3 This contract includes the schedules to this contract, which shall be an integral part hereof. Section 2—Security of tenure 2.1 The Contractor shall have the security of tenure and this contract shall not be suspended, terminated, or revised except in accordance with section 8 hereof. 2.2 The Contractor shall have the right to exploit the atmospheric absorptive capacity of the Area in accordance with the terms and conditions of this contract. 2.3 The Contractor, by notice to the Authority, shall have the right at any time to renounce without penalty the whole or part of its rights in the Area, provided that the Contractor shall remain liable for all obligations accrued prior to the date of such renunciation in respect of the area renounced. 2.4 Nothing in this contract shall be deemed to confer any right on the Contractor other than those rights expressly granted herein. The Authority reserves the right to enter into contracts with respect to resources with third parties in the Area covered by this contract. Section 3—Contract term 3.1 This contract shall enter into force on signature by both parties and shall remain in force for a period of five years. 3.2 Upon application by the Contractor, not later than six months before the expiration of this contract, this contract may be extended for periods of not more than five years each on such terms and conditions as the Authority and the Contractor may then agree in accordance with the Regulations. Such extensions shall be approved if the Contractor has made efforts in good faith to comply with the requirements of this contract.

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Section 4—Annual report The Contractor shall, within 90 days of the end of each calendar year, submit a report to the Secretary-General in such format according to the measurable, reportable, and verifiable principles as may be recommended from time to time by the Legal and Technical Commission covering its exploitation of atmospheric absorptive capacity of the Area and sufficient detail. Section 5—Royalty payment The Contractor shall, within 90 days of the end of each calendar year, pay its royalty to the Secretary-General on the basis of the payment formula as may be recommended from time to time by the Legal and Technical Commission. Section 6—Data and information to be submitted on the expiration of the contract The Contractor shall transfer to the Authority all data and information that are both necessary for and relevant to the effective exercise of the powers and functions of the Authority in respect of the resource exploitation in the Area in accordance with the provisions of this section. Section 7—Inspection 7.1 The Contractor shall permit the authority to send its inspectors to monitor the Contractor’s compliance with the terms and conditions of this contract and the Regulations. 7.2 The Secretary-General shall give reasonable notice to the Contractor of the projected time and duration of inspections, the name of the inspectors, and any activities the inspectors are to perform that are likely to require the availability of special equipment or special assistance from personnel of the Contractor. Section 8—Revision 8.1 When circumstances have arisen or are likely to arise which, in the opinion of the Authority or the Contractor, would render this contract inequitable or make it impracticable or impossible to achieve the objectives set out in this contract the Agreement, the parties shall enter into negotiations to revise it accordingly. 8.2 This contract may also be revised by agreement between the Contractor and the Authority to facilitate the application of any rules, regulations, and procedures adopted by the Authority subsequent to the entry into force of this contract. 8.3 This contract may be revised, amended, or otherwise modified only with the consent of the Contractor and the Authority by an appropriate instrument signed by the authorized representatives of the parties. Section 9—Disputes Any final decision rendered by a court or tribunal having jurisdiction under the Convention relating to the rights and obligations of the Authority and of the

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Contractor shall be enforceable in the territory of any State Party to the Convention affected thereby. Section 10—Interpretation The division of this contract into sections and subsections and the insertion of headings are for the convenience of reference only and shall not affect the construction or interpretation hereof. Section 11—Additional documents Each party hereto agrees to execute and deliver all such further instruments, and to do and perform all such further acts and things as may be necessary or expedient to give effect to the provisions of this contract.

References Adelman S (2010) Rethinking human rights: the impact of climate change on the dominant discourse. In: Humphreys S (ed) Human Rights and Climate Change. Cambridge University Press, pp 159–180 Anderson S, Cavanagh J (2000) Top 200: The Rise of Corporate Global Power. Institute for Policy Studies. http://www.rrojasdatabank.info/top200.pdf Antrim C (2005) Mineral Resources of Stateless Space: Lessons from the Deep Seabed. J Int Aff 59(1):55–80 Armas-Pfirter F (2009) How can life in the deep sea be protected? The International Journal of Marine and Coastal Law 24:281–307 Arnold D (2011) The Ethics of Global Climate Change. Cambridge University Barbato A, Kenny E (2021) 2018–2019 Fortune 500 Companies Greenhouse Gas Emissions. In 2021 Inaugural Report. Recapture. https://www.recapturecarbon.com/fortune-500-emissionsreport-2019 Baslar K (1997) The Concept of the Common Heritage of Mankind in International Law. Martinus Nijhoff Publishers, Leiden Bhatia P, Chugh A (2015) Role of marine bioprospecting contracts in developing access and benefit sharing mechanism for marine traditional knowledge holders in the pharmaceutical industry. Global Ecology and Conservation 3:176–187 Blumberg P (2001) Accountability of Multinational Corporations: The Barriers Presented by Concepts of the Corporate Juridical Entity. Hastings International and Comparative Law Review 24:297–320 Breidenich C, Bodansky D (2009) Measurement, Reporting and Verification in a Post-2012 Climate Agreement. Pew Center on Global Climate Change, Washington, D.C. Brownlie I (2008) Principles of Public International Law, 7th edn. Oxford University Press Buck S (1998) The global commons: An introduction. Routledge, London Chapman B (17 Oct 2018) Majority of the world’s richest entities are corporations, not governments, figures show. Independent. https://www.independent.co.uk/news/business/news/companies-big ger-than-governments-un-human-rights-council-meeting-a8588676.html Churchill R, Lowe A (1983) The Law of the Sea. Manchester University Press Cullet P (2010) The Kyoto protocol and vulnerability: human rights and equity dimensions. In: Humphreys S (ed) Human rights and climate change. Cambridge University Press, pp 183–206

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Eshanov D (2008) The role of multinational corporations from the neoinstitutionalist and international law perspectives: the concept of the three-level game. NYU Environ Law J 16(1):110–169 Franckx E (2010) The international sea-bed authority and the common heritage of mankind: the need for states to establish the outer limits of their continental shelf. Int J Mar Coast Law 25:543–567 Franckx E (2007) The 200-mile limit: between creeping jurisdiction and creeping common heritage? Some law of the sea considerations from professor Louis Sohn’ Former LL.M. Student. Georg Wash Int Law Rev 39(3):467–498 Genest A (2012) The fight against global warming: progress made and priorities for a successor to the Kyoto protocol. Rev Jurid Thémis L’université Montréal 46(3):525–579 Harrison J, Matson P (2001) The atmospheric commons. In: Burger J et al (eds) Protecting the commons: a framework for resource management in The Americas. Island Press, Washington, D.C., pp 219–240 Heede R (2013) Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, pp 1854–2010 Henkin L (1995) International law: politics and values. Springer, Berlin Hunter D et al. (2015) International environmental law and policy, 5th edn. Foundation Press, Minnesota Hutchison C (2006) Does TRIPS facilitate or impede climate change technology transfer into developing countries? Univ Ott Law & Technol J 3:517–537 International Labour Office (2017) Principle 6. In: The Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, 5th edn. Internaional Labour Office, Geneva https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/ publication/wcms_094386.pdf International Seabed Authority (2022) Deep seabed minerals contractors. https://www.isa.org.jm/ deep-seabed-minerals-contractors IPCC (2021) Summary for policymakers. In: Climate change 2021: the physical science basis. Cambridge University Press, pp 3–32 Joyner C (1986) Legal implications of the concept of the common heritage of mankind. Int Comp Law Q 35(1):190–199 Kelsen H (1966) Principles of international law, 2nd edn. Holt, Rinehart and Winston Inc, New York Kramer A (2014) These 10 companies make a lot of the food we buy. Here’s how we made them better. Oxfam America. http://www.oxfamamerica.org/explore/stories/these-10-compan ies-make-a-lot-of-the-food-we-buy-heres-how-we-made-them-better Oppenheimer M, Yohe G (eds) (2014) Climate change, vol 122, pp 229–241 Paul J (2001) Holding multinational corporations responsible under international law. Hast Int Comp Law Rev 24:285–296 Sachs N (2014) Climate change triage. Environ Law 44(4):993–1038 Sands P, Peel J (2012) Principles of international environmental law, 3rd edn. Cambridge University Press Shelton D (2010) Equitable utilization of the atmosphere: a rights-based approach to climate change? In: Humphreys S (ed) Human rights and climate change. Cambridge University Press, pp 91–125 Shipman J et al (2015) An introduction to physical science, 14th edn. Cengage Learning, Boston Slaughter A-M (2009) America’s edge: power in the networked century. Foreign Aff 88(1):94–113 Tanaka Y (2011) Protection of community interests in international law: the case of the law of the sea. Max Planck Yearb UN Law 15:329–375 Van Dyke J (2000) Sharing ocean resources—in a time of scarcity and selfishness. In: Scheiber H (ed) Law of the sea: the common heritage and emerging challenges. Brill, Leiden, pp 3–36 Vanderheiden S (2008) Atmospheric justice: a political theory of climate change. Oxford University Press Vogler J (1995) The global commons: a regime analysis. Wiley, New York

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Wiener J (2013) The diffusion of regulatory oversight. In: Livermore M, Revesz R (eds) The globalization of cost-benefit analysis in environmental policy. Oxford University Press, pp 123– 141 Williams S (1987) The law of outer space and natural resources. Int Comp Law Q 36(1):142–151 Wolfrum R (1983) The principle of the common heritage of mankind. Zeitschrift Für Ausländisches Öffentliches Recht Und Völkerrecht 43:312–337 Wolfrum R (1990) Decision-making in the council: an assessment and comparison. In: Wolfrum R (ed) Law of the sea at the crossroads: the continuing search for a universally accepted regime. Duncker & Humblot, Berlin, pp 59–74 Zell H (2013) Earth’s upper atmosphere. In: NASA. http://www.nasa.gov/mission_pages/sunearth/ science/mos-upper-atmosphere.html

Tsung-Sheng Liao Professor, Law Department, National Chung Cheng University, Taiwan; Visiting Scholar, School of Law, University of California, Berkeley (Aug. 2019- July 2020). LL.M./S.J.D., School of Law, University of Wisconsin-Madison. This article is a revised version of Tsung-Sheng Liao, MNCs under International Climate Change Regime: Recognizing Atmospheric Absorptive Capacity as the Common Heritage of Mankind, Journal of East Asia and International Law 9(2): 379-402 (Aug. 2016).

Chapter 7

Thailand’s Lawsuit Against the United States for Causing COVID-19 Patthara Limsira

and Winatta Saengsook

Abstract Coronavirus disease 2019 (COVID-19) presents various questions concerning international law and states’ domestic laws affected by this global pandemic. One of the legal issues amid COVID-19 pandemic is the state immunity principle. Many lawsuits against foreign states have challenged the state immunity principle amid the COVID-19 pandemic. In Thailand, the Chiangmai Provincial Court (court) addressed in its judgement that it did not have jurisdiction to adjudicate the compensation for COVID-19 pandemic’s damages dispute between a Thai restaurant owner and the United States (US). Notwithstanding surrounding controversies over COVID-19 pandemic, the court considered the motion denied. The main implication of the judgement is that Thailand accepted the state immunity principle under customary international law. This research briefly explains the sovereign immunity doctrine relating to this case, summarises the facts, and analyses the potential ramifications of this judgement under international law. Keywords State immunity · Thailand · United States · COVID-19 · Lawsuit · Customary international law

This article has been updated from ‘The Lawsuit against the United States for Causing COVID-19,’ 13 (2020) J. E. Asia & Int’l L. 233. The authors also pay tribute to the healthcare workers around the world who have lost their lives in the battle against COVID-19, and expresses his sympathy for the millions of victims of the virus. All the websites cited in this article were last visited on February 1, 2023 P. Limsira (B) Faculty of Law, Ramkhamhaeng University, Bang Kapi, Huamark 10240, Bangkok, Thailand e-mail: [email protected] W. Saengsook Faculty of Humanities and Social Sciences, Phranakhon Si Ayutthaya Rajabhat University, 13000 Phranakhon Si Ayutthaya, Thailand e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_7

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Introduction Every kind of peaceful cooperation among men is primarily based on mutual trust and only secondarily on institutions such as courts of justice and police. Albert Einstein1

There have been many frivolous lawsuits against the People’s Republic of China (China) over the coronavirus disease 2019 (COVID-19).2 Most lawsuits were filed in the United States (US)3 and other jurisdictions worldwide.4 These lawsuits commonly seek damages from China based on its role in unleashing the COVID-19 pandemic.5 These attempts seem contrary to international law because they seek to bring China to a national or international judicial forum without its consent.6 Also, there was a lawsuit against World Health Organization for conspiring with China’s government.7 Therefore, the litigation venture will not be an easy task but a herculean one.8 There is no solid evidence9 for the conspiracy that either the deadly virus is a Chinese bioweapon or the lab released a natural virus.10 However, the Chinese government does appear to have tried to cover up the outbreak when it began spreading globally.11 Also, litigation concerning state responsibility for COVID-19 has been filed in Thailand. However, in this case, the defendant was not China but the US. On June 26, 2020, a restaurant owner in Thailand filed a claim alleging that the US ignored the evidence and sued it for causing the COVID-19 pandemic.12 The intention of the restaurant owner to proceed in propria persona was that his litigation could serve as a guideline for other Thai business owners in foreign countries to step up and claim their rights.13 With the line in the sand drawn, the Thai court delivered its decision. The primary purpose of this research is to look into the legal issues of the Thai restaurant owner’s lawsuit against the US. This article is composed of five parts, including Introduction and Conclusion. Part two will briefly explain the background 1

Einstein (1950). For the scientific fact concerning the COVID-19 pandemic. See Paudyal et al. (2022) ; Girardi and Bremer (2022); Khandia et al. (2022). 3 The jurisdictional basis has generally been the Foreign Sovereign Immunities Act (FSIA) 1976, Pub. Law. 94–583, §8. See Keitner (2021a); Larkin (2020); Keitner (2020). 4 E.g. Salau (2020); Bowcott and Giuffrida (2020). 5 Those attempts were based on the Principle of Transboundary Harm from the Trail Smelter Arbitration. See Miller (2020). See also Bratspies and Miller (eds) (2006). Cf. Keitner (2021b). 6 Shaw (2017). 7 Kling et al. (2021); Stempel (2021). 8 Perry (2021); Trigt (2020); Tzeng (2020); Rutschman and Gatter (2020). 9 Frutos et al. (2022); Liu et al. (2020); Beusekom (2020); Yusha (2020); Cohen (2020). 10 Rogin (2020); Baier and Re (2020). 11 Chen (2020). 12 Xinhua (2020). 13 Post Today (2020) ; Ban Muang (2020) ; Kom Chad Luek (2020) . 2

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and substance of the sovereign immunity doctrine in line with this case. Part three will summarise the judgement and review the proceedings before the court. Part four will make some commentary on the ramifications of the judgement and analyse its main points under international law.

The Sovereign Immunity Doctrine: Today’s Context14 It is a fundamental principle15 of international law that states are immune from the jurisdiction of foreign municipal courts.16 This principle is based on reciprocity, comity, independence, and dignity of states.17 Foreign states may rely on sovereignty immunity with respect to conduct in the exercise of sovereign authority (iure imperii)18 and their dignity as independent states.19 Later developments covered certain groups of individuals and institutions,20 inter alia, foreign heads of state, diplomatic agents, and international institutions and their officials and agents.21 The foreign sovereign immunity was rooted in the immunity of the person of the monarch22 as to the Latin maxim princeps legibus solutus (The prince is not bound by the laws)23 , which means that the king was above the law. That seemed natural when kings were considered the embodiment of a state’s sovereignty and when diplomatic agents were considered personal representatives of the monarchy. Moreover, one sovereign monarch could not be subject to the jurisdiction of another sovereign monarch since all kings were equal and the king can do no wrong.24 These echoes from par in parem non habet imperium (equals have no sovereignty over each other),25 one of the Latin maxims in international law.26 Besides, the concept of 14

Ruys et al. (eds) (2019); Allen et al. (eds) (2019); Okeke (2018); Fox and Webb (2015); Yang (2012a); Alebeek (2008); Bankas (2005); Sucharitkul (1959). 15 Some scholars suggested that jurisdictional immunity should to be a rule instead of a principle of international law. See Finke (2010). 16 Mesch (1974). 17 Webb (2018); Sucharitkul, op. cit., 117. 18 Crawford (2012). 19 Randall (2002); The Parlement Belge, (1880) LR 5 PD 197, at 214–215. 20 Gaeta (2012); Cassese (2005); Shaw, op. cit., 554–559, 577–588. 21 Watts (1995); Scott and Watts (2019); Foakes (2014). 22 R v Bow Street metropolitan stipendiary Magistrate and others, exparte Pinochet Ugarte (Amnesty International and other intervening) (No.3), 2 All ER 97, House of Lords, 1999. See Webb (2019); Chinkin (1999). 23 Jaffe (1963). 24 The King can do no wrong had existed in England under the reign of Edward (the First) from 1272 to 1304. See Pollock and Maitland (2012); Watkins (1927); Borchard (1926). 25 Pennington (2007). 26 Caplan (2003); Knuchel (2011); Jones v. Ministry of Interior of the Kingdom of Saudi Arabia, [2(2011) 006] UKHL 26 (H.L. June 14, 2006); Al-Adsani v. The United Kingdom, ECtHR 21 November 2001, para. 56.

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immunity can be traced back to times,27 which has been a widely accepted doctrine found in the historical written evidence of ancient empires from the distant past such as Babylonian, Egyptian, Greece, Roman, Indian, and Chinese.28 A king would not be subject to the jurisdiction of another state while visiting the state, and by extension, a monarchy’s representatives were also granted immunity.29 At present, the linkage between states and monarchs began to fade away, leaving only states to maintain absolute immunity and extend it to other states.30 A State relies on the classical concept of state immunity either to claim that a particular court does not have jurisdiction over it or to prevent enforcement of a judgement against any of its assets,31 including state-owned entities.32 Another essential aspect of state immunity is based on the equality of sovereignty, independence, and dignity,33 which is the basis of non-intervention in the internal affairs of other states.34 Court proceedings against foreign states generate tensions and interfere with international relations. Any attempt to pass on the question would embarrass the executive seeking to arrive at an appropriate diplomatic settlement.35 However, immunity from jurisdiction does not mean exception from the legal system of the territorial state in question.36 As a result, no principles of international law are more fundamental or universally accepted than the state immunity principle.37 There used to be the sole doctrine of absolute immunity from the jurisdiction of domestic courts unless a waiver of immunity could be obtained.38 The jurisdictional immunities of states are derived mainly from the numerous judicial branch practices,39 which have been incorporated into the legal systems of the majority of modern states.40 As time passed, the theory of sovereignty changed after the twentieth century41 as the effect of the principle of state immunity that has been evolved from a doctrine of

27

Preiser (1995). Bederman (2001); Ross (1989). 29 Since the Treaty of Westphalia, the principle of state immunity has been largely uncontroversial. See Nagan and Haddad (2012); Philpott (2004); Akande and Shah (2010). 30 Yang (2012b). 31 Pugh (1953); Pavoni (2012). 32 Kupelyants (2018); Kates (2019). 33 Bodin (1576, 2009); Oguno (2016). 34 Brownlie (2008). 35 Malawer (1971); Dawson and Weston (1963); Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964). 36 Methymaki and Tzanakopoulos (2020); Shaw, op. cit., 525. 37 Dinstein (1966); Badr (1984a). 38 Fox & Webb, op. cit., 167–286; Keller (2021). 39 Sucharitkul, op. cit., 3. As the landmark case in the US Supreme Court judgement of The Schooner Exchange v. McFaddon and Others, 11 U.S. 116 (1812). See Bankas, op. cit., 33–51; Murphy (1968). 40 Damrosch (2019); Okeke, op. cit., 41–66; Hervey (1929). 41 Laski (2014). 28

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absolute immunity to a doctrine of restrictive immunity.42 As a result, a foreign state will be accorded immunity only for claims arising out of sovereign or public acts (acta jure imperii), as opposed to claims arising out of its commercial transactions or private legal activities (acta jure gestionis).43 Sovereign Immunity remains an essential underlying factor in much transnational litigation.44 However, the details of state immunity are consistently uncertain.45 They are frequently abstract and mysterious since there is a persistent divergence between adherents of the doctrine of absolute immunity and those who back restrictive immunity.46 Regarding the rules on state immunity, a crystallisation of customary international law was achieved at the Council of Europe in 1972, which promulgated the European Convention on State Immunity,47 with its additional protocols to establish the European Tribunal in matters of State Immunity.48 Those instruments were the first comprehensive multilateral treaties to be concluded on the matter. In 1977, the United Nations General Assembly adopted Resolution 32/151 on the state immunity in the work programme of the International Law Commission (ILC).49 The goal was to standardise the state practices because the diversity and consequent uncertainty in law were confusing.50 The resulting journey lasted almost 27 years. The ILC was forced to work through the deep divisions among state representatives in the General Assembly’s Sixth (Legal) Committee and ad hoc committees51 to culminate in a finalised version of the Draft Articles on Jurisdictional Immunities of States and their Property 1991, accompanied by a set of annexed understandings. Finally, the General Assembly adopted the United Nations Convention on Jurisdictional Immunities of States and Their Property (UNCSI) in 2004.52

42 Shmalo (1965); Victory Transport, Inc. v. Comisaria General, 336 F.2d 354, 381 US 934 (1965); Saudi Arabia v. Nelson, 507 US 349, 361 (1993). 43 Orakhelashvili (2019); Hill (1981), at 155, 162–163. 44 Terzieva (2022); Whytock (2013); Dunoff, op. cit., 384. 45 Dellapenna (1992), at 61; Crawford (1981). 46 Schreuer (1988); Badr (1984b). 47 It was come into force in 1976. There are only eight state parties: Austria, Belgium, Cyprus, Germany, Luxembourg, the Netherlands, Switzerland, and the United Kingdom. See Sinclair (1973). 48 Additional Protocol to the European Convention on State Immunity came into force in 1985. There are five state parties: Austria, Belgium, Cyprus, Luxembourg, Netherlands, and Switzerland. See von Hennigs (2001); Damian (1987). 49 Noting that Sompong Sucharitkul from Thailand was appointed as a chairman of the working group to consider the question of future work by the Commission on the topic of Jurisdictional immunities of States and their property and an ILC’s Special Rapporteur for the topic in 1977. See United Nations (1978) Yearbook of the International Law Commission, 1978, vol.II: Part Two Report of the Commission to the General Assembly on the Work of Its Thirtieth Session. United Nations, New York, 152–153. 50 Bankas, op. cit., 209–249; Morris (1989). 51 Hafner (2013). 52 GA Res. 59/38 (Dec. 2, 2004) (adopted without a vote).

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The UNCSI maintains a restrictive approach,53 but the degree to which states recognise the restrictive approach is still a point of contention.54 The UNCSI shall enter into force after it has been signed and ratified by 30 states.55 Considering the development of the sovereign immunity principle through the years, the UNCSI is an excellent achievement in the sense that states have agreed on a multilateral treaty that does not allow states to have absolute immunity in foreign courts. Therefore, the basic approach of the treaty is an appropriate one that ought to be followed.56 Therefore, if any state did not have domestic laws on state immunity, the provisions in the UNCSI would be available as a model for the new legislation. Nevertheless, for states with their own laws, the UNCSI would improve the legal position of people or companies hoping to start proceedings in other states, allowing them to be confident that litigation will follow the same basic approach to legal certainty and legal harmonisation worldwide.57 Last but not least, several events have affected the changing nature of sovereign immunity combined with jus cogens during the previous decade.58 These have impacted the dynamic of contemporary international law. The emergence of jus cogens principles enjoys a higher rank in the international hierarchy than other international law principles59 in the normative hierarchy, which included state sovereignty and sovereign immunity. Furthermore, there was a significant development from the Italian court,60 which asserted jurisdiction concerning human rights violations during the Second World War by Germany in civil cases.61 In return, Germany brought the dispute to the International Court of Justice (ICJ) in 2008.62 The ICJ released its judgement in 2012, ruling that Italy violated international law in asserting jurisdiction over Germany for jus cogens abuses, and there was no such exception recognised in customary international law anymore.63 The decision was not unanimous, however.

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Van Aaken (2014). Shan and Wang (2019); Higgins (1994). 55 Art. 30 of UNCSI. 56 According to the European Court of Human Rights has consistently relied on that UNCSI provisions. See Pavoni (2018). 57 Pmbl. of UNCSI. 58 The jus cogens principle is codified in Article 53 of the 1969 Vienna Convention on the Law of Treaties. See Weatherall (2015); Menkes (2013); Villiger (2009); Dörr and Schmalenbach (2012a). 59 Kleinlein (2017); Kolb (2015); Shelton (2006); Orakhelashvili (2006). 60 Supreme Court of Cassation (Corte Suprema di Cassazione) is the highest court of appeal or court of last resort in the Italy judicial system. See Merryman and Vigoriti (1966–1967). 61 Alebeek, op. cit., 10–102. See, e.g., Ferrini v. Republica Federale di Germania, Corte di Cassazione, Joint Sections, Judgement 6 November 2003–11 March 2004, n. 5044 (“Ferrini Case”). Ferrini Judgement No. 5044/2044, 11 March 2004, Rivista di diritto internazionale 87 (2004), 539; English translation: 128 I.L.R. 659. 62 Tomuschat (2021). 63 Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening), Judgement, I.C.J. Reports 2012, p. 99. See Orakhelashvili (2012); Gragl (2019); Higgins (2013). 54

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As it was vehemently contested, strong dissents were also delivered.64 When a norm attains the character of jus cogens, an obligation of erga omnes65 is imposed upon the community of states as a whole.66 The current position of sovereign immunity is still considered under international law to be an ongoing issue in light of the rising importance of jus cogens.67 As a result, state practices and case law have been and will be a significant additional part of international law’s dynamic.68 These will allow further developments of the law in line with the needs of governments, international organisations, and other entities.69 Although the UNCSI demonstrated some success in the conclusion of a multilateral treaty on this issue, the treaty remains unratified. As such, it still has not yet been in force.70

Judgement of Civil Case Black no. Po. 1062/2563: A Summary71 The lawsuit was filed on June 26, 2020. The plaintiff was an attorney who acted as the manager of Au’s café, along with his grandson and business partner in the café. The defendant is the US, a juristic person under international law. According to the plaintiff, the tortious actions of defendant injured numerous individuals in many countries, including Thailand. Although the defendant did not have a domicile in Thailand, the plaintiff has one in Chiang Rai province. In accordance with Sect. 4 ter of the Civil Procedure Code,72 the plaintiff submitted the complaint to the Civil 64

Dissenting opinions of Judge Cançado Trindade in Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening), Judgement, ICJ Reports 2012, pp. 179–290; Dissenting opinions of Judge Yusuf , ibid., 291–308; Dissenting opinions of Judge Ad Hoc Gaja, ibid., 309–322. 65 Barcelona Traction, Liht and Power Company, Limited, Judgement, I.C.J. Reports 1970, p. 3., at para. 33; Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), Judgement, ICJ Reports 2007, p. 43, at para. 110. 66 Brownlie, op. cit., 597. See also Prosecutor v. Furundzija, Case No. IT-95–17/1-T, at paras. 260– 262. However, there are divergences between the Obligations of jus cogens and erga omnes. See Picone (2011). 67 Nagan and Root (2013). 68 Krisch (2021); Eboe-Osuji (2008). 69 It is a crossing and contesting a variety of actors in international law with Interdisciplinary scholarship reaffirming them as the matrix is articulated as legal and political. See Dos Reis and Grzybowski (2021). 70 It has been signed by 28 states and ratified by 22 states, and Thailand has not signed yet. See United Nations Treaty Collection. (2022). 71 An unreported judgement. See Thaipost (2020) available only in Thai >; Matichon Online (2020) . 72 Section 4 ter of Thailand Civil Procedure Code. ‘The other plaint as provided other than the Sect. 4 bis which the defendant is not domiciled within the Kingdom and the cause is not arose within the Kingdom, if the plaintiff has Thai nation

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Court in the domicile of the plaintiff, choosing to file the complaint at Chiangmai Provisional Court at the end of the year 2019, after the spread of COVID-19 pandemic all around the world, including Thailand. The plaintiff was encouraged on May 26, 2020, as he received on social media news that COVID-19 had originated in humans whose source was allegedly Virus Lab BSL-3 Biocontainment Facility in North Carolina, the US. Plaintiff argued that he received information from the tweets of Greg Rubini’s Twitter account and an American television channel in which he said that COVID-19 was designed as a biological weapon in the BSL-3 Biocontainment Facility in North Carolina. It had been developed there by Professor Ralph Baric.73 Mr. Rubini also said that the Dark Government delivered the virus in North Carolina to China, Italy, and other countries.74 Professor Luc Montagnier, a Nobel laureate who discovered the Human Immunodeficiency Virus (HIV) in 2008, told a French reporter that COVID19 had not arisen from nature but had been intentionally developed by molecular biologists and other experts. Other news media rumours suggested that the virus had been taken from bats and subjected to intensive HIV genetic modification.75 Plaintiff’s documents on file claim this to be the cause of COVID-19 epidemic. Plaintiff seeks access to essential data from many sources and will deliver the information to the court before examining the evidence as the plaintiff asked earlier. It is claimed that in this manner, the defendant injured the plaintiff by causing COVID-19 to spread into Thailand, causing the Thai government to issue the Declaration of an Emergency Situation according to the Emergency Decree on Public Administration in Emergency Situations B.E. 2548 (2005),76 thereby closing all restaurants and other businesses.77 Plaintiff has been doing the restaurant business since 2019, focusing on serving drinks in air con and open-air spaces. Plaintiff claims a benefit after costs of 5,000 baht (approximately USD 160) a day/150,000 baht a month (approximately USD 4,777). or domicile within the Kingdom. It shall be submitted to the Civil Court or to the Court within the territorial jurisdiction of which the Plaintiff is domiciled. In the case of the plaint according to the first paragraph, if the defendant has the property liable to execution within the Kingdom, irrespective of temporization or permanence, the plaintiff shall submit the plaint to the Court within the terrestrial jurisdiction of which such property is situated’. Section 4 bis of Thailand Civil Procedure Code. ‘The plaint concerning immovable property, or any right or interest concerning immovable property shall be submitted to the court within the territorial jurisdiction of which the immovable property is situated, whether the defendant shall have domicile within the Kingdom or not, or to the Court within the territorial jurisdiction of which the defendant is domiciled’. 73 BBC (2021); Nuki and Newey (2021). 74 Whitehouse and Al-Sibai (2020). Cf. Hakim (2021); Maxmen and Mallapaty (2021); Cohen (2021). 75 The Connexion (2022). 76 Official Statement of the Office of the Prime Minister (2005). 77 Regulation Issued under Sect. 9 of the Emergency Decree on Public Administration in Emergency Situations B.E. 2548 (2005) (No. 1). In News. Available via Ministry of Foreign Affairs. Available via https://image.mfa.go.th/mfa/0/mkKfL2iULZ/migrate_directory/news3-20200329-164122-910 029.pdf.

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The ‘close’ regulation caused by the COVID-19 epidemic, presumably caused by the defendant’s action, covered the period from March 26 to June 30, 2020, inflicting a monetary loss on the plaintiff in the amount of 450,000 baht (approximately USD 14,572). Plaintiff also prays for 7.5 per cent interest per annum to compensate for their lack of income during the lockdown.78 However, on July 8, 2020, Chiangmai Provincial Court held that the defendant is a foreign state with sovereign immunity rights under customary international law. Therefore the court found that it did not have jurisdiction over this case and considered the motion denied.79

Commentaries There are two main legal points at issue under international law from the ramifications of the judgement. One is Thailand’s application of customary international law, and the other is the principle of state immunity.

Thailand’s Application of Customary International Law The international and domestic legal systems frequently interact, despite being separate entities.80 Any state cannot rely on its domestic law to avoid international law obligations,81 which rely on pacta sunt servanda principles.82 Those obligations bind the state through various sources of international law, both traditional sources and material sources, that are beyond the scope of Article 38 of the ICJ.83 The failure to comply with those obligations may lead to state responsibility.84 Moreover, each state’s constitution governs the interaction between international and domestic law.85

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Nguyen (2020). In the private interview with the Plaintiff, he reviewed that the main reason he did not appeal against a judgement to the Court of Appeal due to his personal reason. 80 Björgvinsson (2015). 81 Art. 27 of the 1969 Vienna Convention on the Law of Treaties. See Villiger, op. cit., 369–376; Dörr and Schmalenbach (2012b). See also Treatment of Polish Nationals and Other Persons of Polish Origin or Speech in Danzig Territory, Advisory Opinion, 1932 PCIJ (ser. A/B) No. 44 (Feb. 4). 82 Aust (2013). 83 Distefano (2019); Besson and d’Aspremont (eds) (2017); Kennedy (1987). 84 Arts. 1–2 of Responsibility of States for Internationally Wrongful Acts 2001; Stern (2010). 85 Stein (1994); Goldsmith and Levinson (2009). Cf. Hersch Lauterpacht argued that the relationship between international law and national law should be governed by international law. See Maniruzzaman (2001). However, Antonio Cassese argued that a matter of national legal tradition. See Cassese (1986a). 79

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Therefore most of the state’s international obligations in the domestic sphere regulate its constitutions86 under two principal doctrines, namely monism87 and dualism.88 Section 178 of the Constitution of the Kingdom of Thailand 2017 (B.E. 2560)89 only addresses the procedures of concluding an international treaty and the process of its transformation into the domestic law regime.90 Nevertheless, no more details are laid down on how customary international law or the general international legal obligations may be implemented in the Thai legal system. There are, however, a few Thai court decisions that address those international obligations. Reflecting that Thailand has always obeyed international customary law and general principles of law in its decisions because they have already been incorporated into municipal law.91 In practice, Thailand often applies customary international law by adopting the doctrine of automatic incorporation.92 86

Klabbers (2020); Kirby (2006); Cassese (1986b). Gragl (2018). 88 Starke (1999); Ferrari-Bravo (1983); Charlesworth et al. (eds) (2005). 89 Section 178 of the Constitution of the Kingdom of Thailand 2017. The King has the Royal Prerogative to conclude a peace treaty, armistice, and other treaties with other countries or international organisations. Any treaty which provides for a change in Thai territories or external territories over which Thailand has sovereign right or jurisdiction under a treaty or international law, or which requires the enactment of an Act for implementation, and other treaties which may have wide scale effects on the security of economy, society, or trade or investment of the country must be approved by the National Assembly. In this regard, the National Assembly shall complete its consideration within sixty days as from the date of receipt of such matter. If the National Assembly does not complete the consideration within such period of time, it shall be deemed that the National Assembly has given approval. Other treaties which may have wide scale effects on the security of economy, society, or trade or investment of the country under paragraph two are treaties pertaining to free trade, common customs union, or the authorisation of natural resources utilisation, or which cause the country to lose rights over natural resources, in whole or in part, or on any other treaties provided by law. There shall also be a law prescribing procedures for the public to participate in the expression of opinions and to obtain necessary remedy from the effects of conclusion of a treaty under paragraph three. Where a question arises as to whether any treaty constitutes a case under paragraph two or paragraph three, the Council of Ministers may request the Constitutional Court to render a decision thereon. The Constitutional Court shall complete its decision within thirty days as from the date of receipt of such request. 90 Limsira (2017). 91 The following cases reflected the practices of international customary law in Thailand by adopting the obligations erga omnes. E.g. Judgement of the Central Administrative Court No. Red 607– 608/2549 (the dispute on the right to secret vote Procedure under art. 21(3) of the Universal Declaration of Human Rights); Judgement of the Civil Court Case No. Red 12,083/2526 (the dispute on immunity from enforcement of diplomatic property under diplomatic immunity and privileges); Judgement of the Supreme Court Case No. 739/2498 (the dispute on the right of the United Nations to manage the assets of the Japanese empire); Judgement of the Supreme Court Case No. 1142/2494 (the dispute on the right of hot pursuit); Judgement of the Supreme Court Case No. 585/2461 (the dispute on the recognition of foreign judgement). See Kittichaisaree (1995). 92 For example the principle of non-refoulement. See Jane (2007); Fieman (1989–1990); Helton (1989). Cf. Chotinukul (2020); Vang (2014). 87

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State Immunity As explained above, Thailand has not directly accepted the obligations under international customs but often implements them as part of its national law under general principles of law. Therefore, following the judgement in the cited case, state immunity was accepted in Thailand as a part of international customary law; it has been thus incorporated into the Thai national legal system. However, there are distinctions from many other countries that legislated the state immunity principle, including its exceptions, as their domestic law, offering foreign states immunity from legal proceedings.93 Considering the emergence of the UNCSI recently, Thailand should enact her domestic law to prepare for the ratification of the Convention. However, it is vital to consider the place of jus cogens in the normative hierarchy, with its limitations on sovereign immunity. Therefore, Thailand may have to consider jus cogens in implementing her new legislation.

Conclusion The world has been confronted with an unprecedented pandemic situation, COVID19. How we overcome the disease will be a reflection and a record of our humanity. What we act will be a lesson learned for the next generation. Fighting against COVID-19 represents unprecedented challenges. It requires new initiatives, including global efforts with bona fide. Instead of continuing the misinformation94 and the pandemic’s blame game, all humankind should collaborate,95 laying the groundwork to strengthen public health systems and better address future pandemics. Ipso facto, today’s actions will be recorded in history and transmitted to the next generation. Now, we can learn how to deal with COVID-19 from the experiences of public and private sectors globally and domestically.96 How can we overcome this

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E.g. Foreign Sovereign Immunities Act 1976 (US), State Immunity Act 1978 (United Kingdom), Singaporean State Immunity Act 1979 (Singapore), The South African Foreign States Immunities Act 87 of 1981 (South Africa), Pakistani State Immunity Ordinance VI of 1981 (Pakistan), Malaysian Immunities and Privileges Act of 1984 (Malaysia), Malawi’s Immunities and Privileges Act No. 16 of1981 (Malawi), State Immunity Act 1985 (Canada), Foreign State Immunity Act of 1985 of the Commonwealth of Australia, Law No. 196/1985 (Australia), Argentina Law No 24/488 (Statute on the Immunity of Foreign States before Argentine Tribunals) 1995, Israeli Foreign State Immunity Law 2008 (Israel), and Act on the Civil Jurisdiction of Japan with respect to a Foreign State Act No. 24 of 2009 (Japan). See Alebeek, op. cit., 200–300. 94 Gisondi et al. (2022); Patwa et al. (2021); Vergin (2022); Ball and Maxmen (2020); Dib et al. (2022); Kricorian et al. (2022). 95 Wahaj et al. (2022); Moshtagh et al. (2020). 96 Palit (ed) (2022); Zoumpourlis et al. (2020); Lewis (2022); Belitski et al. (2022).

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pandemic together as a whole,97 rather than just securing each national interest?98 How can humankind survive an unexperienced crisis? The answers to these questions will be absolutely in our hands. Even though the current immune system and vaccine99 are not efficiently tackling COVID-19, we should not let it defeat our humanity.

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Patthara Limsira Assistant Professor at Faculty of Law, Ramkhamhaeng University, Thailand. LL.B. (Magna Cum Laude) / LL.M. (Chulalongkorn). Address: Faculty of Law, Ramkhamhaeng University, Bang Kapi, Huamark, Bangkok 10240 Thailand. Winatta Saengsook Associate Professor at Faulty of Humanity and Social Science, Phranakhon Si Ayutthaya Rajabhat University, Thailand. LL.B., LL.M. in Business Law and LL.D (Ramkhamhaeng University) / Barrister at Law / LL.M. (Chicago-Kent College of Law, Illinois Institute of Technology, USA). Address: Faculty of Humanities and Social Sciences, Phranakhon Si Ayutthaya Rajabhat University, 13000 Phranakhon Si Ayutthaya Thailand.

Chapter 8

OBOR as an Agent of Revolution in International Dispute Resolution Hamid Mukhtar

and Hafiz Abdul Rehman Saleem

Abstract The One Belt One Road (OBOR) plan is a top-level developmental project primarily designed to enhance infrastructure output and investment cooperation. OBOR participating countries represent more than one third of the global GDP. It has a far-reaching impact on transnational trade and investment. The said project has been intended to promote capital flows, trade connections, investment infrastructure, and extended coordination among member states. The OBOR is also giving birth to numerous disputes among the investors and host states, consequently requiring an efficient system for dispute resolution. Therefore, a well-organized system for dispute resolution has become vital for the success of the initiative. The OBOR development is going to bring a revolution in dispute settlement system which is necessary to settle disputes arising out of it. This chapter discusses the OBOR as an agent of revolution in international dispute resolution specifically in the area of Investor-v-State disputes. It points out the existing arrangements for dispute resolution and the way forward. Keywords One belt one road · Dispute resolution · Investor · State · Bilateral · Multilateral

Introduction The One Belt One Road (OBOR) initiative launched by China’s President Xi Jinping in 2013, has become the biggest project of the world which involves more than half of the world’s countries and numerous international organizations.1 Most of the members are either least developed or developing countries. The said project has been designed to promote capital flows, trade and investment infrastructure, and policy 1

Casas-Klett and Li (2022).

H. Mukhtar (B) School of Law, University of Okara, Okara, Punjab 56300, Pakistan e-mail: [email protected] H. A. R. Saleem Department of Law, University of Sahiwal, Sahiwal, Punjab 57000, Pakistan © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_8

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cooperation among the participating member states. Billions of investments are being made along the OBOR, majorly in infrastructure projects.2 The mentioned plan is a method for the cooperation that encourages common development and provides a road map for peaceful cooperation by improving mutual trust and understanding to strengthen multifaceted areas. It will stimulate real cooperation in all connected areas in order to construct a community of common destiny, collective benefits and mutual responsibility advancing trust, cultural integration, and economic development.3 A project of this magnitude gives birth to huge challenges especially in the areas of legal protection and enforcement which are much different from those which exist in the domestic plan of a country. The OBOR is primarily a politically motivated financial plan and its legal feature is underdeveloped. However, it has potentially redefined the trade governance and influenced the relevant laws of the countries.4 Resultantly, eastern characteristics are emerging in international norms. Improved economic integration is bringing an abrupt increase in different kinds of disputes i.e., enterprise vs. enterprise, enterprise vs. state, and state vs. state disputes.5 An effective mechanism for dispute resolution thus can help in fixing the doubts that may affect trade and investment. A foreseeable mechanism guaranteeing the protection of investment may encourage the flow of investment along the OBOR. Hence, the initiative has influenced towards the development of a system for the settlement of disputes, which may bring a revolution in the area of dispute resolution.

Dispute Resolution in Chinese Strategy Within the OBOR China’s National Development and Reform Commission along with the Ministry of Commerce and the Ministry of Foreign Affairs released the blueprint of the OBOR Initiative in March 2015.6 It shows that the Initiative does not contain a specified governance and implementation structure. Further, China has intended to make use of already existing bilateral and multilateral cooperation regimes in order to smoothly implement the initiative.7 Therefore, it is evident that instead of launching a quite new system for dispute resolution, the initiative may use the previously available mechanisms under different bilateral and multilateral agreements. China has already concluded Bilateral Investment Treaties (BITs) with 86 countries which have been identified as potential partners in the OBOR.8 Further, China has entered into a number of preferential and regional trade agreements (RTAs) as well: Asia–Pacific Economic Cooperation, the China-EU Trade and Cooperation 2

See The Economic Times (2017). Ministry of Foreign Affairs of PRC (2015). 4 Holloway (2020). 5 Chaisse and Matsushita (2018). 6 Du (2016). 7 Wolff (2018). 8 Bath (2016). 3

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Agreement, the China-ASEAN Free Trade Agreement (CAFTA), and Pakistan-China FTA.9 China is further negotiating for FTAs with different countries.10 Moreover, China has also signed New York and the ICSID Convention along with more than hundred states and it is also a member of the World Trade Organization (WTO) and the Permanent Court of Arbitration.11 Hence, a variety of dispute resolution mechanisms are already in existence as above mentioned agreements and arrangements contain provisions for the resolution of disputes.12 It is also important to mention here that China has been taking part in dispute settlement regimes under the WTO, the ICSID, and FTAs including BITs and RTAs.13 The OBOR’s action plan does not provide any vision which intends to offer a mechanism for dispute settlement which is beyond the above-mentioned regimes and contains a totally new apparatus for the said purpose.

Possible Dispute Resolution Mechanism Under One Belt One Road As far as dispute resolution mechanism for the OBOR is concerned a mixture of arbitration and mediation seems to be the most suitable option here.14 The Supreme People’s Court of PRC (SPC) is the main propagator of this idea. The SPC, at various occasions, has been directing its subordinate courts to resolve disputes among foreign and Chinese parties by making use of arbitration, mediation, and other non-litigation forms in order to improve the working mechanism for the commercial arbitration, and commercial, administrative, industrial, and judicial mediation.15 The “International Academy of the Belt and Road,” while highlighting the shortcomings in existing mechanisms for dispute resolution, has also suggested the mediation as the best approach for investment dispute resolution to be followed by arbitration.16 The Asian Infrastructure Investment Bank’s Agreement also includes arbitration as a model dispute resolution system for investment-related disputes.17 The “International Economic and Trade Arbitration Commission of China” (CIETAC) prepared the first Sino-originated arbitration rules in 2017, called the Investment Arbitration Rules. These rules were also open for foreign parties to adopt in their subsequent investment agreements with China for the settlement of disputes.18 9

Smillie (2018). Mukhtar (2018a, b). 11 Shan et al. (2021). 12 Hindelang (2016). 13 Hua (2017). 14 Yee (2018). 15 Lianbin (2014). 16 Wang (2017). 17 Asian Infrastructure Investment Bank (AIIB) (2015). 18 Lu (2018). 10

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The “International Chamber of Commerce” (ICC) issued its notes in 2018 regarding resolving the One Belt One Road disputes using mediation and arbitration. The said notes positively refer mediation as highly effective dispute resolution method in most of the cases. The major advantages of mediation include possibility of resolution of disputes amicably, speedily, and cost effectively than other methods. It further refers the reflection of cultural considerations in mediation. Chinese parties consider mediation more favorable than other methods as it supports them and safeguards their business relations while maintaining their reputation during the resolution of disputes.19 In January 2018, the Central Leading Group of China for Comprehensively Deepening Reforms, issued policy for the setting up of a mechanism for the settlement of the OBOR disputes.20 Further, the SPC issued the “Provisions on Several Issues Regarding the Establishment of the International Commercial Court” on July 1, 2018.21 The said Provisions contain 19 articles that constitute the basis for the settlement of disputes for the OBOR.22 The aforementioned Provisions state that the mechanism for resolving disputes for the OBOR would be composed of two international commercial courts: one in Xi’an with jurisdiction to cover disputes arising from the projects of silk road and the other in Shenzhen with the jurisdiction of cases arising from the twenty-first-Century Maritime Silk Road projects. Both courts are collectively known as the China International Commercial Court (CICC).23 The CICC is an organ of Supreme Peoples’ Court of China; a forum solely formulated to adjudicate international commercial disputes.24 The modes of dispute resolution include mediation, arbitration, and litigation as mentioned in Article 11 of the Provisions. The whole staff working in the CICC consists of Chinese nationals,25 and the parties can only be represented by Chinese lawyers.26 The judges of the CICC can seek assistance from members of the International Commercial Expert Committee acting as a mediator27 and for the interpretation of foreign law.28 The SPC acknowledged the advantages of having several mechanisms for the settlement of disputes arising from the construction of “One Belt One Road” and the demands of Chinese and international counterparts for a diversified mechanism for dispute.29 A single mechanism does not necessarily depict a unified system. Rather, it may include more than one mechanism to resolve disputes. 19

Chaziza (2018). Liqin (2018). 21 Supreme People’s Court Network (2018). 22 Mollengarden (2019). 23 Ibid. 24 Supreme People’s Court Network, op. cit. 21. 25 Jue Jun Lu, op. cit. 18. 26 Mollengarden, op. cit. 22. 27 Supreme People’s Court Network, op. cit. 21, Article 12. 28 Ibid. 29 Ibid. 20

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Is It Desirable to Have a Dispute Resolution Mechanism for “One Belt and One Road”? In order to look into this issue, it is necessary to encircle existing international arrangements for the settlement of disputes under various instruments. Different forums deal with dispute resolutions in different domains under different agreements i.e., GATT Panels, DSB, ICSID, International Criminal Tribunals, UNCLOS, and various fora of arbitration, etc.30 The said specialized institutions designed to resolve disputes in their relevant fields deal and settle different propositions which arise in their specific jurisdiction. Mechanisms at regional levels bearing the local characteristics are also in place for the settlement of various kinds of disputes.31 States choose to select among the available wide range of options while selecting a mechanism for dispute resolution. Complications in the clear picture of dispute resolution along the OBOR perspective are due to the fact that its participants belong to a range of countries and the regional organizations. States’ capability to obligate to a specified mechanism for dispute resolution for the OBOR can be influenced by their existing affiliations. Further, engagement in various international instruments may affect the ability of OBOR states in dispute settlement system for the OBOR.32 Effectiveness of the enterprise-v-state (also refers as Investor vs state) dispute resolution system is not only necessary but also highly important for the successful completion of the OBOR project. The dispute resolution systems provided by the ICSID and the WTO are facing problems like; lengthy process, issues related to transparency, threats to state sovereignty, and massive expenses, etc. While enforcement of awards of these mentioned forums is also a huge challenge that parties face in the practice.33 Therefore, keeping in view the social, legal, and cultural structures of the states along the OBOR, new mechanisms for the resolution of disputes are being proposed.

Problems with the Existing Dispute Resolution Mechanisms Existing systems of dispute resolution, including Investor-State Dispute Settlement (ISDS), may not be efficient in solving disputes between the OBOR states or investors therein due to numerous deficiencies in the existing systems.34 In the WTO system, for example, the major problem is that the individual investors are unable to take their disputes against the host states before the WTO as they have to go through their home governments in order to attract its jurisdiction and investors desiring to seek 30

Sands et al. (1999). Petersman (2006). 32 Hu and Huang (2018). 33 Some countries along the Belt and Road are not contracting party of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. 34 Wang, op. cit. 16. 31

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remedies have to convince their relevant governments for negotiating their disputes at state to state level.35 Further, the enterprises cannot get compensation under the WTO system and there are challenges regarding implementing retaliatory measures by the countries having weaker economic position against the economically stronger countries in case of decision in their favor.36 The WTO rules are also deficient in fully resolving the disputes of participating states of the OBOR, especially where some of them are not the members of the WTO.37 Moreover, the system provided under ICSID Convention also faces the challenges of non-availability of appeal mechanisms, high costs and the difficulties in the enforcement of awards.38

Need for an Effective and Convenient Investor-State Dispute Resolution Under OBOR The previously discussed dispute resolution mechanisms are dominated by the western influence. Whereas, the majority of the countries participating in the OBOR are least developed or developing countries and most of them belong to the east.39 Therefore, a dispute resolution mechanism having the eastern characteristics is not only desirable but also has become essential for the effective implementation of the OBOR. Different scholars from China and other countries are proposing different methodologies for the effective and efficient resolution of disputes of investor-vs-state under the OBOR. Given the fact that in addition to Chinese companies, investors from the west are also making investments in the OBOR, a mechanism that can be recognized by all the parties to the OBOR, only can successfully resolve the investorstate disputes.40 In this regard, the “International Academy of Belt and Road” has proposed a set of rules covering arbitration, conciliation, and mediation. It has further included an appeal mechanism, transparency rules, and a code of conduct for the arbitrators, conciliators, and the members of appellate body which have been published in Blue Book.41 The mechanism proposed therein is the combination of the decent characteristics took from the existing systems of dispute resolution.

35

World Trade Organization (WTO) (2010). For example, in the US Gambling case, the complainant was authorized to retaliate but had to abandon retaliatory measures because the United States could punish it in other international organizations or economic cooperation forums. See also Wang (2011). 37 For example, Turkmenistan, Uzbekistan, Afghanistan, Azerbaijan, Bahrain, Iran, Iraq, Lebanon and Syria are not member states of the WTO. 38 Yannaca-Small (2006). 39 Dimitrijevi´ c and Jokanovi´c (2016). 40 Chaisse and Matsushita (2018). 41 Wang, op. cit. 16. 36

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Further, China has also approved guidelines for establishing a mechanism to resolve investment and trade disputes among the OBOR states.42 It is important to note here that China already has an existing trade dispute resolution body i.e., “China International Economic and Trade Arbitration Commission” (CIETAC).43

Challenges for the Proposed Models for Investor-State Dispute Resolution Most of the Free Trade Agreements and the Bilateral Investment Treaties have a built-in mechanism for the dispute settlement. In China-Pakistan FTA 2006,44 for example, Article 54 specifically deals with the investor-state dispute resolution which provides that if a dispute between investor and the home state is not resolved within six months from the date of initiation of dispute, then in such a case the investor has two options, either the investor can go to the relevant court of the host country or to ICSID under the “Convention on the Settlement of Disputes between States and Nationals of Other States” for the resolution of dispute. It further provides that “once the investor has submitted the dispute to the competent court of the Party concerned or to the ICSID, the choice of the forum shall be final.”45 Majority of the BITs and the ASEAN treaty provide similar provisions for dispute resolution which is consultation, and mediation followed by arbitration from an ad-hoc arbitration tribunal. In most of the cases, however, the treaties do not provide for a venue of the forum or choice of the law, etc.46 China’s proposed dispute resolution mechanisms for the OBOR seem to alter this position and move jurisdiction explicitly to China. The Memoranda of Understanding (MOUs) that the China has signed with more than 70 countries regarding collaboration on the OBOR projects do not offer any different mechanism for settling disputes, other than the usual terminology referring to “friendly means, consultations,” etc.47 The question regarding China’s proposed dispute resolution mechanisms for the OBOR, therefore, revolves around the question of how these mechanisms will fit in the agreements already signed between China and the OBOR nations, amid the already existing alternatives to arbitration in China.

42

The guidelines were passed during a meeting of the Leading Group for Deepening Overall Reform of the 19th Communist Party of China Central Committee. 43 China International Economic and Trade Arbitration Commission (2022). 44 Mukhtar (2018a, b). 45 Article 54(2) of China-Pak FTA 2006. 46 Hu, Huang, op. cit. 32. 47 Ellis (2018).

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The Construction of Investment Dispute Settlement Mechanism Under the OBOR The present ISDS mechanism in bilateral, multilateral, and regional investment agreements involving countries along the OBOR does not fully meet the actual needs of investment dispute settlement.48 The lengthy and costly investment arbitration in countries along the route is a heavier burden. In particular, lack of consistency of rulings and lack of procedural transparency and regulation of foreign investment in host countries make the current ISDS ineffective. The restriction of power also dampens the enthusiasm of the countries along the route to use the ISDS mechanism, and even triggers the cooperation of the ISDS mechanism as a legal crisis.49 Therefore, how to promote the reform of the existing investment arbitration mechanism among countries along the OBOR, simultaneously seeking alternative dispute settlement methods other than arbitration, is the key point in the development of the ISDS mechanism for the OBOR.50 Regarding the construction path of the ISDS mechanism for the OBOR, the academic community has suggested different options. For example, relying on the existing bilateral, multilateral, or regional mechanisms, by promoting the reforms and improvement of the existing mechanism, the countries along the route can handle dispute settlement.51 The formation of a new dispute settlement center specifically for the OBOR can be beneficial. From an ideal point of view, creating a brandnew “Belt and Road Dispute Resolution Center” can meet the needs of the OBOR initiative. It can also make up for the shortcomings of the existing mechanisms.52 However, considering the existing international arrangements, the practical feasibility of building a new dispute settlement mechanism is not high. In fact, as an inclusive new regional economic development initiative, the OBOR initiative is not intended to create a new, instead, rely on existing bilateral, multilateral, or regional mechanisms to promote connectivity and facilitate investment and trade among countries along the route.53 Therefore, at the present stage, the construction of the ISDS mechanism for the OBOR, should first rely on the current bilateral, multilateral, or regional arrangements, promote and improve the existing ISDS mechanism, so that the ISDS mechanism can start resolving disputes on early bases. It does not rule out the possibility of building a new “OBOR Dispute Settlement Center” when circumstances are suitable in the future.

48

Dahlan (2020). Lai (2021). 50 Zhu (2019). 51 Yong and Daiwei (2007). 52 Leung (2018). 53 Chaisse and Kirkwood (2021). 49

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Diversified Remodeling of ISDS Mechanism Under the One Belt One Road Initiative The existing ISDS mechanism follows the operation mode with arbitration as the core and invokes consultations and mediation as ingredients for dispute settlement.54 Consultation and mediation fall under the scope of Alternative Dispute Resolution (ADR). There are obvious advantages of ADR in improving efficiency, cost saving, and reaching a mutually acceptable solution.55 The disputing parties can achieve a win–win situation through creative dispute settlement. More importantly, through autonomous negotiations, the settling of disputes helps in maintaining decent investment relations and continuous cooperation between the host country and the investor.56 The OBOR initiative takes infrastructure construction as a priority area. Countries along the OBOR rely on infrastructure construction projects, while investors can obtain benefits through uninterrupted cooperation. In this regard, peaceful means are the best way to resolve disputes under the OBOR initiative.57 If consultation and mediation do not resolve all disputes, arbitration may continue to play its role. In addition, considering the specific developmental stage of the countries along the route, it is necessary to reserve domestic litigation as an option. Therefore, the ISDS mechanism under the OBOR initiative could be a combination of mandatory consultation, voluntary mediation, arbitration, and litigation.58 Comprehensive mechanism for investor-state dispute settlement reforms requires not only new treaties, but also the modification of existing treaties.59 As China and the OBOR countries are currently signing BITs, the states that have not yet signed BITs may not only start BITs negotiations as soon as possible, but also strive to adopt relatively complete dispute settlement clauses in newly signed BITs. While signing individual BITs that have not yet entered into force, China and the concerning states can complete the local procedural requirements in order to enter the treaty into force as early as possible. The BITs that have already entered into force but the terms are too outdated, the renewal and modification of the treaty can be executed by signing a new treaty or modifying the previous one.60 China has already started to update some early signed BITs, but at the current stage, the update mainly focuses on the BITs that have been signed with some countries from Europe.61 In the process of signing new BITs or replacing existing BITs with countries along the OBOR, China may try to integrate into the ISDS system that is more perfect and in line with the smooth implementation of the OBOR initiative. In this 54

Connor (2017). Stipanowich et al (2004). 56 Moore (2014). 57 Enderwick (2018). 58 Dahlan (2018). 59 Li and Bian (2020). 60 Hu (2019). 61 Baldwin (2011). 55

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course, China may use this method as the main line to promote the cooperation with other participating countries along the route.62 The coordination in signing BITs, and then through BITs, countries along the OBOR can spread this idea more effectively, thereby promoting higher cooperation for the ISDS mechanism among the countries along the route, and creating a broader and more systematic system for the future.63

Conclusion With the implementation of the OBOR initiative, investment activities in the states along the route have become frequent which are giving rise to different kinds of disputes along the OBOR. The disputes that might arise out of the OBOR initiative are diverse and a proper mechanism to handle such disputes is not only necessary but also vital for the smooth development. Proper settlement of international investment disputes will help in strengthening the mutual trust of participating states along the OBOR, and promote the long-term and sustainable development of the OBOR cooperation mechanism. Moreover, the OBOR is acting as an agent in revolutionizing the global governance and settlement system for international disputes. Considering the current reality, the construction of the ISDS mechanism for the OBOR initiative mainly relies on the existing bilateral, multilateral, or regional mechanisms. In the future, however, a specific center for the resolution of disputes arising out of OBOR is predictable. Specific aspects include improving arbitration legislation, updating BITs; ensuring the consistency of arbitration awards, etc. These efforts can ensure the peaceful resolution of disputes.

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Hamid Mukhtar Assistant Professor & Head of School of Law at University of Okara, Pakistan. B.A./LL.B. (U. Punjab), LL.M. (Wuhan U.), S.J.D. (Zhejiang U.). ORCID: https://orcid.org/00000002-1803-4490. The author may be contacted at: [email protected] / Address: School of Law, University of Okara, Okara 56300, Punjab, Pakistan.

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Hafiz Abdul Rehman Saleem Assistant Professor of Law at University of Sahiwal, Pakistan. B.A., LL.B. (U. Punjab), LL.M. (South Central University of Economics and Law), S.J.D. (Zhejiang U.). ORCID: https://orcid.org/0000-0003-1179-8196. The author may be contacted at: [email protected] / Address: Department of Law, University of Sahiwal, Sahiwal 57000, Punjab, Pakistan.

Chapter 9

Inflation Reduction Act’s Clean Vehicle Provisions: Analysis of Potential International Trade Law Violations Soojin Nam

Abstract The United States’ Inflation Reduction Act (IRA) introduces new eligibility requirements for the existing USD 7,500 tax credit provided to electric vehicles. The new requirements condition the credit upon North American final assembly and North American-sourced materials and components. As tensions flare between the US and China, these new local content requirements reflect the US’s effort to establish a supply chain for electric vehicles that circumvents China. The blow, however, is felt elsewhere, namely by South Korean auto makers whose electric vehicle models are no longer eligible for the significant tax credit necessary to compete in the American market. As South Korea considers submitting a complaint to relevant international bodies, this paper dissects the IRA’s relevant provisions and analyzes the applicability of international trade law rules of the WTO and the Korea-US Free Trade Agreement to the new local content requirements of the IRA. Keywords Inflation reduction cct · Clean vehicle subsidy · National treatment · Local content requirement · KORUS FTA

S. Nam (B) Department of International Economics and Law, Hankuk University of Foreign Studies, 107, Imun-ro, Dongdaemun-gu, Seoul 02450, Korea e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_9

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Introduction On August 16, 2022 the US President Joe Biden signed the Inflation Reduction Act (IRA) into law. The IRA includes broad measures to reduce the country’s fiscal deficit, health care costs, and energy costs while combatting climate change.1 In achieving these goals, the IRA was specifically designed to “boost American manufacturing and competitiveness” by, among other things, providing targeted tax incentives for onshore manufacturing as well as the use of US-sourced materials.2 The enactment of the IRA—which embodies such strong prioritization for domestic sourcing and manufacturing—caused great anguish and frustration among US’s trade partners, particularly among South Korean automobile manufacturers across the Pacific. This is because the IRA revised the eligibility requirements for the USD 7,500 tax credits available for electric vehicles (EVs) to require local manufacturing and content, which cut off South Korea’s major automobile manufacturers from receiving the significant tax credits critical to compete in the US market.3 The enactment of IRA has thus caused much tension in the bilateral relations between South Korea and the US. While South Korea’s Yoon government has yet to launch a legal action against the US, it has expressed the possibility that the IRA may be in violation of international trade rules and warned that the Korean government is willing to submit a complaint to the relevant international bodies if efforts for bilateral talks fail.4 In this context, this article aims to provide a preliminary analysis of the international trade rules applicable to the IRA’s provisions on the eligibility requirements for the USD 7,500 tax credit (Clean Vehicle Provisions) to show that these provisions are likely in violation of applicable WTO rules as well as the US-Korea Free Trade Agreement (KORUS FTA). The article begins by dissecting the IRA’s Clean Vehicle Provision, followed by a preliminary legal analysis of the Clean Vehicle Provisions under the WTO’s General Agreement on Tariffs and Trade (GATT), the Agreement on Subsidies and Countervailing Measures (SCM) and the KORUS FTA.

Revisions to the Clean Vehicle Provisions Under the Inflation Reduction Act The Clean Vehicle Provision of the IRA is an amendment to the US Internal Revenue Code Sect. 30D.5 Before the IRA’s amendment, Sect. 30D had already provided a maximum of USD 7,500 of tax credits for all qualifying electronic vehicles; and the

1

The White House (2022). Ibid. 3 Ellen (2022). 4 Lee (2022). 5 26 U.S.C. §30D (2020). 2

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final amount of the tax credit had depended simply on the capacity of EV battery.6 The IRA’s amendment thus does not alter or increase the total amount of credit, but narrows the eligibility criteria by newly introducing: (i) critical mineral requirement; (ii) battery component requirement; and (iii) final assembly requirement, which all contain some form of local content requirement preferencing the US products or the US manufacturing.7 The IRA’s tax credits may accrue against, among others, the income tax of the purchaser of a new qualifying EV.8 The IRA also allows car dealers to directly provide the credit to the purchaser “in cash or in the form of partial payment or down payment” for the purchase of a qualifying vehicle at the point of sale.9

Critical Minerals Requirement To be eligible for half of the total possible credit (USD 3,750),10 the IRA now requires that a certain percentage of the value of the “critical minerals” contained in the battery of an EV be extracted or processed in the US or in any country with which the US has a free-trade agreement, or is recycled within North America.11 The “critical minerals” are those needed to manufacture EV batteries including, among others, lithium, cobalt, nickel, copper, graphite, tin, and aluminum.12 For vehicles placed in service in or after 2025, if any of the critical minerals are extracted, processed, or recycled from a “Foreign Entity of Concern”13 —namely China—the vehicle will not be eligible for this credit. This critical minerals requirement is interpreted to improve the US’s energy security by reducing the country’s dependence on foreign supplies of the minerals needed to support the great transition to low-carbon technologies including electronic vehicles.14 While the rising oil prices have spurred demand for electronic vehicles at an all-time high, the US currently sources most of its critical minerals from abroad, 6

26 U.S.C. §30D(b) (2020). The existing requirement on battery capacity remains after the amendment with adjustment to the minimum wattage (from 4 to 7 kw/hour). 8 26 U.S.C. §30D(a) (2020). 9 26 U.S.C. §30D(g)(2)(C) (2020). 10 Inflation Reduction Act of 2022, Pub. L. 117–169, Title I, § 13,401 (a), 136 Stat. 1818, 1954 (2022). 11 Relevant percentages depend on the date on which the vehicle was placed in service: entry into force until December 31, 2023: 40%; January 1, 2024 until December 31, 2024: 50%; January 1, 2025 until December 31, 2025: 60%; January 1, 2026 until December 31, 2026: 70%; after January 1, 2027: 80%. Id. at § 13,401 (e). 12 Defined in 26 U.S.C. §45X(c)(6). 13 The term is defined in Sect. 40,207(a)(5) of the Infrastructure Investment and Jobs Act. The definition includes any entity owned or subject to jurisdiction of a “Covered Nation,” which, under a different statute, includes China, Russia, North Korea and Iran. 14 Bazillian (2022). 7

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mainly from China.15 The domestic supply of these minerals, on the other hand, is negligible. For instance, the US and Canada together only refine 3% of the world’s lithium compared to 59% for China. For Cobalt, both countries together only refine about 3.5% compared to 75% for China.16

Battery Components Requirement To be eligible for the other half of the total possible credit (USD 3,750),17 the IRA requires that a certain percentage of the value of components contained in the EV battery be manufactured or assembled in North America.18 Also, if any vehicle placed in service in or after 2024 includes a battery that contains components manufactured or assembled in a “foreign entity of concern,” such vehicle will not be eligible for this credit. This battery component requirement is interpreted to further US’s efforts to move electronic vehicle battery production to the US. In 2021, approximately 80% of the world’s production of the major components of electronic vehicle battery cells— cathode, anode, separators, and electrolytes—were produced in China, South Korea, and Japan.19 China, in particular, produced over half of the world’s production of each of the components.20 The US, on the other hand, produced these components in meager amounts, for instance, producing 1% of world’s cathode and anode components in 2021.

Final Assembly in North America Requirement The amendment further requires that electronic vehicles must be “finally assembled” in North America to be eligible for any tax credit.21 This means that even if a vehicle satisfies the critical mineral or the battery component, it will not be an eligible vehicle unless finally assembled in North America. 15

Ibid. Swindells (2022). 17 Inflation Reduction Act of 2022, Pub. L. 117–169, Title I, § 13,401 (a), 136 Stat. 1818, 1954 (2022). 18 Relevant percentages depend on the date on which the vehicle was placed in service: entry into force until December 31, 2023: 50%; January 1, 2024 until December 31, 2025: 60%; January 1, 2026 until December 31, 2026: 70%; January 1, 2027 until December 31, 2027: 80%; January 1, 2028 until December 31, 2028: 90%; after January 1, 2029: 100%. Id. at § 13,401 (e). 19 Cho et al. (2021). 20 Ibid. 21 Inflation Reduction Act of 2022. Final Assembly in North America means that a manufacturer must assemble a vehicle for delivery to dealer or importer with all components parts necessary for the mechanical operation of the vehicle in North America. 16

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Eligibility criteria

LCR

Critical minerals

Extracted/processed from US and US FTA Countries

Battery components

Manufactured/Assembled in North America

Final Assembly of EVs Assembled in North America

Before the amendment, Sect. 30D had no provision requiring final assembly in any geographic location, allowing all EVs to be qualified for the tax credit.22 After the enactment of the IRA, the US Department of Energy published a list of EVs that meets the domestic final assembly requirement. The list only includes 21 models of EVs that are eligible for the 2022 credit whereas a total of 72 EVs are available for sale in the US.23 The list includes no EV models manufactured by a South Korean automaker, such as Hyundai or Kia.

Summary: Local Content Requirements All of the above requirements—Critical Mineral, Battery Component, Final Assembly—include some form of “local content requirements” (LCR). Local content requirements request that a certain amount of the final value of the good or service is derived domestically, either by using domestic inputs or manufacturing the goods domestically.24 The LCRs in the IRA’s Clean Vehicle Provisions are summarized in Table 9.1 below. These requirements differ from a typical LCR in that the scope goes beyond the US borders to the wider region of North America.26 A previous version of the bill required American production and manufacturing but was revised allegedly because of concerns raised by Mexico and Canada given the integration of the automotive supply chains in the region.27 Nonetheless, as will be examined below, these 22

Ibid. Chavez (2022). 24 Lin and Weng (2020). 25 Inflation Reduction Act of 2022. 26 The IRA also includes the modification and creation of the following tax credits for clean energy: (1) modifying existing tax credit for electricity produced from renewable resources; (2) modifying tax credit for investment in certain energy properties with higher credits for clean energy properties; (3) creating new tax credit for clean electricity produced from facilities with zero carbon emissions; and (4) creating a new tax credit for investment in facilities with zero emissions. For all of these provisions, the IRA provides additional credit (in addition to the base credit) for projects that satisfy the “domestic content” requirement. It requires that “any steel, iron or manufacture product which is a component of such facility … was produced in the United States.” Inflation Reduction Act of 2022. 27 Smith (2022). 23

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“regional” LCRs present a serious likelihood of violating existing WTO Rules as well as the KORUS FTA.

Analysis of Relevant International Trade Rules GATT Article III:4’s National Treatment Principle Also known as the national treatment principle, Article III:4 of the GATT requires national treatment of imported “like products” with regards to “all laws, regulations and requirements affecting [the products’] internal sale, offering for sale, purchase […] or use.”28 Barring the application of any exceptions, laws and regulations that favor domestic products over like imported products would thus be in violation of GATT Article III:4. In US-Renewable Energy, India challenged certain environmental subsidies programs of seven different American States, some of which included LCRs similar to those found in the IRA.29 One of the challenged measures included Montana’s laws which provided tax credits for investments made to blend petroleum diesel with biodiesel.30 However, the law conditioned the credit on the requirement that the biodiesel is made entirely from Montana-produced feedstocks.31 Like the IRA, Montana’s laws allowed tax credits to accrue against individual income tax or corporate income tax collected under Montana’s tax codes. India challenged this provision to be in violation of GATT III:4’s national treatment principle.32 Based on the past WTO jurisprudence, the panel in US-Renewable Energy applied a four-step analysis to determine that Montana’s laws—as well as other measures— violated GATT III:4. First, the Panel found that the imported and domestic products at issue are “like products.” The Panel cited Argentina-Financial Services to find that a complainant may establish “likeness” by showing that the measure at issue provides for differential treatment based solely on the origin of the products.33 Concerning the Montana tax credit, the Panel agreed with India that the measure creates a distinction between the biodiesel and feedstock “solely on the basis of origin” and was thus sufficient to establish “likeness.”34 28

General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 [hereinafter GATT] Article III:4. 29 Panel Report (2019c). 30 Montana Annotated Code MT Code § 15–32-703 (4) (2015). 31 Ibid. [Emphasis added]. 32 Montana Annotated Code MT Code § 15–32-703 (1) (2015). 33 US-Renewable Energy, 7.89. 34 Nonetheless, the Panel argued that the analysis might have been different if the US were able to show that there is a difference between Montana-origin and non-Montana origin feedstock as

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Second, the Panel found that the measures at issues fell within the scope of the phrase “laws, regulations and requirements” under Article III:4 because the phrase “encompasses a variety of governmental measures, from mandatory rules which apply across the board, to government action that merely creates incentives or disincentives for otherwise voluntary action by private persons.”35 In this context, the Panel held that the Montana tax credits embodied in Montana laws (Montana Annotated Code, Sect. 15–32-703) clearly qualify as laws or regulations resulting from the government that sets out rules “with which compliance is necessary to obtain an advantage from the government.”36 Third, the panel found that the measures at issue “affects the sale, purchase, transportation, distribution or use” of the imported like products. The Panel also found that in previous panels, the word “affecting” included not only laws that directly govern the conditions or sales or purchase, but also “measures which create incentives or disincentives with respect to sale, offering for sale, purchase and use” of the like imported products.37 The Panel further held that there is no need to examine whether the trade-restrictive measure actually affected the decision to purchase domestic goods over imported goods under current circumstances.38 Applying such a rule, the Panel thus found that even if there is evidence that since 2011, no taxpayer has claimed the Montana tax credit, it is sufficient to note that the tax credit involves a “formally different treatment of imported and domestic products” that adversely modify the conditions of competition for the imported like products.39 Fourth, the Panel found that the measures at issue accord “treatment less favorable” to imported products given that the “past [WTO] cases have consistently found that the provision of incentives or advantage for the use of domestic over imported products accord less favorable treatment to such imported products.”40 The Panel points to the text, design, and structure of the Montana tax credit and held that the law clearly provided discriminatory incentives to purchase and use Montana-origin feedstock. While the US argued that there was no evidence of actual effects of less favorable treatment–in that there was no evidence that the measure actually resulted in disincentives to buy imported goods—the Panel found that Article III:4 applied nonetheless. In other words, the Panel found that Article III:4 applied also to de jure as well as de facto discrimination of imported like products.41 If the four-step analysis of US-Renewable Energy is applied to the IRA’s Clean Vehicle Provisions, similar conclusions are likely to be drawn given that the IRA also contains LCRs similar to that of the Montana Tax Credit in US-Renewable Energy. an input into biodiesel or that the biodiesel made from Montana-origin feedstock is in any way different from non-Montana-origin feedstock. Ibid. 7.3.2.4. 35 Ibid. 7.151, citing to Panel Report (2019a) [hereinafter Brazil-Taxation]. 36 Ibid. 7.152. 37 Ibid. 7.157. 38 Ibid. 7.159 citing to Panel Report (2000) [Emphasis added]. 39 Ibid. 7.190. 40 Ibid. 7.272. 41 Nelson and Puccio (2021).

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First, the IRA will satisfy the “like products” condition given that the Act makes distinctions between critical minerals, battery components as well as assembled EVs solely on the basis of their origin. The IRA’s LCRs appear not to be related to any other criteria for distinction; for instance, there is no reason to suspect that critical minerals or battery components sourced from or EVs manufactured in North America are of better quality. Thus, the rule allowing the presumption of “like products” for differential treatment based solely on the origin of the products will likely apply to the IRA. It is worth noting that in US-Renewable Energy, the relevant Montana tax provision distinguished Montana-origin feedstock from not US-origin feedstock. In other words, as long as there is a distinction made based solely on the origin, the scope of the distinction—whether it is narrower than the US as in Montana or whether it is broader than the US as in IRA’s North America—is not dispositive of satisfying Article III:4’s “likeness” requirement. Second, as Montana’s tax credit was clearly qualified as “laws, regulations and requirements,” there is no reason that similar tax credit provided by the American federal laws (Internal Revenue Code) will fail to satisfy this requirement.42 Third, the IRA will also be found to “affect[t] the sale, purchase, transportation, distribution or use of the imported like products” given that in ways very similar to the Montana tax credit, it adversely modifies the condition of competition for imported products by providing disincentives for the purchase of imported critical minerals, imported battery components and imported EVs.43 Fourth, the IRA’s tax credit is likely to provide significant incentives to buyers to purchase EVs assembled in the US over imported vehicles. The IRA provides USD 7,500 tax credit which would be at least 13% of the purchase price for qualifying sedans; and such credit may even be applied immediately at the point of sale.44 While not all imported vehicles are affected—given that the scope of the LCRs is such that imported vehicles from Mexico and Canada will not be affected—it is clear that all of the other imported EVs, including those from South Korea, will face disincentives compared to the US manufactured “like products,” with respect to “their sale, offering for sale, purchase and use.” Additionally, with regards to critical minerals and battery components, similar argument can be made. The significant tax credit provided only to vehicles including critical minerals or battery components sourced from North America (or, in case of critical minerals FTA-partners) will provide significant disincentives for car manufacturers to purchase or use imported critical minerals or imported battery components other than those imported from Mexico or Canada (or in case of critical minerals, FTA-partners). What is instructive of US-Renewable Energy is that the relevant 42

US–Renewable Energy, 7.151–52; Panel Report (2016) at 7.307–11 (interpreting the terms “laws and regulations” in accordance with ordinary meaning of the terms and finding that the terms refer to “legally enforceable rules of conduct under the domestic legal system of the WTO member concerned”) [hereinafter India-Solar Cells and Solar]. 43 US–Renewable Energy, 7.157–59. 44 The IRA imposes a maximum price limit for different types of vehicles eligible for the credit; for sedans, the limit is USD 55,000. A USD 7,500 credit will thus be at least 13% (7,5000/55,000) of a sedan’s purchase price.

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standard does not concern whether the measure actually affected the decision to purchase domestic goods over imported goods “under current circumstances.”45 In other words, even if the American production of crucial minerals or battery components is meager under current circumstances46 and thus the enactment of the IRA will not result in immediate decisions to substitute imports with domestic critical minerals or battery components, the IRA will still be found to “affect” the purchase or use given that it contains disincentives concerning imported products. Fifth, the analysis in US-Renewable suggests that LCRs—in so far as they provide incentives for the use of domestic products over like imported products—will be found to provide “less favorable treatment” regardless of the actual market effects of the provision. In other words, IRA’s discriminatory provisions—the LCRs—are in themselves sufficient to find “less favorable treatment” in violation of Article III:4. While the actual market effects of the IRA are still uncertain, it is worth noting that the IRA had already cut off many imported EV models that otherwise would qualify for the USD 7,500 credit. In short, based on past WTO jurisprudence, it is highly likely that the IRA’s LCRs will be found to violate Article III:4’s national treatment principle as it provides discriminatory preferential incentives for domestic goods over certain imported goods. Additionally, given that the scope of the LCRs in the IRA is broader than the US territory—that is, its scope expands to North America (and in critical mineral requirement, other FTA partners)—one could also argue that the IRA provides discriminatory preferences to Mexican and Canadian “like” products against other WTO members. Hence, IRA arguably is also incompatible with GATT I:1’s Most-Favored Nations (MFN).47

Application of Exceptions to GATT III:4 The GATT provides a number of exceptions to its Article III:4’s national treatment principle. For the IRA, the US may argue that the Clean Vehicle Provisions are

45

US-Renewable Energy, 7.161. Supra note 16, at 19 and accompanying text. 47 An argument may be made that Article XXIV’s exception for customs union or free-trade area may apply to the IRA’s Clean Vehicle Provisions given that the LCRs include North American imports—subject to the US-Mexico-Canada Free Trade Agreement—and imports of other FTApartners of the US. Nonetheless, the language of Article XXIV makes quite clear that “the purpose of … a free-trade area should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such territories.” The IRA’s Clean Vehicle Provision, as examined above, is a trade-restrictive measure that does not facilitate trade among US’s trade partners; rather its newly introduced onerous conditions make it more difficult for FTApartners—including South Korean firms—to trade with the US; additionally, the IRA most certainly makes trade even more difficult for the non-FTA trading partners of the US. Thus, if an argument were to be made that the IRA violates GATT Article I:1’s Most-Favored Nations provision and that the preference granted to Mexico and Canada should be extended to other members of the WTO, the US is unlikely to be able to defend its measure by relying on Article XXIV’s exception. 46

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subject to the general exceptions under Article XX and the security exception of Article XXI. Applicability of each of these exceptions are analyzed in turn below. Article XX’s General Exceptions GATT Article XX provides exceptions to the national treatment obligation when trade-restrictive measures are necessary to achieve certain legitimate policy objectives. Namely, Article XX, subparagraph (b) provides exceptions to measures that are “necessary to protect human, animal, plant life or health,” and subparagraph (j) provides exceptions to measures “essential to the acquisition or distribution of products in general or local short supply.”48 Article XX’s general exceptions face a two-tiered test: first, the party invoking the defense must show first that the measure in question is provisionally justified under the relevant subparagraph; and second, the measure is justified under the “chapeau.”49 Article XX’s chapeau makes clear that the exceptions provided under this Article do not apply to “arbitrary or unjustifiable discrimination” or “disguised restriction on international trade.” In Brazil-Taxation, the Panel found that a discriminatory measure would be provisionally justified under subparagraph (b) if the measure addresses the particular interest specified in the subparagraph i.e., there is sufficient nexus between the measure and the protection of human, animal, and plant life.50 If the nexus is established, then the measure must also be found “necessary” to achieve the objective.51 The necessity analysis balances the importance of the interest being protected, the contribution of the discriminatory measure to the protection of the interest, traderestrictiveness of the measure, and whether there are any WTO-consistent less traderestrictive alternatives that could achieve the same level of protection.52 If such necessity is established, the first test—provisional justification for interest in subparagraph—is satisfied; after that, further examination is necessary to determine whether the measure satisfies the chapeau to be able to apply Article XX(b) exception. The Panel reaffirmed that one of the most important factor in determining compatibility with the chapeau is to question whether the “discrimination can be reconciled with, or is rationally related to, the policy objective.”53 The US may possibly argue that the IRA’s Clean Vehicle Provision falls under the scope of Article XX(b) exception as Sect. 30D is designed to combat climate change by providing tax incentives in the form of tax credits to buyers who purchase low-carbon EVs. While the US may succeed in establishing that Sect. 30D has a nexus to the protection of human, animal, and plant life, it is difficult to see how the US may argue that Sect. 30D—as amended by the IRA—would be “necessary” to achieve that objective, particularly, given that there is clear evidence of a less 48

GATT art. XX [Emphasis added]. Panel Report (2019c) 7.514. 50 Ibid. 51 Ibid. 7.584. 52 Ibid. 7.585. 53 Ibid. 7.539. 49

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restrictive, WTO-compliant alternative—the “old” Sect. 30D. As noted above, the IRA introduces new trade-restrictive LCRs, which, arguably, do not further the goal of protecting the environment;54 hence, one may easily show that there is indeed a less-trade-restrictive alternative to the current Sect. 30D—Sect. 30D before the IRA amendments. Even if the US somehow succeeds in establishing the necessity requirement, it would be equally difficult to establish satisfaction of the chapeau since Sect. 30D’s discriminatory provisions—the LCRs—have little relation to the objective of subparagraph (b). In fact, there is widespread industry concern that due to the onerous LCRs in the amended Sect. 30D, “hardly any cars will qualify” for the tax credits.55 In short, it is unlikely that the IRA’s Clean Vehicle Provision would fall under the scope of Article XX(b)’s exception. The US may also argue that given the limited domestic production of critical minerals or battery components, IRA’s LCR measures fall under subparagraph (j)’s exception. Subparagraph (j) allows exceptions for both “general” and “local” shortages of products, and arguably, critical minerals and battery components may be in “short supply” if the US were to be defined as the relevant locality. To analyze the applicability of Article XX(j)’s exception to the IRA, the same two-tiered analysis from subparagraph (b) above is used: first, “nexus” and “necessity” tests to establish provisional justification under the subparagraph, then the examination of the requirements of the chapeau.56 In analyzing the applicability of subparagraph (j) to the IRA, the following statement of the Appellate Body in India-Solar Cells and Solar is particularly instructive: [T]he terms ‘products in general or local short supply’ refer to a situation in which the quantity of available supply of a product, from all sources, does not meet demand in a relevant geographical area or market and that they do not refer to products in respect of which there merely is a lack of domestic manufacturing capacity.57

In other words, the lack of “domestic supply” is not the relevant standard; rather the shortage of supply should be assessed given available imports. India, in that case, tried to defend its discriminatory measures by arguing that India had relied heavily on imported products and had thus been prone to market fluctuations in international supply. India further argued that government intervention was required in order to minimize its dependence on imports and to “ensure domestic resilience in addressing any supply disruptions.”58 The Appellate Body, however, noted that without evidence that there were actual disruptions in the supply, India’s discriminatory measure will not invoke the application of subparagraph (j). In fact, some have interpreted the 54

Supra note 23 and accompanying texts. Chavez, supra note 23. 56 See analysis of subparagraph (b) above. In India-Solar Cells and Solar, however, the Appellate Body clarified that the “essential” language in subparagraph (j) provides a more stringent legal threshold for the “necessity” test and should be interpreted to mean closer to requiring “indispensability” in achieving the stated purpose. See Appellate Body Report (2016) 5.60. 57 Ibid. 5.75 (reciting and affirming panel’s finding) (quotation marks deleted). 58 Ibid. 55

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Panel Report and the Appellate Body Report of the India-Solar Cells and Solar case to require that there must be imminent or actual risk of supply shortage and that as long as there is supply availability of the product in the international market, subparagraph (j) cannot be raised.59 The US may wish to justify the LCRs in the Clean Vehicle Provision—like India— as measures necessary to secure a continued supply of critical minerals and battery components amidst potential international disruptions, particularly given that the US’s supply of critical minerals and battery components has largely relied on China. Nonetheless, such justification will not be available unless the US can show that there is indeed an actual shortage of these products in the overall international market. Article XXI’s Security Exception Article XXI—the Security Exception Provision—of the GATT reads: Nothing in this Agreement shall be construed (a) to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or (b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests. (i)

relating to fissionable materials or the materials from which they are derived;

(ii)

relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;

(iii) taken in time of war or other emergency in international relations; or (c) to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

Article XXI allows the WTO members to derogate from the GATT principles, including the national treatment principle, to protect their “essential security interests” if any of the following are at stake: (1) strategic security information; (2) “fissionable” nuclear materials; (3) goods and services provisioned for military establishment; (4) war or other emergency in international relations; and (5) UN Charter obligations. [Emphasis added]. The US may argue that the IRA’s Clean Vehicle Provisions are necessary to protect its “essential security interests.” Indeed, commentators have advanced that the IRA’s Clean Vehicle Provisions “improve US energy security, ostensibly by reducing its dependence on foreign supplies of the minerals needed to support the energy transition [from traditional sources to clean energy].”60 As discussed above, China— dubbed by the Biden administration as the “most-serious long-term challenge to the international order”61 —dominates the international supply chain for EV batteries. 59

Rutherford (2020) [Emphasis added]. Supra note 14 [Emphasis added]. 61 Blinken (2022). 60

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But the tensions between the US and China have been flaring on all fronts, not only on trade but notably also on Taiwan. The LCRs indeed reflect the US’s efforts to establish a supply chain for EVs that sidesteps China. The US may thus try to justify the LCRs by invoking that such measures are necessary to protect their “essential security interests” against the growing tension between the two countries. Meanwhile, the panel in Russia—Traffic in Transit established the legal standard for Article XXI exception. There, Ukraine challenged the legality of certain traderestrictive measures of Russia, who, in turn, invoked Article XXI’s security exception to justify the measures. Russia advanced that in their view, there was an “emergency in international relations” and the measures against Ukraine were necessary to protect their essential security interests. Russia further argued that it had full and unreviewable discretion in invoking the exception, relying on the “it considers” language in the chapeau of Article XXI (b).62 ,63 The panel rejected Russia’s argument that the self-judging language of the chapeau applies to all of Article XXI. Instead, the panel proposed the following two-step analysis. In order to successfully invoke Article XXI, the state party invoking the exception must first objectively establish the requirements of subparagraphs of Article XXI (b), such as the existence of “war or other emergency in international relations.”64 The panel noted that the subjective discretion provided by the self-judging language does not apply at this first stage. It is only in the second stage—after having objectively shown the requirements of Article XXI(b) subparagraphs—that the state party may subjectively apply the chapeau, that is, (i) to define their “essential security interests” and (ii) to impose measures that they deem are necessary to protect those interests.65 The panel added that even in this second stage where discretion is provided, however, the state invoking the exception must do so in “good faith.”66 This obligation requires member states to not use Article XXI’s exception as a means to circumvent their obligation under the GATT. To assess whether Russia met its goodfaith obligation, the panel provided some important principles. First, the panel clarified that “essential security interests” [are] not any security interests but those that “may generally be understood to refer to those interests relating to the quintessential functions of the state, namely, the protection of its territory and its population from external threats, and the maintenance of law and public order internally.”67 Second, the panel held that while the “emergency in international relations” (the condition of the subparagraph) may be interpreted broadly, the invoking state has the burden of articulating their essential security interests with greater specificity if the emergency is further removed from war or government failure. The panel found that 62

Panel Report (2019b) (herein after Russia—Traffic in Transit) 7.27. It is worth noting that in this case, the US, as an observer, sided with Russia on the issue of reviewability. Ibid. 7.51. 64 Ibid. 7.103 [Emphasis added]. 65 Ibid. 7.131. 66 Nam and Lee (2019). 67 Russia—Traffic in Transit, 7.130. 63

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the less characteristic is the “emergency in international relations” invoked by the Member, i.e., the further it is removed from armed conflict, or a situation of breakdown of law and public order (whether in the invoking Member or in its immediate surroundings), the less obvious are the defense or military interests, or maintenance of law and public order interests, that can be generally expected to arise.68 In such cases, a Member would need to articulate its essential security interests with greater specificity than would be required when the emergency in international relations involved, for example, armed conflict.69 Third, the panel found that the good-faith obligation requires that the invoking state show a plausible nexus between the essential security interests and the measure taken by the invoking state. Specifically, the measure at issue must “meet a minimum requirement of plausibility in relation to the proffered essential security interests.”70 The panel’s findings in Russia—Traffic in Transit sheds light on how IRA’s Clean Vehicle Provision would be analyzed under existing Article XXI laws. First, the US would be required to objectively show that there is an “emergency in international relations” with regards to its relationship with China. While this term may be interpreted broadly to include circumstances that are removed from an actual armed conflict or government failure, it is uncertain whether the current tensions between the US and China are comparable to the tensions between Russia and Ukraine at the time of the trade-restrictive measures in Russia—Traffic in Transit, which, although in hindsight, was really the beginning of an all-out armed conflict.71 Second, even if the US succeeds in objectively establishing an “emergency under international relations,” it must still articulate an “essential” security interests that are protected by the IRA’s Clean Vehicle Provision—an interest that relates to the protection of its territory or maintenance of public order. Because the current tensions between the US and China are considerably removed from an actual armed conflict, the interests must be articulated with greater specificity. It is uncertain whether there is indeed a sufficiently specific “essential” security interest—as distinguished from an economic interest—related to the IRA’s Clean Vehicle Provision.72 Most importantly, the US will face the burden of showing that the IRA’s Clean Vehicle Provision plausibly protects the said essential security interest; in other words, the US would have to show that the IRA’s Clean Vehicle Provision—whose target is not restricted to Chinese imports but disadvantages important trade partners such as South Korea—to be plausibly related to the articulated security goal concerning China. In short, the US will not be able to successfully raise an Article

68

Ibid. 7.135. Ibid. 70 Ibid. 7.138. 71 Ibid. 7.136 (finding that “in the case at hand, the emergency in international relations is very close to the ‘hard core’ of war or armed conflict”). 72 In India-Solar Cells and Solar, India argued that the trade-restrictive measures in question were necessary to achieve India’s “energy security,” but did not invoke Article XXI’s security exception. India-Solar Cells and Solar¸ supra note 42. 69

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XXI defense unless they successfully show that there is an “emergency in international relations,” and that the IRA’s Clean Vehicle Provision is plausibly related to protecting a specifically-articulated essential security interest.

Potential Violation of the Agreement on Subsidies and Countervailing Measures IRA’s Clean Vehicle Provisions may also be analyzed under the WTO’s Agreement on Subsidies and Countervailing Measures (SCM). The SCM’s definition of subsidies includes tax credits, such as those provided under the IRA’s Clean Vehicle Provision.73 In particular, Article 3.1(b) prohibits the so-called “import-substitution subsidies.” It reads: 3.1 [T]he following subsidies … shall be prohibited: … (b) Subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.74

These subsidies are deemed per se illegal and do not depend on the actual effects of the subsidy on the complaining Member’s industry or economy. The IRA’s Clean Vehicle Provisions arguably fall under the scope of the prohibited import-substitution subsidy of the SCM. The jurisprudence on Article 3.1 (b) of the SCM has expanded the scope of the provision to include not only de jure contingency upon the use of domestic over imported goods, but also on de facto contingency upon the use of domestic over imported goods.75 In other words, even if the IRA’s Clean Vehicle Provisions facially does not condition the tax credit on the use of “domestic” American goods—because the scope of the IRA’s LCRs is inclusive of North America or other FTA-partners—it may be argued that there is a de facto condition that requires the use American goods over imported goods. While the facts surrounding the Clean Vehicle Provisions including their actual effects on the market must be further investigated, it is likely that for at least some EVs, the eligibility for the USD 7,500 tax credit would depend on substituting imported critical minerals, imported battery components and imported EVs with domestic products or assembly. If the Clean Vehicle Provisions are found to fall under the scope of Article 3.1(b), they 73

Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, annex 1A, 1869 U.N.T.S. 14. [hereinafter SCM] Article 1.1 (a)(1)(ii). The SCM has been interpreted to cover subsidies provided to purchasers, such as the IRA’s Clean Vehicle Provision, under the assumption that the benefit of the tax credit provided to the purchaser of a product is deemed, without proof to the contrary, to have been provided to the producer. See e.g., Panel Report (2002) 7.229. 74 SCM art. 3.1 (b). 75 Appellate Body Report (2000) 142.

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will then be found to be per se illegal without having to prove whether the subsidies actually produced adverse effects on the interests of the complaining state.76 The SCM regime presents a number of advantages than the GATT against LCRs because when a panel finds a prohibited subsidy, Article 4.7 of the SCM allows the panel to demand the withdrawal of the subsidy without delay, which, in past cases, has been within 90 days.77 Additionally, unlike the GATT, the SCM does not provide for any exceptions.

Analysis Under the Korea-US Free Trade Agreement Article 2.2, Paragraph 1 of the KORUS FTA provides: Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretive notes, and to this end Article III of GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.78

In other words, the legal analysis conducted above on the US’s potential violation of the national treatment principle under GATT’s Article III:4 is equally applicable to the national treatment obligation imposed upon the US and South Korea under the KORUS FTA. While the KORUS FTA exempts the parties from national treatment if any of the specific circumstances enumerated in Annex 2-A are satisfied, none are likely to present for IRA’s Clean Vehicle Provision. Hence, a separate analysis of a potential violation of the KORUS FTA’s national treatment principle would be unnecessary. Similarly, the KORUS FTA’s Article 23.1 states that “[f]or purposes of [KORUS FTA’s national treatment provision], Article XX of GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.”79 Thus, a separate analysis of the applicability of GATT Article XX’s general exceptions under the KORUS FTA would be unnecessary. However, the KORUS FTA notably adopts its own security exception provision. Unlike GATT Article XXI, KORUS FTA’s Article 23.2 provides: Nothing in this Agreement shall be construed: … 76

The SCM also prohibits “actionable subsidies”—subsidies that are “specific” and those that cause an “adverse effect” to the interests of another Member including by causing injury to the domestic industry of another Member. Even if the Clean Vehicle Provisions are found to fall outside the scope of Article 3.1(b), they are likely to be condemned as actionable subsidy. 77 Hestermeyer and Laura Nielsen (2014). 78 Free Trade Agreement between the Republic of Korea and the United States of America, U.S.-S. Kor. (30 Jun 2007 modified 5 Dec 2010 and 1 Jan 2019) [hereinafter KORUS FTA], Chapter Two National Treatment and Market Access for Goods, art. 2.2, https://ustr.gov/trade-agreements/freetrade-agreements/korus-fta/final-text. 79 KORUS FTA Chapter Twenty-Three Exceptions, art. 23.1.

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(b) to preclude a Party from applying measures that it considers necessary for the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security or the protection of its own essential security interests.

More importantly, the footnote to Article 23.2(b) states that “[f]or greater certainty, if a Party invokes Article 23.2 in an arbitral proceeding initiated under … Chapter Twenty-Two [KORUS FTA’s own dispute resolution procedures], the tribunal or panel hearing the matter shall find that the exception applies.”80 The footnote appears to have been included in light of the controversy surrounding the scope of the “it considers” language of the GATT Article XXI and may reflect the parties’ effort to clarify the level of subjective discretion provided under this exception. The US indeed has so far maintained that Article 23.2 should be interpreted to allow full and unfettered discretion to the parties to invoke the exception.81 The provision has not yet been interpreted by a panel or a court; and it is uncertain whether a general “good faith” requirement—one similar to GATT Article XXI—also applies to Article 23.2 to qualify the scope of discretion provided. Nonetheless, without a good-faith requirement, Article 23.1—as interpreted to give absolute discretion to parties— would undermine the object and purpose of the KORUS FTA as it would allow parties to circumvent the trade-promoting measures of the treaty simply by invoking the exception. Also, if anything and everything is potentially a valid security exception, Article 23.1 would become the blackhole that sucks in the rest of the agreement and renders all other provisions ineffective. Under such interpretation—as maintained by the US—if the US invokes Article 23.2 and determines that the IRA’s Clean Vehicle Provision is a necessary security measure, Korea would have no recourse under the KORUS FTA. The KORUS FTA provides an independent dispute resolution mechanism that calls for, first, consultation between the parties, second, referral to the joint committee—consisting of officials from both states—to resolve the dispute if the consultations fail, and lastly, the establishment of a three-person panel if the efforts of the joint committee fail.82 However, for any disputes concerning automotive products—which would include any potential dispute concerning the IRA’s Clean Vehicle Provision—the KORUS FTA provides an elective fast-track dispute resolution procedure that does not require consultation and provides a much-abbreviated timelines for the rest of the process.83 Nonetheless, the uncertainties surrounding the scope of Article 23.1’s security exception raise serious concerns as to the effectiveness of the KORUS FTA’s dispute resolution mechanism in constraining the US’s potential violation of the KORUS FTA’s national treatment principle.

80

Ibid. fn. 2. Cho (2018). 82 KORUS FTA Chapter Twenty-Two Institutional Provisions and Dispute Settlement, art. 22.2– 22.10. 83 Ibid. annex 22-A. 81

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Conclusion The IRA’s Clean Vehicle Provisions include various local content requirements that are likely to violate the GATT and the SCM, as well as the KORUS FTA. Nonetheless, it would be misleading to conclude this article without discussing the ongoing crisis of the WTO system. The WTO’s dispute settlement system is now toothless, without an appellate body that has the enforcement authority. The legal arguments analyzed above concerning the IRA’s Clean Vehicle Provisions may thus be of little use in actually getting the US to change its behavior through the usual WTO dispute resolution mechanism. Some predict that “in the absence of a binding WTO system, Members will be free to impose LCRs indiscreetly”84 and the US seems to be in the lead. While the main multilateral system is on a limbo, injured states such as South Korea are left to rely on dispute resolution mechanisms provided under the bilateral FTA, whose effectiveness in ensuring compliance is questionable given the broad security exception. The implications of the legal analysis provided above must be situated in this broader global context of increasing protectionism and rejection of multilateral regulatory oversight. Thus, for states such as South Korea, it would be prudent to adapt to the IRA’s trade-restrictive measures—for instance, by increasing North American EV assembly plants, or by developing South Korean critical mineral processing industry to take advantage of the preference granted to FTA-partners—all the while pursuing redress under international trade rules.

References Appellate Body Report (2000) Canada–certain measures affecting the automotive industry, WTO Doc. WT/DS139/AB/R; WT/DS142/AB/R Appellate Body Report (2016) India–certain measures relating to solar cells and solar module, WTO Doc. WT/DS456/AB/R Bazillian M (2022) Argument: the inflation reduction act is the start of reclaiming critical mineral chains. Foreign Policy. https://foreignpolicy.com/2022/09/16/inflation-reduction-act-criticalmineral-chains-congress-biden Blinken AJ (2022) The administration’s approach to the People’s Republic of China, US Department of State, Secretary of State. https://www.state.gov/the-administrations-approach-to-the-peoplesrepublic-of-china Chavez S (2022) The problem with Biden’s EV subsidy: hardly any cars will qualify. Financial Times. https://www.ft.com/content/169d18de-de55-4ae6-99ef-77d221292e03 Cho KW (2018) US Cites “Essential Security Interests” in its tariffs on South Korean steel and cars. In: Hankyeoreh Daily. http://english.hani.co.kr/arti/english_edition/e_business/860812.html Cho S, et al (2021) Analysis of global supply chain of core product: batteries. Trade Focus No. 28. https://www.kita.net/cmmrcInfo/internationalTradeStudies/researchReport/focusBrie fDetail.do?pageIndex=1&no=2231&sClassification=1 Ellen K (2022) Inflation reduction act comes into focus At UNGA. Center for Strategic and International Studies. https://www.csis.org/analysis/inflation-reduction-act-comes-focus-unga

84

Nedumpara and Venkataraman (2020).

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Hestermeyer H, Laura Nielsen L (2014) The legality of local content measures under. WTO Law J World Trade 48:553–591, 583 Lee K (2022) US inflation reduction act goes against international trade norms. In: Korea Times. https://www.koreatimes.co.kr/www/tech/2022/10/129_334988.html Lin SH, Weng Y (2020) Can strengthening the local content requirements meet a government’s need to raise industrial productivity and production? J Appl Econ 23(316–328):316 Nam S, Lee EYJ (2019) Who violated international law? Critical analysis of abe’s export restrictions to Korea. J East Asia Int Law 12(353–372):356 Nedumpara J, Venkataraman A (2020) The rise of import substitution subsidies and local content requirements in a dystopian WTO 2.0 regime, p 233. https://www.researchgate.net/public ation/342230684_The_Rise_of_Import_Substitution_Subsidies_and_Local_Content_Require ments_in_a_Dystopian_WTO_20_Regime Nelson D, Puccio L (2021) Nihil Novi Sub Sole: the need for rethinking WTO and green subsidies in light of United States—renewable energy. World Trade Rev 20:491–508 Panel Report (2000) Canada—certain measures affecting the automotive industry, WTO Doc. WT/DS139/R, WT/DS142/R Panel Report (2002) Canada–export credits and loan guarantees for regional aircraft, WTO Doc. WT/DS222/R Panel Report (2016) India–certain measures relating to solar cells and solar module, WTO Doc. WT/DS456/R Panel Report (2019a) Brazil—certain measures concerning taxation and charges, WTO Doc. WT/DS472/R Panel Report (2019b) Russia—measures concerning traffic in transit, WTO Doc. WT/ DS512/R Panel Report (2019c) United States–certain measures relating to the renewable energy sector, WTO Doc. WT/DS510/R [hereinafter US-Renewable Energy) Rutherford A (2020) Energy security and green energy: national policies and the Law of the WTO. Springer, Cham, p 125 Smith T (2022) Proposed tax credits would make electric vehicles more expensive. Insight American Action Forum https://www.americanactionforum.org/insight/proposed-tax-credits-wouldmake-electric-vehicles-more-expensive/#ixzz7hGwjPpMu Swindells S (2022) US senate passes act with incentives for critical minerals. Mining Journal https:// www.mining-journal.com/energy-minerals-news/news/1437372/us-senate-passes-act-with-inc entives-for-critical-minerals#:~:text=The%20775%2Dpage%20IRA%20contains,not%20incl uded%20in%20the%20list The White House (2022) Fact Sheet: How The Inflation Reduction Act Will Help Small Businesses. https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/12/fact-sheethow-the-inflation-reduction-act-will-help-small-businesses

Soojin Nam Associate Professor at Department of International Economics and Law, Hankuk University of Foreign Studies. A.B. & J.D. (Harvard), M.A. (Sciences Po). ORCID: https:// orcid.org/0000-0001-6632-1681. Nam acknowledges financial support from Hankuk University of Foreign Studies. The author may be contacted at: [email protected] / Address: HUFS Dept. of International Trade, 107, Imun-ro, Dongdaemun-gu, Seoul 02450 Korea.

Chapter 10

The Coordinating Role of Public International Law: Observations in the Field of Intellectual Property Sung Pil Park

Abstract The recent surge of multijurisdictional IP disputes and the increase in non-binding soft laws have made scholars cast doubt on the sustainability of public international law and the validity of the current IP legal system. Private lawyers may now think that they do not have to pay keen attention to public international law any longer when providing legal advice to their clients, particularly MNCs. This study makes a concise description of today’s legal environment in the field of IP, focusing on the emerging legal norms of transnational law, particularly in the context of its interplay with public international law. With respect to this, the ongoing and even heightened roles of public international law will be discussed. Finally, a typology is suggested using exponents to express the intensity of State sovereignty to facilitate understanding of the relationship between public international law and other categories of law. Keywords Intellectual property · Multijurisdictional IP disputes · Public international law · Private lawyers · MNCs · Transnational law

S. P. Park (B) Graduate School of Future Strategy, KAIST, 291 Daehak-ro, Yuseong-gu, Daejeon 34141, Korea e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_10

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Introduction Globalization has brought about a new phenomenon. In particular, legal questions in such fields as human rights, the environment, and finance, frequently transcend national boundaries.1 Adequate laws addressing the issues in these fields will relieve the individuals or corporations that suffer from them.2 However, what if there is no such law, whether international or domestic, to tackle these legal issues? Against this backdrop, the so-called “transnational” law has emerged and evolved historically.3 These new classes of law have become a point of contention among international law scholars, given that most legal norms in this category are regarded as non-binding “soft law.”4 In the past decades, the most significant development in international legal practice has been the surge of multijurisdictional Intellectual Property (“IP”) disputes.5 The recent global IP war between Apple Inc. and Samsung Electronics Co. Ltd. is a typical example of this. However, there are repeated concerns and criticisms against multijurisdictional IP disputes in that they inhibit the innovation of Multinational Corporations (“MNCs”) by draining out valuable corporate resources to redundant legal battles over the same legal issues around the globe.6 Accordingly, a group of practitioners and scholars proposed some public international laws whose primary function is to allocate domestic laws to resolve multijurisdictional IP disputes.7 However, there is a long way to go before such public international laws that can address private international law issues will be formed and begin to function properly.8 Some scholars interpret these phenomena as the dwindling influence on private legal practice from public international laws.9 In addition, transnational law scholars even suggest the dismantling of the traditional State-law nexus.10 This new environment will thus possibly endanger the solidarity and sustainability of the public international law reign in terms of international relations. Of course, this unprecedented legal environment has been brought about by the emergence of the modern form of the corporation and, more importantly, its extreme evolution into MNCs.11

1

Larry (2016). See infra. Chapter III.C.6. 3 Key concepts that have been discussed along with transnational law include “lex mecatoria,” “international constitutionalism,” “legal pluralism,” etc. For details, see. Peer (2012). 4 The term “soft law” refers to regulatory instruments influencing the behavior of individuals and corporations through informal mechanisms, such as reputational concerns, while “hard law” denotes legally binding rules. See. Milton and Kath (2016); Harri and Tim (2015). 5 For a factual background of this concept, see. Sung-Pil (2014). 6 Michael (2013), Giuseppe (2015). 7 See, e.g., The American Law Institute (2008). 8 See supra note 5. 9 Harold (1994). So, Berman suggests “world law” as the alternative to international law. 10 Supra note 3 at 308–309. 11 Detlev (1970). 2

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The primary purpose of this research is to show the growing importance of public international law for private lawyers, with special references to IP cases. This paper is composed of four parts, including Introduction and Conclusion. Part two will discuss several notable challenges of globalization to public international law, such as the emergence of transnational law, the surge of multijurisdictional IP disputes, and the theory that States’ rule-making authority have exhausted. Part three will examine the roles of today’s public international law by discussing examples in the field of IP. In Conclusion, the author will suggest that public international law is not actually losing its facilities but has been more aggrandized by being ordained to coordinate or collaborate with transnational and domestic laws.

Challenges of Globalization for Public International Law Evolution of Transnational Law Transnational law has emerged and developed following globalization.12 Jessup introduced the term “transnational law,” which soon became a buzzword among international law scholars.13 He regarded it as an “alternative” to both traditional “private international law” and “interlegal law” coined by Alf Ross “to include all law which regulates actions or events that transcend national frontiers.”14 Since the introduction of the transnational law concept into the international law field, a group of scholars has developed theories to explain such a new phenomenon. These theories can be broken down into roughly three categories. Following the early day notion of transnational law, firstly, some scholars view that transnational law has been evolving in the void of legal institutions regarding human rights, environmental protection, labor rights, etc. In this transnational law school, there actually exist two subcategories. One group of scholars, including Jessup, describe transnational law as encompassing traditional public international law and private international law, as well as the newly emerging rules that have not been considered as either public or private international law.15 The other group of scholars insists that transnational law refers only to the newly formed field of law that is mostly soft law.16 Second, legal sociology scholars believe that Jessup’s categorization does not exactly capture reality in the development of international law.17 Rather, these scholars insist that 12

Paul (2005). Philip (1956). 14 Ibid. at 2. Jessup’s transnational law is quite a broad concept including public international law, private international law, and other rules that do not fall into those two categories. In this article, the author uses the term in rather a narrower sense to cover the last category, whose rules do not fit into either public international law or private international law. 15 Ibid. at 2. 16 See, e.g., Lawrence (1996). 17 Supra note 3 at 306–310. 13

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transnational law, as public international law, be only one form of a societal norm as a response to today’s challenges.18 Thirdly, economics and organization theorists assert that transnational law should be understood as a form of global governance.19 They put their theoretical basis on Oliver Williamson’s “contractual schema.”20 It is not difficult to find non-binding transnational laws that are actually respected and observed in practice by market players. A standardization mechanism in the field of IP is an example of such voluntary observance of transnational law. A standardsetting organization (“SSO”) examines certain candidate technologies.21 Once they meet its criteria, they can become industrial standards. In general, such standard technologies protected by patents are called standard essential patents (“SEPs”).22 In return, the owners of SEPs should, in general, commit to the Fair, Reasonable, and Non-Discriminatory (“FRAND”) terms.23 National courts could reject a company’s claim of injunctive relief for infringement of its SEP if the FRAND commitment were to be breached.24 Transnational law scholars may thus consider the standardization process in the field of IP as evidence of thriving transnational laws that are respected and observed by market players, even with their soft law status. Even from such an example of “standardization,” public international law seems to make a diminishing contribution to specific transnational issues of today. However, it is evident that the facilities of public international law have not declined. Rather its new roles in several directions regulating transnational legal phenomena are being fully observed in the field of IP.

18

Ibid. at 308. Some examples of the governance approach to transnational law are as follows: Regan and Hall, supra note 4; Megan and Benedict (2013), Supra note 3; Larry (2011), Tim (2011), Andreas et al. (2006), Dan (2005), Kalypso and Gregory (2005) 20 See, e.g., Gralf-Peter and Moritz (2009). 21 Examples of the most influential SSOs operating worldwide are as follows: International Telecommunication Union (“ITU”), International Organization for Standardization (“ISO”), International Electrotechnical Commission (“IEC”), Institute of Electrical and Electronics Engineers Standard Association (“IEEE-SA”), etc. In addition to the international SSOs, there exist numerous regional and national SSOs around the globe. 22 These patented technologies should be used by others in compliance with the established standards. Thus, the owners of SEPs may be placed in a more advantageous position by standardization. 23 The FRAND commitment suggests that the owner of a SEP would not discriminate other companies by imposing unfair or unreasonable licensing terms on them. Thus, the legal status of SEPs is achieved in return for the commitment to the FRAND terms. 24 National courts will find a plaintiff’s breach of the FRAND commitment if, e.g., the plaintiff asked for unreasonably high royalty rates to the defendant. 19

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Multijurisdictional IP Disputes Although this article attempts to show that public international law is still important from the observation in the field of IP, the international community has recently acclaimed a need for introducing a new global legal system to overcome current inefficiencies and waste of corporate resources. The past decade has seen a lot more patent applications and litigations in the global IT industry. Since the territoriality principle of each IP law is based on the long-lasting notion of State sovereignty, recent IP litigations conducted worldwide in many jurisdictions on similar or even the same legal issues have become a new challenge to both public and private international law.25 There are several challenges that multijurisdictional IP disputes have created. Firstly, multijurisdictional IP disputes are criticized as contra-innovation.26 In other words, corporations tend to spend their valuable resources in defending or offending lawsuits with astronomical damages claimed, rather than in achieving a meaningful innovation whose benefit will mostly be conferred to the customers. Secondly, due to different results from the same or similar legal issues, MNCs will face more uncertainty in their global operation. On the same design patent issues, e.g., the Seoul District Court held for Samsung Electronics Co. Ltd., while the US District Court of Northern California for Apple Inc. Different results from different jurisdictions could be caused by the following reasons: (1) Domestic laws, both substantive and procedural, on the specific IP issues differ from each other; (2) The courts of different jurisdictions may interpret law in a different manner. They may be affected by precedents, legal culture, and jurisprudence; and (3) The locus of specific legal issues, e.g., patent infringement, could create different fact patterns affected by its unique market environment. Many scholars assert that those challenges of multijurisdictional IP disputes should be addressed by new international legal norms.27 However, such new legal norms may not be able to stand alone separately from other categories of law. As will be discussed in this article, they rather need to cooperate with other types of law to perform effectively.28

Exhaustion of States’ Rule-Making Authority? Transnational lawyers would assert that States’ rule-making authority has been exhausted, seeing that transnational laws have recently increased.29 If extending this idea to the extreme, one may argue that public international law has passed and 25

This group of IP litigations are referred to as the multijurisdictional IP disputes in this article. Supra note 6. 27 For reviewing such scholarly attempts, see Jaemin (2012); supra note 5. 28 See infra III.C. 29 Supra note 3 at 310. 26

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now it is the age of transnational law. Certainly, the ever-increasing MNCs, whose activities are transcending national boundaries, cannot be addressed properly through conventional legal tools. Nonetheless, public international law is still very useful. Take arbitration as an example. It is one of the most frequently used alternative dispute resolution (“ADR”) methods by transnational lawyers, based on the “Convention on the Recognition and Enforcement of Foreign Arbitral Awards” (hereinafter New York Convention).30 It shows that States’ rule-making authority is essential. Without the New York Convention to recognize and enforce arbitral awards, arbitration would have been almost useless. This also implies that public international law, leveraged by States’ rule-making authority, contributes to regulating the transnational legal phenomena.

New Roles of Public International Law in the Field of IP The Public–Private Dichotomy In domestic law, the term “private law” refers to “a branch of law concerned with private persons, property, and relationships.”31 Noticeable examples are contracts, commercial law, property law, family law, and torts. Meanwhile, “public law” refers to “a branch of law concerned with regulating the relations of individuals with the government and the organization and conduct of the government itself.”32 It contains constitutional law, criminal law, civil and criminal procedures, and administrative law. Such a “public–private dichotomy” has not created much confusion in any domestic legal system.33 In international law, however, this public–private distinction has been a source of confusion. Traditionally, public international law refers to “the law of nations which is concerned with the relationships among subjects of international law,”34 while private international law refers to the rules dealing with “relations between individuals or 30

Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). It has 156 States Parties. 31 See Merriam-Webster’s Legal Definition (2016) http://www.merriam-webster.com. 32 Ibid. 33 This is because States do not have to be barred by such a divide in their legislation and enforcement of laws. Actually, a State can decide public or private nature of a law to regulate specific subject matters. Today, many laws are in fact in a hybrid form, i.e., a one that contains both a public and private nature. E.g., a patent law in any jurisdiction may deal with individual applicants’ relationship with the State (more precisely patent offices) and provide all procedural rules for patent prosecution. At the same time, a patent law defines the infringement of patent, which is a typical private law issue. 34 Ademola (2012). States and international organizations are the subjects of public international law, and its subject matters are those legal issues stemming out of the relationship among these subjects. However, this public “international” law differs from public “domestic” law in two aspects. First, the former generally excludes individuals, either natural persons or corporations, while the

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legal persons in which the laws of more than one State may be applied.”35 Simply put, private international law is another name for the conflict of laws.36 In fact, the term “private international law” must be a misnomer, because the conflict of laws is a domestic law that exists in the most respective jurisdiction.37 Meanwhile, the increasing roles of MNCs and non-governmental organizations (“NGOs”) in today’s economic environment have raised questions on how to treat these “non-State actors.”38 Due to the transnational presence and activities of these private entities, two opposite approaches are conceivable to deal with legal issues they may have to deal with. These two methods may be labeled as a “public-toprivate” approach and a “private-to-public” approach.39 The former is asking whether public international law can be extended to include MNCs and NGOs as international law subjects, while the latter, whether treaty-based private international law can be developed (Table 10.1).40

Sovereignty Focused Hierarchy of Law To explain the ongoing contribution of public international law in dealing with transnational legal issues in a simpler and more systematic way, it can be useful to symbolize public international law, domestic law, and transnational law. Considering State sovereignty in each category of law, a hierarchical structure can be designed as follows (Fig. 10.1). In the figure above, the intensity of sovereignty is expressed as “exponents.” Firstly, public international law, at the top of the hierarchy, is formed by States. Multilateral treaties, such as the WTO Agreements, plurilateral treaties, such as latter includes legal issues where at least one party is the State. Second, the former has no centralized legislative authority, while the latter has the State. 35 Ibid. at 8. 36 Ibid. In the context of international transaction, this conflict of laws issue actually includes both “choice of law” issues and “choice of jurisdiction” or “choice of court” issues. Private lawyers should face in finalizing every international agreement. 37 This term “private international law” is now understood by the international law community as “conflict of laws.” Criticism on such an inappropriate nomenclature is found in the work of Alf Ross earlier in 1947. He commented on the term as: “Normally it is both hopeless and inadvisable to try to alter a generally accepted terminology, but in this case linguistic usage is so misleading that it seems to me right to make the attempt. For private international law is neither private nor international.” See Alf (1947). So, Ross used an alternative term “interlegal law” rather than this misleading term “private international law.” 38 Andreas et al. (2004), Conway (2009). The corporate non-State actors whose businesses transcend national boundaries are referred to either as transnational corporations (“TNCs”) or MNCs. However, these terms in many occasions are used interchangeably. 39 For details on these two approaches, see supra note 5. 40 Robert Jennings and Arthur Watts actually envisioned integration of public and private international laws by embodying private international law rules in treaties. See Ademola, supra note 34 at 8–9.

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Table 10.1 The public–private dichotomy of law Realm

Nature

Rule maker

Subjects

Binding effects

Dispute resolution

Examples

International

Public

State-State; State-IO

State; IO

Hard

Usually not available; WTO DSM

TRIPs; PCT; EPC; Berne convention

Private

State

State; IO; Corp.; NGO

Hard

Domestic courts

Conflict of laws

Public

State

State; IO; Corp.; NGO

Hard

Domestic courts

Administrative law; Civil & criminal procedure

Private

State

IO; Corp.; Hard NGO

Domestic courts

Contracts; Torts; Property law

Hybrid

State

State; IO; Corp.; NGO

Hard

Domestic courts

Patent Law; Copyright law

Private

State; IO; Corp.; NGO

State; IO; Corp.; NGO

Soft

ADR

Lex Mercatoria; UN Global compact

Domestic

Transnational

Source Compiled by the author [IO–International Organization; Corp.–Corporation; TRIPs–Trade Related Aspects of IP Rights; PCT–Patent Cooperation Treaty; EPC–European Patent Convention]

Public International Law: Sn : : Domestic Law: S1 : : Transnational Law: S0 Fig. 10.1 Sovereignty focused Hierarchy of law

the Anti-Counterfeiting Trade Agreement, and bilateral treaties, including free trade agreements, require at least two States for their creation. This category of law requires multiple sovereignty for its creation, so it is expressed as “S” to the “n” power. Secondly, as domestic law is enacted by each State by its single sovereignty, it is expressed as “S” to the first power. Lastly, transnational law involves no State sovereignty by definition, therefore it is expressed as “S” to the zero power. It is thus located at the bottom of the hierarchy.

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This hierarchy implies that sovereignty of the States runs from the higher category to the lower category of law by coordinating or empowering. Based on this hierarchical representation of the categories of law, the author will explain why public international law remains significant, even in the era of transnational legal challenges. The next chapter describes such a dynamic interplays of law in today’s international legal environment.41

Emerging Roles of Public International Law Harmonization of Domestic Laws A practical solution to the transnational legal problems is to coordinate domestic laws of different jurisdictions to resemble each other. Ideally, States may make their laws on specific subject matters, e.g., patents, to be identical with the most advanced law of a jurisdiction.42 However, explicit copying of the law of another State is not the case for most domestic laws of today. Rather, based on its own sovereignty, “State A” can respect the laws of “State B” and do its best tuning of its laws to those of “State B.” This is the essence of the harmonization of laws. The political and economic atmosphere, however, may become a stumbling-block before the harmonization efforts of States, as laws of an advanced State may become superior to all other counterparts. If less developed States do not fully trust the advanced State, it is hard to persuade those unsatisfied States to remain in a harmonious relationship.43 However, the laws of advanced States could usually be favored due to their sophistication, if the need for harmonization is accepted by the States. Using the sovereignty exponents discussed in the previous subchapter, this role of public international law for harmonization can be expressed as “Sn is a proper subset of S1 [Sn ⊂ S1 ],” which implies that public international law (Sn ) provides core elements that should be included in the domestic law (S1 ) of any jurisdiction.44 41

However, this hierarchy does not mean that effect of domestic law, including constitution and statutes, is in general subject to that of public international law. The hierarchy is suggested in this article just in order to emphasize coordinating roles of public international law. The sovereignty of a State is sort of a sui generis and not originated from public international law. On the contrary, the sovereignty of each State form a basis of the legal effect of public international law. For details on the relationship between public international law and municipal law, see von Bogdandy (2008). 42 This actually happens when a least developed country adopts laws by explicitly copying those of advanced countries. 43 One of the best known examples is the less developed countries’ rejection of the WTO Agreement not to hand over their State authority to developed countries. For details, see supra note 5. 44 Of course, not all provisions of public international law proposed for harmonization have to be found in each domestic law. The results of such harmonization, i.e., harmonized domestic laws, may be expressed as “S1 is approximately equal to S’1 [S1 - S’1 ],” considering that domestic laws, even after experiencing harmonization of core provisions, may have non-core provisions that are different from each other.

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In the field of IP, public international law has guided or facilitated such harmonization processes from several decades ago.45 The Paris Convention declared harmonizing the substantive IP laws as one of the most important principles, and established a union to protect industrial property rights.46 This treaty established several minimum standards that domestic IP laws of the union members should meet.47 While the harmonization efforts of domestic laws today are usually made by developed countries, in the 1880s, when the Paris Convention was adopted, developed countries were reluctant to change their IP laws.48 In this regard, the enactment of the Leahy–Smith America Invents Act (“AIA”), the revised patent law of the US of 2011, implies that developed countries are now enthusiastic about harmonizing IP laws.49 The Patent Cooperation Treaty (“PCT”) established an international patent prosecution platform through the World IP Organization (“WIPO”) for the individuals and corporations of the union members.50 The PCT system has been found to be successful, based on the harmonization requirements.51 Although the PCT set up its unique international patent prosecution phase, known as the “international phase,” harmonization of domestic patent laws of the member States enabled applicants to experience a more familiar procedural atmosphere by the harmonization of domestic laws. To facilitate harmonized patent prosecution using the PCT, 17 parallel agreements with the union members, including the IP5, were also enacted.52 In the meantime, the TRIPs Agreement tries to harmonize IP laws around the world.53 It includes provisions to harmonize substantive IP laws of the member States by establishing minimum protection standards.54 Although the TRIPs Agreement does not allow private actors, such as MNCs, to resolve disputes through its Dispute Settlement Mechanism (“DSM”), it offers the facilitation to resolve multijurisdictional IP disputes by heightening the IP law standard of its member States. 45

Harmonization can be achieved through each State’s legislative efforts which can sometimes be pushed by public international law, such as TRIPs and Free Trade Agreements (“FTAs”). If a State resists harmonization, it is not easy to enforce such changes in the domestic law due to its sovereignty. 46 Suzanne (2003). 47 John et al. (2010). However, this treaty is silent about harmonization of procedural rules, e.g., those for patent prosecution process. 48 For details, see John (2009). 49 D. Kappos, former director of the US Patent and Trademark Office once explained the background of this changed attitude of developed countries. See David (2010). 50 World Intellectual Property Organization (1970). 51 Supra note 47 at 22. 52 WIPO, ISA and IPEA Agreements. http://www.wipo.int/pct/en/access/isa_ipea_agreements. html. 53 WTO Intellectual property: protection and enforcement. https://www.wto.org/english/thewto_e/ whatis_e/tif_e/agrm7_e.htm. 54 The WTO asserts in its website that IP protection will ultimately benefit society as a whole. See ibid. But most LDCs may consider IP protection as hindrance to the development of their economies.

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Internationalization of Domestic Laws Some transnational legal issues cannot be properly addressed, even if domestic laws of multiple States are fully harmonized. Even though the patent laws of all States are fully harmonized to be identical, applicants still have to file their patents in every jurisdiction they desire to get legal protection on their inventions. The best, and probably the only way, to avoid such redundant transaction costs is to form a public international law ordaining individuals and corporations of all member States as the subjects. In the field of IP, harmonization efforts based on treaties have successfully upgraded domestic IP laws to the level of public international laws. This relationship can be expressed by the sovereignty exponents as [Sn ← S1 ], which implies that domestic law is elevated to public international law status. In the field of IP, particularly with regard to the patent prosecution system, public international law plays a significant role in meeting this truly transnational legal challenge.55 In the 1880s, the Paris Convention, by granting priority periods for each industrial property right, established a unified priority system among its member States.56 The internationalization of this treaty is, however, quite limited. Yet, it was able to introduce a more comprehensive international patent regime, known as the PCT. As a supplemental treaty to the Paris Convention, the PCT established a more advanced international patent prosecution system.57 This treaty not only enables patent applicants to preserve priority date, but facilitates the examination of patents at each local patent office. The European Patent Convention (EPC) is another example of the successful internationalization of the patent prosecution system.58 The European Patent Office (EPO) examines patent applications and grants European patents.59 In fact, the EPC patent prosecution procedure resembles the PCT mechanism.60 Furthermore, applicants can move on to the EPC route after completing the PCT’s international phase.61 Regarding copyrights and related rights, the Berne Convention for the Protection of Literary and Artistic Works (hereinafter Berne Convention) is an example of internationalizing domestic laws to some degree. This treaty allows an author to claim

55

For MNCs and other private patent applicants, it is an expensive and time-consuming job to go through patent prosecution processes in local patent offices where their businesses reside. 56 WIPO (1883). Article 4 of the Convention grants 12 months for patents and utility models, and 6 months for industrial designs and trademarks as priority periods. The period starts from the filing date of the first application. The filing date, however, is not included in the priority period. 57 It is not about one unitary patent, or about a unified patent prosecution system for its member countries. The PCT process is in fact divided into the international and the national phase, but only the former is an “international” process, while the latter is still “domestic.”. 58 European Patent Office, The European Patent Convention. https://www.epo.org/law-practice/ legal-texts/epc.html. 59 European Patent Office, Services & Activities. https://www.epo.org/about-us/services-and-activi ties/services.html. 60 European Patent Office (2014). 61 WIPO (2014).

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his/her copyright or related rights in the State, where they are infringed without registering such rights.62 Although it does not reach the level of providing extraterritorial jurisdiction (ETJ), the Berne Convention at least facilitates copyright and related right holders to access any member State’s court when the rights are infringed.63

The Publicization of Private International Laws As discussed above, private international law is not exactly “international’ law, but substantially domestic law. If an agreement provides a choice of laws and courts issues, parties involved in an IP dispute only have to depend on such provisions. However, today’s transnational legal issues, such as multijurisdictional IP disputes, cannot in general be solved just by agreements.64 Thus, practitioners and scholars have made attempts to promote private international law to public international law status. This relationship can be also expressed by the sovereignty exponents as [Sn ← S1 ], because private international law is in fact domestic law. “Publicization” in this context means that it actually becomes public international law. There are several well-known examples of attempts to publicize private international law. Firstly, although not exclusively applied to the IP issues, the Hague Conference/Conférence de La Haye (“HCCH”), or “The Hague Conference on Private International Law”65 attempts to provide binding rules for the choice of laws and courts.66 Secondly, in the field of IP, there is a comprehensive proposal drafted by the American Law Institute (“ALI”) to deal with conflict of laws issues in the age of internet technology and its impact on IP.67 This proposal provides sophisticated rules for the resolution of multijurisdictional IP disputes, regarding jurisdiction, choice of law, recognition, and the enforcement of foreign judgments.68 In an ideal world where private actors conducting transnational businesses are fully supported by the international legal system, multijurisdictional IP disputes could be resolved in any competent local court with its decision enforced elsewhere.69 In this case, the court handling such multijurisdictional IP disputes would have an ETJ.70 This dramatic role of public international law that establishes an ETJ for individuals and corporations, can be expressed by the sovereignty exponents again as [Sn ← S1 ], 62

For details on the Berne Convention, see supra note 5 at 360–1. See also WIPO (1886). Surge of multijurisdictional copyright disputes can also be conceivable due to the huge volume of digital contents and ever-advancing technologies for their creation and delivery. 64 To deal with an infringement of a patent, the patent holder may want to, and have to select the laws and courts of a State where the patent is registered. 65 HCCH (1955). 66 HCCH (2005). 67 Supra note 7. Such a motivation Statement is found in the foreword and the reporters’ memorandum sections of the proposal. For details on the ALI proposal, see supra note, 5 at 366–70. 68 Supra note 7. However, the ALI proposal has not been promoted to the level of public international law. 69 It is the purpose of the ALI Proposal. See supra note 5. 70 For details on the ETJ, see Harold (1982). 63

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as it leads private parties that were originally subject to domestic law and their State jurisdiction to resort to the ETJ conferred by public international law status.

International Jurisdiction for the States Some public international laws establish international tribunals.71 In the field of IP, the Understanding on Dispute Settlement (DSU) of the TRIPs Agreement provides an important Dispute Settlement Mechanism (DSM) through its Dispute Settlement Body (DSB).72 It can be the forum for dispute settlement not only among the WTO member States, but also for private actors who are willing to address trade-related issues indirectly. The role of public international law, in this case, can be expressed by the sovereignty exponents as [Sn ← S1 ]. Private actors are not allowed to personally file lawsuits in the DSB. This mechanism, however, is a result of the long-term struggle among States who finally cooperated to agree on the DSU.

International Jurisdiction for Private Actors The ETJ mechanism discussed above may be useful for private actors conducing transnational businesses, yet there exists a more advanced and aggressive form of jurisdictional arrangement in real life. The European Union (“EU”), by introducing both the European patent with unitary effect (hereinafter unitary patent) and the Unified Patent Court (“UPC”), attempts to adopt a truly internationalized system for patent prosecution and enforcement.73 The unitary patent and the UPC are coupled together regarding the point when they become effective.74 The UPC will operate as part of the judicial system of the member States.75 It will deal with the cases related to both European and unitary patents occurring in the territory of the member

71

Currently four international tribunals remain active with global scope, i.e., the International Court of Justice, the International Criminal Court, the International Tribunal for the Law of the Sea, and the Appellate Body of the WTO, while there are many other international tribunals whose regional and substantive scopes are limited. 72 WTO (2014a, b). Regarding the DSB, see WTO (2014a, b). 73 For details on the unitary patent and the UPC, see European Patent Office (2016). In this regard, the unitary patent and the UPC may potentially become more effective patent prosecution and enforcement mechanisms than those proposed by the ALI. However, more legislative efforts need to be made before this new European patent system could come into operation due to the UK’s vote on June 23, 2016 to leave the EU (so-called the ‘Brexit’). For details, see Aisling (2018). 74 European Patent Office (2016). The unitary patent granted by the EPO will have unitary effect in all member States. See Ibid. 75 Unified Patent Court–FAQ on the Unified Patent Court. epo.org/mobile/applying/european/uni tary/upc/upc-faq.html.

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States.76 The UPC will comprise a Court of First Instance, a Court of Appeal, and a Registry.77 Once this unprecedented attempt of the EU is attained, it could trigger discussions on the introduction of similar international legal mechanisms in other parts of the globe. It is an ultimate form of international jurisdiction that is equipped with complete legal authority to decide on multijurisdictional IP disputes and enforce decisions.78 Hence, this system can be expressed by the sovereignty exponents as “Sn is equal to S1 [Sn = S1 ].” It implies that private actors are now the subjects of public international law, at least with regard to patent prosecution and enforcement.

Demarcation of Transnational Laws Is public international law necessary in implementing international cooperation? It is an issue among today’s IP policymakers.79 Francis Gurry, former Director General of the WIPO, asserted, “In the field of IP, multilateralism is especially important because of the mobility and global application of innovation, ideas and creative works,” and also said, “not every form of international cooperation needs to be implemented through a treaty.”80 His idea seems to have its basis on the transnational law’s legal pluralism.81 One may have to admit that, as Mr. Gurry quoted from Lord Arnold McNair in his interview, “a treaty has been described, with some degree of exaggeration, as the only and sadly overworked instrument with which international society is equipped for the purpose of carrying out its multifarious transactions.”82 However, the WIPO’s Director General also confessed that “incoherent and inconsistent rule-making” can be a downside of the flourishing transnational laws, and that such a defect can be harmful to particularly small and medium-sized States.83 Mr. Gurry’s blessing on the transnational laws ironically highlights the significant role of public international law

76

Ibid. Ibid. 78 It is different from the ETJ mechanism in that the jurisdictional power and enforcement authority are fully institutionalized by the establishment of the unified court system, while the ETJ needs to be maintained by the courts in different jurisdictions. Of course, one may label such a unified court system as an extreme case of the ETJ. 79 See WIPO Mag (2016). 80 In an interview with the WIPO Magazine, the Director General mentioned: “The international community can decide to do something through a resolution or decision of one of WIPO’s constituent bodies (e.g. the WIPO General Assembly). While such arrangements are generally not binding in the strict legal sense unless adopted in the form of a treaty to which a State accedes formally, they can advance internationally agreed goals.” See ibid. 81 For the discussions on legal pluralism, see supra note 3. 82 Supra note 79. 83 Ibid. 77

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in hedging the risk associated with this new category of law.84 This role of public international law can be labeled as “demarcation” of transnational laws.85 Eventually, public international law provides a guideline, so that the flexibility of transnational laws may not harm the coherency and consistency of its mother law.86 The demarcation role of public international law can be also analyzed in the context of the standardization mentioned earlier.87 For this discussion, it is worthwhile to consider an assertion that public international law can establish minimum procedural rules for setting the rules and standards.88 It is also maintained that public international law is offering procedural guidelines to standard setters. The existence of public international law, e.g., the WTO Agreement on Technical Barriers to Trade (“TBT”) in the standardization context, provides a guideline for the SSOs. It enables diverse soft law instruments to be generated within the scope of such a procedural rule.89 This emerging demarcation role again verifies the notion that public international law is not losing its importance. Here, it is actually collaborating with transnational laws. The demarcation can be expressed by the sovereignty exponents as “Sn is a proper superset of S0 [Sn ⊃ S0 ].” It implies that transnational laws need to be made within the scope of public international law.

Conclusion: Growing Importance of Public International Law So far, by looking into the IP filed, this research has shown that public international law is not losing its importance, even in the age of transnational law, at least in the field of IP. To the contrary, the study suggests that public international law can coordinate (1) harmonization of domestic laws, (2) internationalization of domestic conflict of law rules, (3) publicization of private international law, (4) provision of international jurisdiction both for States and private actors, and (5) demarcation of transnational laws. Table 10.2 shows the roles of public international law in coordinating its diverse collaboration works with the other categories of law. Notwithstanding the ever-increasing multijurisdictional IP disputes and soft laws to deal with transnational legal issues, public international law still plays an important role in the international community. In fact, the importance of its roles has been 84

Ibid. The Paris Convention and the Berne Convention in a sense predicted the emergence of transnational laws. But these foundational treaties of international IP system also stipulated that such transnational laws should be made compatible with each convention. 85 In other words, public international law decides on the metes and bounds of transnational laws whose boundary is inherently unclear. 86 One may label this role as the “anchoring effect” of public international law considering that its rules hinder transnational laws not to deviate too much from their mother law. 87 See supra II.A. 88 Herwig (2013). 89 Ibid.

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Table 10.2 Typology of the roles of public international law Type

Relationship

Examples

Harmonization [Sn ⊂ S1 ]

Public international law provides core elements which should be included in domestic laws

Harmonization of domestic IP Laws according to TRIPs, Paris Convention, etc.

Internationalization; Publicization; [S1 → Sn ]

Some domestic laws are HCCH; ALI proposal upgraded to public international law

Jurisdiction for the States [S1 XS’1 = Sn ]

Multiple State sovereignty forms public international law

Jurisdiction for private actors [S1 = Sn ]

Public international law forms a Unitary patent & UPC unitary patent & unified court system

Demarcation [Sn ⊃ S0 ]

Transnational laws need to be Agreements among small & made within the scope of public medium WTO member States international law

Legalization [S0 → Sn ]

Some transnational laws may be Not found yet upgraded to public international law

WTO TRIPs

Source Compiled by the author

growing, at least from observations of diverse public international laws in the field of IP. Due to the proliferation of soft laws regarding transnational issues, private lawyers are now also expected to provide advice on such issues for their business clients.90 Professional responsibilities of private lawyers should, of course, include such advice on non-binding rules, injury to reputation in the market, as well as many more. However, this new responsibility and changing role of private lawyers do not imply that they can now disregard the provision of advice on public international law issues. As transnational laws are flourishing today, public international laws are also developing. A further critical finding in this article is that the former needs the latter to sustain.

References Ademola A (2012) Complete international law. Oxford University Press, Oxford Aisling M (2018) Brexit and the unitary patent package: a further compromised future. J Law Technol Soc 15(2):175–208 Alf ROSS (1947) A textbook of international law: general part. Longmans, London Andreas B, Richard H, Geoffrey U (2004) Non-state actors and authority in the global system. Routledge, London

90

For details, see Regan & Hall, supra note 4.

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Andreas S, Guido P, Dorothée B (2006) Global rules and private actors-towards a new role of the transnational corporation in global governance. Bus Ethics Q 16:505–532 Berne Convention for the Protection of Literary and Artistic Works (1886) http://www.wipo.int/tre aties/en/text.jsp?file_id=283698 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) http://www. newyorkconvention.org/english Conway WH (2009) Understanding international law. Wiley-Blackwell Dan D (2005) How corporations govern: taking corporate power seriously in transnational regulation and governance. Harv Int Law 46:411 David JK (2010) Patent law harmonization: the time is now. Landslide 3(16) Detlev FV (1970) The multinational enterprise: a new challenge for transnational law. Harv Law Rev 83:739–792 European Patent Office (2014) How to apply for a European patent. http://www.epo.org/applying/ basics.html European Patent Office (2016) Unitary patent. http://www.epo.org/law-practice/unitary/unitary-pat ent.html European Patent Office (2016) Unitary patent & Unified Patent Court. http://www.epo.org/law-pra ctice/unitary.html Giuseppe M (2015) Why apple’s patent win against samsung is a loss for consumers and innovation. https://insidesources.com/why-apples-patent-win-against-samsung-is-a-lossfor-consumers-and-innovation. Accessed 20 Dec 2022 Gralf-Peter C, Moritz R (2009) Transnationalizing private Law–the public and the private dimensions of transnational commercial Law. German Law J 10:1341 Harold GM (1982) Extraterritorial jurisdiction at a crossroads: an intersection between public and private international law. Am J Int Law 76:280 Harold B (1994) World Law. Fordham Int Law J 18:1617–1619 Harri K, Tim S (2015) Softness in international instruments: the case of transnational corporations. Syracuse J Int Law Comm 42:367 HCCH (1955) Statute of the hague conference on private international law. http://www.hcch.net/ upload/conventions/txt01en.pdf HCCH (2005) Convention on choice of court agreements. http://www.hcch.net/upload/conventions/ txt37en.pdf Herwig CHH (2013) Dealing with trans-territorial executive rule-making. Missouri Law Rev 78:441 Jaemin L (2012) A clash between IT giants and the changing face of international Law: the samsung vs. apple litigation and its jurisdictional implications. J East Asia Int Law 5:117–142 John C, Amy L, Michael M, et al (2010) Global issues in intellectual property law. p 20 John R (2009) United States: patent law harmonization–a historical perspective. Mondaq. http:// www.mondaq.com/unitedStates/x/81474/Patent/Patent+Law+Harmonization+A+Historical+ Perspective Kalypso N, Gregory S (2005) Transnational mutual recognition regimes: governance without global government. Law Contemp Probl 68:263 Larry CB (2011) Private actors and public governance beyond the state: the multinational corporation, the financial stability board, and the global governance order. Indiana J Glob Legal Stud 18:751 Larry CB (2016) The emerging normative structures of transnational law: non-state enterprises in polycentric asymmetric global orders. http://papers.ssrn.com/abstract=2755324 Lawrence F (1996) Borders: on the emerging sociology of transnational law. Stanford J Int Law 32:66–70 Megan D, Benedict K (2013) Ersatz normativity or public law in global governance: the hard case of international prescriptions for national infrastructure regulation. Chinese J Int Law 14(1) Merriam-Webster’s Legal Definition (2016) http://www.merriam-webster.com

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Michael P (2013) Apple versus samsung: a patent war with few winners. https://www.newyorker. com/tech/annals-of-technology/apple-vs-samsung-a-patent-war-with-few-winners. Accessed 20 Dec 2022 Milton CR Jr, Kath H (2016) Lawyers in the shadow of the regulatory state: transnational governance on business and human rights. Fordham Law Rev 84:2002 Paul SB (2005) From international law to law and globalization. Columbia J Trans Law 43:487–492 Peer Z (2012) Defining the space of transnational law: legal theory, global governance, and legal pluralism. Trans Law Contemp Probl 21:305 Philip CJ (1956) Transnational law. Yale University Press, Yale Sung-Pil P (2014) Harmonizing public and private international law. J East Asia Int Law 7:351–378 Suzanne S (2003) The political economy of intellectual property treaties, berkeley program in law & economics: working paper series 1. http://escholarship.org/uc/item/9j50z2gz#page-2 The American Law Institute (2008) Intellectual property: principles governing jurisdiction, choice of law, and judgments in transnational disputes. https://wipolex-res.wipo.int/edocs/lexdocs/laws/ en/us/us218en-part2.pdf. Accessed 20 Dec 2022 Tim B (2011) Transnational governance as the layering of rules: intersections of public and private standards. Theoret Inq Law 12:517 von Bogdandy A (2008) Pluralism, direct effect, and the ultimate say: on the relationship between international and domestic constitutional law. Int J Const Law 6(3–4):397 WIPO MAG (2016) Francis Gurry on the challenges for multilateralism in the field of intellectual property (2016) http://www.wipo.int/wipo_magazine/en/2016/05/article_0001.html WIPO (1883) Paris convention for the protection of industrial property. https://wipolex.wipo.int/ en/text/288514 WIPO (1886) Berne Convention for the Protection of Literary and Artistic Works WIPO (2014) PCT-Applicant’s Guide–National Phase–National Chapter–EP. http://www.wipo.int/ pct/guide/en/gdvol2/annexes/ep.pdf World Intellectual Property Organization (1970). Patent Cooperation Treaty. http://www.wipo.int/ pct/en/texts/articles/atoc.htm WTO (2014a) Understanding on rules and procedures governing the settlement of disputes. http:// www.wto.org/english/docs_e/legal_e/28-dsu_e.htm#4 WTO (2014b) A unique contribution. https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_ e.htm.

Sung Pil Park Professor of Intellectual Property Law at the Korea Advanced Institute of Science and Technology (KAIST). LL.B./M.A. (Seoul N.U.), LL.M./J.S.D.(Northwestern). Attorneyat-Law (Michigan Bar). ORCID: https://orcid.org/0000-0002-7778-4814. The author may be contacted at: [email protected] / Address: Graduate School of Future Strategy, KAIST, 291 Daehak-ro, Yuseong-gu, Daejeon 34141 Korea. This chapter is based on “The Coordinating Role of Public International Law: Observations in the Field of Intellectual Property,” Journal of East Asia and International Law 9(2): 321-339.

Chapter 11

The Artificial Intelligence in International Law Young-Yik Rhim

and KyungBae Park

Abstract Law t reacts to the progression of scientific technology in the end. Though conservative, changes are beginning to take place due to Artificial Intelligence (AI). AI is automating conventional legal works, creating a new industry namely Legal Tech. This paper investigates the characteristics and flow of legal AI and computational law while focusing on the applicability of AI to international law. Mainly, the paper reviews three critical areas: dispute resolution, trial prediction, and machine translation, respectively. International law has different characteristics than domestic law applied in each country. Unlike domestic law, international law has not been aggregated from a pandect, and it is a still daunting task to draw any meaningful insights for further analysis due mainly to limited data (i.e., trial cases and precedents). Nevertheless, AI is already penetrating the legal ecology system, and international law would eventually accept the influx of such changes exhibiting greater force. Keywords International law · Artificial intelligence · Machine learning · Deep learning · Computational law · Legal tech · ODR · Trial prediction · Machine translation

This book chapter is reproduction of “The Applicability of Artificial Intelligence in International Law,” Journal of East Asia and International Law 12(1): 7-30 under the official permission of YIJUN Press Ltd. The websites cited in this article were last visited on January 5, 2023. Y.-Y. Rhim (B) · K. Park Intellicon Metalab, Seoul, Korea e-mail: [email protected] K. Park e-mail: [email protected] Y.-Y. Rhim Mass Communication and Public Relation, Konkuk University, Seoul, Korea Korean Association for Artificial Intelligence and Law, Seoul, Korea © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_11

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Introduction Machine learning and deep learning are the symbols of modern Artificial Intelligence (AI). They have become familiar to us after AlphaGo. However, its history dates back a very long time. The origin of Machine learning can be found in Artificial Neural Network (ANN) which emulates the human-neural networks. McCulloch and Pitts (1943)1 proposed the first mathematical model of the ANN. Using the McCulloch-Pitts model, Frank Rosenblatt (1957)2 invented the ANN -Algorithm (Perceptron). ANN and Perceptron created the concept of Machine Learning which is a methodology that is completely different from Rule-based AI. Machine learning is an application of AI that provides computer the ability to automatically learn from data without being explicitly programmed. AI methodology is largely classified into Rule-based and Learning-based (Machine learning). These two methodologies have advantages and disadvantages, respectively. In Machine Learning, there are various models3 other than ANN, but ANN is the representative algorithm. ANN created a concept called Machine Learning and gained attention for a long period. However, ANN could not develop significantly due to technical issues such as overfitting and lack of data and gradually collapsed after the 1990s. In the year 2000, the chronic issues of the neural network were resolved one by one by Geoffrey Hinton and others. In 2006, Geoffrey Hinton’s team published a monumental paper4 with the support of Canada. This paper revealed that the chronic issues of the ANN could be resolved through pre-training of data and marked a new milestone in the research on ANN. After this paper, the word, ‘Deep learning’ started to gain popularity. In 2012,5 the Hinton team won with an overwhelming performance at the ‘ImageNet Large Scale Visual Recognition Competition (ILSVRC),’ an image recognition competition. In 2016, AlphaGo made an appearance. Today, the era of AI based on deep learning was opening its doors again. AI is now transforming all industries and economic structures. Global IT companies such as Google, Facebook, Microsoft, and Amazon have all announced that the core technology of the future is AI and are investing a significant amount of money. AI is equivalent to the surviving technology of a nation and corporate. However, law reacts last to the progression of scientific technology in the end. Even in such a conservative world of law, things are fast changing due to AI. Actually, AI and computers began to transform conventional legal works. AI and Legal Tech have created a newly legal industry. Legal searching tools like Ross Intelligence6 are equipped with voice recognition and propose accurate legal materials with regard 1

McCulloch and Pitts (1943). Rosenblatt (1957). 3 For example, Regression, Decision Tree, Naive Bayes, Support Vector Machine, etc. 4 Hinton et al. (2006). 5 Krizhevsky et al. (2012). 6 ROSS Intelligence is a legal searching service that harnesses the power of AI to make legal research more insightful. 2

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to such questions. AI continuously creates new services such as intelligent search, contract analysis, trial prediction, and document automation. This research deals with the characteristics and flow of legal AI and computational law while focusing on how AI technology would apply to international law. This paper is composed of four parts, including Introduction and Conclusion. Part two will discuss Legal AI and Legal Tech. Part three will tackle highly topical questions on international law and AI.

Legal AI and Legal Tech Artificial Intelligence and Expert System The captivating terminology of AI was first used at the 1956 Dartmouth Conference and is widely known throughout the world. The historical Dartmouth Conference was participated by the geniuses of the time such as John McCarthy, Marvin Minsky, and Herbert Simon. There were various discussions on computer theory, machine intelligence, and natural language processing. After the Dartmouth Conference, a methodology called ‘Symbolic AI’ thrives significantly.7 With the 1956 Dartmouth Conference as a start, scholars predicted that AI similar to that of humans could be realized. However, contrary to the initial expectation, it was soon revealed that AI did not easily solve complex problems or real-world issues. This evidenced the fundamental limitations of Symbolic AI. As such, AI collapsed in vain and the first AI winter began in the early 1970s. The first AI era, referred to as the era of reasoning and search, let down the curtain and the methodology of using ‘knowledge’ itself developed. In the 1970s, the second AI boom unfolded. During this period, ‘Expert System’ equipped with knowledge comparable to that of a human expert became greatly popular. An Expert System is a program that answers questions or solves problems about a specific domain of knowledge, using logic and rules that are derived from the knowledge of human experts.8 In order to develop an Expert System, human experts have to reorganize specific professional knowledge and represent it as logic and rules (if–then rules). An expert system can be divided into two subsystems: the inference engine and the knowledge base. The knowledge base represents facts and rules. The inference engine applies the rules to the known facts to deduce new facts.9 The world’s first Expert System, ‘DENDRAL’ was introduced at the end of the 1960s.10 DENDRAL is capable of inferring the types of organic chemicals with 7

Symbolic approach refers to the research technique based on formal logic and symbol system in the field of inference, search, problem-solving and others. In plain language, it is an approach method that aims to solve the problems of the world through symbols and rules, just like mathematics. 8 Liao (2005). 9 Wong and Monaco (1995). 10 Lederberg (1964).

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a mass spectrum data of chemical substances and can be referred to as a sort of ‘AI-Chemist.’11 Since the advent of DENDRAL, the Expert System which infers by expressing knowledge in a specific area in a rule prospered significantly. For example, ‘MYCIN’ is the world’s first medical expert system developed in the 1970s by Bruce Buchanan of Stanford University, the US.12 This system diagnoses contagious blood diseases and prescribes appropriate antibiotics. Here, the related medical knowledge is expressed in over 600 rules.

Legal Expert System With the success of the medical expert system, there arose a movement to apply the expert system in another specialist area, namely ‘the law.’ In 1970, a paper on the technique of applying the expert system in law was published.13 This paper discussed how computer science would be applied in the work of attorneys and legal argumentation. In particular, this paper concluded that the physical, financial, and technical issues should be resolved in order to complete the legal expert system in detail.14 Since then, there has been continuous interest and research on AI and legal reasoning. In 1977, Thorne McCarty developed the first legal expert system called ‘TAXMAN.’15 This system materialized the algorithm which expressed the rule and concept of the Federal Tax Law in the US.16 The TAXMAN project was an extremely experimental attempt but exhibited good performance in legal reasoning. Afterward, Kevin Ashley begins to develop a Case-based System, imitating the inference process of a human attorney.17 Ashley completed the world’s first Case-based System called, ‘HYPO’ in 1987.18 After Ashley’s methodology, many legal expert systems were created. It was followed by ‘CHIRON’ (1991)19 for the tax law in the US, ‘LOGEEXPERT’ (1991)20 for National Housing Act in Quebec, Canada, and others. In particular, the ‘SHYSTER’ (1993)21 system, as an inference system for the field of intellectual property, developed by James Popple in Australia has been 11

Ibid. Shortliffe (1974); See also Shortliffe et al. (1975). 13 Buchanan and Headrick (1970). 14 Ibid. 15 McCarty (1977). 16 It enables users to execute the work such as calculating the corporate tax with regards to capital transactions through computer programs by saving the details of law related to corporate tax in US as algorithm in the computer program. 17 Case-Based System began from a research by Roger Schank from Yale University, US in the beginning of 1980s. It is the representative expert system methodology along with Rule-Based. 18 Rissland and Ashley (1987). 19 Sanders (1991). 20 Paquin et al. (1991). 21 Popple (1993). 12

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evaluated as the most successful model out of the Case-based system. Popple also presented a hybrid expert system called ‘SHYSTER-MYCIN’ (2003)22 by combining the Case-based SHYSTER and Rule-based medical system MYCIN. In spite of many researches after then, we have hardly seen an AI lawyer of an expert system. This is because the legal expert system did not exhibit the performance that was expected in reality. It did not just apply to law, but was also the same case in the expert systems in other fields. In an expert system, basically, humans have to represent or combine all rules from outside. However, such a process is bound to require unlimited time and cost. Especially when new knowledge has to be added or a rule has to be changed, it is extremely difficult to reflect it automatically. In the end, as critical disadvantages such as development cost and maladjustment to circumstances were revealed continuously, the popularity dropped. This was the second winter of AI in the 1990s. In today’s deep learning, the word ‘expert system’ is not widely used. However, the majority of AI is still created in the form of the classical expert system. Various expert systems such as Diagnosis System, Planning System, Configuration System, Decision Support System, Advising System, and Monitoring System exist.23

Computational Law The legal expert system studied previously was significant in the history of legal AI. It is because the computer was able to make legal reasoning by using legal knowledge. However, the concept and attempt on using law and computer science existed before the advent of the Expert System. The theoretical methodology of using a computer in law is called ‘Computational Law.’24 This terminology is used together with Legal Informatics, Legal AI, Jurimetrics, etc. Computational Law was named from the perspective of reasoning and algorithm but it is also called ‘Legal Informatics’ from the perspective of data analysis process or informatics.25 At first glance, AI and law look entirely different. In terms of inference structure or methodology for problem-solving, however, there are quite several common elements.26 In fact, in the legal area, the law itself is described in the form of rules and logic. Moreover, AI shares a similar structure in terms of taking after logical representations. Due to such similarities, the possibility of utilizing AI in the field of law began relatively earlier in the UK, the US, or the EU.

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O’callaghan et al. (2003). Thiessen et al. (2012). 24 Love and Genesereth (2005). 25 Legal informatics is considered as a super ordinate concept of the science of law but after Machine Learning-Based AI technology has been applied, there is no significance in categorizing these two. However, in case of biology, Bioinformatics and Computational Biology are used differently. 26 Carneiro (2014). 23

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As soon as the name AI appeared at the Dartmouth Conference, a surprising paper on computation method which converts law into formal logic was published by Layman Allen.27 Converting law into formal logic means that legal knowledge is converted for computers to process. Therefore, Allen’s research in fact provided mathematical structure and methodology for the realization of legal AI for the first time and it could be considered as a start of Computational Law. However, when the AI Revolution was reaching Europe from the US, a detailed and practical methodology with regard to legal AI was proposed.28 Lucien Mehl claimed that legal work had to be automated by actively introducing a computational methodology to law. He classified the legal automation methodology using the computer into two types: a search engine which would provide the legal researcher with both quick access to relevant case precedents and legal scholarship, and a question and answering (Q&A) system which would enable legal counseling.29 He predicted that if computers were actually applied to law based on these two concepts, the majority of the lawyer’s work could be automated and the future legal service would be innovated.30 Thanks to innovators like Layman Allen and Lucien Mehl, the law was finally able to encounter ‘computationalism’ relatively faster than other studies. The computation of law refers to the technique which formalizes legal structure and logic so that an automation algorithm or machine could execute legal reasoning. Computational Law, which started together with the history of AI materialized in detail in the form of an Expert System. Computational law which accompanied the rise and fall of ‘AI.’ It was combined with AI technology such as Machine Learning, Deep Learning, and Natural Language Processing for significant advancement and positioned itself into another field of study.31 Currently, the official lecture of AI is established in renowned US law schools. Based on such studies, legal AI and the Legal Tech industry keep developing in a virtuous cycle.

Legal Tech Legal AI is a terminology that includes legal expert systems and Computational Law which is a theoretical study. Legal AI can be examined in detail in an industry called ‘Legal Tech.’ Legal Tech is a compound word for ‘Legal + Technology.’ The most famous case in Legal Tech is ‘Ross Intelligence.’32 With a natural language 27

Allen (1957). Mehl (1958). 29 Ibid. 30 Ibid. 31 In 1987, International Conference on Artificial Intelligence and Law (ICAIL) was introduced. Through this international conference, scholars exchanged various information and computational law was disseminated not only in US but also around the world. 32 Addady (2016). 28

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processing-based legal search engine, Ross was developed using the IBM Watson API. On the other hand, ‘DoNotPay’ was introduced to the world of legal AI under the title, ‘World’s first robot lawyer’; it is a sort of legal Q&A ChatBot that offers legal advice with regard to parking violations.33 In addition, ‘LISA’ provides document automation services under the promotional phrase of ‘Robot lawyer.’ Whether convenient or not, the three abovementioned systems became known to the world in 2016 when AlphaGo appeared. Legal technology traditionally referred to the application of technology and software to help law firms with practice management, Legal technology traditionally referred to the application of technology and software to help law firms with practice management, document storage, billing, accounting, and e-discovery.34 The types of Legal Tech industry are as diverse as the work of lawyers. In the end, all the services with the nickname of AI lawyer can be considered as one of Legal Techs.35 In fact, the root of Legal Tech is extremely deep. The encounter of computers and the law itself is the beginning of Legal Tech; it visually appeared in the form of a legal search service. After the 1950s, the computer positioned itself as an essential tool for searching for documents or materials. In the legal area, as searching for precedents or legal documents is extremely important, the computer was applied earlier than other fields. In the 1960s, the Ohio Lawyer Association in the US already introduced the computer system to search for precedents.36 Since then, legal search services unfolded on a full scale in the private sector. ‘LexisNexis’ started the legal search service for the first time in the private sector and ‘Westlaw’ joined the search service business based on a massive database of legal documents. With these two companies almost dominating the legal search service, Legal Tech was not able to secure diversity in the industry of itself.37 In 2001, an online law firm called ‘LegalZoom’ began providing various legal services, it started to improve the problems of offline services and gain attention. The existing lawyers in the industry filed a lawsuit against LegalZoom for violation of the Attorney Law,38 but the court took the side of LegalZoom. Since then, LegalZoom has continued to apply new technologies in order to improvise the problems of online services. Now, it has become a brand that is more famous than large-scale law firms by securing millions of customers.39 In the US, the Discovery system was developed and based on ICT technology, and the automation industry of legal documents advanced early. In particular, in eDiscovery, a lot of legal costs is incurred from the work of analyzing the massive 33

Porter (2018). Hibnick (2014). 35 Gunst (2018). 36 Troy (1969). 37 Haggerty (2018). 38 Lawyers in the US claimed that LegalZoom which uses science technology to provide legal counseling to customers was “Unauthorized Practice of Law.” 39 See The Global Unicorn Club. In: CB Insights. https://www.cbinsights.com/research-unicorncompanies. 34

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amount of digital documents. John Kelly established the ‘BlackStone Discovery’ in 2003.40 This company is capable of analyzing documents of 1.5 million cases at 10 percent of the human lawyer cost. In 2009, ‘Lex Machina’ which is a Legal Tech company that applies statistics prediction technology to law appeared. Lex Machina, which started as a joint project by Stanford University’s Law School and the Department of Computer Engineering, provides statistics information by analyzing the US Federal Court’s Docket related to litigation and various litigation materials as well as various visual prediction materials.41 Legal Tech was able to root itself early in the US due to reasons such as high legal costs and e-discovery system. However, the explosive growth of Legal Tech is deeply related to the resurrection of AI. Machine Learning technology such as deep learning opened a new era of AI and affected all industries. and the Legal Tech field was not an exception, too. When Machine Learning technology and natural language processing technology penetrated law, completely different legal systems that were from the previous became possible. As can be seen from the advent of Ross, Legal Tech is becoming more intelligent with its application in simple automated legal services and furthermore in AI technology. By witnessing the rapid emergence of the Legal Tech industry, it helps us understand how legal AI has been developed.

International Law and Artificial Intelligence Dispute Resolution and Artificial Intelligence In the legal field, because AI can be utilized in the overall dispute resolution procedure, automation technology can easily be applied as Alternative Dispute Resolution (“ADR”) instead of litigation in court. In particular, there is a high possibility of applying AI technology in Online Dispute Resolution (“ODR”). Furthermore, AI can also be applied in arbitration or mediation. The ICT technology and AI which lay the foundation for ODR can be applied in international arbitration and other dispute settlement mechanism. The arbitration procedure is a sort of private trial for resolving the dispute in accordance with the procedure that has been agreed upon by both parties in advance. It usually involves the parties concerned appointing a lawyer, legal professor, or other specialists as an arbitrator to resolve the disputes when a 1-person or 3person arbitrators conduct a hearing, reaches a verdict, and assigns legally binding force in the court judgment.42 Such an arbitration system is widely utilized in businesses or international transactions such as construction fields where standardized 40

(May 17, 2019) Company Overview of Blackstone Discovery Inc., Bloomberg. Lex Machina was taken over by an American legal information company, ‘LexisNexis’ and is evaluated as the representative successful model of LegalTech. 42 Murray (2021). 41

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disputes often occur. The key to the arbitration procedure lies in the parties concerned reaching an agreement autonomously on the dispute resolution method so that the parties concerned can utilize AI by reaching an agreement in order to reduce dispute resolution expenses and time.

ODR and AI The ODR is an effective method of resolving a dispute with regard to the massive quantity of e-Commerce. The United Nations Commissions on International Trade Law (“UNCITRAL”) recognizes that the dispute resolution method under the conventional legal system is unable to provide appropriate or efficient resolution for e-Commerce disputes between countries. Therefore, as an alternative, it endeavors to establish an international ODR system for massive dispute that is small in terms of amount.43 The UNCITRAL established an ODR platform to handle disputes in international e-Commerce and commenced its operation. First, the operation of the platform started for ADR Institute (Jan. 9, 2016) and then, the operation commenced for consumers and businessmen (Feb. 15, 2016). National Arbitration Forum (NAF), Asian Domain Name Dispute Resolution Centre (ADNDRC), and American Arbitration Association (AAA) in which the authority for resolving disputes related to domain name (online) has been approved by the Internet Corporation for Assigned Names and Numbers (ICANN) provides official ODR, as well.44 Moreover, there are commercial ODR providers such as Modria, Cybersettle, and SmartSettle that offer online dispute resolution as their businesses. Amazon or eBay provides in-house ODR services, respectively.45 The possible AI in ODR is a conventional expert system like the Decision Support System. Also, the Negotiation Support System, Auto Counseling System, and others are widely used in practice. In case of the Decision Support System, it was utilized in the field of the Product Liability Act in 1980. At the time, the Rule-based Legal Decision-Making Systems (“LDS”) developed by Rand46 was used by legal experts to resolve problems in the litigation case of product liability.47 In the case of the Negotiation Support System based on the Decision Support System, extremely diverse programs have been developed and utilized such as Adjusted Winner, AniMed, AutoMed, Cybersettle, AssetDivider, Fair Outcomes, and Smartsettle. Among them, ‘Smartsettle’ of iCan Systems Inc. has been used relatively comprehensively. Smartsettle is an arbitration program with optimized algorithm, offering maximum profit to all parties concerned in the negotiation.48 43

UN General Assembly Resolution 65/17 (2011). Joo (2016) 45 Ibid. 46 In the early 1980s, Rand was a company that advised on risk assessment in damage case. The system was to investigate the effect of changes in legal doctrine on settlement strategies and practices. 47 Waterman and Peterson (1980). 48 Beyond Win–Win. https://www.smartsettle.com. 44

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Smartsettle can be utilized in small-sum claim, insurance and settlement of loan, family, company, regional community, government, development of water resources and a treaty on international peace. The advantage of Smartsettle is that it enables online negotiation, so that more efficient results can be obtained than face-to-face meetings and that prompt and fair agreement can be identified through early intervention. In addition, when the parties concerned in dispute are unable to meet due to a different schedule, negotiation can be done asynchronously, and multiple sessions of negotiation process can be constituted. Generally, it can be thus executed faster than the general arbitration process.49 The most successful system among many private ODR systems is the eBay Resolution Center.50 Presently, the Center handles more than 60 million cases in a year and a significant part is operated with an automated system. The eBay Resolution Center has been so designed that the parties concerned can exchange opinions and reach an agreement by themselves through a platform.51 The automated counseling system is not very different from the Decision Support System considering that it is utilized in online dispute resolution. One of the most recent automated counseling systems that is utilized in online dispute resolution is the ‘Solution Explorer’ provided pursuant to the Civil Resolution Tribunal Act in British Columbia, Canada.52 Solution Explorer started its beta test in January 2016 and provides automated counseling service on cases related to collective building with a program that is currently undergoing multiple tests.53 It provides information on the progress of problem resolution by analyzing the disputes based on the information inserted or selected by the disputing party and offering detailed information for its resolution prior to proceeding with the actual negotiation or conciliation.54

International Arbitration and AI The Expert System technology or AI technology that has appeared in ODR can be applied to international arbitration, as well.55 Considering the characteristics of international arbitration, the following scenarios can be possible. First is the selection of the arbitrator, which is one of the most important procedures in arbitration. Parties often ask what factors to consider and how to find information that may assist them in assessing a candidate for nomination to a Tribunal. AI can be useful in this process. Above all, AI prepares the arbitrator’s profile through a database or the Internet and then analyzes the detailed information of the arbitrator. Next, it selects the appropriate arbitrator for the relevant dispute and ranks them. AI 49

Kim (2016). Resolution Center. In: eBay. https://resolutioncenter.ebay.com. 51 Rule and Rogers (2011). 52 Solution Explorer. In: Civil Resolution Tribunal. https://civilresolutionbc.ca. 53 Ibid. 54 Kim. op. cit. 49. 55 Sim (2018). 50

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can judge the conflicting interests between the parties concerned and can recommend three optimal arbitrators in the end. Such a system could be based on Expert System or could be applied with data analytics.56 Second, AI can play the role of an arbitrator. According to the ‘UNCITRAL Model Law’57 which is an assisting institution of the UN that enacts the International Trade and Commercial Law, arbitration using AI is not impossible. In the 1958 New York Convention,58 there is no expression that the arbitrator must be a human. The arbitration by AI can be thus acknowledged.59 However, for the AI to act as a human arbitrator, a few risks exist. For example, an algorithm bias60 such as ‘gender,’ ‘age,’ and ‘race’ may exist in the AI system itself, so there may be a risk of reaching a conclusion preferable to a conglomerate or specific country in the process of arbitration. Also, the measures to guarantee the ‘due process’ of arbitration and ‘transparency’ of arbitration decision are currently uncertain. As a result, it is difficult for AI to replace human arbitrators in international disputes in terms of social and political context. Therefore, as of today, automated systems would be the measure in assisting or sub-serving the arbitration process. It would also be useful to compare the legal research, analysis, and arbitration result with that of the AI.61 Lastly, there is a prediction of the arbitration result. Securing sufficient data related to arbitration is essential in AI-based predictions. It is not easy to secure data in the majority of international arbitrations. Especially, in the case of international commercial arbitration, arbitration rulings are not even published. On the other hand, many unredacted awards can be found in arbitrations between investors and nations at International Center for Settlement of Investment Dispute (“ICSID”), Society of Maritime Arbitrators (SMA) and Court of Arbitration for Sport (“CAS”).62 With the growing need for the information included in the arbitration awards, a few organizations started to develop database, providing information related to arbitration.63 The representative database includes Arbitrator Intelligence,64 Dispute Resolution Data,65 and Global Arbitration Review Arbitrator Research Tool (“GAR 56

Hutson (2017). Art. 7 of UNCITRAL Model Law on International Commercial Arbitration 2006. 58 Art. V of Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention). 59 Art. II(2) of New York Convention. 60 Angwin et al. (2016); See also Caliskan et al. (2017). 61 Just like “ROSS” an Artificial Intelligence lawyer specializing in the Bankruptcy Law, all the analysis required for the final arbitration decision can be processed more efficiently. 62 Paisle and Sussma (2018). 63 Ibid. 64 It will make available responses to detailed surveys to be completed by arbitration users who will report on their experiences with specific arbitrators. Arbitrator Intelligence has also collected almost 1,400 arbitral awards from jurisdictions around the world, which it intends to make available in some form. 65 It collects arbitration-related data from critical sources including most of the major international arbitration institutions. 57

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ART”).66 Although the database above help to understand deeply the arbitration process, currently, analysis using AI is difficult in various aspects due to the hurdle in acquiring full unredacted awards and analyzing the principle in relation to arbitration.

Trial Prediction Trial Prediction67 refers to the technology of predicting the result of trials using computer algorithms and was introduced to the world with the nickname, AI Judge.68 Trial prediction relies on Machine Learning more than the conventional Expert System. In the US, researches on trial prediction using AI have taken place from a long time ago. However, unlike domestic law, international law does not have a single hierarchical normative system but covers comprehensive fields horizontally. So it would not be easy to predict a trial. Even if international law is restricted to a particular field, it would be challenging to apply Machine Learning due to the lack of related precedents or legal data.

AI and Trial Prediction A leading study on trial prediction is related to predicting the result of the US Supreme Court’s trial. The AI used for trial prediction is a conventional Machine Learning like a decision tree.69 In 2004, Andrew Martin and his colleague researchers adopted the decision tree technique to predict the result of the US Supreme Court cases.70 The justices and legal experts at the time were extremely skeptical about applying the technology to law. The research team, however, hosted a prediction contest (competition) and compared the predictions of legal experts and those of the algorithm. The result was a crushing defeat for the legal experts. The prediction of the legal experts stayed at 59 percent, while the result of the algorithm showed 75 percent prediction accuracy.71 Since then, the study of trial prediction on the US Supreme

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It provides information about individual arbitrators which includes individual arbitrator’s own responses as to their procedural preferences and practices as well as providing names of counsel who have appeared before the arbitrator and arbitrators with whom they have sat on an arbitration panel. 67 Trial Prediction or Predictive Trial refers to the set of efforts to predict a result of trial in advance which the author of this paper coined the terminology. 68 Vincent (2016). See also Aletras (2016). 69 Based on a few characteristics (input value, independent variable), this technique analyzes the pattern existing between the label (response value, dependent variable) value and identifies a combination of predictable rules. It is similar to Twenty Questions as it poses questions and narrows down the subject. 70 Martin et al. (2004). 71 Ibid.

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Court advanced further thanks to the efforts of Daniel Katz. In 2014, Katz developed an algorithm that could predict approximately 70 percent of the US Supreme Court cases through a project conducted by Michigan State University.72 In 2017, Katz team created a generalized methodology without a model specialized to individual Supreme Court Justice.73 Katz applied a random forest algorithm which is a Machine Learning technique that is more advanced than the initial decision tree. All the Supreme Court’s precedents between 1816 and 2015 were analyzed as learning data. The study by Andrew Martin and Daniel Katz demonstrates clearly that Machine Learning is effective in trial prediction.74 A recent notable point is the study of trial prediction by the European Court of Human Rights (ECHR). In 2016, a joint research team comprised of the University College London, the University of Sheffield and Pennsylvania State University developed an algorithm that predicts the ECHR trials.75 The performance showed approximately a 79 percent conformity rate with the ruling of the court above, reaching the same conclusion in 4 out of 5 cases proceeded by the ECHR.76 The joint research team used Machine Learning to learn the relevant data on ruling (584 cases) in relation to Articles 3 (Prohibition of torture and inhuman or degrading treatment and punishment), Article 6 (Right to a fair trial) and Article 8 (Right to respect for private and family life) of the European Convention for Human Rights. As for the detailed algorithm, it was an algorithm called Support Vector Machine (SVM) and not the existing decision tree.77 This study is significant in that it fully used the actual court materials instead of the subjective characteristics of the judge based on natural language processing.

The Possibility of Trial Prediction in International Law Trial prediction shown above was possible due to explicit norms and sufficient data. However, the norms of international law are rather abstract dealing with various areas. Also in international law, many treaties can be interpreted vaguely under political and cultural influence. Disputes between countries tend to be resolved amicably and secretly by a strong tradition in international customs. Therefore, international trials and authoritative rulings are not universal. There are specialized international law fields such as the law of the World Trade Organization (WTO) and international criminal law. However relevant rulings are still insufficient. According to the WTO, 529 disputes are recorded as of September 8, 2017. According to International Court of Justice (ICJ) records, there are 174

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Katz et al. (2014). Katz et al. (2017). 74 This sentence synthesizes the findings from the aforementioned research articles. 75 Aletras et al., op. cit. 68, at 20. 76 Ibid. 77 Cortes and Vapnik (1995). 73

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judicial precedents as of August 1, 2018, and the Former Yugoslavia War Tribunal has prosecuted 161 people and ruled approximately 100 verdicts.78 The data is too limited for learning international law-related judicial precedents using machine learning. Therefore, predicting trial results using machine learning in international-related issues is not an easy task. Recently, however, machine learning techniques using only a small amount of data are appearing continuously. For example, one-shot learning and transfer learning are useful. One-shot learning refers to the field of Meta-Learning (learning how to learn) where a model is required to quickly learn a new task from one or a very few numbers of training data (hence the name). Transfer learning is a machine learning method that focuses on storing knowledge gained while solving one problem and transferring it to a different but related problem (hence the name). Transfer learning is useful in the case of insufficient data for a new domain.79 If the method of the ECHR is used in unique international law fields such as the WTO, trial prediction is not necessarily impossible.

International Law and Machine Translation The field that needs AI desperately and realistically in international legal issues would be translation. English materials related to international law require translation work into the languages of each country. The translation is done in all international law materials. For instance, there would be treaties, international precedent materials, international conference materials, and others. Unlike other foreign language translations, critical legal problems would occur in the event of mistranslation in the field of international law. If the legal norms contained in the original text are not properly translated in the translation process, sanctions may be imposed on the recipient regardless of the intent of the sender. For this nature of legal texts, legal translations have the potential to cause a great deal of damage and loss to translators than any other translation. Therefore, a lot of workforce and expenses are required to reduce mistranslations. In international law, one could actively utilize Machine Translation (MT) technology using AI to resolve such issues.80 MT refers to the automated work of translating the source text into target text by using the computer. Studies on MT had already started in the initial stage of AI.81 MT had various problems such as the quality of translation. However, both the EU and the US used translation based on the MT system from a long time ago. The place that urgently needed MT was international institutions such as the UN and the 78

WTO, Dispute Settlement. https://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm. See also International Criminal Tribunal for the former Yugoslavia (ICTY), Infographic: ICTY Facts & Figures. http://www.icty.org/en/content/infographic-icty-facts-figures; ICTY Judgment List. http:// www.icty.org/en/cases/judgement-list. 79 Pan and Yang (2009). 80 Kennedy (2000). 81 Weaver (1955).

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European Commission.82 Even now, many international institutes use automated MT systems. Recently, Deep Learning began to be applied to MT and its performance enhanced rapidly. Therefore, MT will ultimately play a crucial role in bridging the international society.83

Flow of MT MT is largely classified into Rule-Based MT (RBMT) and Statistical MT (SMT). RBMT is a translation method of regularizing the grammar which was mostly used previously. As it translates based on grammar, it is highly accurate and professional per field. However, sentences that deviate from the grammatical rule is highly likely to be mistranslated.84 SMT builds the rule-based models on an immense amount of Bilingual Corpus by translating into word and phrase format respectively and combining them.85 The existing Google and others used a method called SMT or Phrase-based MT (PBMT).86 Recently, SMT is evolving into Neural MT (NMT) method. Researchers attempted to apply Deep Learning to improve the problems of the existing translation method. In 2016, Google unveiled the Deep Learning-Based NMT for the first time in the world.87 Neural MT brought innovation to MT.

Neutral MT The representative neural network that appears in NMT is Recurrent Neural Network (RNN).88 RNN is one of the deep learning algorithms which processes sequence data with time or order.89 Unlike general neural networks, RNN can use internal 82

EC Joint Commission commenced the development of auto language translation system called EUROTRA in 1976 to reduce the colossal work and labor cost arising from the different languages, executing translation in 81 directions among 9 languages. At first, it was for 7 EC member countries like UK, France, Germany, Italy, Denmark, Netherlands and Greece but later on, Portugal and Spain were added so the development of translation system for 9 languages began in 1982 and was completed in 1993. 83 Bahdanau et al. (2014). 84 Hutchins (1995). 85 Ibid. 86 The principle of such method is simple. First, various meanings of a word or phrase are saved. It creates the so-called translation dictionary. Next, if the user inserts a sentence, it is divided into words or phrases and proposes the translation result that is judged to be closest to the original meaning. 87 Wu et al. (2016). 88 Ibid. at 25. See also Chung et al. (2014); Mikolov et al. (2010). 89 Recently, LSTM (Long Short-Term Memory) which complements the disadvantages of early RNN is widely used.

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Fig. 11.1 Basic structure of NMT92

state (memory) to process sequences of inputs. For their internal memory, RNN is able to remember important things about the input it received, which enables it to be very precise in predicting what’s coming next. This is the reason why RNN is the preferred algorithm for sequential data like time series, speech, text, financial data, etc.90 RNN is able to create outputs in diverse forms by receiving the input.91 The basic structure of NMT is a connection of two RNN modules as seen below (Fig. 11.1). One is called an encoder and the other one is called a decoder. An encoder converts a source sentence into a ‘meaning’ vector which is passed through a decoder to produce a translation. You will feed an English sentence to encoder and feed the output state of encoder into the decoder. Then, the decoder will generate a French sentence. As can be seen from the figure below, the sentence, ‘Je suis etudiant’ can be produced from the word, ‘I am a student.’ Since the appearance of NMT, the performance of MT has enhanced remarkably. Recently, the attention model which focuses on an important part of input sentence in the decoding process was introduced and MT continues to evolve (Fig. 11.2).

International Law and Translation Problems In international law, translation problems are always bound to occur in countries that do not use English as the native language or the official language.93 In particular, 90

Zaremba et al. (2014). In particular, if the output has a sequence like the input data, it is called Sequence-to-Sequence (seq2seq) models. See generally Sutskever et al. (2014); Cho (2014). Seq2seq models have enjoyed great success in a variety of tasks such as machine translation (NMT), speech recognition, and text summarization. 92 Cho et al., ibid. 93 Bae and Bae (2009). 91

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Fig. 11.2 Modified architecture of the encoder-decoder in translation94

translation plays an extremely important role in treaty-making from the signing process to the stage where the final rules are specified. Mistranslation causes critical legal problems between countries. The Treaty of Waitangi is the most famous case of treaty mistranslation. The Treaty of Waitangi is a treaty signed on February 6, 1840, between representatives of the UK and Maori in order to stop armed conflicts on the Island of Waitangi, a northern island in New Zealand. The translation from English to Maori caused legal problems in this treaty. For example, as there was no word for sovereignty in Maori, ‘kawanatanga,’ a protolanguage of the Maori tribe was used. However, ‘kawana’ in ‘kawanatanga’ is just a word spelling out the English word ‘governor’ by pronunciation. When translated into English, it means governance rather than sovereignty. Due to these reasons, the Maori party claimed ‘All land belongs to us,’ while the British apprehended that ‘New Zealand is a colony of Great Britain.’ This mistranslation is causing severe controversy regarding the rights of Maori even to this day.95 The Waitangi Treaty case is just the tip of the iceberg. These types of errors are frequently occurring. In Korea, there are many mistranslations in treaties. Mistranslations have been found in the Korean version of the Comprehensive Economic Partnership Agreement (CEPA) between South Korea and India. Such mistranslations have also occurred in the Korean version of the Korea-EU FTA. In particular, the mistranslation in the Korean version of the Korea-US FTA led to legal issues.96 There was a verdict demanding the errata to be disclosed as follows: ‘If the amendment details caused by mistranslation in the agreement are announced objectively and transparently, conditions for social consensus regarding the Korea-US FTA could be created, leading to high public value.’97 Mistranslation of treaties is a risk factor in terms of international law that all countries potentially carry. The field of international law which concerns various countries with different languages essentially carries these risks. Therefore, machine translation based on Deep Learning can be considered as a way to reduce these risks.

94

Ibid. at 1409.1259. Laurie (2002). 96 See Chosunilbo Daily (2011). 97 The Korean version of Korea-US FTA and Korea-EU FTA are equivalent to the English version. As an equivalent text, there was discordance between the English and Korean version. This is, in fact, not mistranslation but is discordance in legal effect. Therefore, the translation of treaty has to be approached extremely carefully as it is not just a simple translation. 95

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Automated Legal Translation Collaboration System AI will probably be used in translating international law documents automatically and in interpreting simultaneously in international trials and arbitration. However, AI only acts as an assistant to human beings at the moment, as opposed to translating or interpreting completely on behalf of humans. Neural network translation needs vast learning data in the translation field. However, as international law does not have enough data, it is difficult to expect outstanding translation performance. Furthermore, as accurate translation is crucial in international law unlike other fields, the accuracy of machine translation needs to be further assured. A model in which human beings and machines collaborate is ideal in reality. The effect of this collaboration model would enhance the quality of translation by using AI as a tool for systemizing legal translation. Legal translation consists of three stages in general. In Stage 1, a professional translator carries out the translation and in Stage 2, the translation is proofread by a native speaker. In Stage 3, the translation is examined again by lawyers. Mistranslation is prevented and translation quality can be enhanced by repeating these stages. However, the problem in each stage is that proofreading has to be made in the upper stage, but reviewing legal issues and translating are different tasks. Thus, it is difficult to catch all the mistranslations. As such, it is extremely important to systemize the translation process by making full use of the computer. Computer-assisted Translation (CAT) is utilized frequently in general translation. CAT includes materials and references with regard to relevant fields, glossary research and analysis preparation, translation, editing, formatting, and proofreading.98 A revision procedure by a third party is required depending on the type of translation. Proofreading is not only required in the editing process but is also required in the final stage. Proofreading by a legal specialist is absolutely necessary for legal translation. In addition, it is also important to establish a system that is capable of objectifying the subjectivity of legal specialists when selecting the terminology. AI can intervene in all processes. The most straightforward way is combining the MT system with CAT. Thus, the initial translation begins with MT and its result is proofread by a translation specialist. In the intermediate stage, the legal specialist carries out the proofreading and then the translation specialist reviews it again. All these processes must take place in a collaboration method through the computer system. Finally, the legal specialist carries out the final proofreading which requires the collaboration between international and domestic law specialists. The editing process and translated words are all saved in the database. This data will be utilized again as the learning data for AI. Collaborated CAT combined with AI is expected to maximize the efficiency of legal translation.

98

Barrachina et al. (2009).

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Objectification of Legal Translation Evaluation Legal translation is the work of replacing the words and phrases of the original legal system with the corresponding expression with ‘fidelity to the source text (ST) being the first consideration.’99 Therefore, the standard of translation quality is achieving equivalence.100 This can be similar to the source-oriented approach which is a method of evaluating the quality of target text (TT) depending on the extent of deviation from the equivalence of ST.101 So far, the majority of legal translation evaluation that has taken place in Korea can be classified as having used ‘the source-oriented evaluation method’ which evaluates mistranslation based on the achievement of formal equivalence. For example, the discussion concerning legal translation quality evaluation that surfaced during the Korea-US FTA mistranslation event shows that equivalent attainment at the lexical level centered on legal terminology is used as the main criteria.102 However, the majority of legal translation that is done as part of the public translation initiative in Korea is not considered an authoritative translation. In other words, the translated material is considered only as an official translation that provides information or is used as a reference about the law. Therefore, evaluation centered on the receiver’s understanding is also important. Legal translation, just like general translation, requires ‘the Receiver-Oriented evaluation method’ which demands the text to be the basic unit instead of words.103 AI or computer can be used not only for doing the actual translation work but for evaluating the quality of existing translated materials. Bilingual Evaluation Understudy (BLEU) is a technique that measures the quality of machine translation objectively. BLEU was developed by IBM in 2002.104 As one of the quantitative indexes for measuring translation quality, BLEU measures the translation quality by determining how many words are in common between the translated sentence and the reference pool that has been selected by humans. BLEU method can be applied to Receiver-Oriented evaluation. However, a more precise evaluation system is required for treaty translation or the production of authoritative translation. For example, a hybrid evaluation system that reflects both lexical equivalence and legal semantic equivalence can be used. An automated evaluation collaboration system similar to the automated translation collaboration system is an example as well. As a result, it is essential to establish an objective evaluation system with regard to legal translation

99

Sarcevic (1997). Bae, Bae. op. cit. 94, at 28. 101 Williams and Chesterman (2002). 102 In 2011, the Ministry of Foreign Affairs and Trade revealed that as a result of inspecting the Korean copy of the Korea-EU FTA, there were more than 200 mistranslations. 296 errors in total, such as 166 cases of mistranslation, 9 cases of orthography, 25 cases of inconsistency, 13 errors in the indication of Proper Noun, were discovered, amended, and the revised agreement was disclosed. 103 Yoo (2017). 104 Papineni et al. (2002). 100

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for international law. Computers or AI must also be utilized actively for detecting translation errors.

Conclusion Globalization is an inevitable flow of contemporary human society. In the globalization process, various disputes occur in nations and companies as they become entangled beyond boundaries. In such disputes, international legal issues lay hidden fundamentally. In particular, international economic law is gaining a more important position gradually due to the expansion of transnational trade and investment. Disputes between countries are generally mediated by international law rather than international economics law. In international law, treaties and customary international law are important. Problems in international laws have been resolved based on conventional methods. Translating, interpreting, and applying treaties as well as customary international law are works that are all done by humans. Modern AI automates legal work, analyzes documents, and predicts trials. In the era of legal AI and Legal Tech, international law can benefit from the help of cuttingedge technology, as well. The translation of a treaty differs from the translation of general documents. Mistranslations lead to serious legal and political disputes. Therefore, Deep Learning-based MT and Collaboration AI systems with humans will play an influential role in international law. Besides, AI would be applied to the quality evaluation with regard to existing translated materials and the standardization work will become an international legal issue. We can think about applying ODR and AI in the field of international arbitration. It is not difficult to use the conventional expert system in international arbitration. However, replacing an arbitrator with AI is technically not easy. In the case of international disputes, particularly, the materials to be analyzed are immense so that AI is not expected to make decisions. However, we can imagine AI helping the appointment of an arbitrator. In the realm of law, predicting the result of trials is particularly important. AI that can predict trials by learning the precedent of the ECHR has appeared. Together, we can think about a system that can predict trials related to international law. However, the trial materials or data of the ICJ or the WTO are so poor that creating a Machine Learning-based Prediction System would not be very optimistic in the near future. Even in the case of international arbitration, it is difficult to secure the related materials. Therefore, to create an AI that can predict the arbitration result is difficult. However, new machine learning methods such as one-shot learning and transfer learning can be useful in the case of insufficient data. In the future, we could expect the advent of prediction algorithm in any degree if we prepare a standardized procedure and prepare data for learning. International law is different from domestic law. International law does not have rules centered on massive law books like domestic law. Furthermore, as the trial cases and precedents are not diverse, it is challenging to presume an analysis pattern.

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In practice, however, AI is innovating the legal ecology fundamentally. International law would eventually accept such changes. In the future, international law will be more important. When international law is closely affiliated with AI, it would exhibit greater force.

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Young-Yik Rhim Representative Lawyer and CEO of Intellicon Metalab; Adjunct Professor of Mass Communication and Public Relation at Konkuk University (Seoul, Korea); Member and Judge of ICAIL; Vice President of Korean Association for Artificial Intelligence and Law. ORCID: https://orcid.org/0000-0001-9252-4159. The author may be contacted at: ceo@intellicon. co.kr / Address: 554, Nonhyeon-ro, Gangnam-gu, Seoul, 06136, Republic of Korea. KyungBae Park Researcher at Intellicon Metalab. (Ph.D.) The author may be contacted at: kbp@ intellicon.co.kr.

Chapter 12

Revitalizing Anthropological Approaches in International Law: From International Law to Global Law Tikumporn Rodkhunmuang

Abstract Anthropological approaches in international law have been ignored for centuries. The main area of interest is to emphasize indigenous peoples and account for their vulnerabilities in the development of international law. However, shifting from the ideology behind the concept of international law to global law is a crucial debate, for example, global human rights law, global criminal law, global administrative law, global environmental law, global health law, and the law of global governance. This chapter officially considers revitalizing anthropological approaches for rethinking and relearning the international legal spaces. Moreover, it provides a comprehensive understanding of global legal pluralism in terms of the widely accepted current development of global legal thinking and pedagogies. Overall, this chapter provides an introduction to transforming the global concept of justice. Keywords Anthropological approach in international law · Global administrative law · Global environmental law · Cultural relativism

Introduction The landscape of international legal studies has crucially ignored the importance of anthropological approaches as a scientific methodology. Anthropologists have critically observed the initial compliance of anthropological studies in legal fields. However, legal relations initially have unique references to legal pluralism that is intended to spread from local practices and customs.1 The rapidly changing landscape

1

Loos (2018).

All the websites cited in this article were last accessed on January 30, 2023. T. Rodkhunmuang (B) Department of International Law, School of Law, Mae Fah Luang University, 333 M.1 Thasud, Muang, Chiang Rai 57100, Thailand e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_12

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of the Anthropocene in all dimensions of social and human sciences has led to crosscutting progressive development in the advancement of human rights and dignities.2 The crucial transformation of the critical approaches to recognizing international law is a vital angle, as it seeks decentralization from the main subject of international law, the so-called state-centric nature of the international legal system. Meanwhile, some anthropological approaches focus on the role of non-state actors, notably in the specific fields of international law of subalternity, international law of marginalized persons, international law of women, and international law of postcoloniality.3 This incorporation of ethnographic readings engages in international legal spaces by hybridizing and deconstructing the global legal order. Interestingly, the importance of anthropologically informed reading of international legal documents is related to, among other things, global health law, global human rights law, and global environmental law by advocating global legal pluralism at the same time.4 Nonetheless, this chapter considers reflexive anthropology to address the current development of the methodological and epistemological understanding of the increasing relationship between anthropology and postcolonial international law, that is, global law.5 Additionally, legal anthropology has established marginalized groups of human beings as units of legal analysis. For example, laws of Southeast Asia involving multicultural groups exist alongside various sets of religious beliefs.6 Initially, innovative research on the anthropological relationship of legal systems started during the period of colonization, in which modern laws were introduced in colonized countries. Emphasizing rules for governing marginalized persons, women, the laws of subalternity, and statelessness have been suggested as the core concepts of international human rights law.7 Geographical differences and diversity in East and South Asia have been historically studied from anthropological perspectives, such as local communities in Tibet in China, the rules of Zen Buddhism in Japan, the role of kinship in Korean society, and regulations addressing the complexities of ancient societies in Nepal, Bhutan, and India in South Asia.8 The universalization of international human rights law has had some limitations, for example, the so-called universalism within exceptionalism.9 Generally, the cultural approaches to anthropological studies are a necessary condition for restricting the universalism of international human rights law that excludes international human rights’ exceptionalism. The mainstream of anthropological studies

2

Allot (2000), Shelton (2010), Kotzé (2014). Rajagopal (2003), Anghie (2005), Anghie (2006), Chimni (2006), Pahuja (2011), Gathii (2011), Chimni (2012), Frisso (2019). 4 Gostin (2014), Burci and Toebes (2018), Percival et al. (2014), Berman (2012), Berman (2020), Tamanaha (2021). 5 Domingo (2011), Walker (2015), Calpaldo (2016). 6 Hooker (1978). 7 Goodale and Merry (2007), Goodale (2008), Goodale (2009), Goodale (2017). 8 Paik et al. (2013), Chesterman et al. (2019). 9 Pitts (2018), Acharya and Buzan (2019). 3

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is cultural relativism, which is the core element of legal studies from the perspective of anthropology. In this chapter, I would define the critical introduction to international legal studies from the anthropological point of view by proposing international legal ethnography as a core unit of contextual analysis. This introduction provides an illustration of anthropology in international legal studies. The following sections proceed as follows. The second section considers the role of culturalization of international law and beyond. The third section discusses how the shifting landscape of international law to global legal studies has created a new relationship with anthropological approaches through ethnographic multi-cited research approaches as a new tool for critical preliminary studies of the global legal order. The fourth section suggests global legal pluralism as an alternative resolution for including cultural anthropology in the widening and changing terrain of the global legal order. Critically speaking, the shifting and changing ideology of states as the main subject of international law in the new terrains of legal studies requires new approaches to bring global legal theories into local practices, particularly the emerging role of individuals as global actors.10 In brief, anthropological approaches to international law revitalize the human-centric nature of international legal studies away from state-centrism, while simultaneously shifting the forms, existence, and further philosophical levels to include all human beings as the real stakeholders in global legal pluralism.11

An Illustration of Anthropological Approaches in International Legal Studies The international legal dispatch of anthropological approaches initially empowers the system for protecting international human rights law. Inclusively, the development of the human rights-based international system has increased exponentially for all classical stakeholders, including the decentralization of state-centric and organization-centric characteristics of the global system and the devolution of humanity. The evolving role of the individual in the international legal system has drastically evolved, as observed by Andrew Clapham.12 Additionally, the work of Anne Peters has illustrated the significance of the increasing role of the individual from international legal history13 until the recent decentralization of global strategies, including the eco-human centeredness of new global strategies, such as the Sustainable Development Goals (SDGs).14 10

Parlett (2011), Peters (2016), Kjeldgaard-Pedersen (2018). Reus-Smith (2021). 12 Clapham (2010). 13 Op. cit. 10. 14 Kotzé and French (2018). 11

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With regard to humanity, international legal documents have followed instances of war, such as World Wars I and II. Moreover, the originality of international human rights laws was highlighted by documents with particular reference to marginalized groups, such as the International Convention on the Elimination of All Forms of Racial Discrimination,15 the Convention on the Elimination of All Forms of Discrimination against Women,16 the Convention on the Rights of the Child (CRC),17 the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families,18 the International Convention on the Rights of Persons with Disabilities,19 and the International Convention for the Protection of All Persons from Enforced Disappearance.20 From a historical point of view, international legal documents have rarely enforced states that should be protected and guaranteed the minimum requirements for humanity under international laws. Moreover, the first systematic engagement of anthropologists with international law made a considerable contribution to developing the relationship between anthropology and international law, as mentioned by Sally E. Merry.21 The huge expansion in academic output and a growing body of knowledge has crucially impacted the social science of anthropological theory. This work will help social scientists, global activists, and international lawyers to comprehensively understand the coproduction of international law and how it functions with global agendas.22 Inviting anthropologists to circumvent the international legal process yields innovative value-added for international law itself. Merry has also emphasized how international law works for small villages without state domination, the judiciary, and international legal authorities, which are the main focus of the classical domain of international law and anthropology.23 Academically, apart from the state-centric, global engagements between international law and culture as a process reorganizes the international legal relationship with villagers and the local customs, that is, village laws.24 Interestingly, the emerging forms of postcolonial international law have sufficiently deliberated subalternity 15

UN General Assembly, International Convention on the Elimination of All Forms of Racial Discrimination. U.N.T.S 660 (21 Dec 1965), p 195. 16 UN General Assembly, Convention on the Elimination of All Forms of Discrimination Against Women. U.N.T.S. 1249 (18 Dec 1979), p 13. 17 UN General Assembly, Convention on the Rights of the Child. U.N.T.S. 1577 (20 Nov 1989), p 3. 18 UN General Assembly, International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families. A/RES/45/158 (18 Dec 1990). 19 UN General Assembly, Convention on the Rights of Persons with Disabilities. A/RES/61/106 (24 January 2007). 20 UN General Assembly, International Convention for the Protection of All Persons from Enforced Disappearance. A/RES/47/133 (20 December 2006). 21 Merry (2006). 22 Merry (2014). 23 Op. cit. 21. 24 Falk (1998), Prieto-Ramos (2017).

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from Eurocentric international law, for instance, the international legal structure of the Convention on the Elimination of All Forms of Discrimination against Women. This involves the universalization of laws to protect women as subjects of domination, as crucially observed in the work toward constructing a global law of violence against women and the human rights system.25 This study highlights the importance of cultural legitimacy in implementing the quasi-international legal text combined with local cultures and legal consciousness.26 However, the essence of this international legal procedure for crucial monitoring by states is that states must apply gender sensitivity to most of the governance mechanisms.27 Learning by doing is a process, and states must respond to gender equality meticulously. In summary, the women’s rights regime has been articulated into new local practices in specific cultural systems.28 The international law on re-indigenizing peoples has coproduced and recovered colonizing history in which there is an alternative recovery of global memory. Using the language of human rights law, in particular with the law of self-determination, provides an indication of how to restore humanity by expressing cultural freedom and liberty.29 For example, the provocativeness of the international legal terrain is to realize the external right to self-determination, secession, and the proliferated implementation of internal self-determination to deliberate people’s political, social, and economic context following a democratically conditioned society.30 Moreover, the international legal project concerning the rights and duties of indigenous people commenced with the crucial work of Stephen Anaya, which elaborated normative setting as the element of self-determination, namely, cultural integrity.31 Anaya viewed and valued self-determination as a broader right of specific individual and collective rights regarding cultural integrity. The UNESCO Draft Declaration of Principles for the Defense of the Indigenous Nations and Peoples of the Western Hemisphere emphasizes cultural definition from an international legal declaration mentioning that “each culture has dignity and value which must be respected and preserved, every people have the right and duty to develop its culture” and also “in their wide variety and diversity, and in the reciprocal influence they exert on one another, all cultures form part of the common heritage belonging to all mankind.”32

25

Merry (2003). Ibid. 27 Ibid. 28 Ibid. 29 Schulte-Tenckhoff (2012). 30 Ibid. 31 Ananya (2005). 32 UN Educational, Scientific and Cultural Organization (UNESCO), Declaration on Fundamental Principles Concerning the Contribution of the Mass Media to Strengthening Peace and International Understanding, to the Promotion of Human Rights and to Countering Racialism, Apartheid and Incitement to War (28 Nov 1978). 26

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Various international legal norms, with particular reference to cultural integrity, have been established as a set of soft international laws, including the Draft Declaration of Principles for the Defense of the Indigenous Nations and Peoples of the Western Hemisphere 1981,33 the Declaration of Principles of Indigenous Rights 1985,34 the Declaration of Principles on the Rights of Indigenous Peoples 1987,35 the Convention Concerning Indigenous and Tribal Peoples in Independent Countries 1991,36 and the Draft United Nations Declaration on the Rights of Indigenous Peoples, 1994.37 Furthermore, the latest development of the United Nations Declaration on the Rights of Indigenous Peoples was promulgated by the United Nations in 2007.38 The classical anthropological views in the international legal terrain profoundly condition all the models referred to in the abovementioned documents. In brief, classical studies of the relationship between international legal anthropology have focused on analyzing and contextualizing the set of international legal instruments as inviting multiculturalism in terms of international legal realization and consciousness.39

Beyond the Culturalization of International Law The culturalization of globalism was coined by Peter Fitzpatrick,40 which illustrated the instantiation of globalism in terms of the legal ground by explaining human rights with the globalizing theory as the laws of globalism.41 His synthesis of the originality of the global law originated in the forms of lex mercatoria, and has impacted the contemporary international forms of the law of global governance.42

33

United Nations, Draft Declaration of Principles for the Defense of the Indigenous Nations and Peoples of the Western Hemisphere. U.N. Doc.E/CN.4/Sub.2/476/Add.5, Annex 4 (1981). 34 United Nations, Declaration of Principles of Indigenous Rights. U.N. Doc. E/CN.4/1985/22, Annex 2 (1985). 35 United Nations, Declaration of Principles on the Rights of Indigenous Peoples. U.N. Doc. E/CN.4/Sub2/1987/22, Annex 5 (1987). 36 International Labour Organization (ILO), Indigenous and Tribal Peoples Convention. C169 (27 Jun 1989). 37 United Nations, Draft United Nations Declaration on the Rights of Indigenous Peoples. U.N. Doc. E/CN.4/1995/2, E/CN.4/Sub.2/1994/59, 105 (1994). 38 UN General Assembly, United Nations Declaration on the Rights of Indigenous Peoples. A/RES/61/295 (2 Oct 2007). 39 Chiam et al. (2017). 40 Fitzpatrick (2001). 41 Ibid, pp 111–218. 42 Ibid, pp 203–206.

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Additionally, Fitzpatrick’s crucial argument on globalism is that the contending diversity of universalism following the main conceptual idea of cultural absolutism contains a static, authoritarian, traditional, exclusionary, closed, and inviolable community, in contrast to the human rights framework, which includes the transcultural concept and is integrated with liberalism, individualism, democracy, and progressive change.43 Thus, the culturalization of international law must go beyond the binary opposition of global cultures, such as democracy and authoritarianism, an ideology of the left versus right, and the North versus South divided for exploring alternative resolutions for solving the remaining global questions.44 Unfortunately, international law has been caught in traps since it created international legal modernity. Alternatively, the making of the new global legal culture is an identity of international legal anthropology; for example, the characteristics of international criminal law are the hybridization of the new global legal culture, which is a combination of common law and civil law.45 In addition to clarifying the hybridization of the global legal culture, the globalization of the liberalization of legal culture should be considered.46 In contrast to the culturalization of international law, however, various dimensions of the global justice system should be dealt with. Interestingly, international criminal law offers a better alternative for global justice and managing fairness in global crime cases following the principles of a fair trial and procedure.47 Addressing cultural integrity in international legal studies is a way not only to engage with international law as culture and process but also to explore the practice of non-state actors in creating and implementing the international legal order. For example, the increasing role of marginalized persons practically leads to the development of international human rights laws with special references to women, children, indigenous peoples, persons with disabilities, migrant workers and their families, and the subalternities.48 Nonetheless, the dynamics of the global culture, especially global economic culture flows at a time of increasing migration globally, have to be a point of focus, on the one hand.49 On the other hand, the work of Mark Goodale and Sally E. Merry indicates the translation of international human rights law into local practices. At the same time, the indicators show that differences in countries’ practices are based on geographical and cultural diversity. This is the anthropology of human rights.50

43

Ibid, pp 207–211. Fitzpatrick (2008), Xavier (2018). 45 Campbell (2013). 46 Menyhart (2003). 47 Delmas-Marty (2002), Zenker (2016). 48 Morawa (2003), Timmer et al. (2021). 49 Yasuaki (2017). 50 Op. cit. 8. 44

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As the paradigm shifts conceptualization from international to transnational law, the transforming actors are the crucial issues to be emphasized. Multinational corporations also have a vitally pseudo-subject of international law while implementing the role of transnational law in the global agenda.51 The rise and fall of the main international actors, such as states, have led to their dominance of the international arena for a century.52 At the current time of post-national space and post-national order, there is a lack of research on the regeneration of cultural legitimacy in the post-national world.53 At the same time, the fluctuating role of global governance is at a critical juncture.54 Global public goods or the “global commons” requires governance by the most potent international legal discourse for the common heritage of humankind.55 The spectrum of global public goods has an indefinite nature that sheds light on the ambiguity between the pure public and the benefit of the private.56 Moreover, in the age of the Anthropocene, international environmental law has been playing a leading role in changing the international legal order of the global climate crisis.57 For instance, the central role of humans in dynamizing the international law of climate change is crucial, such as transferring climate technology between the communities. This seems to transform the role of human beings into one of environmental concerns.58 The hybridization of corporations of humans and the environment is still the core of the international developmental discourse of our time.59 The increasing role of transnational civil movements or civil society has driven global issues better than the internationally authorizing states have.60 Crucially, the need for international, transnational, and global law recognizing this kind of global movement is at its weakest point, particularly in anthropo-legal studies. The anthropological approach to international development studies has already focused on the backlash of the global resistance to international law from below, or the grassroots movements, as evidence that international law functions irregularly.61 This means that international law in the classical sense cannot manage global predicaments intentionally. In summary, given the current global disorder from an international legal perspective, the global commons under the state-centric system have to be transformed into

51

Bekker et al. (2010), Jonge (2011), Boer (2019), Lusting (2020), Zumbansen (2020), Zumbansen (2021). 52 Koskenniemi (2001), Scott et al. (2020). 53 Krisch (2011), Krisch (2016). 54 Krisch (2014). 55 Morss (2007), Shaffer (2012), Kuo (2013). 56 Goldmann (2016). 57 Parks and Morgera (2019). 58 Cardesa-Salzmann and Cocciolo (2019). 59 Kotzé (2014a, b). 60 Woodward (2006), Frankenberg (2008). 61 Rajagopal (2005).

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real stakeholders in international law. However, it is difficult to change.62 The inclusion of anthropological methodology into the coproduction of international legal knowledge must be interdisciplinary, even if the culturalization of international law is a goal rather than a plan. Thus, reconceptualizing global law is a new tool for resolving global challenges by shifting the theoretical concept of the state-centric into a global-centric system.63 However, the anthropological methodology needs to be included in studies of the new global legal terminology.64 These anthropological approaches would help provide a comprehensive understanding of global legal studies and transform global disorder into an orderly world.65

The Relationship Between Anthropology and Global Legal Terrain Overview Global law is the progressive reflection of global legal structural transformation since the dawn of international legal history. Emerging fields of global law have been ignited in the light of legal space and time compression.66 Technically, global legal science is an igniting terrain of globalization and theorizing about law and the global community in a multicultural world.67 The anthropological approaches to global legal studies address legal pluralism as conditions, projects, and analytical categories, such as the contribution to a better understanding of international legal theory and practice by inviting richness and layered background of the methodologically groundbreaking approaches in global legal projects. It is assumed that a slight adaptation of legal terminology from international legal grammar to global legal language has been clearly defined to significantly impact the international legal process and has global implications.68 By definition, global laws have announced a new terrain of inclusiveness of global stakeholders and provided new characteristics of global laws.69 Notably, the significant characteristics of global law have countered globalization and the centralizing hegemony of global legal pluralism. Similar to the hegemonic hierarchy in global laws, the emergence of 62

Johns (2007). Karton (2012). 64 Husa (2007). 65 Alkoby (2010). 66 Backer (2012). 67 Amariles (2015). 68 Roth-Isigkeit et al. (2016), Law (2018). 69 Op. cit. 8; Domingo (2011). 63

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global administrative law governs the global agenda.70 It articulates social facts in the conceptualizing law and creates publicness in the global order. Assimilation of global administrative law is the root and derivative concept of global governance.71

Global Administrative Law Global administrative law is the concept of private partnership with the engagement of public institutions; the original concept came from international administrative law in the eighteenth century.72 Moreover, there are progressively advancing ideas from the Hartian approaches of legal positivism. The procedural concept of operationalization in global administrative law and global entities are likely to be juridically accountable for global governance.73 Moreover, global administrative law has been more influential in global governance, which has faced global contestation of legal regulations dominating the global challenges of public participation.74 Krisch sketched the pictures of the “pluralist global administrative law” and constructed mutual challenges in global regulatory governance that characterized the new global order.75 However, this view differs from the exclusiveness of anthropologically inviting global law. Furthermore, the simplification of global administrative law is categorized into five kinds: (1) functioning regulatory by private institutions; (2) rearranging by the hybridization between intergovernmental–private partnerships; (3) administrating by formal international organizations; (4) regulating by treaties and local administration or networking and also cooperative regimes; and (5) cooperating by transnational networks between national authorities.76 In addition to the common understanding, the subjects of global administrative law are not only states but also individuals, corporations, non-governmental organizations, and other collectives.77 In other words, it is widely accepted that most nonstates actors should be accepted as crucial global entities. Global legal spaces have been creatively and innovatively invented to foster legal implications.78 However, some global legal phenomena, such as global health laws, global environmental laws, global human rights laws, global criminal laws, and global comparative laws, have been built on inclusiveness in global laws.79 70

Kingsbury et al. (2005). Harlow (2006), Kingsbury (2009). 72 Kingsbury (2009). 73 Krisch (2006). 74 Dyzenhaus (2005). 75 Op. cit. 73. 76 Op. cit. 70. 77 Boisson de Chazournes (2009). 78 Frydman and Twining (2015). 79 Le Goff (2007), Goggin (2013). 71

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Global Health Law In the COVID-19 pandemic, global health law functions in accordance with the Constitution of the World Health Organization as well as global human rights instruments.80 It has protected the legitimacy of the highest attainable human health, both physically and mentally.81 At the same time, soft implementation during the global pandemic created too many obstacles for health management. However, the pandemic and increasing observance of the progressive development of the anthropology of health have contributed much more to the advancement of global health laws.82 As a result of the informal international law-making process, almost all the global policies at the time of the pandemic automatically concretize international legal instruments.83

Global Environmental Law In the age of global climate change, meanwhile, there is an increasing role for international environmental laws to deal with infringements during industrialization.84 However, this approach excludes humans’ vital role in the Anthropocene age.85 The eco-centric focus plays a crucial role in implementing international law on climate change; however, there is no such responsiveness to unpredictable global warming. Thus, global environmental law is emerging too quickly in response to the climate crisis with the new global strategies for the SDGs.86 Therefore, the global resolution strategies have created a new space for including environmental anthropology in resolving global problems.87

Global Human Rights Law By contrast, the proliferation of global human rights has strongly connected the world to more humanity through the expansion of global human rights language and the spreading of human rights practice from the global to the local and from the international to the domestic.88 Moreover, the global strategies of human rights defenders have located valued-added and increased awareness of human rights around the 80

Gostin (2014), Burci and Toebes (2018). Tobin (2012). 82 Grogan and Donald (2022). 83 Cowan and Mumford (2021). 84 Lord et al. (2012), Lin and Kysar (2020); Alogna et al. (2021). 85 Webster and Mai (2021), Cadman et al. (2021). 86 French and Kotzé (2018), Ebbesson and Hey (2022). 87 Atapattu (2004). 88 Law (2018). 81

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globe.89 Technically, the global mechanism to monitor the human rights agenda must be investigated and firmly established.90

Global Criminal Law In the age of transnational crime, global criminal law and procedure have creatively complied with the principle of complementarity to fill domestic gaps that lead to challenging global crimes, such as genocide, aggression, war crimes, and crimes against humanity.91 These crimes, however, do no cover the development of other crimes, such as femicide, ecocide, and the weaponization of artificial intelligence under international humanitarian law.92 However, the need to study anthropological dimensions in international law has been reconsidered and relearned to evaluate human capabilities. In this regard, an anthropological perspective on international criminal law is an alternative solution to give international responsibility to develop international criminal law in the existing global criminal law. It results from the contemporary discussion to redefine new crimes under the international criminal jurisdiction with individual criminal responsibility.

Global Comparative Law Comparative global law is a more cosmopolitan perspective that includes states, societies, and cultures from their historical orientation.93 In this sense, global comparative law is the legacy of the different implementations of international law from each country’s domestic policies. Global comparative law creates methodological pluralism, and offers a flexible way to redefine legal terminology.94

89

Wilson (1999). Goggin (2013). 91 Op. cit. 45. 92 Galliott et al. (2021), Custers and Fosch-Villaronga (2022) 93 Benda-Beckmann (2008). 94 Op. cit. 64. 90

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Changing Identities of Anthropological Approaches in Global Legal Pluralism This section aims to understand the context and modalities of global legal instruments and the adoption of soft and hard instruments and to trace their operation at all levels, from international to domestic and from locality to globality.95 Additionally, global legal pluralism is an approach to broadly envision the current global legal terrain. Global legal relations with global pluralism have gained extraordinary relevance for political anthropology, transforming the understanding of state law into laws with multiple jurisdictions.96 Moreover, global pluralism plays a role in the harmonization process of various legal systems in the contemporary world beyond the national legal system to cover the multilayers of legal systems, such as localism, regionalism, and globalism, in dispute settlement.97 Technically, the reconceptualization of global pluralism is not only based on legal grounds and applied to multilevel justice, but also looks at a factual basis.98 Global legal pluralism is the outcome of globalization99 to deal with inconsistencies in the fragmentation of international law, the proliferation of international actors, and the various norm-creating agencies.100 Moreover, contemporary international law is not assumed to set only standardization or “a singular global standard,” but also, from the practical aspects, needs transnational legal practices.101 In theory and practice, international legal practitioners should consider the anthropological approach for universalization and harmonization. Anthropologists have also suggested that the characteristics of existing global law already match judicial experience to develop the judiciary from the bottom.102 On the one hand, the emerging global economic culture is creating the idea of global law to deal with various international matters, the so-called lex mercatoria. At the same time, global legal pluralism can be regarded as a standalone emerging new legal field.103 This study argues that global legal pluralism has necessarily been combined with anthropology, effectively resulting in best practice. For instance, Franz von Benda-Beckmann illustrated the characterization of anthropology of law as a discipline related to law and fact as local knowledge.104 Moreover, anthropology flexibly figures a divergent way of transitory exchange using local language 95

Lindahl (2012). Frydman and Twining (2015). 97 Ibid. 98 Pogge (2005). 99 Op. cit. 79. 100 Ibid. 101 Op. cit. 63. 102 Ibid. 103 Op. cit. 79. 104 Op. cit. 93. 96

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and disagrees with rules and power.105 Thus, the methodological specialization of anthropology and law is the focus of this study because of its specific attention to the plurality and complexity related to actors. On the other hand, global legal pluralism metrics can be analyzed mathematically as a global analytical indicator connecting global law with legal pluralism. This device could constrain and measure the behavior of both individuals and institutions to become a model of global governance.106 Global indicators require relevant actors to play their part in the public and private sectors and to make decisions with evidencebased approaches.107 Alternatively, global law has expanded the legitimate transnational network and represented a very pluralistic combination of the various legal regimes.108 The basic requirements of global law are creativity and innovation, such as creative global regulations and innovative institutions.109 Similarly, global legal pluralism is increasingly essential in the backlash of international law and counter-hegemonic globalization, such as the alienation of international law, which is hugely different from domestic laws or local customs. Then, the alternative resolution is global legal pluralism that compromises cosmopolitan goals and normatively advances global human rights.110 Global social movements, particularly transnational civic society or coalitions, have also impacted international regulations and organizations, such as World Bank projects.111 However, the perception of global legal pluralism is a challenge. The role of the global civic movement is currently under debate. It further highlights the need for the international judiciary to be transparent. Despite the recent development of a global community from the institutional design between international law and relations, it has crucially ignored the current advancement of global legal order and affairs. Therefore, global legal pluralism plays a vital role in proposing a solution to the tension between global order, cultural diversity, and global justice.112 To accommodate cultural diversity and include cultural values, it maintains the circumstances of the well-ordered state system and relies on the forms of local cultures.113 This reflection includes inviting important anthropological aspects as a crucial consideration of the new global design and engages with the theoretical methodology. Collective action is the corpus concept that has generated the contemporary concept of the global legal order,114 which provides the origins of the global law of 105

Ibid. Op. cit. 67. 107 Ibid. 108 Perez (2003). 109 Ibid. 110 Rajagopal (2005). 111 Ibid. 112 Op. cit. 65. 113 Ibid. 114 Op. cit. 95. 106

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global governance. Importantly, global legal culture is needed for the rule of law.115 However, there are some limitations to the key strands that global legal history should be studied under the socio-legal viewpoint and vice versa, that is, so-called global legal politics.116

Concluding Remarks Revitalizing anthropological approaches in international law is creatively and innovatively developing a modern tool for international lawyers by redefining theoretical frameworks and analytical patterns to understand global legal challenges comprehensively. Even though subjects and methodologies directly matter for empirical legal studies, this new research design attunes legal practitioners to include anthropological angles in their consideration of global governance. This chapter showed that anthropological approaches aid understanding of multiculturalism, contextualization, and global institutions in a legal manner based on global values. It is both complex and challenging to relocate the human-centric perspective taken into account. It is difficult to identify who represents the global community even though state sovereignty is failing and individuality is rising. The answer lies in how to find significant roles and duties for the global community.117 A crucial discussion on global administrative law is related to the global legal discourse.118 The law of global governance is a new legal term in which the anthropological approach should be highlighted.119 It is the most outstanding contribution to global development and cooperation.120 The result is global norm-creating both formally and informally. With the changing patterns and essence of global legal politics into multilevel governance, a substantially transformed global legal order will become a new global legal movement.121 Global legal development has crucially illustrated that the core values of multilevel governance are vital to finding alternative solutions to global challenges.122 For example, global warming, transnational crimes, human rights violations, and global health pandemics must be seriously monitored.123 In this regard, it may be valuable to take global pluralism into account, and the inclusiveness of human beings also

115

Op. cit. 46. Benton (2019). 117 Larouche (2012). 118 Mitchell and Farnik (2009); Kuo (2012). 119 Halme-Tuomisaari (2016). 120 Chesterman (2008). 121 Negri (2005). 122 Köchler (2006). 123 Pitasi et al. (2018). 116

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necessarily advances global governance in legal considerations.124 If that could be achieved, global justice could be delivered.

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Jonge AD (2011) Transnational corporations and international law: accountability in the global business environment. Edward Elgar Karton J (2012) Global law: the spontaneous, gradual emergence of a new legal order. Tilburg Law Rev 17(2):276–284 Kim MSH (2021) Custom, law and monarchy: a legal history of early modern France. Oxford University Press Kingsbury B (2009) The concept of ‘law’ in global administrative law. Eur J Int Law 20(1):23–57 Kingsbury B, Krisch N, Stewart RB (2005) The emergence of global administrative law. Law Contemp Probl 68(3–4):15–61 Kjeldgaard-Pedersen A (2018) The international legal personality of the individual. Oxford University Press Köchler H (2006) The united nations organization and global power politics: the antagonism between power and law and the future of world order. Chin J Int Law 5(2):323–340 Koskenniemi M (2001) The gentle civilizer of nations: the rise and fall of international law 1870– 1960. Cambridge University Press Kotzé LJ (2014a) Human rights and the environment in the anthropocene. Anthropocene Rev 1(3):252–275 Kotzé LJ (2014b) Rethinking global environmental law and governance in the Anthropocene. J Energy Nat Resour Law 32(2):121–156 Kotzé LJ, French D (2018) The Anthropocentric ontology of international environmental law and the sustainable development goals: towards an eco-centric rule of law in the Anthropocene. Glob J Comp Law 7:5–36 Krisch N (2006) The pluralism of global administrative law. Eur J Int Law 17(1):247–278 Krisch N (2011) Who is afraid of radical pluralism? legal order and political stability in the postnational space. Ratio Juris 24(4):386–412 Krisch N (2014) The decay of consent: international law in an age of global public goods. Am J Int Law 108(1):1–40 Krisch N (2016) Pouvoir constituant and pouvoir irritant in the postnational order. Int J Const Law 14(3):657–679 Kuo MS (2012) Inter-public legality or post-public legitimacy? global governance and the curious case of global administrative law as a new paradigm of law. Int J Const Law 10(4):1050–1075 Kuo MS (2013) On the constitutional question in global governance: global administrative law and the conflicts-law approach in comparison. Glob Const 2(3):437–468 Larouche P (2012) A vision of global legal scholarship. Tilburg Law Rev 17(2):206–216 Law DS (2018) The global language of human rights: a computational linguistic analysis. Law Ethics Hum Rights 12(1):111–150 Custers B, Fosch-Villaronga E (eds) (2022) Law and artificial intelligence: regulating AI and applying AI in legal practice. Springer Law DS (2018) The global language of human rights: a computational linguistic analysis. Law Ethics Hum Rights 12(1):111–150 Le Goff P (2007) Global law: a legal phenomenon emerging from the process of globalization. Indiana J Glob Leg Stud 14(1):119–145 Lindahl H (2012) Legal order and the ‘globality’ of global law. Tilburg Law Rev 17(2):168–176 Loos T (2018) Subject Siam: family, law, and colonial modernity in Thailand. Cornell University Press Lord R, Goldberg S, Rajamani L (eds) (2012) Climate change liability: transnational law and practice. Cambridge University Press Lusting D (2020) Veiled power: international law and private corporation, 1886–1981. Oxford University Press Menyhart R (2003) Changing identities and changing law: possibilities for a global legal culture. Indiana J Glob Leg Stud 10(2):157–199 Merry SE (2003) Constructing a global law-violence against women and the human rights system. Law Soc Inq 28(4):941–977

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Merry SE (2006) Anthropology and international law. Annu Rev Anthropol 35:99–116 Merry SE (2014) Global legal pluralism and the temporality of soft law. J Leg Plur Unoff Law 46(1):108–122 Mitchell AD, Farnik J (2009) Global administrative law: can it bring global governance to account? Fed Law Rev 37(2):237–261 Morawa AHE (2003) Vulnerability as a concept of international human rights law. J Int Relat Dev 6(2):139–155 Morss JR (2007) Good global governance: custom, the cosmopolitan and international law. Int J Law Context 3(1):59–71 Negri A (2005) Postmodern global governance and the critical legal project (trans: Chryssostalis JH, Hanafin P). Law Crit 16:27–46 Pahuja S (2011) Decolonising international law: development, economic growth and the politics of universality. Oxford University Press Paik JH, Lee SW, Tan KYL (eds) (2013) Asian approaches to international law and the legacy of colonialism: The law of the sea, territorial disputes, and international dispute settlement. Routledge Cowan D, Mumford A (eds) (2021) Pandemic legalities: legal responses to COVID-19—justice and social responsibility. Bristol University Press Parks L, Morgera E (2019) Research note: reflections on methods from an interdisciplinary research project in global environmental law. Transnatl Environ Law 8(3):489–502 Parlett K (2011) The individual in the international legal system: continuity and change in international law. Cambridge University Press Percival RV, Lin J, Piermattei W (eds) (2014) Global environmental law at a crossroad. Edward Elgar Perez O (2003) Normativity creativity and global legal pluralism: reflections on the democratic critique of transnational law. Indiana J Glob Leg Stud 10(2):25–64 Peters A (2016) Beyond human rights: the legal status of the individual in international law (trans: Huston J). Cambridge University Press Pitasi A, Dib NB, Protolese G (2018) Legislative innovation. towards a global law. Making process: the case of global citizenship policy modelling. Int Rev Sociol 28(3):392–402 Pitts J (2018) Boundaries of the international: law and empire. Harvard University Press Pogge T (2005) Recognized and violated by international law: the human rights of the global poor. Leiden J Int Law 18(4):717–745 Prieto-Ramos F (2017) Global law as translated text: mapping institutional legal translation. Tilburg Law Rev 22:185–214 Rajagopal B (2003) International law from below: development. Cambridge University Press, Social movements and third world resistance Rajagopal B (2005) The role of law in counter-hegemonic globalization and global legal pluralism: lessons from the Narmada valley struggle in India. Leiden J Int Law 18(3):345–387 Reus-Smith C (2021) The end of global pluralism? Eur J Int Rel 27(4):1249–1273 Roth-Isigkeit D, Otten J, Avbelj M et al (eds) (2016) The grammar of global law. Goethe University Schulte-Tenckhoff I (2012) Treaties, peoplehood, and self-determination: understanding the language of indigenous rights. In: Pulitano E (ed) Indigenous rights in the age of the UN declaration. Cambridge University Press, pp 64–86 Scott KN, Claussen K, Côté CE et al (eds) (2020) Changing actors in international law. Brill Nijhoff Shaffer G (2012) International law and global public goods in a legal pluralist world. Eur J Int Law 23(3):669–693 Shelton D (2010) Human rights and the environment: substantive rights. In: Fitzmaurice M, Ong DM, Panos M (eds) Research handbook on international environmental law. Edward Elgar, pp 256–283 Tamanaha B (2021) Legal pluralism explained: history, theory. Oxford University Press, Consequences

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Ebbesson J, Hey E (eds) (2022) The cambridge handbook of the sustainable development goals and international law. Cambridge University Press Timmer A, Baumgärtel M, Kotzé LJ et al (2021) The potential and pitfalls of the vulnerability concept for human rights. Neth Q Hum Rights 39(3):190–197 Tobin J (2012) The right to health in international law. Oxford University Press Walker N (2015) Intimations of global law. Cambridge University Press Webster E, Mai L (eds) (2021) Transnational environmental law in the Anthropocene: reflections on the role of law in times of planetary change. Routledge Wilson RA (1999) Human rights, culture and context: anthropological perspectives. Zed Books Witteveen WJ (2012) Jurisprudence for global law? Tilburg Law Rev 17(2):217–221 Woodward BK (2006) Global civil society and international law in global governance: some contemporary issues. Int Community Law Rev 8(2):247–355 Xavier S (2018) Too heavy: beyond the global north and the justification for global administrative law. Indian J Int Law 57(3–4):337–356 Yasuaki O (2017) International law in a transcivilizational World. Cambridge University Press, pp 422–479 Zenker O (2016) Anthropology on trial: exploring the laws of anthropological expertise. Int J Law Context 12(3):293–311 Zumbansen P (ed) (2020) The many lives of transnational law: critical engagements with Jessup’s bold proposal. Cambridge University Press Zumbansen P (ed) (2021) The oxford handbook of transnational law. Oxford University Press

Tikumporn Rodkhunmuang Lecturer of International Law at Department of International Law, School of Law, Mae Fah Luang University. LL.B. (Chiang Mai U.), LL.M. (Chulalongkorn), LL.M. (Tsinghua). Address: School of Law, Mae Fah Luang University, 333 M.1, Thasud, Muang, Chiang Rai, 57100, Thailand.

Chapter 13

Lost Opportunities in the CPTPP Dispute Settlement Mechanism: Lessons for Future FTAs Rajesh Sharma

Abstract For states Party to the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) negotiation seems a bit of an opportunity missed, for not taking the appropriate lead in including innovative and specific procedures for state-to-state dispute settlement. Even during the bilateral FTA negotiation minimal time and effort are generally spent on this part of the FTA negotiation. It was generally discussed within “rules” negotiation. The lack of attention on dispute settlement procedures for state-to-state disputes during any FTA negotiations has created stagnation. CPTPP is not untouched by such inertia. Despite the long and secretive negotiations, state-to-state dispute settlement did not take the center stage as the focus of the discussions, at least outside, was mainly centered on the investor–state dispute resolution system. Therefore, one can surmise that CPTPP exemplifies yet another lost opportunity in the development of dispute settlement procedures, which could better shape this system for the future or at least, serve as an example for other FTAs. Keywords State-to-state dispute resolution · CPTPP · FTAs · Resolution of trade disputes among states · Investor-state dispute settlement

Introduction Within the contemporary framework of trade liberalization and increased international cooperation, state-to-state dispute settlement mechanisms (DSMs) are a significant and regular feature. DSMs ought to be specifically delineated within any trade agreement that takes care of unnecessary and prolonged bureaucratic negotiations

All the websites cited in this article were last visited on January 30, 2023. R. Sharma (B) RMIT University, 411 Swanston Street, Melbourne, VIC 3000, Australia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_13

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just to tease out the rule-based dispute settlement processes. Learning from the longdrawn and still evolving WTO measures for trade disputes ought at least to arm trading states with foresight to anticipate potential disputes. However, for states Party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) negotiation and signing of the CPTPP seems a bit of an opportunity missed, for not taking the appropriate lead in including innovative and specific procedures for state-to-state dispute settlement. Despite the long and secretive negotiations on (TPP) before the Parties put their signatures in Wellington, New Zealand in October 2015,1 state-to-state dispute settlement did not take the center stage as the focus of the discussions, at least outside, was mainly centered on investor-state dispute settlement (ISDS).2 Even before the release of the official text of TPP,3 discussions and criticism had started circulating premised on parts of the text that had been leaked. It seems that there was no such enthusiasm for providing inputs for the state-to-state dispute resolution system of TPP.4 During the public consultation process, for example in Australia, few suggestions were received on ISDS but none on the state-to-state dispute resolution system.5 Even after the official text was released the situation remained the same. The Australian government, however, has devoted one section on dispute settlement under TPP in its summary published on its website.6 Unfortunately this document rather than discussing specific rules or guidelines on the state-to-state dispute settlement mechanism makes a reference in giving a very basic idea about the state-to-state dispute in a layman’s language that does not do justice to the nature and scale of the TPP agreement. Though there is no negotiation history available, it is safe to assume that not adequate time and resources were spent on state-to-state dispute settlement procedures. Even during the bilateral FTA negotiation minimal time and effort is generally spent on this part of the FTA negotiation. Where this topic was considered, it was generally discussed within “rules” negotiation, which covered many other items.7 The lack of attention to dispute settlement procedures during any FTA negotiations has created stagnation and not allowed innovations in such procedures. TPP is not 1

The Trans-Pacific Partnership Agreement was signed on 4 February 2016 in Wellington, New Zealand. 2 Julien (2016), Feldman (2016), Muir et al. (2015), Chaisse (2015), Mercurio (2014). 3 CPTPP has incorporated the text of TPP, therefore in this chapter TPP and CPTPP will be used interchangeably. https://www.iilj.org/wp-content/uploads/2018/03/CPTPP-consolidated.pdf. 4 Mitchell and Munro (2013), Hillman (2016). 5 All the submissions related to TPP may be found at the Department of Foreign Affairs and Trade website. http://dfat.gov.au/trade/agreements/tpp/negotiations/Pages/submissions.aspx. 6 See Chapter Summary: Dispute Settlement. http://dfat.gov.au/trade/agreements/tpp/summaries/ Documents/dispute-settlement.PDF. 7 For example, China-Chile FTA was concluded only in 5 rounds of negotiations over a period of one year, China-Peru FTA also took similar rounds of negotiation in the same period, China-New Zealand FTA consumed 14 rounds of negotiations and the very recent China-Australia FTA took 21 rounds of negotiations. For details of FTA negotiations of Asian countries see Sharma R (2015) Dispute Settlement Mechanism in the FTAs of Asia. Wolters Kluwer.

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untouched by such inertia. CPTPP, to some extent, has clarified and elaborated a few aspects of the state-to-state dispute settlement mechanism which the TPP text left unclarified and vague. However, even that extra little effort cannot be said as remarkable as one was expecting from this mega FTA. Therefore, one can surmise that CPTPP exemplifies yet another lost opportunity in the development of dispute settlement procedures, which could better shape this system for the future or at least, serve as an example for other FTAs. This paper will first present the salient features of the CPTPP dispute settlement procedure for state-to-state disputes. While describing the salient features it will also compare and contrast CPTPP members’ own approach toward other FTA partners whether that partner is a member of CPTPP or not. At the same time, this paper will evaluate the provisions of the CPTPP dispute settlement procedure and make suggestions to make the system more effective, efficient and practical, in general, to highlight the lost opportunities for CPTPP.

Cooperation At an outset, CPTPP emphasizes that “Cooperation” is the basic norm for resolving disputes. Through cooperation, it envisages that parties will reach “a mutually satisfactory resolution” of any matter that might affect the operation of the CPTPP Agreement. Moreover, it is obligated to Parties to “endeavor” to agree on “interpretation and application” of the CPTPP Agreement and such endeavors must be made “at all times.”8 If examining the Australian approach with its FTA partners, only two among eight partners have agreed to use cooperation as the first port of call for dispute resolution.9 Even in those cases none of the FTAs includes the requirement of “all times.” Another striking feature is that none of those provisions of Australian FTAs have included “consultation” within the cooperation provision. In comparison, the introductory premise of the CPTPP dispute settlement mechanism requires Parties to make every attempt through “cooperation” and “consultation.” This provision of CPTPP is confusing because consultation is already a recognized means and forms the very first stage of dispute settlement in CPTPP. Consequently, an untenable situation may potentially arise if a Party does not cooperate. Would that give rise to another cause of action? CPTPP is silent on these points. Drafters of CPTPP could have gone one step further to explain the consequence of the violation of Cooperation provision or indicated the status of the “Cooperation” within the context of the state-to-state dispute settlement mechanism which has not been clarified since the NAFTA Agreement.10 8

CPTPP Dispute Settlement, art. 28.2. Australia-China FTA and Australia-South Korea FTA have “cooperation” in their respective dispute settlement mechanism for State-to-State disputes. 10 NAFTA, Article 2003 states: “The Parties shall at all times endeavor to agree on the interpretation and application of this agreement, and shall make every attempt through cooperation and 9

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Choice of Forum CPTPP dispute settlement mechanism provides an opportunity to the complaining Party to choose the forum of dispute settlement if a dispute falls within the CPTPP and other international trade agreements including the WTO agreement.11 However, once the complainant makes the choice then the other forum will be excluded completely. Such choice of forum is decided on the basis of a particular trade agreement, which the complaining Party has invoked by requesting for the establishment of a panel or other tribunal.12 Therefore, whichever agreement is used to request for the establishment of a panel or a tribunal, that panel will be the forum for that dispute resolution. In this regard, the CPTPP dispute resolution system has not shown any innovation rather it has followed the standard approach. The overlapping jurisdiction of WTO and any other FTAs has always been a topic of conflict and debate and the CPTPP dispute resolution system has not mitigated that discussion or shown any innovation in this regard.13

Consultation If any Party considers that an actual or proposed measure of another Party is or would be inconsistent with an obligation of CPTPP Agreement,14 or there is a dispute with regard to the interpretation or application of CPTPP Agreement,15 or another Party has failed to carry out an obligation under CPTPP Agreement16 or if the complaining Party considers that certain benefits accrued under some designated chapters of CPTPP Agreement are being nullified or impaired by the inconsistent measures of another Party,17 then it can send the request of consultation to the other

consultations to arrive at a mutually satisfactory resolution of any matter that might affect its operation.” 11 CPTPP Dispute Settlement, art. 28.4.1. 12 Ibid. art. 28.4.2. 13 For details on the overlapping jurisdiction of WTO and FTAs, see Appelton AE (2012) Forum Selection in Trade Litigation. ICTSD Background Paper 2:1; A Handbook on the WTO Dispute Settlement System (2004); Kwak K, Marceau G (2002) Overlaps and Conflicts of Jurisdiction Between the WTO and RTAs. Paper presented at the Conference on Regional Trade Agreements, WTO (2002). 14 CPTPP Dispute Settlement, art. 28.3.1.b. 15 Ibid. art. 28.3.1.a. 16 Ibid. art. 28.3.1.b. 17 Ibid. art. 28.3.1.c. The Chapters which are identified for this purpose are Chap. 2 (National Treatment and Market Access for Goods), Chap. 3 (Rules of Origin and Origin Procedures), Chap. 4 (Textile and Apparel Goods), Chap. 5 (Customs Administration and Trade Facilitation), Chap. 8 (Technical Barriers to Trade), Chap. 10 (Cross-Border Trade in Services), and Chap. 15 (Government Procurement).

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Party.18 The request for consultation should be in writing and it should identify the impugned measures and other issues in dispute, the legal basis for the complaint and the reasons for such request.19 CPTPP dispute settlement mechanism allows initiating consultation against a proposed impugned measure as well which is quite different from other FTAs.20 This is something new in the CPTPP dispute settlement mechanism as compared to other FTAs. In the case of proposed measures, CPTPP makes it mandatory for the parties to make every effort to request consultation within 60 days of the date of publication of the proposed measure.21 However, such a request for consultation is without prejudice to the right to make request for consultation at any time as it is done in any other cases.22 After receiving the request for consultation, the other Party is required to respond to the requesting Party within 7 days of the receipt of the request for consultation. The time period prescribed here may be changed with the consent of the Parties. If the other Party does not respond, then it is deemed that the other Party has received the request for consultation seven days after the date on which the Party making the request transmitted that request. CPTPP dispute settlement has not clarified a gap that may potentially arise in a situation when the other Party does not respond to the request for consultations or does not engage in consultations. Though the use of word “shall” indicates that the responding Party is obligated to take part in consultations but it falls short of guiding the complaining Party about any recourse available thereafter.23 It will be unfair to the complaining Party, which will have no recourse unless the other Party engages in consultations. It is compounded by the fact that the CPTPP dispute settlement mechanism provides for a shorter period of time for perishable goods as compared to the general conditions.24 It will be frustrating for the complaining Party, a failure to the system to some extent if it has to wait till the expiration of the consultation period before initiating the panel process. Moreover, it is a glaring example of the violation of the cooperation provision as envisioned in the dispute settlement mechanism of CPTPP. 18

CTPP Dispute Settlement, art. 28.5.1. Ibid. art. 28.5.1. The request of consultation is circulated to all members of CPTPP Agreement through their Contact Points. 20 Ibid. art. 28.5.1. 21 Ibid. art. 28.5.1, footnote 1. 22 Ibid. 23 CTPP Dispute Settlement, art. 28.5.2 reads: “The Party to which a request for consultations is made shall … reply …” Further article 28.5.4 says “… they shall enter into consultations ….” However, there is no indication as to what a complaining Party should do if the other Party does not heed to its request for consultations or take part in consultations. 24 In general, for perishable goods, the time period is half of the time period prescribed for the normal situations. For example, in Article 28.5.4, a time period of 15 days has been prescribed which is half of the time period for the normal conditions. Similarly, in Article 28.7.1, for perishable goods a time period of 30 days has been assigned which is again half of the time period for the general conditions. 19

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Panel Process Like any other FTA, CPTPP dispute settlement system has a panel process to resolve disputes between the disputing Parties. The panel process can be initiated by the complaining Party upon failure of the consultation process in reaching any resolution within the prescribed time frame.25 A party that requested consultation might initiate the panel process by sending a written notice addressed to the responding Party.26 The panel is then established upon delivery of the written notice of such a request.27 The written request for the establishment of a panel includes the identification of a measure or other matters at issue and includes a summary of the legal basis of the complainant sufficient enough to present the problem clearly.28 The content of the request for the establishment of a panel is mostly similar to that of the request for consultations. The former requires a “brief summary” of the legal basis, while the latter only requires an “indication” of the legal basis for the complaint.29 The most striking difference between consultations and the panel process is that Parties are allowed to initiate consultations when a “proposed measure” is an issue. However, the same proposed measure cannot be a ground for the initiation of the panel process after the failure of consultations. In practice, it makes sense as a proposed measure is not the “measure” in a technical sense which may be subject to a “dispute” or becomes a determinable issue for the Panel to make a final determination. Therefore, the CPTPP dispute settlement system clearly states: “A panel shall not be established to review a proposed measure.”30 While the same proposed measure may become a subject matter of consultations. By including “proposed measure” in the consultations process, CPTPP dispute settlement has shown innovation. By using a traditional approach to panel process, however, the same innovation did not go any further. In this regard, CPTPP dispute settlement mechanism lost the opportunity to take the lead. Following the example of ICJ process, CPTPP could have proposed that a panel may give an “advisory opinion” on the “proposed measure” particularly when consultation Parties had different views. This advisory opinion may also become relevant if a measure is put in place, but its operation has not started yet. For example, an advisory opinion may be adopted when a statute has been passed by the Parliament, but it would be effective in six 25

Parties have 60 days’ time in general and 30 days’ time in the case of perishable goods for consultations. The counting of time period starts from the date of the receipt of the request for the consultation. In addition to that, disputing Parties may agree on a different time period of consultations and if they do so then they need to wait until the expiry of agreed time period to initiate panel process. See CTPP Dispute Settlement, art. 28.7.1. 26 CTPP Dispute Settlement, art. 28.7.1. The copy of the same request must also be circulated to all Parties to CTPP at the same time as per art. 28.7.2. 27 Ibid. art. 28.7.4. 28 Ibid. art. 28.7.3. 29 See CTPP Dispute Settlement, art. 28.7.3 and CTPP Dispute Settlement, art. 28.5.1. 30 CTPP Dispute Settlement, art. 28.7.7.

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months or one year thereafter. In that situation, the panel could give its “advance ruling” or “advisory opinion” on that measure which would put all controversies relating to that measure in the future at rest. Otherwise, the proposed measure, which is once discussed at earlier consultations may come up again for future consultations when the same measure no longer remains a “proposed” measure i.e., becomes effective or operational.

Consolidation of Panel and Dispute Though consolidation of the panel is allowed in CPTPP dispute settlement, the current CPTPP Agreement has fallen short of taking it to a logical or practical conclusion. In CPTPP, consolidation of the panel may happen only when the first panel is already established. If another Party requests to establish a panel on the same matter on which a panel has already been established, it is then proposed that a single panel should be established wherever it is feasible.31 For the consolidation of panel to be feasible, the timing or conclusion of two consultations must happen at the same or within close proximity. So, the establishment of a panel in one case should have finished or close to finished when the request for a new panel is made. Following the experience from international commercial arbitration, CPTPP dispute settlement mechanism should have provided guidelines and conditions of “whenever it is feasible” for consolidation.32 The consolidation process, at present, may be abused and multiple proceedings on the same issue may arise in the current CPTPP dispute settlement mechanism, which may lead to conflicting decisions. In order to avoid such situations, CPTPP dispute settlement could have provided some safeguard mechanism. For example, when a request for the establishment of a panel has already been issued in one case and a consequent request for consultation is filed by another party on the same issue, consultations on the same issue could be stopped and Parties ask to join the panel proceeding if they are serious and ready to resolve finally. Possible abuse of the system may arise in a situation when a party joins in one panel proceeding as a “third party” and at the same time also commences a consultation on the same issue. However, CPTPP dispute settlement proceedings do not prescribe any rule to deal with this situation. Another significantly conflicting situation arises when the responding Party agrees to engage in consultations with the other complaining Party in the second consultation and in the end reaches some agreement with the other Party. Simultaneously, the responding Party still continues with the panel proceeding in the first case. In the case when the issues are the same the respondent, the Party may force a different solution with different complainant Party at a different stage of the dispute settlement

31 32

Ibid. art. 28.7.6. See, e.g., Singapore International Arbitration Centre Rules-2016, Rules 6 & 8.

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proceedings in the CPTPP dispute settlement mechanism instead of assisting and cooperating in resolving the same dispute with different Parties. In order to take advantage of the loophole in the CPTPP system, the second complainant may delay the request for consultation, so that the first panel would already be established and hearings commenced. In such a situation, the consolidation will not be feasible as the second complainant may have to repeat its case and the panel has to re-hear the case. Yet another possible conflict may arise where the second complaining Party demands to exercise its right to appoint a panelist in accordance with the CPTPP dispute settlement mechanism. This will undermine and frustrate the prospect of consolidation as the CPTPP dispute settlement procedure does provide for such a situation or how to deal with it. Furthermore, CPTPP does not clarify who has the power to choose on the issue of consolidation: the parties, or the existing tribunal or any other person or agency. Either, the CPTPP Agreement does not clarify who will have the final decisionmaking authority for this purpose. All of the above point toward the fallacies that exist raising questions of practical and significant concern that are not answered by the CPTPP dispute settlement mechanism.

Composition of Panel The composition of the panel in the CTPP dispute settlement mechanism is very comprehensive and innovative as compared to other FTAs. Respecting Parties’ autonomy, different processes are allowed to vary or agree to from what is proposed in the CPTPP dispute settlement mechanism.33 As a default rule, the process of composition of a tribunal is well crafted and shows some thoughts, which have been put into it, unlike other FTAs.34 The panel is composed of three members.35 The complaining and responding Parties generally appoint their respective panel members. In that regard they could select any individual who can meet the qualification requirements prescribed in the CPTPP dispute settlement mechanism. There is a Roster of Panel Chairs and Party Specific Lists, which can be used in certain situations as a default, mainly when a Party does not appoint its panel member within the prescribed time.36 The consequence of not appointing a Party-appointed panel member is different for the requesting Party and the responding Party. If the complaining Party does 33

CPTPP Dispute Settlement, art. 28.9.2. Australia-China FTA and Australia-the South Korea FTA were signed in the close proximity of TPP, but those FTAs do not contain detailed rules relating to composition of tribunal as compared to TPP. 35 CPTPP Dispute Settlement, art. 28.9.1. 36 The obligation, process and guidance of preparation of Party Specific List and Roster of Chair are dealt with in art.28.11. 34

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not appoint its panel member within the specified time limit then the consequence is serious because in that situation the dispute settlement proceedings will lapse at the end of that period.37 It may sound harsh but has great practical sense. If the complainant is not vigilant and serious about its role in the composition of the panel, there is no need to expect the responding Party to continue or even allow the default process to complete the composition of the panel. If the responding Party is not appointing its panel member or delaying in making such an appointment the Roster of Chair and Party Specific List may be used to complete the composition of the panel. In that case, if the respondent has already created its list, the panel member can be appointed from that list.38 If the responding Party has not yet created that list of panel members, a panel member then will be selected from the Roster of Panel Chairs established under the CPTPP dispute settlement mechanism.39 In a situation where the Roster of Panel Chairs has not been established, the panel members may be selected randomly from a list of three persons for chairs prepared by the complainant.40 Thus, under the CPTPP dispute settlement mechanism, panel members are selected in a number of ways: either by the parties; or from the available lists that have been constituted; or from the Roster of the Panel Chairs; or randomly from the list of the three persons for panel chairs prepared by the complaining Party. It has been argued by experts that the responding Party may block or hinder the appointment of panel members wherever consent from the responding Party is needed.41

Appointment of Chair In order to maintain the integrity of the dispute settlement procedures the CPTPP dispute settlement mechanism has provided for a detailed and comprehensive process for the appointment of the Chair. The first port of call, respecting the parties’ autonomy, the CPTPP dispute settlement mechanism has put an obligation on parties to “endeavor to agree” on the appointment of a chair.42 If parties do not agree on the name of the Chair, the two parties’ appointed panelists are required to agree on the Chair from the Roster of Panel Chairs.43 Unfortunately, if the two panelists also fail to agree, the disputing parties

37

CPTPP Dispute Settlement, art. 28.9.2.b. According to Article 28.9.2.a, the complaining party has 20 days’ time to appoint its panel member. Upon expiry of this time period, if the panel member is not appointed, the dispute settlement proceeding will lapse. 38 CPTPP Dispute Settlement, art. 28.9.2.c.i. 39 Ibid. art. 28.9.2.c.ii. 40 Ibid. art. 28.9.2.c.iii. 41 Lester (2022) 42 CPTPP Dispute Settlement, art. 28.9.2.d.i. 43 Ibid. art. 28.9.2.d.ii.

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get involved and choose the Chair in agreement with the two-panel members.44 The disputing parties may also appoint the Chair randomly from the Roster of Panel Chairs in the event the two panelists fail to agree on the name of the chair.45 This process is independent of the involvement of the two panelists. Also, there is an alternative route to appoint the Chair at that stage through which a disputing party may elect to take help from an “independent third party” to choose the Chair from the Roster of Panel Chairs instead of selecting the Chair randomly by the parties.46 Though the use of an independent third party is allowed, there are several conditions which must be satisfied such as the request to the independent third party must be made jointly, once the independent third party is selected, all communication with the independent third party should be copied to all disputing parties. In this case, no disputing parties should try to use any means to influence the independent third party’s appointment process47 and any costs associated with the appointment of the chair by an independent third party are borne by the party that elects to have the chair appointed by the independent third party.48 After the Chair is appointed by the independent third party, if the independent third party fails or is unwilling to appoint the Chair, the disputing parties have to resort to the selection of the Chair from the Rosters of Panel Chair on a random basis.49 The random selection method requires further elaboration, which TPP dispute settlement fails to provide. It is important for the Parties to know how this random selection works. For example, who finally picks the name randomly, or is it going to be selected by lottery and, if so, who picks first? TPP should have given some guidelines or a supervision process for the random selection of the chair. If TPP dispute resolution mechanism has designed the appointment of the Chair in such an elaborate way, it should have gone one more step further to guide Parties in situations of a random selection of the Chair because someone—either an individual or an entity—has to make a selection.50 Some of these issues were later addressed by CPTPP in 2019 by enacting Rules of Procedure under Chap. 28 (Dispute Settlement) with a section fully devoted on Procedure to Select a Chair or Other Panelist by Random Selection. The random selection of the panel member is not as worrisome as it triggers when the respondent does not appoint its panel member. In that case, the complaining Party or its appointed panel member may make the random selection. For the recalcitrant respondent, it may not be considered unfair, but rather strengthen the integrity of the dispute resolution process. Moreover, in this context, a random appointment process may only come into play if the Rosters of the Chair is not established which 44

Ibid. art. 28.9.2.d.iii. In this situation, the Chair may not be appointed from the Roaster of Panel Chairs. 45 Ibid. art. 28.9.2.d.iv. 46 Ibid. art. 28.9.2.d.v. 47 Ibid. art. 28.9.2.d.v.B. 48 Ibid. art. 28.9.2.d.v.A. 49 Ibid. art. 28.9.2.d.v.C. 50 Op. cit. 41.

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is very highly unlikely in the given situation.51 Only when the respondent’s list of panel members and Rosters of Panel Chair are not in existence the random selection process for the panel member will be used.52 As the selection of the Chair is mainly roster-based, CPTPP dispute settlement mechanism has put in place a system of selection of the Chair in situations where the Roster of the Panel Chairs is not yet established. In that situation, the Chair of the panel will be selected in the following ways. First the complaining Party and the responding Party will prepare a list of three people of their choice for the position of Chair. Then, from the two lists, the Chair will be selected on a random basis.53 Second, Parties will have an alternative route to appoint an independent third party to select the Chair from the list prepared by the complaining Party and the responding Party.54 The conditions relating to the independent third party are the same as that of one applied when the parties decide to use the independent third party to appoint a panel member from the Roaster of Panel Chairs.55 Last, Parties have to resort to a random selection process, if the independent third party is unable or unwilling to appoint the Chair from the two lists prepared by the disputing Parties.56 The use of an independent third party in the appointment of the panel members in the CPTPP dispute settlement mechanism is different from other FTAs, which use WTO’s Director General or Deputy Director General as the appointing authority in some FTAs.57 The use of the WTO Director General or its deputy may raise questions on whether such duty could be imposed on the Director General through FTAs and if so whether the Director General has obligation to accept that duty. If considering FTAs as furthering the objectives of WTO one may argue that such responsibility of appointing authority on the Director General of WTO to appoint the Chair of the panel in an FTA dispute settlement is reasonable or at least it casts a moral obligation on the Director General to help appoint Chair in an FTA dispute settlement mechanism like TPP.

Qualifications of the Panel Members and the Chair TPP dispute settlement provision has taken the lead in prescribing qualifications for the panel members and the Chair. It has three sets of rules: the first is general in 51

For this purpose, it is assumed that CPTPP is operative and effective after going through ratification process. 52 CPTPP Dispute Settlement, art. 28.9.2.c.iii. 53 Ibid. art. 28.9.2.d.vi. 54 Ibid. art. 28.9.2.d.vii. 55 Ibid. art. 28.9.2.d.vi.A & B. 56 Ibid. art. 28.9.2.d.vi.c. 57 The recently signed FTA between Australia and China is an example on this point. Article 15.7 of the Australia-China FTA provides that if any arbitrator of the tribunal has not been appointed within the prescribed time frame, then either Party may request the Director-General of the WTO to designate an arbitrator.

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nature which are applicable to all panel members including the Chair; the second is applicable to Parties appointed panel members and not to the Chair of the panel; and the third is only applicable to the Chair. According to the general qualifications relating to education, all panel members should have expertise or experience in law, international trade and other matters covered in the CPTPP or the resolution of disputes arising out of international trade agreements.58 At a personal level, all panel members are chosen strictly on the basis of objectivity, reliability and sound judgment.59 At a professional level, while serving as the panel member, s/he should be independent to the extent that not be even affiliated with or take instruction from any Party.60 CPTPP has also drawn up a Code of Conduct for panel members, which must be observed throughout the dispute settlement proceedings under CPTPP.61 CPTPP is unique in prescribing special qualifications for the Party-appointed panel member in accordance with the nature of dispute. These set of rules are applicable to the Parties’ appointed panel members. If the dispute is related to labour issues, for example, it is required under the CPTPP dispute settlement mechanism that panelists other than the Chair have experience in labour law or practice.62 Similarly, for environmental disputes panelists other than the Chair should have expertise or experience in environmental law or practice.63 Lastly, in situations where the dispute is related to Transparency and Anti-corruption, the panelists other than the Chair must have expertise and experience in anti-corruption law and practice.64 Therefore, it is not only the responsibility of the disputing parties to select their panelists who have expertise in law, international trade and dispute resolution, etc., but also to select panelists who have expertise or experience in the subject matter of the dispute.65 Certainly such an approach will be helpful in terms of quality and timely resolution of disputes. CPTPP dispute settlement mechanism has imposed a prohibition that the Chair must not be a national of any disputing Party or a third Party. If the Chair is selected from the Roaster of the Panel Chairs, nationals of the disputing Parties and third Parties will be thus excluded.66 It is to note that disqualification on the basis of nationality only applies to the Chair of the panel and it does not apply to the Party’s appointed panel member.67 It is expected that the Chair without nationality of any Party in a dispute will be fair and impartial and at least s/he will not be swayed 58

CPTPP Dispute Settlement, art. 28.10.1.a. Ibid. art. 28.10.1.b. 60 Ibid. art. 28.10.1.c. 61 Ibid. art. 28.10.1.d. 62 Ibid. art. 28.9.5.a. 63 Ibid. art. 28.9.5.b. 64 Ibid. art. 28.9.5.c. 65 Ibid. art. 28.9.4. 66 Ibid. art. 28.9.3. 67 It is evident from the provisions related to Party Specific Indicative Lists which says “Individuals who are nationals of that party” may be included in the Party Specific Indicative Lists. See CPTPP Dispute Settlement, art. 28.11.10. 59

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due to his/her nationality or loyalty toward his/her own country. The fairness and impartiality of the Chair may also guide panel members to act professionally in resolving the dispute in a fair and impartial manner.

Transparency of Panel Proceedings While most of the FTAs keep the panel proceeding confidential, the CPTPP Dispute settlement mechanism has made “any hearing before the panel shall be open to the public.”68 Only with the agreement of the disputing Parties, the hearing may be closed to the public.69 Nevertheless, such a transparent approach to dispute resolution proceedings is laudable and CPTPP has shown a new way for the next generation of FTAs to follow. The transparent hearing under the CPTPP dispute settlement mechanism is subject to one restriction, that is, confidential information must be protected.70 In support of the transparent hearing, the CPTPP dispute settlement mechanism also requires the disputing Parties “to make best efforts to release to the public” all the documents related to disputes such as its written submissions, written version of an oral statement and written response to a request or question from the panel.71 All these documents should be made public as soon as it is filed and in any event, it should be made public once the final report is issued.72 As a matter of principle, this requirement of making all documents public is subject to the condition that confidential information must be protected.73 However, for this purpose, the CPTPP dispute settlement mechanism has not provided any definition of confidentiality or who should decide which information is confidential and what if one Party breaches the confidentiality obligations. UNCITRAL Rules on Transparency have so far provided the best definition of confidentiality and the CPTPP dispute settlement mechanism should have considered adopting that definition to make this transparency in dispute settlement proceedings much more practical.74 Later during the negation of CPTPP, this issue was to some extent addressed through the Rules of Procedure under Chapter 28 (Dispute Settlement) enacted by CPTPP. Another aspect of transparent dispute resolution proceedings is to include nongovernmental organizations (NGOs). The CPTPP dispute settlement mechanism allows only those NGOs, located in the territory of the disputing Parties, to provide 68

CPTPP Dispute Settlement, art. 28.13.b. Ibid. 70 Ibid. art. 28.13.f. 71 Ibid. art. 28.13.d.i. 72 Ibid. art. 28.13.d.i & ii. 73 Ibid. art. 28.13.d. 74 For details on confidentiality, see article 7 of the UNCITRAL Rules on Transparency in Treaty Based Investor-State Arbitration. 69

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written views regarding disputes that may assist the panel in evaluating the submissions and arguments of disputing parties.75 In other words, the written submissions of NGOs serve as the eyes and ears of the panel at the same time they provide alternative views which help the panel to make a well-informed decision. Of course, whether an NGO will be allowed to make a written submission is dependent on the panel which is obligated to consider the requests first. Even if there is a slight margin of discretion in the hands of the panel, considering the general approach of transparent hearings under the CPTPP dispute settlement mechanism, the panel will allow NGOs from the disputing parties to make written submissions. Rules of Procedure under Chapter 28 (Dispute Settlement) now gives an elaborate process of how to deal with NGOs and their submissions.

Implementation of the Final Report After considering the arguments of the Parties and based on evidences, the Panel issues the initial and then the final report with its decision. The process related to the initial report and the final report is very much similar to any other FTAs.76 In this regards, the CPTPP dispute settlement mechanism has not shown any sign of innovation.77 The CPTPP dispute settlement mechanism aims “to secure a positive solution to disputes.”78 For the implementation of the final report, it is the obligation of the responding Party to eliminate the non-conformity or the nullification or impairment “whenever possible.”79 There is no explanation as to how long a period is considered as “whenever possible.” The CPTPP dispute settlement mechanism further allows the responding Party to have a “reasonable period of time” to eliminate the nonconformity or nullification or impairment “if it is not practicable to do so immediately.”80 It may be inferred here that “whenever possible” in fact means “immediately.”81 Otherwise, a timeline like “whenever possible” and “immediately” may not sit together in the same provision. Like other FTAs, the CPTPP dispute settlement mechanism first allows the party to endeavor to agree on a reasonable period of time for implementation of the final report.82 If disputing Parties do not reach an agreement on a reasonable period of 75

CPTPP Dispute Settlement, art. 28.13.c. For provisions relating to initial report, see CTPP Dispute Settlement, art. 28.17; for the provisions relating to final report, see CPTPP Dispute Settlement, art. 28.18. 77 For example, Australia-Japan FTA requires issuance of draft award and then the final award. See Australia-Japan FTA, art. 19.12.6. 78 CPTPP Dispute Settlement, art. 28.19. 79 Ibid. art. 28.19.2. 80 Ibid. art. 28.19.3. 81 For example, WTO DSU in Article 21 uses “prompt compliance.” 82 For example, see Australia-South Korea FTA, art. 20.13.3. 76

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time, any Party may request the Chair to determine the reasonable period of time through arbitration.83 The CPTPP dispute settlement mechanism provides a guideline for the fixation of a reasonable period of time which may not be more than 15 months from the presentation of the final report. Upon arbitration, the Chair may determine reasonable period of time which may be less or more than 15 months depending on the particular circumstances.84 Thus on one hand, the CPTPP dispute settlement mechanism makes 15 months an upper limit of the reasonable period of time, while, on the other hand, it provides flexibility in final determination if circumstances dictate so. As a reasonable period of time is decided by the Chair through arbitration, the CPTPP dispute settlement mechanism does not make it clear whether parties are allowed to present their arguments before the Chair. The arbitration procedure for this purpose is not elaborated in the CPTPP dispute settlement system which shows a lack of completeness in this regard.85 However, the Rules of Procedure enacted under Chapter 28 (Dispute Settlement) throws some light on the process relating to post-report scenarios.

Compensation, Suspension and Monetary Assessment In the CPTPP dispute settlement mechanism, there are two situations when compensation may be paid by the responding Party to the complaining Party. The first situation is when the responding Party decides or declares no intent to eliminate the non-conformity or nullification or impairment as adjudged by the panel in the final report.86 In this case, since the responding Party is willing to pay compensation so, the complaining Party may enter into a negotiation with the responding Party “with a view to developing mutually acceptable compensation.”87 However, it is to note that there is no provision in the CPTPP dispute settlement system, which sanctions the responding Party that declares the intention of not complying with the final report. This issue becomes even more serious if one recalls that the said “compensation … shall be a temporary measure.”88 It is not “preferred to full implementation through elimination of the non-conformity or the nullification or impairment.”89 It further says: “Compensation … shall only be applied until the responding party has eliminated the non-conformity or the nullification or the impairment or until a

83

CPTPP Dispute Settlement, art. 28.19.4. Ibid. art. 28.19.5. 85 Australia-China FTA provides: “the arbitral tribunal shall seek written submissions” and even “hold meeting with the Parties.” See Australia-China FTA, art. 15.14.2. 86 Ibid. art. 28.20.1.a. 87 Ibid. art. 28.20.1. 88 Ibid. art. 28.20.15. 89 Ibid. 84

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mutually satisfactory solution is reached.”90 Consequently, compensation in the situation, when the responding Party has clearly indicated not to comply with the final report, would hardly be considered a “mutually satisfactory solution.” Therefore, it is submitted that CPTPP has fallen short in making sure that the responding Party fully complies with the final report. Otherwise, a Party with better bargaining power may get away with the impugned measures which harmed another Party simply by paying compensation. According to the CPTPP dispute settlement mechanism, the negotiation for compensation may also commence “following the expiry of the reasonable period of time … there is a disagreement between the disputing Parties as to whether the responding Party has eliminated the non-conformity or the nullification or impairment.”91 It is noted that this matter, which is a subject of a compliance review, allows the parties to negotiate compensation.92 It is highly unlikely that the responding Party will engage with the complaining Party to negotiate an amount of compensation. The complaining Party may suspend the benefits if the complaining Party and the responding Party are unable to reach an agreement on the amount of compensation.93 The benefits may also be suspended if the responding Party breaches, as believed by the complaining Party, the terms of the agreement of compensation.94 Before the benefits are suspended, the complaining Party must serve written notice to the responding Party that it intends to suspend the benefits.95 The notice should also specify the level of benefits that the complaining Party proposes to suspend. For greater certainty, the CPTPP dispute settlement mechanism gives an explanation that the phrase “the level of benefits that the Party proposes to suspend” refers to the level of concessions under the CPTPP Agreement, the suspension of which a complaining Party considers will have an effect equivalent to that of the non-conformity, or nullification or impairment in the sectors listed on which the CPTPP dispute settlement mechanism is applicable and determined to exists by the panel in the final report.96 There are guidelines for the complaining Party to consider while intending to suspend the benefits. In general, benefits should be suspended in the same sector

90

CPTPP Dispute Settlement, art. 28.20.15. Ibid. art. 28.20.1.b. 92 Article 28.21 of CPTPP Dispute Settlement states: “if a responding party considers that it has eliminated the non-conformity or the nullification or impairment found by the panel, it may refer the matter to the panel” for determination. 93 CPTPP Dispute Settlement, art. 28.20.2.a. 94 Ibid. art. 28.20.2.b. 95 Ibid. art. 28.20.3. 96 This explanation is included in the footnote 3 of the CPTPP Dispute Settlement Mechanism mainly to guide the complaining Party. See CPTPP Dispute Settlement, art. 28.20.3, footnote 3. The sectors which are identified for the purpose of suspension of benefits are Chap. 2 (National Treatment and Market Access for Goods), Chap. 3 (Rules of Origin and Origin Procedures), Chap. 4 (Textile and Apparel Goods), Chap. 5 (Customs Administration and Trade Facilitation), Chap. 8 (Technical Barriers to Trade), Chap. 10 (Cross-Border Trade in Services), and Chap. 15 (Government Procurement). See CPTPP Dispute Settlement, art. 28.3.1.c. 91

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or subject matter in which the panel finds non-conformity, nullification and impairment.97 The second approach is that if the complaining Party believes that suspension of benefits in the same sector or subject matter is not practicable or effective and the circumstances are serious enough, it may suspend benefits in the different sector or subject matter.98 However, there is no indication as to how to determine the seriousness of the circumstances. At one level, any non-conformity, nullification or impairment may cause serious detriment to the trade of the other Party, which may ultimately undermine the very purpose of CPTPP i.e., free trade. Further guidance has been enumerated in the CPTPP dispute settlement mechanism for the complaining Party to take into account while intending to suspend the benefits. First, the complaining Party should consider the importance of that trade, services or other subject matter in which non-conformity or nullification or impairment has been found by the panel.99 Second, all goods and financial services covered under Chapter 11 (Financial Services), services other than such financial services and each section in Chapter 18 (Intellectual Property) are considered as each distinct subject matters for this purpose.100 Third, which seems to be the most important consideration is that the complaining Party should take into account the broader economic elements related to the nullification or impairment and the broader economic consequences of the suspension of benefits.101 It is very helpful for the complaining Party as well as the responding Party to have a clear understanding of the distinction of the subject matters which may reduce further disputes or that may be referred for determination by the reconvening panel or through compliance review at a later stage. Suspension of benefits cannot begin immediately upon serving of such notice to the responding Party by the complaining Party. There is a waiting period of 30 days prescribed in the CPTPP dispute settlement mechanism. Only after the expiry of that 30 days, the suspension of benefits will be operational.102 After receiving the notice of suspension of benefits, if the responding Party believes that the level of suspension is manifestly excessive,103 or the complaining Party has not followed the procedures of suspension,104 or it believes that it has eliminated the non-conformity or the nullification of the impairment, it may request the panel to be reconvened to consider the matter.105 The reconvened panel then rules upon whether the level of suspension of benefits is excessive. If the panel finds so, it will recommend the level of benefits, which it considers to be equivalent.106 If the 97

CPTPP Dispute Settlement, art. 28.20.4.a. Ibid. art. 28.20.4.b. 99 Ibid. art. 28.20.4.c.i. 100 Ibid. art. 28.20.4.c.ii. 101 Ibid. art. 28.20.4.c.iii. 102 Ibid. art. 28.20.3. 103 Ibid. art. 28.20.5.a. 104 Ibid. 105 Ibid. art. 28.20.5.b. 106 Ibid. art. 28.20.5. 98

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panel finds that the complaining Party did not follow the principles and procedures set for the suspension of benefits, the panel may set out the extent to which the complaining Party may suspend the benefits; subject matter or sector suspension can be made; and then the complaining Party may suspend benefits only in a manner consistent with the Panel’s determination.107 However, there is no sanction or reprimand for the complaining Party which violates the principle and procedures for the suspension of benefits. The responding Party must take the action of reconvening the panel within 30 days of the delivery of the written notice by the complaining Party with regard to the suspension of benefits.108 This notice is so effective that it will also stop the commencement of suspension of benefits until the reconvened panel finally determines the matter. If the responding Party does not make the request to reconvene the panel for determination of the level and sector of suspension, the suspension of benefits will commence and thereafter no remedy may be available to the respondent Party. Therefore, it is advisable for the responding Party to make the request for reconvening the panel for determination of this issue. In lieu of the suspension of benefits, the CPTPP dispute settlement mechanism has introduced a system of “monetary assessment.”109 Once the reconvened panel determines the suspension of benefits, the responding Party may approach the complaining Party in writing to indicate its intention to pay a monetary assessment and to engage in consultations for the amount of the assessment. If no agreement is reached during the consultation period, as a default rule, the amount of monetary assessment will be equal to 50% of the level of the benefits determined by the panel to be of equivalent effect. In case the panel has not yet reached its determination, a monetary assessment will be 50% of the level that the complaining Party has proposed to suspend.110 The payment may be made in US dollars, or an equivalent amount of the currency of the responding Party or any other currency agreed to by the disputing Parties.111 The payment will be made in equal quarterly installments which will commence 60 days after the date on which the responding Party gives notice that it intends to pay a monetary assessment.112 The payment of the monetary assessment is limited up to 12 months period which may be extended upon request.113 At the time of extension, all issues such as the amount of assessment, period of extension and terms of extension may be open for re-negotiation.114 Any failure of payment or breach of conditions related to payment may trigger the suspension of benefits.115

107

Ibid. art. 28.20.3. Ibid. art. 28.20.6. 109 Ibid. art. 28.20.7. 110 Ibid. 111 Ibid. art. 28.20.8. 112 Ibid. 113 Ibid. art. 28.20.10. 114 Ibid. art. 28.20.11. 115 Ibid. art. 28.20.12.a. 108

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A monetary assessment is not a substitute for the rectification of the measure which has caused non-conformity, nullity or impairment. The responding Party is required to present a plan of the steps it will take to eliminate the non-conformity or nullification or impairment when the first quarterly payment of the monetary assessment is due.116 If the responding Party fails to submit this plan, the complaining Party may suspend benefits.117 This provision has tried to keep the emphasis on the fact that nothing can substitute the full implementation of the final report, i.e., elimination of non-conformity, nullification and impairment. A very noble use of monetary assessment has been envisaged in the CPTPP dispute settlement mechanism. In some circumstances, disputing Parties may agree to create a fund through which any monetary assessment is paid. In this case, this fund may be used for “appropriate initiatives to facilitate trade between the Parties, including by further reducing unreasonable trade barriers or by assisting the responding Party to carry out its obligations under this Agreement.”118 Thus the money paid by the responding Party can be possibly used for the benefit of the responding Party. It will also help the responding Party to deal with its domestic political and economic concerns relating to the implementation of the final report. The responding Party may initiate the discussion on the possible use of this fund.119 When it happens, the complaining Party is then obliged to accord sympathetic considerations to the possible use of the fund.120 However, if the disputing Parties do not agree on the usage of the fund, the responding Party may elect to use 50% of the amount determined by the panel or 50 percent of the level of suspension proposed by the complaining Party.121 If the responding Party does not make such an election of payment of monetary assessment, the complaining Party may suspend the benefits.122 Therefore, the CPTPP dispute settlement mechanism imposes the onus on the responding Party to take initiatives with regard to the use of the fund and to protect itself by making the right selection and carrying it out even without the consent of the complaining Party. Once again, this will also serve as a temporary reprieve for the respondent Party as the prime obligation is to eliminate every non-conformity, nullification and impairment.

116

Ibid. art. 28.20.9. Ibid. art. 28.20.12.b. 118 Ibid. art. 28.20.8. 119 Ibid. art. 28.20.13. 120 Ibid. art. 28.20.14. 121 Ibid. art. 28.20.13. 122 Ibid. 117

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Good Offices, Conciliation, Mediation and ADR The CPTPP dispute settlement mechanism has included a process that is similar to any FTA.123 Parties may resort to these processes voluntarily at any time and even terminate at any time.124 With the agreement of the parties these processes may continue even after the establishment of the panel.125 Unlike other FTAs, the CPTPP dispute settlement mechanism has declared that the proceedings that involve good offices, conciliation or mediation are confidential.126 However, a person who serves as a mediator or conciliator or as a good office in a dispute may not serve as a panel member later when it is established to resolve the same dispute.127 The CPTPP dispute settlement mechanism urges private parties to encourage and facilitate the use of arbitration and other means of ADR for the settlement of international commercial disputes between private parties in the free trade area.128 To this end, Parties are required to provide procedures to ensure observance of agreements to arbitrate and for the recognition and enforcement of arbitral awards in such disputes.129 If a Party is a signatory of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, it is supposed to have put in place a procedure to ensure observance of agreements to arbitrate and recognition and enforcement of arbitral awards.130 In this regard, the CPTPP dispute settlement mechanism could have included Model Law on International Commercial Arbitration to make that country more arbitration-friendly. The New York Convention alone is not sufficient to make jurisdiction arbitration-friendly. The CPTPP dispute settlement mechanism could have also gone further to make the use of good offices, conciliation and mediation more meaningful than mere a statement. This process has been found in almost all FTAs but it is not used often.131 The situation is the same in the WTO dispute settlement system.132 There are plenty of spaces within the dispute settlement system in FTA including CPTPP where conciliation and mediation may be used effectively to resolve the dispute amicably in an

123

Australia-Japan FTA and Australia-China FTA include Good Offices, Conciliation and Mediation. However, Australia-South Korea FTA does not provide for this means of dispute resolution system. 124 CPTPP Dispute Settlement, art. 28.6.1. 125 Ibid. art. 28.6.4. 126 Ibid. art. 28.6.2. 127 Ibid. art. 28.10.2. 128 Ibid. art. 28.23.1. 129 Ibid. art. 28.23.2. 130 Ibid. art. 28.23.3. 131 A notable absence of Good Offices, Conciliation and Mediation has been seen in Australia-the South Korea FTA. 132 In Canned Tuna (Thai. v. EC), mediation was used to help resolve the dispute as later the mediator’s advisory opinion was considered by the Parties to agree to the final solution of the longstanding dispute.

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efficient and effective manner.133 In this connection, CPTPP lost the opportunity to take the lead in this area.

Conclusion The CPTPP dispute settlement mechanism has in part shown the leadership and innovation in creating a dispute settlement mechanism more effective, efficient and practical. Some examples of innovation are consultation on proposed measures and additional qualification for the panel in relation to specific types of disputes. These are good steps toward the efficient resolution of disputes for CPTPP. Maintaining a roster system for the panel Chairs and party specific list will certainly help to create a pool of panel members, which can be used for the composition of the panel. The system of monetary assessment in lieu of suspension of benefits and creation of a fund for the use of this money for a noble cause is an innovative step. However, in many places as discussed above it has left gaps or missed opportunities to create a better system. For example, consolidation of panel is a good idea, but the CPTPP dispute settlement mechanism has not proposed conditions or guidelines for such consolidation which may be misused or abused by the parties. The involvement of measure economies in CPTPP raised the expectation to see new and innovative features in dispute settlement, which are not available yet in other FTAs. A notable example is to introduce the appeal system for state-to-state disputes, so that other FTAs, in the future, would have followed the same path. It was also expected that the CPTPP dispute resolution system would make more use of good offices, conciliation and mediation, but it has not gone any further than the current practice. It will take some time to see a large number of countries take part in creating another FTA for any innovation in dispute settlement mechanisms. So far, CPTPP is concerned that it is now a lost opportunity for making the dispute settlement system more efficient, effective and practical.

References Chaisse J (2015) Navigating the expanding universe of international treaties on foreign investmentcreation and use of a critical index. J Int Econ Law 18(1):79–115 Feldman M (2016) The role of pacific rim FTAs in the harmonization of international investment law: towards a free trade area of the Asia-Pacific. E15 Initiative Hillman J (2016) Dispute settlement mechanism. In: Schott, Jeffrey J, Cimino-Isaacs C (eds) Assessing the trans-pacific partnership, volume 2: innovations in trading rules. PIIE Julien C (2016) Two steps forward one step back… the trans-pacific partnership investment rules. Georg J Int Law 47:1 Lester S (2022) Can TPP dispute panels be blocked. international economic law and policy blog. http://worldtradelaw.typepad.com 133

For detailed discussion on this point see Sharma, op. cit. 7.

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Mercurio B (2014) The trans-pacific partnership: suddenly a “game changer.” World Econ 37(11):1 Mitchell AD, Munro J (2013) State-state dispute settlement under the Trans-Pacific Partnership Agreement. In: Voon T (ed) Trade liberalization and international co-operation: a legal analysis of trans-pacific partnership agreement. Edward Elgar, pp p156-178 Muir E et al (2015) Current issues in Asia pacific foreign direct investment. APEC

Rajesh Sharma Senior Lecturer at Legal and Dispute Studies, Criminology and Justice of RMIT University, Melbourne, Australia; Author of the book “Dispute Settlement Mechanism in the FTAs of Asia,” Wolters Kluwer, 2015; Arbitrator at Korean Commercial Arbitration Board. LL.B. (U. Dehli), M.Phil. (CUHK), MBL (Monash), Ph.D. (CUPL). The opinion expressed here is of the author and that does not represent the opinion of any institution or organization to which the author is affiliated.

Chapter 14

Pointing with Boneless Finger and Getting Away with it: The Ill-Substantiation Problem in Cyber Public Attribution Fan Yang Abstract State’s urge to make attribution ensues the suffering from prior foreign malicious cyber operations. Helpful in understanding such attribution practice are three commonly recognized dimensions, respectively, from technical, political, and legal perspectives. Compared to confidentially processed attribution, to publicly blame a state should be better substantiated. But as legal deficiencies in the current body of international law, apart from also some technical obstacles, cannot live up to the political desire of the accuser to make public attribution, the ill-substantiation problem becomes prominent. Debates over the “control test” and misuse of due diligence principle in cyber scenarios extend the responsibility scope of the territorial state. Lack of essential evidentiary requirements cripples the predictability and falsifiability for bringing up accusation. Inculpability for erroneous attribution invites the accusing state’s recklessness. In light of these legal deficiencies, an international norm on responsible state behavior for public attribution could be a promising way forward. Keywords Ill-Substantiated public attribution · Due diligence · Evidentiary requirements · Erroneous attribution · Responsible state behavior

This chapter is a fully revised and expanded article developed with permission from the author’s earlier contribution to a research report on Managing U.S.-China Tensions Over Public Cyber Attribution, published by Carnegie Peaceful Endowment in March 2022. The author owes thanks to Carnegie’s research team on cyber public attribution, inter alia, George Perkovich and Ariel Levite, for their earlier comments as well as the support for the reproduction of this lengthier article. F. Yang (B) Cyberspace International Law Center, School of Law, Xiamen University, 422 Siming Nan Road, Xiamen City 361005, P. R. China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_14

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Introduction The history for states to publicly attribute malicious cyber operations to an alleged accused is not long.1 Although being the most frequent user of such policy tool, the US government’s debut only came in 2014, when five members of the Chinese People’s Liberation Army (PLA) were indicted in a district court in the US, for hacking American companies for intellectual property.2 A more prominent example is the denunciation made by the Biden Administration in 2021,3 also echoed by some of its allies,4 over China’s Ministry of State Security for maintaining a network of criminal contract hackers responsible for the Microsoft Exchange Server attack that affected large group of worldwide users. No wonder, after a state—either its governmental system or private businesses therein—suffers from malicious cyber operations by a foreign actor, it is tempting to identify and hold publicly accountable whoever it believes is responsible for that misbehavior. With an intention to deter malice and encourage order, such self-help effort can seemingly be of value to an underregulated cyberspace. When cyberspace just began to show its impact on international affairs, it was once a common fear that, with its unique architecture and operational process, “the Internet is perfect for plausible deniability.”5 The recent tide of public attribution— especially ill-substantiated ones among them—is no panacea against such fear, but rather seems to be a hypercorrection. For the international society, neither direction is satisfactory. The ultimate question to ask should then be: how to strike a balance between these conflicting interests, so that the bad agents in cyberspace cannot easily escape from penalty, while reckless public accusation also comes with a nonnegligible consequence. 1

To clarify, this Article uses the term “cyber operation” to incorporate different categories of cyber activities, including cyberattack which may amount to a use of force or armed attack in the sense of international law, and cyber espionage which refers to the large variety of below the Law of Armed Conflict (LOAC) activities in cyber “grey zone,” and also cyber-criminal activities, which does not trigger state responsibility in the strict and traditional sense, but may be changing in the cyber scenario. On another note, this Article focuses on public attribution made by states. Entities other than states can also publicly attribute blame for a cyber operation, but for different aims and subject to different rules, if any. Private corporations, usually cyber security firms, may aim to enhance their influence, cultivate market demands, and ultimately cash out by selling products, services, and solutions on cybersecurity. Media may simply want an eye-catching story and may be easily manipulated by customized feeds of source information provided by enterprises or state organs. Since it falls outside of the purview of international law, the problem with these entities making public attribution merits a separate piece of analysis. 2 Dong et al. (2014). Some commentator coined this as "attribution by indictment," see Keitner (2019). 3 The White House (2021). 4 Among them are the EU, NATO, and UK. See, e.g., Council of the EU (2021, UK Foreign, Commonwealth & Development Office, National Cyber Security Centre, and The Rt Hon Dominic Raab MP (2021), NATO (2021). 5 Brenner (2009).

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For the latter part of the query, this article would propose that public attribution requires a timely calibration especially from the legal viewpoint. Otherwise, it may incur extra problem, as any accuser naturally tends to point fingers rather recklessly if no effective curb exists. To illustrate, Sect. 14.2 will usher in a widely used analytical framework to dissect cyber public attribution process, point out the ill-substantiation problem, and demonstrate its destabilizing nature. Section 14.3 will focus on three types of legal deficiencies in extant international law that enable and encourage ill-substantiated public attribution. Section 14.4 will then propose the norm on responsible public attribution as a possible way forward.

The Problem with Ill-Substantiated Public Attribution Three-Dimension Framework to Interrogate Public Attribution The effort of cyber public attribution entails three generally recognized considerations, which stem from technical, political, and legal perspectives, respectively.6 First, the attributing state must technically understand what happened and restore the truth as much as it can. The creation of a factual foundation for attribution is in large part a forensic process through signals intelligence to trace the malicious cyber operation back to a machine or a location. Yet, pinning down the human actors who physically conducted the operation behind the screen often requires corroboration from human intelligence as well. It goes without saying that the ultimate establishment of responsibility falls within the purview of law. Although for tech experts like Dmitri Alperovitch, co-founder of a cyber security firm Crowdstrike, “identifying who is responsible … is now largely a solved problem,”7 states’ capabilities to associate an attack with a responsible party through technical means are far from evenly distributed.8 Asymmetric pattern of attribution practice can thus be deduced from such technical imparity, as the capable states tend to use public attribution more frequently, with their envisaged adversaries fixed on the receiving ends.9 Second, after the state has attained a certain level of confidence that it knows the source of a malicious cyber operation, it then has a series of political decision to 6

For pioneering work to review the exercise of “matching an offender to an offence … in minimizing uncertainty” on tactical, operational, and strategical levels. See Rid and Buchanan (2015). 7 Alperovitch (2018). 8 The imparity of cyber capabilities among states, including that to attribute, has been assessed and largely validated by many empirical studies. For one example, see The International Institute for Strategic Studies (2021). 9 For chart illustrations covering the period of 2015–2020 verifying this deduction, see Garrett Derian-Toth et al. (2021). Not surprisingly, top five countries that made the most use of public attributions are all from Five Eyes Alliance, and China, Russia, Iran and North Korea have been identified as the responsible actors for 75% of all state-sponsored offensive cyber operations.

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make, such as whether, when and in what form to publicly hold the actor accountable, or whether to call for coordinated actions from allies. As has been righteously noted, this political decision making is “a highly complex process which requires trade-offs of multiple considerations.”10 The accusing state may be influenced by a complex matrix of political intentions, including, inter alia: to show accountability to a domestic constituency11 ; to name and shame the accused; to signal for the purpose of effective deterrence12 ; to serve as a window to observe possible reactions from the accused state; to hold a state legally responsible and to justify possible measures in response13 ; or to signify a redline that the accusing state wants to draw in service of its efforts to establish norms.14 Compatible with this complexity, different forms of public attributions have also been developed for different case scenarios. The US, for example, can make public cyber attribution by indicting foreign criminal, imposing economic sanctions, sending out technical alerts, and issuing official statements or press releases.15 To sum up, a state’s decision as to the timing, the seriousness, and the form of an attribution represents the final trade-off after a comprehensive evaluation over domestic pressure and interstate relations. In this sense, attribution is ultimately political. Third, from a legal perspective, public attribution means imputation by connecting the offense to an offender according to applicable rules, either domestic or international. For purpose of this chapter, domestic imputation—such as indictment against foreign individuals—is left undiscussed; specific focus is put on cases intending to establish state responsibility as per applicable international law. Within this limit, legal attribution also serves as a basis to legitimize future responding measures, such as self-defense or other forms of countermeasures the accusing state may take, depending on the nature and severity of the original malicious cyber operations.16 Ideally, the international legal system should provide clear guidance regarding rules for attribution. However, the current body of international law is seriously inadequate on this issue, which, as will be explained, is the very root of the problem. It’s worthy to note that states may still publicly accuse others of conducting unwanted cyber operations regardless of any clear legal basis for doing so. For example, the US officially holds that political attribution in the form of official announcements does not require meeting any legal standards in the strict sense.17 This well reflects the complexity embedded within public attribution practice as to its diversified form and purpose.

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Egloff and Smeets (2021). Hinck and Maurer (2020). 12 Romanosky and Boudreaux (2020). 13 Schmitt and Vihul (2014). 14 U.S. DOJ Press Conference Transcript (2020). Some describes “the strategic logic of public attribution as a meaning-making process,” see Egloff (2020). 15 Eichensehr (2020). 16 Schmitt M, Vihul L, op. cit. 13. 17 U.S. Office of the Director of National Intelligence (2018). 11

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Substantiation as the Problem Compared to attribution that is confidentially processed and privately communicated, it is only logical that public attribution should be better supported. Conversely, however, public attribution is particularly susceptible to the problem of ill-substantiation, if not the absence of substantiation at all. The fundamental cause is that—to use the language of the three dimensions analytical framework— the political desire to publicly blame adversary state cannot be properly checked and balanced, due to technical imparity and the lack of legal restraints. Under strong political impetus to publicly blame the accused state, the technically capable state seems to enjoy taking advantage of the lawless status quo. The term “ill-substantiated public attribution” is thereby specifically coined. It refers to a subcategory of reckless public denouncements that assigns responsibility for a malicious cyber operation to a state without a solid legal logic of imputation or any adequate accompanying evidence. This problem lies in moving scale, rather than a simple yes-or-no judgment. As regards this concept, three illustrating points are necessary. First, the appropriate level of substantiation should match the purpose and form of public attribution.18 Take an extreme case as example. Here, a state is held publicly responsible for carrying out cyber operations that amount to an armed attack,19 activating the victim state’s right to self-defense. Obviously, such a claim is subject to challenge unless it can be unequivocally supported.20 Another comparable situation occurs when there is a breach of general international legal obligation of nonintervention, and the accusing state aims to establish responsibility that can justify its future countermeasures. The requirement to prove this latter claim should be appropriately downsized. Second, ill-substantiated public attribution has also instigated normative contentions among two opposite camps of states. Since 2015, China, Russia, and other countries have consistently held the position that accusations must be substantiated.21 The US and the UK, among others, are firm advocates of the position that international law does not require disclosure of evidence to support accusations; states can thereby “act reasonably under the circumstances.”22 The most updated result of such contention is reflected in the 2021 report of the UN GGE, when it emphasized again that “the accusations of organizing and implementing wrongful 18

Some have noted that different purposes of public attribution relate to different levels of evidence. See Eichensehr K, op. cit. 15, p 558. 19 It is a long-debated question as to when does cyber operations fall within the meaning of “armed attack” in the language of Art. 51 of UN Charter. See, e.g., Dev (2015). 20 Finlay and Payne (2019). 21 China, Russia, et al. (2018). 22 Quoted phrase appeared in the first statement of the US position on evidentiary issues, see Egan (2017). Regarding legal underpinnings of evidentiary issues in cyber attribution, “the U.S., British, French, and Dutch efforts to block the development of customary international law on attribution” have been criticized as “shortsighted.” See Eichensehr K, op. cit. 15, pp 521–598.

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acts brought against states should be substantiated.”23 The connotation that only verified accusation stands is clear, but the "how" question remains untouched. Third, ill-substantiated public attribution problem should be addressed in marginal sense rather than in average or absolute sense. Solid substantiation brings positive yield, which helps to produce long-term credibility and stability. But it also means cost. The author tends not to go extreme on the requirement of substantiation, paying no attention to the constraint condition of cost. Against this backdrop, the law of diminishing marginal utility instructs that the logical deduction to stop is the point where marginal cost for extra substantiation cannot be covered by the added yield it may bring. As per this logic, the most productive phase in terms of legalization is exactly when the world moves from the lawless status quo to a more disciplined and transparent regime of public attribution.

Destabilizing Nature of Reckless Accusation Although public attribution per se will not necessarily pose a problem, the illsubstantiated public attribution is unhelpful in securing the political pursuits of the accusing state, as has been previously listed. Public attribution is often justified as a policy tool to ease domestic pressure to react against a foreign malicious cyber operation. By telling a falsified or incomplete story, an ill-substantiated—and thus unhealthy—public attribution tends to exaggerate the efficiency and the fierceness of the authority, but seldom with satisfying answer from those crucified. This may breed populism, which will in turn squeeze the policy space. Critiques on the credibleness of cyber deterrence often builds on the observation that cyber attribution is difficult and manageable from the side of a hidden attacker.24 Making ill-substantiated public attribution would only worsen this situation, because reckless accusation is insufficient to legitimize possible responding measures from the deterring state, and therefore is a cheap form of signaling in the eyes of a potential adversary. By the same token, naming and shaming are unlikely to work as previously anticipated by the accusing state, because reckless finger-pointing may be interpreted as slandering and defamation. In some cases, a state pursues to exert more deterring influence by bringing its ally to form a collective attribution.25 To clarify, a mere increase in the number of the accusing side is probably useful in making a fuss, but it will not enhance the legitimacy of an attribution. For each claim to stand, the robustness of the legal logic and the completeness of the evidence still play a decisive role. Ill-substantiated public attribution contributes little—if not brings outright detriment—to norm-building, as it relies on the incompleteness of applicable rules. When a state deems itself in an advantageous position in the game of accusing 23

The Group of Governmental Experts (2021). McKenzie (2017), Fischerkeller and Harknett (2017). 25 White House Press Briefings (2021). 24

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versus accused, it will not have enough impetus to push forward a more elaborate set of rules governing cyber attribution. The current asymmetrical pattern of ill-substantiated public attribution would thus be trapped in a deadlock at the best, and quite likely reinforce itself. This tendency is structurally destabilizing because, a constantly accusing state may make it normal to point fingers without enough substantiation, while a constantly accused state will grow increasingly resentful and eventually erupt. Ill-substantiated public attribution may increase the risk of a successful false-flag operation that incurs conflict.

Legal Deficiencies that Enable Ill-Substantiated Public Attribution As mentioned, international law serves as the basis to impute the accused state in relation to malicious cyber operations. State responsibility arises when there is a breach of international obligation that can be attributed to the state per international law.26 Apart from another long-recognized problem regarding the lack of primary rules on cyber obligations, ill-substantiated public attribution is enabled and encouraged by the legal deficiencies in the current body of international law that relates to attribution. The deficiencies are threefold: (1) international rules for attribution are inadequate to cope with cyber scenarios; (2) international legal evidence requirements are underdeveloped in general and insufficient for cyber in particular; and (3) legal consequences for making factually incorrect or wrongful public attribution are not clearly defined.

Attribution Rules General international law recognizes that attribution rules have been compiled in International Law Commission’s draft Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA), particularly Articles 4 through 11. ARSIWA was adopted by the UN General Assembly,27 and is considered by both courts and commentators to be a fine codification of customary international law.28 Linking state organs’ activity to that state as per ARSIWA proves to be less troublesome. But when it comes to evaluating state responsibility for activities conducted by nonstate actors, to ascribe the agency to a state agent is no easy task. Unfortunately, most of the cyber attributions are in the latter camp. To address the issue of linking a nonstate 26

Art. 2 of ARSIWA. (28 Jan 2002) General Assembly Resolution on Responsibility of States for internationally wrongful acts, UN Doc (A/RES/56/83). https://undocs.org/en/A/RES/56/83. 28 Crawford (2013). 27

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actor’s behavior to a state, existing proposals de lege lata are quite controversial. Two, respectively regarding control test and due diligence, will be examined below. Regarding the legal standard of the level of control required for attribution to occur, two generally recognized approaches29 are the “effective control” test devised by the International Court of Justice (ICJ) in the Nicaragua case,30 and the “overall control” test developed by the International Criminal Tribunal for the Former Yugoslavia Appeals Chamber in the Prosecutor v. Tadic decision.31 Some argue that the “overall control” test should prevail in scenarios of cyber attribution, because the “effective control” test is far stricter and thus may function as “a free pass to state sponsorship of cyberattacks.”32 This proposal is far from a suitable solution for two reasons.33 First, both of the test standards focus on the level of control a state exerts over the nonstate actor, so that they cannot cover cases of attribution when the malicious cyber activities suggests no obvious evidence of control. Second, the “overall control” standard was explicitly confined to “organized and hierarchically structured groups” such as military or paramilitary units,34 while, as a matter of juridical fact, the stricter “effective control” test has been upheld in determining attribution concerning the acts of individuals or non-organized groups. Considering how difficult it is to persuasively demonstrate that a state is effectively or generally controlling a nonstate entity, an alternative would be to hold states responsible for regulating or preventing unauthorized persons or groups from conducting malicious cyber operations within their jurisdictions. This potentially more qualified candidate of attribution rules is captured by the proposal to extend the application of “due diligence” in a cyber scenario. Due diligence is a notion first recognized by the ICJ in Corfu Channel.35 Academic viewpoints among international lawyers are rather unanimous to import due diligence to cyber context, but are competing to categorize it as a primary rule of international obligation over state conduct,36 or as a secondary rule to determine violation.37 The Tallinn Manual 2.0 on the International Law Applicable to Cyber Warfare defines due diligence as a substantive obligation38 ; the United Nations Group of Government Experts (UN GEE) report endorses this approach with similar 29

Ibid, pp 146–154. Case concerning Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. USA), Merits, (27 Jun 1986) ICJ Report. 31 Prosecutor v. Tadic, Appeals Chamber, Decision on the Defence Motion for Interlocutory Appeal on Jurisdiction (2 Oct 1995) (ICTY-94–1-AR72). 32 Shackleford and Andres (2010). 33 Lahmann (2020). 34 Prosecutor v. Tadic, paras. 131, 137. 35 The Corfu Channel Case (United Kingdom v. Albania), Merits, ICJ Report, 1949. 36 Shackelford et al. (2016), Jensen and Watts (2021). 37 Mackenzie and Scott (2021), Chircop (2018). 38 Schmitt (2017a), Rule 6. The rule reads: “State must exercise due diligence in not allowing its territory, or territory or cyber infrastructure under its governmental control, to be used for cyber operations that affect the rights of, and produce serious adverse consequences for, other states.” 30

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wording.39 Per this understanding, the original task of attributing malicious cyber operations to a territorial state no longer requires an answer. A new task of legal estimation emerges: whether there is a breach of due diligence obligation. To satisfy this test, the following six commonly recognized elements should be fulfilled: (1) The existence of acts (by a nonstate actor or a third state) contrary to the rights of a victim state; (2) which are conducted from or through the territory of the potentially responsible state (or from or through the territory or cyber infrastructure under its control); (3) which would have been unlawful if conducted by the potentially responsible state; (4) which have serious adverse consequences for the victim state; (5) with respect to which the potentially responsible state has actual or constructive knowledge; and (6) upon which the potentially responsible state can act, but fails to take all feasible measures.40 Among them, the third element on the unlawfulness test deserves a separate note, especially under the backdrop of a recently appeared expansionist view. According to such a view, territorial state is imputable for certain malicious cyber operations, even though they cannot unquestionably be categorized as internationally wrongful acts for lack of clear primary rules in international law. Combatting ransomware is one such example. Traditionally, ransomware attack is understood as cybercrime, attributable only to private bodies. As cybercrime can easily cross multiple borders, to effectively combat ransomware highly depends on international coordination of law enforcement, but the failure of which should not lead to liability of the territorial state. Recent development has overthrown this legal setting when, since the first half year of 2021, an intensive series of ransomware attacks hit the infrastructure and livelihood business worldwide and especially the US. In particular, President Biden publicly alleged that “Russia has some responsibility to deal with this.”41 After a face-to-face meeting with Russian President Putin in Geneva on June 16, 2021, he escalated that rhetoric: “Responsible countries need to take action against criminals who conduct ransomware activities on their territory.”42 Some commentators have taken an even more proactive stance. They suggested that as a due diligence obligation, Russia is responsible to curb ransomware gangs in its territory, otherwise the US can legitimately adopt countermeasures including sanctions or military cyber operations.43 This signals a disturbing tendency to inappropriately broaden territorial state’s international obligation, for activities that happened inside its border that are harmful to another state, even when those activities would have not been unlawful if conducted by that territorial state. 39

The Group of Governmental Experts, Report on Advancing Responsible State Behavior in Cyberspace in the Context of International Security (Advanced Copy) (2021). 40 See CCDCOE Cyberlaw Wiki, Due diligence. https://cyberlaw.ccdcoe.org/wiki/Due_diligence. 41 Remarks by President Biden on the Economy (2021). 42 Remarks by President Biden in Press Conference (2021). 43 Harding et al. (2021); Goldsmith (2021). Note there are also other viewpoints justifying the US combating ransomware group in Russian territory as “self-help,” instead of as countermeasure as to Russia’s breach of due diligence obligation. See Corn (2021).

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Turning to the minority approach of due diligence as an attribution rule, the identification of the actual author shifts to that of state territory where those operations originate. According to such “indirect” or “imputed” attribution,44 a state is held responsible for the cyber malicious operations harming another state rather than for a breach of its due diligence obligation, provided that the act was launched from computer systems located on its territory, and it failed to take feasible measures against the act. As this unorthodox approach seems a bit excessive, it is no wonder the UN GGE specifically pointed out that “the indication that an ICT [information and communications technology] activity was launched or otherwise originates from a state’s territory or from its ICT infrastructure may be insufficient in itself to attribute the activity to that state.”45 In light of these contending and confusing viewpoints, misusing and abusing “due diligence” to forge a legal logic to back up public attribution claims could facilitate ill-substantiation. It is thus important to reiterate the following points. First, “due diligence,” if imported to the cyber scenario, should be better understood as setting an obligation for a state rather than serving as a way to attribute. Second, the actual occurrence of a harmful cyber incident, which would have been unlawful if conducted by a potentially responsible state, is a prerequisite for the injured state to claim a due diligence violation. Third, even if state responsibility is successfully established along the legal path of due diligence, the responding measures that the accusing state might legitimately take should proportionately reflect the fact that the accused state did not conduct the malicious activities but, less harmfully, failed to address them with all feasible measures.

Evidentiary Requirements46 General international law has not yet developed a set of clear rules or consistent guidelines on evidence. Key evidentiary issues such as burden and standard of proof are normally evaluated on an ad hoc basis. For cyber disputes, such ambiguity can be interpreted as a loophole that allows states to carry out malicious cyber operations hoping for no consequence; or it can also be interpreted as an opportunity that allows states to sometimes make public attributions “reasonably under the circumstances,”47 sometimes rather recklessly. 44

Lahmann H, op. cit. 33, p 91. Report of the Group of Governmental Experts on Advancing Responsible State Behavior in Cyberspace in the Context of International Security (Advanced Copy) (2021). 46 Some commentator deems the evidentiary requirement in legal argument on cyber issues as a deadlock problem, which has no solution, so long as one sticks to an interventionist approach to impose international law on cyber operations. See d’Aspremont (2016). 47 Quoted phrase appeared in the first statement of the US position on evidentiary issues, see Egan BJ, op. cit. 22, p 177. Regarding legal underpinnings of evidentiary issues in cyber attribution, “the U.S., British, French, and Dutch efforts to block the development of customary international law on attribution” have been criticized as “shortsighted.” See Eichensehr K, op. cit. 15, pp 521–598. 45

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Of those two evidentiary issues, burden of proof is less controversial. It is generally recognized that in “a bilateral dispute over state responsibility, the onus of establishing responsibility lies in principle on the claimant state.”48 As a mechanism specifically tailored for cyber attribution, some proposed a shift of the burden of proof scheme, referred to as a “virtual control” test.49 The main argument behind this idea is that in cyber disputes, the territorial state for the alleged misbehavior has better access to the knowledge necessary to verify certain facts. By this mechanism, a prima facie responsibility would be established for the territorial state, unless it can provide evidence showing otherwise. It is not hard to imagine that this would probably cause more trouble than it intends to solve.50 Regarding the standard of proof, a generally observed practice is that evidentiary standards should vary along a sliding scale based on the severity of the offense. Established ICJ cases also emphasized the importance to keep standard of proof transparent in the judgments.51 Through a comparative assessment of international litigation, one can identify a few recognizable levels of hierarchy on standards of proof, largely borrowed from the domestic legal system of common law countries.52 As the highest level of requirement of standard of proof, "proof beyond reasonable doubt" has its root in criminal cases and embodies the value of presumption of innocence. It requires a full chain of evidence, weighing together heavily toward one direction that forms a virtually indisputable claim. In international juridical forum, such standard is usually mandatory to substantiate a guilty verdict, as is made clear in the Rome Statute of the International Criminal Court regarding international criminal liability.53 The ICJ held in a few of its cases that, "claims against a state involving charges of exceptional gravity must be proved by evidence that is fully conclusive…same standard applies to the proof of attribution for such acts."54 Because a cyberattack amounts to an international crime with exceptional gravity, to substantiate its attribution should meet “proof beyond reasonable doubt” requirement. In some cases, a preponderance of evidence is sufficient to support a legal claim. This lower level of requirement for the standard of proof concerns mainly the balance of probabilities of the two sides, which will favor the party with a more likely than not argument. In this regard, judges have vast discretionary power. As a result, extant

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ARSIWA, Commentaries, Chapter V, p 8. Margulies (2015). 50 Lahmann H, op. cit. 33, pp 93–97. 51 Oil Platforms (Iran v. U. S.), ICJ Judgment of 6 November 2003, Separate Opinion of Judge Higgins, para. 33. 52 Green (2009). 53 Rome Statute of the International Criminal Court, Article 66(3). 54 Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), Judgment, ICJ Reports 2007, p. 90, para. 209. 49

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cases that adopt "preponderance standard" exclusively address territory issues, which rarely involve state responsibility.55 With some room for debate, the ICJ cases and state practices support the “clear and convincing” standard for cases on use of force.56 This requirement for the standard of proof lies in between preponderance and beyond-reasonable-doubt standard. As self-defense is a legitimate exception against prohibition of using force, to substantiate a self-defense case—in normal or cyber scenario—should also adopt the “clear and convincing” standard.57 In other regular cases, the amount of certainty the ICJ generally requires seems also to be clear and convincing evidence by parties.58 To prove a cyber attribution regarding use of force, the “clear and convincing” standard is applicable, since “reasonable states neither respond precipitously on the basis of sketchy indications of who has attacked them nor sit back passively until they have gathered unassailable evidence.”59 To sum up, the international legal practice, mainly reflected by the ICJ’s case law, so far clearly shows that it adopts the relevant standard of proof on a case-by-case basis, appropriate to the circumstances and seriousness of the allegation.60 Based on this premise, the adequate default level of evidence for cyber public attribution should better be set around “clear and convincing” standard, with a sliding scale from “preponderance evidence” up to “proof beyond reasonable doubt.” Exactly which standard prevails should match the severity of the claim on a case-by-case basis. One potential choice is to argue that cyber attribution for self-defense requires "clear and convincing" standard, while, for lower countermeasure level, the preponderance standard would suffice. However, this should not become a strict legal test, due to the complexity of real-life cases. Apart from the complex standard of proof debate, a safer bottom line for the evidentiary requirement could be drawn from general principle of procedural law: in any event, sufficient evidence to allow crosschecking.61 Especially in cyber attribution cases, this can be a proper guideline to counterbalance a convenient excuse of the accusing state to justify its selective disclosure of limited material in the name of prevention of divulging intelligence secrets. It is an important mechanism to bolster an attribution’s credibility by providing sufficient evidence to allow the accused state and other potential stakeholders to confirm or debunk.62 55

The Land, Island and Maritime Frontier Dispute (El Saldavor/Honduras), ICJ Judgment of 11 September 1992, para. 248; Sovereignty over Pedra Branca/Pulau Batu Puteh, Middle Rocks and South Ledge (Malaysia/Singapore), ICJ Judgment of 23 May 2008, para. 86. 56 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. U. S.), ICJ Judgment of 27 June 1986, paras. 106, 109, 115, 135, 207; Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda), ICJ Judgment of 2005, ICJ Reports (2005), paras. 72, 91, 136. 57 O’Connell (2002); Eichensehr K, op. cit. 15, pp 559–562. 58 Teitelbaum (2007). 59 See Schmitt (2011). 60 Brunner et al. (2019). 61 Eichensehr K, op. cit. 15, pp 576–586. 62 Rid T, Buchanan B, op. cit. 6, p 28.

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Some may disfavor the above discussion on setting an evidentiary standard. They may argue that the assessment of the adequacy of evidence is only meaningful in a legal forum, while most cyber public attribution cases will not ever go through litigation. This seemingly realistic viewpoint neglects the fact that clarity about the amount and nature of evidence has its merits. According to Kristen Eichensehr, “Even if setting an evidentiary standard decreases the total number of public attributions, having fewer credible attributions is preferable to having a greater number of illfounded or erroneous attributions.”63 In the sense of facilitating customary law on evidentiary requirement, the formation of opinio juris may take some time, but it will never happen if the world is stuck to its current awkward status. The necessity and urgency are especially true for supporters of the “instant” international customary law.64 Another opposing viewpoint is that it is hard to reconcile the evidentiary requirement on cyber attribution on one hand with the necessity to make a timely attribution on the other.65 This dilemma indeed exists. It should be subject to careful evaluation in a context-specific approach. Again, challenges in collecting and exhibiting evidence should not excuse evidence-less accusations.

Erroneous Attribution If a state makes a cyber attribution with facts that turn out to be erroneous—or, even more seriously, if it carries out self-defense or countermeasures against an accused state based on ill-substantiated allegations—what legal consequences would the accusing state face? Underdevelopment of this legal issue will provide extra room for ill-substantiated public attribution, because no foreseeable punishment exists for irresponsible or erroneous allegations. However, current international law on this issue is tricky,66 not to mention that technical hurdles against a confident attribution in cyber brings extra complexity to this problem. To begin with, it is safe to infer that, once the attribution proves to be based on false facts, the international wrongfulness of the subsequent self-defense or countermeasure adopted by the accusing state cannot be unquestionably eliminated. In other words, the accusing state may be held responsible for taking unjustified steps against the accused state. As a counterargument, the accusing state may propose that it has used its best judgment and built its case for attribution on all then-available evidence in good faith. Could claims of “reasonableness” and “honesty” exonerate its false judgment? 63

Eichensehr K, op. cit. 15, pp 571–572. Bin Cheng first put forward the notion of "instant" international customary law in a discussion on outer space law. See Bin Cheng, United Nations Resolutions on Outer Space: ‘Instant’ International Customary Law? In: Bin Cheng (1997). 65 Rid T, Buchanan B, op. cit. 6, p 32. 66 Milanovic (2020). 64

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Positive view is echoed by some scholarly papers67 as well as official statements.68 For example, Tallinn Manuel 2.0 explicitly asserts: the exercise of the right of self-defense... is subject to the existence of a reasonable determination that an armed attack is about to occur or has occurred, as well as to the identity of the attacker. This determination is made ex ante, not ex post facto. Their reasonableness will be assessed based upon the information available at the time they were made, not in light of information that subsequently becomes available.69

Other commentators opine that with good faith or not, wrongful attribution in the first place will nonetheless make subsequent measures the fruit of a poisonous tree. The ILC holds such view in its commentary to Article 49(1) of ARSIWA.70 If, during an ex post examination, the attribution tends to be wrongful because of errors in ex ante factual assessment, the mistaken state may be responsible whether its agents had acted in good faith or not.71 Last but not least, what if the accusing state makes a public attribution that later proves wrong, but it does not take, concrete measures? Although the accused state does not suffer from the responding measures, but the harm to its fame and reputation has been inflicted. Under such circumstances, should the accusing state be held partially responsible for the false attribution, sometimes intentionally? Would belittlement of this question encourage even more ill-substantiated public attribution? This issue deserves more international discussion.

Toward a Norm on Responsible Public Attribution Against the challenges posed by ill-substantiated public attribution, tentative solutions should be sought as per the three dimensions analytical framework, with due consideration paid to technical, political, and legal dimensions, respectively. Contrary proposals have been made to establish a centralized international attribution mechanism,72 and to keep the current system of decentralized public–private attributions working.73 As this paper particularly takes the perspective of legal lens, an international norm on responsible state’s behavior in public attribution is thus proposed as a possible way forward. In this regard, UN GGE has provided a sound basis by repeatedly emphasizing in its final reports that “the accusations of organizing and implementing wrongful acts

67

Sklerov (2009). The White House (2012). 69 Schmitt (2017b). 70 ARSIWA, Commentaries, art. 49(3). 71 Lahmann H, op. cit. 33, pp 97–109. 72 Shany and Schmitt (2020). 73 Eichensehr (2019). 68

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brought against states should be substantiated.”74 Righteous in its nature though, this norm only points out the need for accusations to be substantiated but fails to elaborate how. Vis-à-vis the legal deficiencies previously identified, and bearing in mind the law of diminishing marginal utility, a norm on responsible public attribution should embody the following points.

Starting with an Out-of-The-Box Thought Private consultation before making cyber attribution public does not involve an illsubstantiation problem, as it will be confined in a confidential environment. If this becomes a mandatory preliminary step, improvement could be expected, because such procedural mechanism has proved to be useful in cutting down interstate disputes in other fields of international law. The WTO dispute settlement mechanism is a noticeable example. According to the relevant WTO rules, disputes are initiated through a formal request for consultations, whereby the complaining member invites the member whose measures are being challenged to discuss the disputed matter in order to resolve it without recourse to further litigation. Such consultation is mandatory, confidential, and with a time limit.75 If a similar mechanism exists in cyber conflict, the accusing state has a great chance to first consult privately with the accused state, channeling its interest demands without forcing the latter into an awkward position.

On Attribution Criteria State should refrain from removing key elements from due diligence rule to expand the coverage of another state’s responsibility scope. Against the urgent need to cope with seriously damaging cybercrimes as ransomware, it may be too rash to argue straightforward for the existence of due diligence obligation to counter, in spite of no primary rule on such behavior. To better balance the position of the disputing states, and to better meet the challenge from ransomware and the like, it may be desirable to envisage a burden to investigate assumed by the accused state, provided that the accusing state can support its claim with satisfied evidence.

74

Report of the Group of Governmental Experts on Advancing Responsible State Behavior in Cyberspace in the Context of International Security, (Advanced Copy) (2021). 75 Art. 4, Understanding on rules and procedures governing the settlement of disputes, Annex 2 of the WTO Agreement.

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On Evidentiary Requirement The standards of proof should be set in principle by the “clear and convincing” test, and shall increase as the seriousness of the accusation enhances. It is recommended that private channels be used to demonstrate early evidence. In this way, the accusing state is able to send a credible signal about its awareness and knowledge of the malicious operation, while the accused state has enough policy space—and face—to maneuver.

On Legal Consequence It should be clear that the international wrongfulness of the responding measures taken by the accusing state cannot be justified by attribution wrongfully made on the basis of error in factual assessment. More ideally, states should act with good faith not making unsolidified accusations. A combined norm on attribution rule, evidentiary requirement, and legal consequence of erroneous attribution could be termed as. (1) A state cannot be held internationally legally responsible solely for an ICT activity launched or otherwise originates from its territory or from its ICT infrastructure. (2) A state should substantiate its public attribution with adequate level evidence for crosschecking, by default to the extent of establishing a “clear and convincing” case, depending on the purpose and severity of its claim. (3) A state should refrain from taking responding measures based on public attribution that has been inadequately substantiated, and it may take corresponding responsibility for making erroneous or falsified attribution.

Conclusion Strictly, the attribution under international law is but one of the two indispensable components in determining internationally wrongful acts, the other being the breach of an international obligation.76 A thorough discussion of attribution cannot do without addressing primary rules on cyber operations, either. This has been shown in previous analysis regarding due diligence. But still, the attribution discussion bears meaning, especially when it relates to some important legal deficiencies. Recent development is featured by the states beginning to favor public attribution as a policy tool. France consistently holds a cautious attitude toward public attribution, when it views naming an enemy, especially if it is a sovereign state, as a political act that requires highest level of decision.77 When France officially 76 77

Art. 2 of ARSIWA. France’s Cyber Strategy (2008); French Cyber Defense Strategic Review (2018).

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attributed a cyberattack for the first time,78 in July 2021, it represents “a subtle shift in the implementation of its attribution strategy.”79 China, the most frequent receiver of cyber public attributions, also made its first practice in 2021 through a private cyber security firm, claiming Indian source malicious cyber operations have been trying to infiltrate into sensitive zones within China’s cyber domain.80 Against this backdrop, the expected marginal benefit from substantiated claims would greatly outweigh the marginal cost to substantiate the claim according to a set of commonly acceptable codes of conduct. A norm on responsible public attribution may be just on time to save the world from a chaotic blame game. Acknowledgements The author would extend the deepest appreciation to George Perkovich, Ariel Levite, Jon Bateman, Scott Collard, June Lee from Carnegie Endowment for International Peace, to Chuanying Lu, Manshu Xu from Shanghai Institute for International Studies, and to Yan Li from China Institutes of Contemporary International Relations, for their insightful critiques on earlier drafts of this Article.

References Alperovitch D (2018) Stopping the next cyber conflict. The Cipher Brief. https://www.thecipher brief.com/column_article/stopping-next-cyber-conflict Brenner S (2009) Cyber threats: the emerging fault lines of the nation state. Oxford University Press, London, p 5 Brunner I, Dobric M, Pirker V (2019) Proving a state’s involvement in a cyber attack: evidentiary standards before the ICJ. In: Tiittala T (ed) Finnish yearbook of international law. Hart Publishing, Oxford, pp 88–89 Cheng B (1997) Studies in international space law. Oxford University Press, London Chapter 7 China, Russia, et al (2018) General assembly draft resolution, developments in the field of information and telecommunications in the context of international security, para. 10, U.N. Doc. A/C.1/73/L.27. https://undocs.org/A/C.1/73/L.27 Chircop L (2018) A due diligence standard of attribution in cyberspace. Int Comparative Law Q 67:643–668 Corn G (2021) International law’s role in combating ransomware? Just Security. https://www.jus tsecurity.org/77845/international-laws-role-in-combating-ransomware Council of the EU (19 Jul 2021) China: Declaration by the high representative on behalf of the European Union urging Chinese authorities to take action against malicious cyber activities undertaken from its territory. https://www.consilium.europa.eu/en/press/press-releases/2021/ 07/19/declaration-by-the-high-representative-on-behalf-of-the-eu-urging-china-to-take-actionagainst-malicious-cyber-activities-undertaken-from-its-territory Crawford J (2013) State responsibility: the general part. Cambridge University Press, London, p 43 78

Guillaume Poupard, the head of the French cybersecurity agency (ANSSI), revealed APT31 modus operandi attack campaign targeting France. https://www.linkedin.com/feed/update/urn:li: activity:6823528088136105984; https://www.cert.ssi.gouv.fr/ioc/CERTFR-2021-IOC-003. 79 Desforges and Géry (2021). 80 According to Antiy Tech Group, a Chinese cyber security firm, multiple cyberattacks targeting Chinese defense and military units have been captured this year alone, allegedly all from India. See Huanqiu News (2021).

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d’Aspremont J (2016) Cyber operations and international law: an interventionist legal thought. J Conflict Secur Law 23(3):575–593 Garrett Derian-Toth et al (2021) Opportunities for public and private attribution of cyber operations. Tallinn Paper Series 12:8–9 Desforges A, Géry A (2021) France doesn’t do public attribution of cyberattacks. But it gets close. Lawfare. https://www.lawfareblog.com/france-doesnt-do-public-attribution-cybera ttacks-it-gets-close Dev P (2015) "Use of Force" and "Armed Attack" thresholds in cyber conflict: the looming definitional gaps and the growing need for formal U.N. Response. Texas Int Law J 50(2):381–401 Dong W et al (2014) United States District Court Western District of Pennsylvania (Criminal No. 14–118). In: The United States Department of Justice. https://www.justice.gov/iso/opa/resour ces/5122014519132358461949.pdf Egan BJ (2017) International law and stability in cyberspace. Berkeley J Int Law 35:177 Egloff FJ (2020) Public attribution of cyber intrusions. J Cybersecurity 2020:1–12 Egloff F, Smeets M (2021) Publicly attributing cyber attacks: a framework. The J Strategic Stud 2021:1–32 Eichensehr KE (2019) Decentralized cyberattack attribution. Am J Int Law Unbound 113:213–217 Eichensehr K (2020) The law and politics of cyberattack attribution. UCLA Law Rev 67:532 Finlay L, Payne C (2019) The attribution problem and cyber armed attacks. Am J Int Law Unbound 113:202–206 Fischerkeller M, Harknett R (2017) Deterrence is not a credible strategy for cyberspace, Foreign Policy Research Institute, pp 381–393 UK Foreign, Commonwealth & Development Office, National Cyber Security Centre, and The Rt Hon Dominic Raab MP (2021) UK and allies hold Chinese state responsible for a pervasive pattern of hacking. https://www.gov.uk/government/news/uk-and-allies-hold-chinese-state-res ponsible-for-a-pervasive-pattern-of-hacking France’s Cyber Strategy (2008). http://archives.livreblancdefenseetsecurite.gouv.fr/2008/inform ation/les_dossiers_actualites_19/livre_blanc_sur_defense_875/index.html French Cyber defense Strategic Review (2018). http://www.sgdsn.gouv.fr/uploads/2018/03/revuecyber-resume-in-english.pdf Goldsmith J (2021) Empty threats and warnings on cyber. Lawfare. https://www.lawfareblog.com/ empty-threats-and-warnings-cyber Green JA (2009) Fluctuating evidentiary standards for self- defence in the international court of justice. Int Comparative Law Q 58:166 Harding E, McCabe R, Lewis JA (2021) Kaseya ransomware attack demands action to match rhetoric, CSIS. https://www.csis.org/analysis/kaseya-ransomware-attack-demands-act ion-match-rhetoric Hinck G, Maurer T (2020) Persistent enforcement: criminal charges as a response to nation-state malicious cyber activity. J Natl Secur Law & Policy 10:525–561. https://jnslp.com/wp-content/ uploads/2020/05/Criminal-Charges-as-a-Response-to-Nation-State-Malicious-Cyber-Activity. pdf Jensen ET, Watts S (2021) Cyber Due Diligence. Oklahoma Law Review 73(4):645–710 Keitner CI (2019) Attribution by indictment. Am J Int Law Unbound 113:207–212 Lahmann H (2020) Unilateral remedies to cyber operations: self-defence. Necessity, and the Question of Attribution. Cambridge University Press, London, Countermeasures, p 88 Mackenzie R, Scott G (2021) Due diligence as a secondary rule of general international law. Leiden J Int Law 34:343–372 Margulies P (2015) Sovereignty and cyberattacks: technology’s challenge to the law of state responsibility. Melbourne J Int Law 14:296 McKenzie T (2017) Is cyber deterrence possible? Air University Press, Air Force Research Institute Papers, pp 7–9 Milanovic M (\2020) Mistakes of fact when using lethal force in international law: part I-III, EJIL Talk

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NATO (2021) Statement by the North Atlantic Council in solidarity with those affected by recent malicious cyber activities including the Microsoft Exchange Server compromise. https://www. nato.int/cps/en/natohq/news_185863.htm?selectedLocale=en Huanqiu News (2021). https://world.huanqiu.com/article/45PXEh1gLZR O’Connell ME (2002) Evidence of terror. J Conflict Secur Law 7:22 Remarks by President Biden in Press Conference (2021). https://www.whitehouse.gov/briefingroom/speeches-remarks/2021/06/16/remarks-by-president-biden-in-press-conference-4 Remarks by President Biden on the Economy (2021). https://www.whitehouse.gov/briefing-room/ speeches-remarks/2021/05/10/remarks-by-president-biden-on-the-economy Report of the Group of Governmental Experts on Advancing responsible State behavior in cyberspace in the context of international security (Advanced Copy) (2021) para. 71(g) Rid T, Buchanan B (2015) Attributing cyber attacks. J Strateg Stud 38:4–37 Romanosky S, Boudreaux B (2020) Private-sector attribution of cyber incidents: benefits and risks to the U.S. Government. Int J Intell Counterintelligence 2020:1–31 Schmitt MN (2011) Cyber operations and the jus ad bellum revisited. Villanova Law Rev 56(3):595 Schmitt M, Vihul L (2014) Proxy wars in cyberspace: the evolving international law of attribution. Fletcher Secur Rev I(II):1–20 Shackelford S, Russell S, Kuehn A (2016) Unpacking the international law on cybersecurity due diligence: lessons from the public and private sectors. Chic J Int Law 17(1):1–50 Shackleford S, Andres R (2010) State responsibility for cyberattacks: competing standards for a growing problem. Georgetown J Int Law 42(971):987 Shany Y, Schmitt M (2020) An international attribution mechanism for hostile cyber operations. Int Law Stud 96:196–222 Sklerov MJ (2009) Solving the dilemma of state reponses to cyberattacks: a justification for the use of active defenses against states who neglect their duty to prevent. Military Law Rev 201:1 Schmitt M (ed) (2017a) Tallinn Manual 2.0 on the international law applicable to cyber operations Schmitt M (ed) (2017b) Tallinn Manual 2.0 on the international law applicable to cyber operations. Cambridge University Press. Rule 71, para. 23 Teitelbaum R (2007) Recent fact-finding developments at the international court of justice. Law Pract Int Courts Tribunals 6(119):122 The Group of Governmental Experts (2021) Report on advancing responsible state behavior in cyberspace in the context of international security (Advanced Copy), para. 71(g) The Group of Governmental Experts, Report on Advancing Responsible State Behavior in Cyberspace in the Context of International Security (Advanced Copy) (2021) Norm 13(c). The norm reads: states should not knowingly allow their territory to be used for internationally wrongful acts using ICTs The International Institute for Strategic Studies (2021) Cyber capabilities and national power: a net assessment. https://www.iiss.org/blogs/research-paper/2021/06/cyber-capabilities-nationalpower The White House (2012) Presidential policy directive/PPD-20, p 7 The White House (2021) The United States, Joined by Allies and Partners, Attributes Malicious Cyber Activity and Irresponsible State Behavior to the People’s Republic of China. https:// www.whitehouse.gov/briefing-room/statements-releases/2021/07/19/the-united-states-joinedby-allies-and-partners-attributes-malicious-cyber-activity-and-irresponsible-state-behavior-tothe-peoples-republic-of-china U.S. DOJ Press Conference Transcript (2020) Charges against Russian officers, Oct. 19, 2020. https://www.rev.com/blog/transcripts/doj-press-conference-transcript-october-19-cha rges-against-russian-officers U.S. Office of the Director of National Intelligence (2018) A guide to cyber attribution White House Press Briefings (2021) Background press call by senior administration officials on malicious cyber activity attributable to the People’s Republic of China. https://www.whiteh ouse.gov/briefing-room/press-briefings/2021/07/19/background-press-call-by-senior-admini stration-officials-on-malicious-cyber-activity-attributable-to-the-peoples-republic-of-china

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Fan Yang The author may be contacted at: [email protected]/Address: 422 Siming Nan Road, Xiamen City, Fujian Province, P. R. China, 361005. The author would extend the deepest appreciation to George Perkovich, Ariel Levite, Jon Bateman, Scott Collard, June Lee from Carnegie Endowment for International Peace, to Chuanying Lu, Manshu Xu from Shanghai Institute for International Studies, and to Yan Li from China Institutes of Contemporary International Relations, for their insightful critiques on earlier drafts of this Article.

Chapter 15

Engineering Compulsory Food Safety Liability Insurance in China: A Joint Perspective of Public and Private International Law Lin Zhang and Xiaochen Zhang Abstract The Chinese toxic milk scandal raised tremendous global concerns about food safety in China. To repair the tarnished reputation of domestic food production, Chinese authorities focused on compulsory food safety liability insurance. Unfortunately, the introduction of compulsory food safety liability insurance in the Food Safety Law of the PRC has been delayed by the disagreements of Chinese legal scholars. Chinese legal scholars have examined the legitimacy of compulsory food safety liability insurance in China mainly from the standpoint of domestic laws. The valuable insight of international laws has been ignored by them. This article attempts to fill this research gap by scrutinizing the Chinese endeavor of launching compulsory food safety liability insurance through the joint perspective of public and private international law. It further demonstrates that the ideology of human rights of public international law has already penetrated the body of broadly interpreted private international law. Keywords Compulsory Food Safety Liability Insurance · China · Public International Law · Broadly Interpreted Private International Law

This article is a revised version of “Engineering Compulsory Food Safety Liability Insurance in China: A Joint Perspective of Public and Private International Law. Journal of East Asia and International Law” 9(2): 341-360. L. Zhang School of Law, Shandong University of Technology, West Campus, Room 308 West, Zhangdian District, Zibo, Shandong Province, P.R. China e-mail: [email protected] X. Zhang (B) School of Law, Shandong University of Technology, West Campus, Zhangdian District, Zibo, Shandong Province, P.R. China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 E. Y. J. Lee (ed.), Revolutionary Approach to International Law, International Law in Asia, https://doi.org/10.1007/978-981-19-7967-5_15

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Introduction Due to rapid globalization, food logistics have already expanded beyond territorial boundaries. Food safety is thus not only a matter of domestic concern, but also one of ever increasing international concern for public health.1 It is no wonder that the food safety issues are regulated under international law covering both the public and private domains. In 2008, the Chinese toxic milk scandal shocked the entire international community.2 It raised tremendous global concern about food safety in China. There was serious public fury over the rampant food adulteration in China. Since this notorious milk incident, Chinese authorities have swiftly taken a series of actions to enhance the safety of domestic food production.3 Among these newly implemented food safety measures, the most salient legal reform was to abolish the Food Hygiene Law, replacing it with the Food Safety Law of the PRC (“FSL”) on June 1, 2009.4 The enactment of the FSL did not mark the pinnacle of the determination of Chinese authorities to strengthen the regulation of food safety. Four years later, the Legislative Affairs Office of the PRC State Council publicized a draft version of the amended FSL to collect public opinions from October 29, 2013 to November 29, 2013.5 This round of amendments was intended to further refine the FSL and reinforce its critical role in guaranteeing food quality and safety in China. Of the proposed amendments, the concept of “compulsory food safety liability insurance” (CFSLI) has aroused the most vigorous discussion among Chinese legal academics.6 CFSLI refers to an insurance scheme that is compulsory for domestic food producers and protects them in the event of food safety incidents. It is evident that CFSLI represents an efficient approach to address the claims of victims of unsafe food, which is recognized by the overwhelming majority of Chinese legal scholars.7 Nevertheless, they do not yet fully agree on whether CFSLI ought to be compulsory or voluntary. In addition, there is debate over the different combinations of specific legal measures needed to curb the byproducts of CFSLI, such as moral hazards or

1

E.g., after the 2008 Chinese melamine milk scandal, many countries banned Chinese dairy food products and the World Health Organization ranked the incident as one of the most serious food safety events handled by it in recent years. See WHO, Emergencies preparedness, response: Questions and Answers on melamine. http://www.who.int/csr/media/faq/QAmelamine/en. 2 Ibid. 3 On September 17, 2008, the Spokesman of the PRC State Council held a special press conference to summarize the new actions taken by the Chinese authorities to deal with the melamine milk scandal and safeguard food safety. See Press Conference Organized by the PRC State Council to Report the Sanlu Infant Milk Powder Scandal [国务院有关部门负责人就三鹿牌婴幼儿奶粉重 大安全事故的有关情况答记者问]. http://politics.people.com.cn/GB/1026/8055387.html. 4 For the full text of the FSL, see Food Safety Law of the PRC [中华人民共和国食品安全法]. http://www.npc.gov.cn/npc/cwhhy/12jcwh/2015-04/25/content_1934591.html. 5 Legal Affairs Office of the State Council of the PRC (2013) 6 Ibid. 7 Yu (2015); Dong (2015); Lu (2015); Xin (2015).

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adverse selection.8 Due to the disagreement of Chinese legal scholars on CFSLI, Chinese authorities finally chose to put it on hold for a while and they did not bring it into the revised FSL that came into effect on October 1, 2015. This regrettable result shows that the existing discussions of Chinese legal scholars about the CFSLI mainly rely on the perspective of domestic laws, missing the international legal aspects of this issue. Academic ignorance of international laws has partly caused the current deadlock in this vein. This research will thus try to revisit CFSLI from a joint perspective of public and private international law in a balanced manner. Here, private international law embraces the economic dimension of sovereign States and international organizations, such as international economic law. The remainder of this paper is structured as follows. Part two will illustrate that the right to safe food is an integral component and attribute of the fundamental human rights to adequate food and health. Correspondingly, the right to safe food is a nonderogable obligation of the international community and each State. Part three will analyze the flaws of the currently available remedies in China for victims of mass torts caused by food safety incidents. This part will further show that CFSLI will be a necessary step for China to reinforce its international commitment to protect the right to safe food. Part four will touch on CFSLI from a viewpoint of international economic law, which is an important segment of private international law in its broad sense. It will focus on the WTO legal regime for protecting consumers’ health and safety. Such a consumer-oriented legal regime based on international human rights law allows States to impose necessary health and safety standards on their commodity imports and exports. In turn, the voluntary choice of States to reasonably exercise this right exhibits their commitment to safeguard consumers’ health and safety, which are fundamental human rights in the sphere of trade. Part five will first discuss the flawed system of commodity export inspection in China. This system per se represents ex ante measures taken by Chinese authorities to protect foreign consumers’ health and safety. It further argues that the overhaul of this dysfunctional system will take time. As a result, for the time being, CFSLI, as an ex post measure, is urgently needed to complement the flawed ex ante export inspection system in China and to enhance China’s exercise of the aforementioned right to protect consumers’ health and safety in the export process pursuant to by the WTO law. Part six will contain concluding remarks. This part will indicate that the human rights viewpoint, which is rooted and emphasized in public international law, has already penetrated the broadly interpreted private international law. Governed by this human rights aspect, both public and private international law in its broad sense force the launch of CFSLI by the Chinese authorities in the not-so-distant future.

8

Ibid.

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The Right to Safe Food in the Domain of International Human Rights Law The international protection of human rights began rapidly growing and developing in the wake of the catastrophes caused by the Second World War, especially the Nazi Holocaust and the Japanese massacre.9 The UN adopted the Universal Declaration of Human Rights (UDHR) on December 10, 1948.10 It asserted that human rights are a set of fundamental legal norms, regularly respected and protected by international law, and initiated the humanizing of international law toward constitutional justice.11 On December 16, 1966, the UN also gave birth to two highly influential international treaties entitled the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (“ICESC”).12 These two covenants, along with the UDHR, have been referred to as the International Bill of Human Rights and hailed as “a veritable Magna Carta.”13 Under the legal framework of the International Bill of Human Rights, the two expressly enumerated fundamental human rights that embrace the right to safe food as their essential element are the right to health and the right to adequate food. Article 25, paragraph 1, of the UDHR establishes the right to health by affirming that: “Everyone has the right to a standard of living adequate for the health and wellbeing of himself and of his family, including food, clothing, housing and medical care and necessary social services.”14 According to this definition, Article 12, paragraph 1, of the ICESC further reinforces this inalienable human right by asserting: “The right of everyone to the enjoyment of the highest attainable standard of physical and mental health.”15 Furthermore, on August 11, 2000, the United Nations Committee on Economic, Social and Cultural Rights adopted General Comment No. 14. Its purpose is to: interpret the right to health, as defined in Article 12.1, as an inclusive right extending not only to timely and appropriate health care but also to the underlying determinants of health, such as access to safe and potable water and adequate sanitation, an adequate supply of safe food, nutrition and housing, healthy occupational and environmental conditions, and access to health-related education and information, including on sexual and reproductive health.16

9

Moravcsik (2000). General Assembly Resolution 217A(III). http://www.un.org/en/universal-declaration-humanrights. 11 Meron (2006). 12 General Assembly Resolution 2200A(XXI). See the full text of the International Covenant on Civil and Political Rights. http://www.ohchr.org/en/professionalinterest/pages/ccpr.aspx; the full text of the International Covenant on Economic, Social and Cultural Rights. http://www.ohchr.org/ EN/ProfessionalInterest/Pages/CESCR.aspx. 13 The phrase of “a veritable Magna Carta” is officially included in the text of The International Bill of Human Rights. http://www.ohchr.org/Documents/Publications/FactSheet2Rev.1en.pdf. 14 Op. cit. 10. 15 Op. cit. 12. 16 Full text of General Comment No. 14, http://www.refworld.org/pdfid/4538838d0.pdf. 10

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As far as legal obligations are concerned, the United Nations Committee on Economic, Social and Cultural Rights clearly indicates in the aforementioned General Comment No. 14 that States are under a general obligation to respect, protect, and fulfill the human right to health and some specific obligations encompassed by this general obligation are of immediate effect regardless of available resources.17 Further, to fulfill the right to health, the General Comment No. 14 illustrates that: States must ensure provision of health care, including immunization programmes against the major infectious diseases, and ensure equal access for all to the underlying determinants of health, such as nutritiously safe food and potable drinking water, basic sanitation and adequate housing and living conditions and to ensure access to the minimum essential food which is nutritionally adequate and safe, to ensure freedom from hunger to everyone is, inter alia, a core obligation incumbent on states arising from the right to health.18

Regarding remedies of the right to health, General Comment No. 14 emphasizes: Any person or group who is a victim of a violation of the right to health should have access to effective judicial or other appropriate remedies at both national and international levels. All victims of such violations should be entitled to adequate reparation, which may take the form of restitution, compensation, satisfaction or guarantees of non-repetition.19

In other words, States are obligated to supply various remedial measures to restore the right to health when this fundamental human right as a whole or any of its core components, such as the right to safe food, is violated. Another fundamental human right relating to the right to safe food is the right to “adequate” food which is defined as “the fundamental rights of everyone to be free from hunger.”20 According to General Comment No. 12, the right to adequate food is “indivisibly linked to the inherent dignity of the human person and indispensable for the fulfillment of other human rights enshrined in the International Bill of Human Rights.”21 In order to realize the right to adequate food in practice, General Comment No. 12 specifies “free from adverse substances” as its normative contents.22 “Free from adverse substances” may refer to: Setting requirements for food safety and for a range of protective measures by both public and private means to prevent contamination of foodstuffs through adulteration and/or through bad environmental hygiene or inappropriate handling at different stages throughout the food chain.23

Likewise, the UN General Assembly is holding the same position with the Committee on Economic, Social and Cultural Rights in this regard. In terms of Resolution 63/187 adopted on December 18, 2008, the General Assembly “reaffirms the right 17

Ibid. Ibid. 19 Ibid. 20 ICCPR, art. 11. 21 U.N. Doc. E/C.12/1999/5; General Assembly Resolution 63/187 (1999). 22 Ibid. 23 Ibid. 18

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of everyone to have access to safe, sufficient and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger, so as to be able to fully develop and maintain his or her physical and mental capacities.”24 General Comment No. 12 makes it clear that States are obliged to respect, protect, and fulfill the right to adequate food.25 For the sake of performing this obligation, States are further required to adopt a national strategy to ensure food and nutrition security for all which “should address critical issues and measures in regard to all aspects of the food system, including the production, processing, distribution, marketing and consumption of safe food, as well as parallel measures in the fields of health, education, employment and social security.”26 With regard to remedies of the right to adequate food, General Comment No. 12 also provides that: Any person or group who is a victim of a violation of the right to adequate food should have access to effective judicial or other appropriate remedies at both national and international levels. All victims of such violations are entitled to adequate reparation, which may take the form of restitution, compensation, satisfaction or guarantees of non-repetition.27

To realize the remedial power to restore the violated right to adequate food as a whole or any of its core elements including the right to safe food, States in turn are bound to provide an array of efficient remedial measures within their own boundaries. Following the direction of international human rights law, it is evident that the right to safe food exists as an integral element of the two fundamental human rights—the right to health and the right to adequate food. In order to respect, protect, and fulfill the two human rights concerned, State must take efficient measures to safeguard, reinforce, and remedy the right to safe food.

Remedial Measures for Violations of the Right to Safe Food in China: Flaws and CFSLI As mentioned above, the right to safe food is regarded as a critical attribute of the right to health and the right to adequate food in the domain of international human rights law. States are obliged to efficiently safeguard and remedy the right to safe food for the purpose of realizing the right to health and the right to adequate food. The 2008 melamine milk scandal has caused a disastrous aftermath of mass tort. In the process of providing remedies for victims, China’s porous remedial regime for violations of the right to safe food, which mainly consists of mass tort compensation funds, government bailouts, and litigation, has been exposed to the public. In these, there is an urgent need for CFSLI to be launched by the Chinese authorities to provide 24

Op. cit. 21. Ibid. 26 Ibid. 27 Ibid. 25

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prompt and full compensations for victims of violations of the right to safe food,28 and to reinforce China’s performance in protecting and fulfilling the two fundamental human rights—the right to health and the right to adequate food.

Mass Tort Compensation Funds Mass tort compensation funds may refer to a scheme whereby, in the case of mass torts, wrongdoers that are financially capable transfer money to independent and professional caretakers to establish special funds for the purpose of compensating victims.29 The selected fund caretakers are fully responsible for the operation of the money pooled in these funds. They are authorized to fairly and scientifically determine the scope, amount, schedule, and other relevant aspects of compensations for victims. In this case, the financial conditions of the compensation funds under their management should be reported to victims and other concerned stakeholders on a regular basis. Once a victim chooses to claim compensation from this type of fund at his/her own discretion, s/he must enter into an agreement with the fund to simultaneously renounce the right to file a lawsuit against the wrongdoers due to the same infringement. Thus, mass tort compensation funds are deemed an alternative remedial measure to litigation for victims of mass torts.30 Mass tort compensation funds first appeared in China as a result of the 2008 melamine milk scandal. To solve the compensation problem for victims in this incident, 22 wrongdoing milk manufacturers together pooled RMB 200 million to set up a medical compensation fund to cover the medical treatment of victims. This fund was steered by the China Industry Association, which is a quasi-governmental agency.31 Likewise, in the 2011 ConocoPhillips oil spill incident, the fisher compensation fund (RMB 1 billion), which was established by ConocoPhillips, was directly managed by the Ministry of Agriculture.32 The two recent mass tort incidents cited here show that from its inception, the mass tort compensation fund has been closely linked with the government in China. In other words, the government or its affiliated agencies replace independent professionals as active caretakers for these funds. The main reason for the government’s involvement in mass tort compensation funds is to implement the national policy for stability. It is fair to say that political and social stability has been tremendously emphasized by the supreme power since China started its transformation process in the late 1970s.33 Because mass tort incidents are always considered

28

Yu, op. cit. 7, at 245. Zhang and Yue (2012). 30 Ibid. 31 Zhang (2010). 32 ConocoPhillips China, MOA/SOA Settlements. http://www.conocophillips.com.cn/EN/who-weare/about/Pages/company-background.aspx. 33 Rong and Chen (2012). 29

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by China’s top leaders to have the potential to cause instability in society, the government at all levels should engage in the entire process of addressing such events as establishing and running mass tort compensation funds.34 The government’s engagement, however, also brings bureaucratic practices into the operation of this type of fund, which makes it inefficient, non-transparent, and uncertain.35 This situation has worsened in the absence of a special law or regulation to govern the life cycle of mass tort compensation funds in China. As such bureaucratic practices become rampant and unbridled in Chinese mass tort compensation funds, the remedial function for mass torts victims regarding the right to safe food is severely undermined.

Government Bailout The government bailout represents another remedial measure for victims of mass torts caused by unsafe food in China. To put it simply, the governments administrating the region of the unsafe food producing enterprises would utilize their fiscal revenues to satisfy the compensation claims of victims who have been born physical or with pecuniary sufferings due to the unsafe food.36 The government bailout can be traced back to the “soft budget constraint” practice during the centrally planned era of China.37 At that time, because Chinese enterprises at all levels were state owned, the governments used to play the role of patron for these enterprises, helping out these affiliated enterprises in case of hardship.38 Even though China has nearly given up on its centrally planned economy, this paternalism by the government has persisted. Especially under the overarching national policy of stability, financial bailout for enterprises that cause mass torts by producing unsafe food has been viewed as the fast track for the governments to ease the fury of masses of victims whose right to safe food has been infringed on by unsafe food. After the breakout of the melamine milk scandal in 2008, e.g., some Chinese local governments even sold parts of their office buildings to raise funds to compensate victims on behalf of milk producers who were the real tortfeasors.39 It is evident that government bailout for food safety violations would deviate from the legitimate objectives of public finance. Article 6 of the PRC Budget Law expressly provides that the objectives of public finance are to improve the welfare of citizens, propel economic and social developments, maintain national security,

34

Ibid. Chai (2012). 36 Gong et al. (2015). 37 Lin and Li (2004). 38 Ibid. 39 Bi (2008). 35

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and guarantee the operation of governments.40 Even if governments spend their budgets for compensating victims on behalf of wrongdoers in food safety in the name of consolidating social order, it will harm the sustainable social stability in the end. While the governments are concerned about social stability, victims would repeatedly hold up governments to satisfy their compensation claims, which might even go beyond the reasonable level, thereby threatening to disturb social order. Actually, the government bailout incubates the increasing social instability. The current Chinese administration and President Xi Jinping have already recognized the malfunctions of the government bailout. They are trying to legalize governmental activities and assess the governments’ activities under the rule of law and sustainable development rather than just “social stability.”41 Therefore, the traditional government bailout is expected to be gradually replaced by the rule of law principle. Today, it cannot be considered a regular remedial measure for victims whose right to safe food is violated.

Litigation For massive victims in food safety incidents, litigation ought to be the last resort to acquire remedies. The PRC Civil Procedural Law provides that mass tort victims are eligible to file lawsuits against wrongdoer enterprises in courts.42 Due to the unique political and judicial system, however, Chinese courts are inclined to reject legal proceedings initiated by mass tort victims in practice.43 Unlike in the judicial independence model in major western countries, Chinese courts are firmly controlled by the ruling Communist Party of China (CPC) and tightly constrained by the governments. In particular, Chinese courts on each level are politically subordinated to each Committee of Political Science and Law of the CPC (CPSL). The CPSLs are directly monitoring the judicial activities of courts and, inter alia, guaranteeing the implementation of the national policy of stability by the courts.44 In addition, the expenditures of Chinese courts on each level mainly come from fiscal revenues of the governments. The governments are thus apt to give priority to fulfilling their own duties when allocating their fiscal revenues. This financial dependence of Chinese courts means that even employing new judges is tightly controlled by the governments. In this context, the governments are usually reluctant to employ sufficient new judges for courts.45

40

See the full text of the Budget Law of the PRC. http://www.lwrd.gov.cn/art/2015/3/27/art_2560_1 66740.html. 41 The Central Committee of the CPC (2013). 42 The PRC Civil Procedural Law, art. 3. http://www.gov.cn/flfg/2012-09/01/content_2214662.htm. 43 Zhang and Yang (2007). 44 Wang (2013). 45 Chen (2014).

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The aforementioned system would lead Chinese courts to not adjudicate mass tort cases easily. Due to a great number of victims, particularly, this type of case is fairly complicated. To handle these cases, Chinese courts have to spend more substantial financial and human resources on in-depth investigations.46 A more important consideration is the legal reasoning of judges that differs widely from that of lay victims. When the verdicts made by judges under the laws are not consistent with the initial expectations of plaintiffs (victims), these numerous victims may engage in radical behaviors, such as violent protests outside the courts, to express their frustrations. If this occurs, CPSL will blame the courts for failing in implementing the national policy of stability.47 Because of these dilemmas, Chinese courts are prone to rejecting mass tort cases. The fundamental solution to this problem is thus to continuously push forward Chinese political reform. Because it cannot be achieved overnight, litigation would not be instituted by victims as an efficient remedial measure to restore their right to safe food in China within the foreseeable future. The above analysis has clearly shown that the Chinese remedial regime for the right to safe food is flawed. To perform the international obligation to protect the right to safe food and to improve its remedial regime, China should adopt the following two approaches. First, China should improve the existing remedial measures for the right to safe food, such as mass tort compensation funds and litigations. Second, China should introduce new measures to enrich the remedial regime in a timely manner.48 As far as the second approach is concerned, “liability insurance” is undoubtedly one of the optimal choices because it can provide efficient and adequate compensation for massive victims whose right to safe food is violated. In accordance with the experiments of voluntary food safety liability insurance in several Chinese regions, moreover, enterprises lack incentives to subscribe to this type of insurance scheme when it is voluntary.49 Hence, only CFSLI, rather than a voluntary system, can work for victims in food safety scandals as a new and effective remedial measure. Moral hazards and adverse selection are byproducts of such insurance schemes. They are not, however, unique features of CFSLI. It is therefore unfair to deny the legitimacy and urgency of launching CFSLI in China as granted by international human rights law on the basis of these common byproducts of all insurance.

The WTO Legal Regime of Consumer Protection As an intergovernmental organization, the World Trade Organization (WTO) is working for free trade among member States rather than for human rights.50 However, along with the ever increasing emphasis on protecting human rights on a global scale, 46

Ibid. Ibid. 48 Li and He (2011). 49 Liu (2014). 50 Noordhoek (2010). 47

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the principles of international human rights law have already dominated the law and institution of the WTO. In this vein, leading international economic lawyers have been carrying out academic endeavors to promote humanizing WTO rules to reduce poverty and safeguard consumers’ safety and health worldwide.51 In response to this type of academic appeal, the WTO itself has taken efficient actions to supply a legal regime to balance free trade and consumer protection for the implicit purpose of fulfilling the human right to adequate food and health, both of which embrace the subordinated right to safe food in the field of international trade. The WTO legal regime for consumer protection principally consists of two important agreements: Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter SPS Agreement) and the Agreement on Technical Barriers to Trade (hereinafter TBT Agreement).52 The common objective of these agreements is to harmonize free market access of food producers with domestic health regulations of food imports and exports.53 They recognize that universally agreed food standards for the protection of consumers bring benefits to both food producers and consumers.54 In particular, the SPS Agreement offers a multilateral framework of rules governing the legitimacy of all domestic measures which aim to protect consumers’ life or health from the risks arising from additives, contaminants, toxins, veterinary drug and pesticide residues, and other disease-causing organisms in foods and beverages.55 It may, however, negatively influence the freedom of international trade as advocated by the WTO. To fulfill the above mission, the SPS Agreement encompasses the elements of precaution and grants sovereign States the right of imposing restrictions on their food imports and exports for the sake of consumers’ health and safety.56 Especially in regard to food imports, these domestic restrictive measures should be backed up by sufficient scientific evidence based on an appropriate risk assessment and the principles of non-discrimination and proportionality.57 The SPS expressly provides: “There is a right, albeit a conditional right, to take provisional measures subject to the requirements for risk assessment laid out in Article 5.1, 5.5 and 5.6.”58 Therefore, it is evident that the SPS Agreement attempts to balance the right of sovereign States to determine measures for consumer protection and the freedom of international trade that cannot be hampered by unnecessary, arbitrary, discriminatory, scientifically unjustifiable, or disguised restrictions.

51

Petersmann (2008). See the full text of the SPS Agreement. https://www.wto.org/english/tratop_e/sps_e/spsagr_e. htm; the full text of the TBT Agreement. https://www.wto.org/english/docs_e/legal_e/17-tbt_e. htm. 53 Ibid. 54 Negri (2009). 55 Op. cit. 52. 56 Ibid. 57 Ibid. 58 Ibid. 52

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The right of States to adopt restrictive measures for pursuing consumer protection is granted by WTO law. Although it points to both food imports and exports, the existing case law of the WTO primarily focuses on the dimension of food imports. In this type of case adjudicated by the WTO Appellate Body, the Codex Alimentarius has been recognized as the benchmark to assess the legitimacy, appropriateness, and proportionality of restrictions on food imports imposed by sovereign States for the sake of protecting their own domestic consumers.59 In EC-Sardines and ECHormones, the WTO Appellate Body confirmed its recognition of the standards of the Codex Alimentarius as “relevant international standards” to be relied on by States as a basis for their food import restrictions, implying that such standards might be adopted without consensus.60 It is thus fair to say that, through adjudicating these food import-related cases, the Appellate Body has clearly shown its stance that “the WTO cannot and does not stand for free trade at any cost” and that remarkable emphasis should be put on the importance of internationally accepted food standards for “upholding a rules-based multilateral trading system that ensures secure and predictable market access, while respecting health and [safety] concerns.”61 Apart from the food import restrictions, the right of States to adopt restrictive measures to enhance consumer protection under the WTO legal regime refers to the field of food exports, as well. Even though food export restrictions attract less attention from the WTO Appellate Body than the aforementioned food import restrictions featured with multilateral influences, at the sole discretion of States, they exhibit commitment to safeguard foreign consumers’ health and safety which are fundamental human rights in trade. A number of sovereign States including China have voluntarily decided to exercise the right of food export restrictions that are granted by the WTO law against domestic food producers in the interests of foreign consumers.62 Unfortunately, few academic discussions have been contributed to this area thus far. To summarize, the core values of international human rights law have also been recognized by the WTO law. The legal regime of the WTO concerning consumer protection represents the endeavors made by this intergovernmental organization, other than maintaining free trade among member States, to protect and enhance two fundamental human rights, i.e., the right to adequate food and the right to health both of which are affiliated to the right to safe food. Under this legal regime, sovereign States have been granted the right to impose restrictions on food imports or exports in the interest of consumers’ health and safety. It is argued that both dimensions of food import restrictions and food export restrictions should be equally emphasized by academia.

59

Ibid. See EC-Sardines case. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds231_e.htm; ECHormones case. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds26_e.htm. 61 Shaw and Schwartz (2005). 62 Apart from the Chinese Commodity Import and Export Inspection System, the US also maintains the Federal Grain Inspection Service System. 60

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The Commodity Export Inspection System in China: Flaws and CFSLI As discussed above, under the WTO legal regime, sovereign States are committed to guarantee and reinforce food safety in the domain of trade. This is largely displayed by their voluntary exercise of the right to take restrictive measures, primarily granted by and pursuant to the SPS Agreement and the TBT Agreement, against food imports and exports for the sake of consumer protection. As a member State of the WTO since 2001, China has followed the instruction of the WTO legal regime concerning consumer protection to voluntarily maintain the commodity import and export inspection system which is domestically governed by the Law of the PRC on Commodity Import and Export Inspection (hereinafter CIEI Law).63 Article 1 of the CIEI Law provides that the objectives of this Law are to strengthen and regulate commodity import and export inspection, protect public interests and legitimate interests of trade parties of imports and exports, and facilitate the development of international trade.64 In addition, Article 4 of the CIEI Law provides that commodity import and export inspection ought to be based on the principles of safeguarding human beings’ health and safety, protecting the life and health of animals and plants, protecting environments, preventing deceptive behaviors, and maintaining the security of sovereignty.65 It is evident that the CIEI Law has absorbed the basic principles of the WTO legal regime concerning consumer protection that free trade and consumer protection should and could be harmonized via implementing the commodity import and export inspection system. However, because the 2008 Chinese melamine milk scandal also seriously harmed the safety and health of foreign consumers through toxic milk exports, it has revealed that commodity export inspection in China is not a seamless web, but is fraught with flaws. In turn, the flawed commodity export inspection system has undermined China’s commitment to protect consumers under WTO law. Moreover, it has tainted the image of Chinese domestic producers and reduced the competitiveness of their commodities in the global market.66 It is thus necessary for China to renovate the dysfunctional commodity export inspection system as a fundamental stepping stone. Given the constraints of the Chinese institutional settings, however, the mending process in this regard will take quite a long time. To supplement the porous commodity export inspection system which acts as an ex ante mechanism for consumer protection, CFSLI should be urgently launched as an ex post measure by the Chinese authorities. It may further improve China’s voluntary exercise of the right of trade restrictions in the interests of consumers under the WTO law. The following two factors would increase the daily workload of the commodity export inspection bureaus and their daily sample experiment frequency. 63

See the full text of the CIEI Law. http://www.cnca.gov.cn/mra/NewZealand/flfg/fl/46210.shtml. Ibid. 65 Ibid. 66 Op. cit. 1. 64

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Personnel Quota and Limited Human Resources China has been operating a rigid personnel quota system for governments since the central-planned economic era.67 Due to this inflexible and outdated system, the headcount of each governmental agency is fixed and cannot be easily changed.68 The rigid personnel quota has often placed increasing workloads on commodity export inspection bureaus with the limited human resources. Since the late 1970s when the reform and opening-up policy was launched, China’s commodity exports have been rapidly increasing on a yearly basis to become the largest export country in the world.69 Pursuant to the CIEI Law, the commodity export inspection bureaus are required to test a sample of each batch of exported commodity before it is freighted out of the country’s borders.70 Because of the headcount of the commodity export inspection bureaus, which has been firmly controlled and rigidly fixed by the personnel quota system, however, the bureaus cannot recruit a sufficient number of full-time professional inspectors to perform their duties.71 To partially relieve themselves of this dilemma, China commodity export inspection bureaus have started to employ a number of part-time inspectors. As these part-time inspectors receive only very basic inspection training and work on the front line,72 however, they have often been negligent in the process of inspection. Pursuing this approach would further jeopardize the interests of foreign consumers.73

Assorted Standards and Local Interests The second factor in the dereliction of duty in the process of commodity export inspection in China is the interests of local governments. At the end of 1993, the CPC and Chinese central government launched a tax-revenue-division reform.74 Pursuant to the reform, China’s annual tax revenues have been split between the central and local government with a new set of criteria. The implementation of this new tax allocation formula has fundamentally changed the fiscal abilities of the central and local government of China, respectively. As statistics show, the ratio of fiscal income of the Chinese central government to that of local governments was 22/78 and the ratio of fiscal expense was 28/72 in 1993. In 2008, the two ratios changed to 53/47 and 21/79.75 67

Zhai (2010). Ibid. 69 Zhang (2011). 70 Ibid. See also CIEI Law, art. 5. 71 Op. cit. 69. 72 Ibid. 73 Ibid. 74 The PRC State Council (2011). 75 Yan (2010). 68

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The two sets of data clearly indicate that since the tax-revenue-division reform, Chinese local governments have been given a smaller piece of the tax-revenue pie contributing more financial strength to make the pie bigger. Also, the “one-veto-all criterion” (一票否决制度) of China’s official promotion system should be considered. This means that a government leader can never get promoted if s/he fails to fulfill one crucial task assigned by the superior government. It puts huge pressure on the local government. Consequently, these sub-factors have provided senior local officials with strong incentives to explore ways to substantially increase local fiscal incomes to successfully complete heavy tasks saddled by superior governments. In this vein, commodity exports represent a lucrative approach for local governments to enlarge their fiscal revenues.76 Therefore, they hold a very positive attitude toward pushing commodity exports and try their best lobbying commodity export inspection bureaus to apply inspection standards in a loose manner. Today, the commodity export inspection bureaus in China rely on the rules and standards of destination countries to inspect exported commodities.77 Because each jurisdiction maintains its own distinctive inspection standards for any given commodity, it is very difficult for Chinese inspectors to be acquainted with all of these standards.78 In particular, a large portion of Chinese inspectors are less-trained, part-time employees, most of whom lack the capability to accurately handle these assorted standards.79 It is thus inevitable that sloppy and rough inspections frequently occur in practice.

Latest Development on the Supervision of Food Safety Since the implementation of the FSL in 2009 and the revision in 2015, China continuously revised the FSL in 2018 and 2021. Despite the changing of the department name, i.e., the food safety supervision and administration department of the State Council,80 there is not much amendment in both the 2018 and the 2021 versions. Nevertheless, the strengthening of supervision is noteworthy. Compared to the 2009 version, Article 2 explicitly changed the ambiguous concept, “food circulation,” into “food sales.” The priority of food safety shall be given to prevention, risk management, and full process control.81 And the protection of food safety requires the whole society to participate in, and a scientific and rigid regulatory system shall be established.82 Food producers and traders shall be responsible for the safety of the food 76

Zhou et al. (2004). Ibid. 78 Ibid. 79 Ibid. 80 Food Safety Law of the People’s Republic of China (2021 Amendment), ch 1, article 5. 81 Ibid. ch 1, article 3. 82 Ibid. 77

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which they produce or deal in, whose behaviors shall be in accordance with laws, regulations, food safety standards, and self-disciplines, and accept supervision from the society.83 The local people’s governments at and above the county level shall establish the information sharing mechanism for food safety.84 The people’s governments at a higher level shall review and evaluate the food safety regulatory work of the people’s governments at a lower level, and a local people’s government at or above the county level shall review and evaluate the food safety regulatory work of the food safety supervision and administration department and other relevant departments at the same level.85 The latest FSL also attaches more supervision responsibilities to the food industry associations and consumer protection associations. According to Article 9, food industry associations shall strengthen industry selfregulation, establish and improve industry norms and punishment and reward mechanisms in accordance with their respective articles of association, provide food safety information, technology, and other services, guide and supervise food producers and traders in legally engaging in production and trade, enhance integrity in the industry, and publicize and disseminate food safety knowledge; consumers protection associations shall conduct social supervision against activities in violation of the FSL or damaging the lawful rights and interests of consumers.86 The 2021 FSL also paid attention to food additives. Those food additives with harmful substances and false production dates, and those that had exceeded the limits specified in food safety standards are prohibited from production.87 The food safety supervision and administration departments should randomly select the food safety management personnel of enterprises for supervisory assessment and publish the assessment results, but may not charge any fees for such supervisory assessment.88 The amount of fine raised to not less than 50,000 yuan but not more than 200,000 yuan.89 In addition to the revision of legal documents, President Xi Jinping changed the accountability mechanism, from the strictest standard, supervision, punishment, and accountability to who is the main supervisor, who should be supervised, and how to supervise. According to the Opinions of the Central Committee of the CPC and the State Council on Deepening the Reform and Strengthening Food Safety90 and Regulations on Food Safety Responsibility of Local Party and Government

83

Op. cit. 81, ch 1, article 4. Op. cit. 81, ch 1, article 6. 85 Op. cit. 81, ch 1, article 7. 86 Op. cit. 81, ch 1, article 9. 87 Op. cit. 81, ch 4, article 34. 88 Op. cit. 81, ch 4, article 44. 89 Op. cit. 81, ch 4, article 130, 131. 90 The Central Committee of the CPC and the State Council (2019). 84

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Leading Cadres,91 local party committees and governments are the major responsibility holders. The State Administration for Market Regulation published the Provisions on the Supervision and Administration of the Implementation of Main Responsibility for Food Safety by Enterprises on September 22, 2022, which came into effect on November 1, 2022.92 Article 3 explicitly rules out persons to be supervised, which are the primary persons in charge of enterprises, food safety directors, and food safety officers.93 On September 27, 2022, the Food Safety Commission of the State Council established an Opinion and a Guideline regarding food safety inspection, which categorized the accountability of food safety to the provincial government, the municipal government, and the government at the county level and township level.94 In light of the above changes, through the management of leading cadres of government at each level, the central committee of CPC wish to supervise food safety problems in a stricter manner.

Conclusion The above description has sketched out the current Chinese commodity export inspection system, which is riddled with flaws. It is clear that some of the flaws are fundamentally ascribed to the institutional settings of China, such as the governmental personnel quota system and the fiscal allocation system. Thus, improving the Chinese commodity export inspection system must be accomplished in collaboration with the political reform of Chinese governments. Otherwise, it is destined to fail. However, China’s political reform is a long-term project. Consequently, the improvement of the Chinese commodity export inspection system will also take a long time. Under such circumstances, to reinforce China’s exercise of the right to take traderelated restrictive measures for consumer protection as granted by the WTO law, post ante measures should be introduced by the Chinese authorities. It is an alternative to continuously and incrementally improving the commodity export inspection system, which represents an ex ante mechanism. In this regard, CFSLI is undoubtedly an optimal option considering its outstanding remedial function for consumers. Therefore, apart from international human rights law, it is also supported by the WTO law that China ought to launch CFSLI in a timely manner. Globalization brings us an interconnected forum that can be also applied to legal research. To mitigate the serious food safety problem in China, there is an urgent need for CFSLI to be launched by the Chinese authorities. As verified by this research, the legitimacy of CFSLI in China is not only rooted in domestic laws, but also embedded in public and private international law in its broad sense. In particular, governed by the human right perspective, public international law and broadly interpreted private 91

The Central Committee of the CPC and the State Council (2019). State Administration for Market Regulation (2022). 93 Ibid. 94 State Administration for Market Regulation (2022). 92

318 Table 15.1 Ratio of Fiscal Incomes and Expenses between the Chinese Central Government and Local Governments in 1993 and 200895

L. Zhang and X. Zhang Year

Fiscal Income Ratio (%)

Fiscal Expense Ratio (%)

1993

Central

28

Local

78

72

2008

Central

53

21

Local

47

79

22

Source Compiled by the author

international law have already twisted their arms to collectively support the Chinese CFSLI attempt. On the one hand, this attempt helps China to better perform its international obligation to protect the subordinated human right to safe food. On the other hand, it also facilitates and reinforces China’s exercise of the right of taking trade-related restrictive measures for consumer protection. Examining CFSLI from a viewpoint of international law, it further provides two valuable points for legal research in the future. First, the holistic approach covering domestic and international law must be noted when scrutinizing a legal phenomenon. Second, the ideology and principles of public international law must be emphasized when analyzing private international law broadly, and vice versa. It is fair to say that, in terms of core values and methodologies, public international law and broadly interpreted private international law are increasingly converging with each other rather than diverging. Acknowledgements The authors are indebted to Mr. Jianlei Luo for his assistance to change the footnote format throughout the article according to the Springer Style.

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Ibid.

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Lin Zhang Professor of Law at Shandong University of Technology and Adjunct Professor at Jilin University School of Law. LL.B./LL.M. (Shandong Univ. of Sci & Tech), Ph.D. (Hong Kong). The author may be contacted at: [email protected] Xiaochen Zhang Lecture at Shandong University of Technology. LLB. (Southwest U. of Political Science & Law). LL.M. /Ph.D. (Sheffield). Post-doctor (Jilin U.) The author may be contacted at: [email protected]. The authors are indebted to Mr. Jianlei Luo for his assistance to change the footnote format throughout the article according to the Springer Style.