The Rule of Law in a Globalized World

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Aug 28, 2011
by Salzburg Global Seminar Staff
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The Rule of Law in a Globalized World

Experts from diverse legal fields met in Salzburg to discuss rules, governance, the nature of law itself and what this means in different parts of the world Invigorating discussions during Plenary sessions

At a time when the world is undergoing a great deal of economic, political and social upheaval, there is more and more interest in, and argument about, the meaning of the rule of law and the proper role of law in society - issues examined last week at the Salzburg Global Seminar's five-day session on 'The Rule of Law in a Globalized World'.

A series of panels during the week explored the particular implications of globalisation for the rule of law in different areas of practice areas, but in so doing also highlighted several unifying themes. Education, especially, was an issue that came up time and time again.

Right from the start, Kenneth Dam from the University of Chicago, who chaired the session, stressed the need to break the topic down into separate legal fields and explore not only rules, but governance, the nature of law itself and what this means in different parts of the world.

In international trade, former U.S. Trade Representative Carla Hills pointed to the great strides that have been made in reducing poverty and boosting transparency with the opening up of global markets under agreed rules, particularly since the founding of the World Trade Organization.

This opening is, of course, far from complete. Alan Wolff, co-chair of Dewey & Le Boeuf's international trade practice group, pointed out that there is still much progress to be made in terms of liberalizing trade and investment around the world. As the stalling of the Doha Round shows, in many cases there is still a long way to go before emerging countries and the West are anywhere near reaching a consensus on certain trade issues. But in Hills's view education - or perhaps re-education - could help to break the deadlock, since it is partly caused by the least developed countries (LDCs)' lack of the necessary know-how to negotiate trade issues effectively. If better informed, she suggested, they might be better placed to understand the benefits available to them.

The importance of education was also one of the main points emerging from the panel on the rule of law in the Middle East. In this case it is not so much the developing countries as the developed nations of the West that could benefit from being better informed about the Middle East, according to Azizah al-Hibri, founder and chair of Karamah - Muslim Women Lawyers for Human Rights. If the West is to really understand the true causes and implications of the Arab Spring and what it means for the rule of law in this region, she argued, it needs to reject preconceived ideas, 'redefine its view of Islam and re-educate itself about the Islamic world'. As she explained, living in a globalized world has made this all the more essential: 'We are a global village now and we know that policies based on wrong assumptions have bad consequences. So perhaps it is time to look at each other more realistically and accurately, and this can only happen through knowledge, not through stereotypes.'

As the Arab Spring itself demonstrated, modern technology has increased the flow of information around the world via the Internet and focused a spotlight on the rule of law across the Middle East. In more general terms, it is also interesting to note that the Internet has had a direct impact on the rule of law in relation to particular practice areas such as intellectual property (IP). As Johannes Christian Wichard, the head of global issues at the World International Property Organization, explained, international law-making has had a tough time keeping up with the sheer pace of digital advancement in recent years. In this sense, the challenges of controlling cyber space pose real questions about the future of IP protection and the rule of law in this sector.

Moving away from practice-specific implications, globalization also has wider connotations for the rule of law in light of the pressures it places on businesses and financial institutions to adapt both their local and international operations to contend with new challenges. Both Peter Solmssen, general counsel at Siemens AG and Robert Shanks, of Raytheon, agreed that, in the business world, senior management is directly responsible both for enforcing the rule of law in the workplace and for creating a work ethos which prioritises compliance. As Solmssen went on to explain, his challenge, when brought in to "clean up" Siemens after the 2007 corruption scandal, was to 'change the entire culture of the company to make compliance a top priority.' He is also a firm believer that large companies like Siemens have a role to play in fighting corruption on a more universal level: They should look not only to enforce the rule of law in the way that they conduct business, he stressed, but also capitalise on their combined market power to help 'drive out corruption and promote transparency,' in the global marketplace as a whole.

Meanwhile, the sessions on capital markets and emerging economies highlighted some of the immediate and continuing financial challenges faced in both developing and industrialised countries and what they mean for the overall development of the global market economy. Understandably, the prospects for development and growth in fragile states and low-income countries depend largely on a country's own particular economic and political circumstances. But, as Carlos Primo Braga, special representative and director for Europe External Affairs (EXT) at the World Bank, told us, if you look at the developing world as a whole you see that its fortunes are increasingly determined by the progress and stability of both middle-income countries (MICs) and so-called "booming" nations, such as China, India and Brazil, and their ability to manage their own growth effectively.

Financial institutions themselves can also help promote the rule of law in the finance sector, says Michel Nussbaumer, chief counsel of the European Bank for Reconstruction and Development (EBRD). 'We have seen that there is a strong correlation between good legislation for business and good market development. Those countries with better legislation seem to do better in market development, so by supporting legal reform in the commercial sphere, we also contribute to the commercial process,' he notes. Since 1991, the EBRD has worked to promote the transition of Central and Eastern European countries to a market economy. As a result of its success in Europe, the Bank is now expanding its operations to North Africa and the Middle East where, as Nussbaumer says, it will need to adopt new strategies for promoting the rule of law, tailored to the particular needs of this region.

On the final day three working groups, which had working through the week in the intervals between panel discussions, presented their findings. These suggested that the very nature of the rule of law and its implications can mean very different things for different nations. Although, as chairman Dam noted, a consensus cannot be reached on what factors are absolutely essential to the rule of law, it is possible to agree on one thing: we can be optimistic that if we examine the core values of each society, we can establish both viable and aspirational goals for the rule of law in both developing and industrialised countries, as well as on a more international level, in a world which contends with the increasing and ever-evolving pressures and challenges of globalisation.