Abstract: Though operating in some form or another for over half a century, sovereign wealth funds (SWFs) did not become an object of general attention until the early part of the 21st century when a combination of the need of developed states for investment and the growing acceptability of state investment in private markets abroad made them both threatening and convenient. Assured by the framework of the Santiago Principles most states now view SWFs as a useful multi-purpose sovereign investment vehicle. Yet over the last decade or so, SWFs appear to have developed the potential to become an important instrument in good governance and development, especially for resource rich and capacity poor developing states. Following the lead of Chile, and with the patronage of IFIs, these SWFs have begun to serve objectives as and with development banks both within and beyond their home state. This paper considers the capacity of SWFs to serve ends beyond mere fund value maximization as envisioned in the Santiago Principles. It explores the value of SWFs as a means of enhancing governance capacity in weaker states, its utility in enhancing development objectives, the emerging landscape of joint ventures among SWFs for development and their intersections with emerging infrastructure and development banks, and their importance in enhancing the operationalization of emerging international business and human rights standards not only within their own organizations but through their investment activities. A brief assessment of these trends ends the paper. It develops a set of transformative changes in approaches to SWF instrumentality that SWFs, especially the smaller SWFs and those in developing states, with a focus on Africa, might deploy in structuring and operating their SWFs within a globalized economic order. These strategies are meant to avoid the circular characteristics of current discussions grounded on premises of finance instrument silos and state based systems that no longer accord with the realities of, and fail to take advantage of the possibilities now offered through, global finance and can be grouped into the three transforming categories suggested in Section III: regionalization strategies; financial objectives strategies; governance strategies.The Article ends by suggesting that it may be time to move from the constraining language of SWFs to the more realistic law of sovereign investing.
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Abstract: The distinction between the obligations of public and private entities, and their relation to law, is well known in classical political and legal theory. States have a duty that is undertaken through law; enterprises have a responsibility that is embedded in their governance. These fundamental divisions form part of the current international efforts to institutionalize human rights-related norms on and through states and enterprises, and most notably through the U.N. Guiding Principles for Business and Human Rights. The problems of conforming to evolving norms becomes more difficult where states project their authority through commercial enterprises. These state-owned enterprises (SOEs) operate where state duty and enterprise responsibility meet.
This Article takes a close look at the issue of the human rights duties of states as owners of SOEs, and of the responsibilities of SOEs for their own human rights related conduct. The form and substance of these duties and responsibilities are considered in light of three recent developments. The first is the increasingly prominent focus on SOEs as human rights-bearing institutions in international soft law and norms. The second is the substantial change in the direction of US policy in trade and globalization. The other is the maturation of Chinese outbound economic and investment policy, where its construction of an outbound nationalist globalization—the One Belt One Road policy—relies to some extent on the projection of commercial power through Chinese SOEs.The Article offers a set of challenges and recommendations for further development. These recommendations and challenges suggest that issues of corporate personality, sovereign immunity, asset partition, and regulatory compartmentalization may well hobble the work of embedding human rights within the operation of states as owners and SOEs as public enterprises. To embed human rights more effectively in accordance with evolving international standards, it may be necessary to substantially change contemporary and backwards-looking legal frameworks within which SOEs now operate. Moreover, the Article demonstrates the shortcomings of the current strongly held consensus that the focus of regulatory governance must be grounded in and through a formally constituted enterprise, the SOE, rather than focusing regulation on economic activity irrespective of the form in which it is undertaken. Until these conceptual issues are considered, the effective regulation of SOEs, supply chains, and multinational corporations will remain elusive.
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Abstract: Corporate social responsibility (CSR) can be split along two distinct lines. The first touches on the nature of corporate personality and is rooted in domestic law regulating enterprises specifically and legal persons generally. The second touches on the nature of the rights of individuals and is rooted in international law (and sometimes domestic constitutional law) defining the scope of the human rights of individuals and the consequential obligations of states and legal persons. Both conversations intertwine, though they tend to operate autonomously. In both cases, however, the traditional focus of corporate responsibility has focused on the relationship between an operating company and its direct effects on individuals, society, and the environment. But increasing attention has been paid to indirect compliance through private intermediaries—the financial institutions that provide operating capital to enterprises. This Article considers the corporate social responsibilities of financial institutions, including sovereign wealth funds, for the conduct of their borrowers. The focus will be the extent of any duty or responsibility of lenders to ensure that their borrowers comply with CSR obligations (or alternatively conform to international human rights standards) as a core aspect of their own CSR obligations, or alternatively, of their responsibility to respect human rights. Section II examines the general regulatory framework. There are two relevant aspects. The first is to understand the scope and character of the legal norms that may apply to enterprises generally with respect to their operations that might be understood as CSR or human rights related in nature. The second aspect considers the range of non-legal normative governance rules that might apply. In the process, it will be important to distinguish between a CSR based regulatory approach and a human rights based approach. Section III considers the application of these norms to financial institutions. This requites distinguishing between those obligations that apply to the internal operations of financial institutions generally, and those obligations that apply to the financial institution’s obligations with respect to its lending activities, that is with respect to its relationship with its borrowers. The Article includes a brief examination of recent cases in which financial institutions undertook such a responsibility, and the ways in which the particular institution undertook the obligation. Three different types of institutions are considered—private banks, sovereign wealth funds/state owned enterprises, and international financial institutions (IFIs). The Article ends with a preliminary consideration of the consequences of this movement for domestic CSR in the United States.
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Larry Catá Backer, “Between the Judge and the Law—Judicial Independence and Authority with Chinese Characteristics,” Connecticut Journal of International Law 33(1):1-41 (2017)
Abstract: What is the scope and nature of judicial reform? To what extent does borrowing from Western models also suggest an embrace of the underlying ideologies that frame those models? It is a common place in the West, whether in Common Law or Civil Law states, that the integrity of the judiciary depends on their authority to interpret law and to apply that interpretation to individual cases and the litigants that appear before the courts. That presumption, however, embeds premises about the organization of political and administrative authority that may be incompatible with those of states developing Socialist Rule of Law structures within Party-State systems. In Common law states those deep presumptions touch on the disciplinary role of judicial opinions as a constraint on judicial interpretation. In civil law states that discipline arises from the constraining principles of the legal codes themselves. In both the legislatures serve as the ultimate check in a complex dialogue with courts in three respects. First, judges serve a political role in their relation to law. Second, cases themselves serve an important political role as well. Third, courts begin to serve as the place where societal narratives are forged and popular expression is constructed and applied. In Socialist rule of law systems, the disciplinary systems are quite different and ought to produce a different relationship between courts, law, and the cases they are bound to apply fairly and consistently under law. This paper considers the way that the logic and grounding principles of Chinese Marxist Leninism may provide guidance in the construction of a judicial enterprise that is both true to its organizational logic and which enhances the authority of judges to serve litigants fairly. It suggests the points of compatibility and incompatibility in the ideologies of these distinct systems of judging and what it may mean for judicial reform in China. That consideration, in turn is based on a fundamental difference, in Socialist Rule of Law systems, between the authority to interpret law and the authority to apply law to an individual case. For Chinese judicial reform it is in the perfectibility of the judge that lies the perfectibility of law that in turn ensures the perfectibility of the judge. Part II considers in very broad strokes the relationship between the judge and law in the West. Part III then considers Chinese reforms touching on the relationship between the judge and the law, and the evolution of normative structures within which one can speak to judicial independence. Part IV then considers the project from the perspective of the grounding ideology of the Chinese state. From that fundamental distinction, the paper will propose a Socialist approach to the judicial function compatible with its own logic and legitimacy enhancing under global consensus principles for a well-organized and functioning judiciary.
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通过集体组织的社会主义现代化评《中华人民共和国慈善法》《中国非营利评论》，第19卷，社会科学文献出版社2017年版，第35—59页” [Commentary on the New Charity Undertakings Law: Socialist Modernization Through Collective Organizations, 19 China Nonprofit Review”, 35-59 (Beijing, China: Social Science Literature Publishing House 2017)].
English language version published as Larry Catá Backer, “Commentary on the New Charity Undertakings Law: Socialist Modernization Through Collective Organizations,” The China Nonprofit Review 9(2):273-309 (2017) (DOI:https://doi.org/10.1163/18765149-12341334).
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ABSTRACT: China’s new Charity Law represents the culmination of over a decade of planning for the appropriate development of the productive forces of the charity sector in aid of socialist modernization. Together with the related Foreign NGO Management Law, it represents an important advance in the organization of the civil society sector within emerging structures of Socialist Rule of Law principles. While both Charity and Foreign NGO Management Laws could profitably be considered as parts of a whole, each merits discussion for its own unique contribution ot national development. This essay considers the role of the Charity Law in advancing Socialist Modernization through the realization of the Chinese Communist Party(CCP) Basic Line. The essay is organized as follows: Section II considers the specific provisions of the Charity Law, with some reference to changes between the first draft and the final version of the Charity Law. Section III then considers some of the more theoretical considerations that suggest a framework for understanding the great contribution of the Charity Law as well as the challenges that remain for the development of the productive forces of the civil society sector at this historical stage of China’s development.
