GlobalTrust Working Paper Series 3/2014

The Emergence of Global Governance and the

Corresponding Need to Regulate it (from “The Law of

Global Governance” (forthcoming, 2014))

Eyal Benvenisti

The GlobalTrust Working Paper Series can be found at

http://globaltrust.tau.ac.il/publications

ISSN 2309-7248

© Eyal Benvenisti

Cite as: Eyal Benvenisti, The Emergence of Global Governance and the

Corresponding Need to Regulate it (from “The Law of Global Governance”

(forthcoming)

GlobalTrust Working Paper 3/2014

http://globaltrust.tau.ac.il/publications

2

Abstract

The following are the texts of the Introduction and Chapter 2 of my Hague Lectures on “The

Law of Global Governance” forthcoming in the 368 Recueil des cours and in the Pocketbook

Series of the Hague Academy of International law.

The book argues that the decision-making processes within international organizations and other

global governance bodies ought to be subjected to procedural and substantive legal constraints

that are associated domestically with the requirements of the rule of law. The book explains why

law – international, regional, domestic, formal or soft – should restrain global actors in the same

way that judicial oversight is applied to domestic administrative agencies. It outlines the

emerging web of global norms designed to protect the rights and interests of all affected

individuals, to enable public deliberation, and to promote the legitimacy of the global bodies.

These norms are being shaped by a growing convergence of expectations that global institutions

adopt rules and institutions that ensure public participation and representation, impartiality and

independence of decision-makers, and accountability of decisions. The book explores these

mechanisms as well as the political and social forces that are shaping their development by

analyzing the emerging judicial practice concerning a variety of institutions, ranging from the

UN Security Council and other formal organizations to informal and private standard-setting

bodies.

These two chapters set out the general framework of the study of global governance and explores

the emergence of global governance bodies, explaining the growing need to find ways to regulate

it.

3

Chapter 1

Introduction

The challenges posed by international organizations and other global governance bodies have

been noted by legal scholars since the early international organizations started functioning. At

the time, the concern was how to ensure the proper functioning of such bodies. With the

exponential proliferation of international organizations and the massive transfer of regulatory

functions to them in all areas of life,1 even more serious and fundamental questions came to the

fore, such as the worry about the future of international law (the fear of “fragmentation”), the

concern over fair decision-making within international organizations (such as the worry about

the “democratic deficit” within them), and finally, the anxiety of democracies regarding the loss

of their autonomy to authoritative organizations led by powerful nations. Civil society protests

against the World Bank’s financing of land development projects such as the Narmada Dam in

India in the 1980s and 1990s, or against the World Trade Organization in its Seattle (1999) and

other meetings, reflected the growing conviction of diffuse stakeholders in developed and

developing countries that the risks were too grave to be disregarded.2 These developments were

soon reflected in academic writing. While initially a new field of study focused on the law of

international organizations, examining the internal structures of international organizations and

their external competences,3 later the attention shifted to defining the constraints that should be

imposed on decision-making processes within international organizations and other global

governance bodies and the ways their powers could be checked.4 The efforts to design and

1 SABINO CASSESE, THE GLOBAL POLITY: GLOBAL DIMENSIONS OF DEMOCRACY AND THE RULE OF LAW (2012).

2 For an insightful account of the Narmada Valley struggle and its global context, see Balakrishnan Rajagopal, The

Role of Law in Counter-hegemonic Globalization and Global Legal Pluralism: Lessons from the Narmada Valley

Struggle in India, 18 LEIDEN J. INT’L L. 345 (2005). 3 The list is quite long and includes HENRY G. SCHERMERS & NIELS M. BLOKKER, INTERNATIONAL INSTITUTIONAL

LAW (5th

ed., 2011); JAN KLABBERS, AN INTRODUCTION TO INTERNATIONAL INSTITUTIONAL LAW (2nd

ed., 2009);

PHILIPPE SANDS & PIERRE KLEIN, BOWETT'S LAW OF INTERNATIONAL INSTITUTIONS (6th

ed., 2009); DAN SAROOSHI,

INTERNATIONAL ORGANIZATIONS AND THEIR EXERCISE OF SOVEREIGN POWERS (2007); JOSÉ E. ALVAREZ,

INTERNATIONAL ORGANIZATIONS AS LAW-MAKERS (2005); NIGEL D. WHITE, THE LAW OF INTERNATIONAL

ORGANISATIONS (2nd

ed., 2005); CHITTHARANJAN FELIX AMERASINGHE, PRINCIPLES OF THE INSTITUTIONAL LAW OF

INTERNATIONAL ORGANIZATIONS (2nd

ed., 2005). 4 The leading thinkers in this field have been Sabino Cassese (see, most recently, GLOBAL ADMINISTRATIVE LAW:

THE CASEBOOK (Sabino Cassese et al. eds., 3rd

ed., 2012) [hereinafter GAL CASEBOOK]); and the leaders of the

Global Administrative Law Project at NYU School of Law (see Benedict Kingsbury, Nico Krisch & Richard B.

Stewart, The Emergence of Global Administrative Law, 68 LAW & CONTEMP. PROBS. 15 (2005) [Kingsbury, Krisch

& Stewart, Emergence]). Armin von Bogdandy and his team at the Max Planck Institute for Comparative Public

Law and International law have concentrated on bodies that exercise “public authority” (see THE EXERCISE OF

4

develop norms of “global administrative law” or of “international administrative law” reflected

the realization that international organizations merit no more trust than domestic administrative

agencies; that they are not necessarily

”the harbingers of international happiness, embodying a fortuitous combination of our

dreams of ‘legislative reason’ and the idea that everything international is wonderful

precisely because it is international.”5

Obviously, global governance institutions are indispensable for resolving coordination

and cooperation problems and for promoting global welfare. However, they also pose challenges

to democracy at the national level. The transfer of regulatory authority from the domestic to the

international has been a vehicle for a handful of powerful countries to escape the domestic

structural checks and balances, such as the separation of powers, court independence, and limited

government, that have played an important role in safeguarding democratic deliberation and

human rights within states.6 Although some international organizations were designed with the

explicit goal of enhancing domestic democratic processes (e.g., the Aarhus Convention on access

to domestic environmental decision-making)7 and international tribunals possess the capacity to

ensure voice to weak stakeholders at the domestic level (e.g., in the areas of human rights, or

trade),8 the bulk of the international organizations were not intended to address democratic

deficits at the national level. Many international organizations have functioned to further

disempower diffuse domestic electorates by expanding the executive power of powerful states

and increasing the leverage of multinational corporations.9 The net result is that all too often the

move to international institutions has to varying degrees eroded the traditional constitutional

PUBLIC AUTHORITY BY INTERNATIONAL INSTITUTIONS: ADVANCING INTERNATIONAL INSTITUTIONAL LAW (Armin

von Bogdandy et al., 2010); Armin von Bogdandy, Philipp Dann & Matthias Goldmann, Developing the Publicness

of Public International Law: Towards a Legal Framework for Global Governance Activities, 9 GERMAN L.J. 1375

(2008)). 5 Jan Klabbers, The Life and Times of the Law of International Organizations, 70 NORDIC J. INT'L L. 287, 288

(2001). 6 Eyal Benvenisti & George W. Downs, The Empire’s New Clothes: Political Economy and the Fragmentation of

International Law, 60 STAN. L. REV. 595 (2007) [hereinafter Benvenisti & Downs, Empire]. 7 Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in

Environmental Matters, Jun. 25, 1998, 38 I.L.M 517, 2161 U.N.T.S 447, available at

http://www.unece.org/fileadmin/DAM/env/pp/documents/cep43e.pdf. 8 Robert O. Keohane, Stephen Macedo & Andrew Moravcsik, Democracy-Enhancing Multilateralism, 63 INT’L

ORG. 1 (2009). 9 See Benvenisti & Downs, Empire, supra note 6, for an analysis of this claim.

5

checks and balances found in many democracies, as well as other domestic oversight and

monitoring mechanisms of executive discretion.10

The proliferation of international organizations also poses challenges from a global

perspective. A large number of functionally specialized international organizations and

international tribunals determine policies in almost all aspects of life, including in the areas of

financial stability, market regulation, development, environment, transportation, intellectual

property, labor standards, public health, immigration, education, communications, and so on,

with little or no institutional cooperation among different institutions with potentially related

interests. Such fragmentation – essentially operating like a “divide and rule” strategy, which

prevents relatively weaker actors from aggregating their voices to resist the fewer but stronger

actors – has hampered the emergence of political competition at the global level by isolating

policymaking within narrow, functional venues that are effectively monitored and controlled by

the executive branches of a small group of powerful democratic states.11

These states have long

played a disproportionately large role in selecting key personnel to steer international

organizations and tribunals, and their bureaucracies are among the few that possess the variety

and depth of regulatory expertise to effectively monitor the broad expanse of international

organizations’ activity and prevent goal displacement.12

Although there are numerous

international judicial bodies whose overlapping spheres of activities provide them with abundant

opportunities to pass judgment on each other’s policies, there have been far fewer cases of robust

review than might have been expected.13

As a result, the large and heterogeneous global public

that resides outside the small group of powerful states can never be confident that their interests,

in the absence of due process, are being adequately protected from the exercise of arbitrary

10

Richard B. Stewart, Accountability, Participation, and the Problem of Disregard in Global Regulatory

Governance (Jan. 2008) (discussion draft), available at

http://www.iilj.org/courses/documents/2008Colloquium.Session4.Stewart.pdf (discussing strategies to address the

evolving gaps in the efficacy of domestic political and legal mechanisms of participation and accountability

resulting from shifts of regulatory authority from domestic to global regulatory bodies). See also Eyal Benvenisti,

Exit and Voice in the Age of Globalization, 98 MICH. L. REV. 167 (1999) (arguing that by employing international

organizations as venues for policymaking, state executives and interest groups manage to reduce the impact of

domestic checks and balances). There may be additional reasons for the concentration of power in the executive and

the decline of domestic checks. See BRUCE ACKERMAN, THE DECLINE AND FALL OF THE AMERICAN REPUBLIC

(2010) (discussing what he sees are the (domestic) factors that lead to the rise of an unchecked U.S. presidency). 11

See Eyal Benvenisti & George W. Downs, Empire, supra note 6, for an analysis of this phenomenon. According

to Stewart, fragmentation of regulatory decision-making at the domestic level can have similar consequences, see

Richard B. Stewart, Madison’s Nightmare, 57 U. CHI. L. REV. 335 (1990) [hereinafter Stewart, Madison's]. 12

Benvenisti & Downs, Empire, supra note 6. 13

Abigail C. Deshman, Horizontal Review between International Organizations: Why, How, and Who Cares about

Corporate Regulatory Capture, 22 EUR. J. INT'L L. 1089 (2011), and see in general the discussion in Chapter 6.

6

power. These bodies are accountable, but only to certain specific actors that control and fund

them, not necessarily to those they affect.14

Developing countries, in particular, often lack the

administrative capacity to meet new regulatory standards,15

much less possess the expertise and

political clout necessary to influence the character of those standards or to ensure that agencies

are reliably fulfilling their mandates.16

Even diffuse constituencies in developed countries are

disadvantaged by international organizations’ opaque decision-making processes, which limit

their opportunities to participate and shape outcomes.

The study of the law that should regulate international organizations and other global

governance bodies seeks to identify the inherent weaknesses of these entities and to provide

remedies to cure them. There are weaknesses related to their functionality – whether they serve

the purposes they are set up to achieve – and there are weaknesses related to their ability to take

into account the interests and rights of all affected stakeholders (the two questions are obviously

interconnected). One challenge facing any proponent of this effort is precisely the initial notion

that “everything international is wonderful,” and therefore international organizations should be

left to their own devices – immune especially from judicial review – for global society to

flourish. This attitude, coupled with the powerful actors’ wish to retain unfettered discretion,

suggests that the efforts to promote accountability and responsiveness in international

organizations, also in the legal academia,17

will remain an uphill struggle.18

As scholars of

domestic administrative law know all too well, the effort to regulate the regulators is an ongoing

game of evasion and avoidance: once interest groups feel themselves too constrained by the law

14

Stewart, Madison's, supra note 11, at 26-27 (noting that international organizations “are often subject to powerful

but in many cases informal mechanisms of supervisory and fiscal accountability to the most powerful states that

create, fund, and support these global institutions”); Nico Krisch, The Pluralism of Global Administrative Law, 17

EUR. J. INT'L L. 247, 250 (2006) [hereinafter Krisch, Pluralism] (noting that the problem with international

organizations is “not an absolute accountability ‘deficit’ … [r]ather … [they are] accountable to the wrong

constituencies. The World Bank, it is often claimed, should respond to the people affected by its decisions, rather

than primarily to the (mostly developed) countries that fund it. The FATF should be accountable to those states

subject to its measures, not just to its members. Or the Security Council should have to answer to the individuals it

targets directly with its sanctions, not only to its member governments or the broader membership of the UN”). 15

Benedict Kingsbury & Kevin Davis, Obligations Overload: Adjusting the Obligations of Fragile or Failed States,

(Nov. 22, 2010) (Preliminary Draft), available at

http://www.iilj.org/courses/documents/HC2010Dec01.DavisKingsbury.pdf [hereinafter Kingsbury & Davis,

Obligations]. 16

Krisch, Pluralism, supra note 14, at 275-76. In fact, many of these countries face difficulties complying with

their obligations under the various treaties, see Kingsbury & Davis, Obligations, supra note 15. 17

This has been documented and analyzed extensively by the Global Administrative Law scholarship: see GAL

CASEBOOK, supra note 4; Kingsbury, Krisch & Stewart, Emergence, supra note 4. 18

Eyal Benvenisti & George W. Downs, Toward Global Checks and Balances, 20 CONST. POL. ECON. 366 (2009).

7

that regulates administrative agencies, they seek to transplant their modus operandi to the private

market. The same goes in the global arena: as will be outlined in Chapter 2, in recent years

global governance has assumed an informal and even private character, which makes

international organizations an even more slippery target of regulation.

This book sets out to outline the remedies that the emerging field of global administrative

law offers for the maladies and risks of global governance. Like domestic administrative law,

this law focuses on the authority of the regulatory agency, on its decision-making process

(including representation and accountability requirements of transparency, participation, reason-

giving, and liability), on the limitations on its exercise of discretion, and finally on judicial

review mechanisms. Again like domestic administrative law, this law’s philosophy is based on a

strong belief in “the virtues of procedural justice.”19

Procedural regularity enhances

effectiveness, increases legitimacy and compliance, and ensures just substantive outcomes.

Because substantive justice is difficult to ascertain and to agree upon, a carefully designed

decision-making process that ensures that the decision-makers are impartial and skillful is likely

to reach decisions that are substantively just. Impartial and skilful actors need little normative

guidance.20

As noted by Paul Bator,

“[t]he task of assuring legality is to define and create a set of arrangements and

procedures which provide a reasoned and acceptable probability that justice will be done,

that the facts found will be ‘true’ and the law applied ‘correct.’”21

This assumption is obviously even more important in the global context where it is more

difficult, if not impossible, to arrive at collective agreements on substantive matters. If this

19

R. A. Macdonald, Judicial Review and Procedural Fairness in Administrative Law: I, 25 MCGILL L. J. 520, 538

(1979-80). 20

Benvenisti Eyal & Porat Ariel, Implementing the Law by Impartial Agents: An Exercise in Tort Law and

International Law, 6 THEORETICAL INQ. L. 1 (2005) (identifying the necessary and sufficient conditions for

promoting the impartiality of agents for reliable policymaking). 21

Paul M. Bator, Finality in Criminal Law and Federal Habeas Corpus for State Prisoners, 76 HARV. L. REV. 441,

451 (1963). See also Michael J. Muskat, Substantive Justice and State Interests in the Aftermath of Herrera v.

Collins: Finding an Adequate Process for the Resolution of Bare Innocence Claims Through State Postconviction

Remedies, 75 TEX. L. REV. 131, 186 (1996) (noting that “Professor Bator is probably right in believing that we can

never be truly sure that we have reached a substantively correct outcome in a given case, but he is also correct in

advocating that we at least implement the most effective possible procedures for finding the truth”).

8

assumption is correct, there is less pressure to delineate substantive legal constraints such as

those advocated by supporters of the constitutionalization of international law.22

This is not to suggest that the emphasis on the proper procedure for decision-making in

global governance bodies is a panacea. The task of ensuring that the decision-makers are

impartial and skillful is daunting. As we shall see – and as seasoned administrative lawyers know

all too well – the temptation to hide power in the cracks of the rules of procedure is very hard to

resist and to thwart. But more importantly, the authorization of the decision-makers (and the

celebration of their skillfulness and impartiality) obscures the potential democratic losses:

“Providing greater voice and participation cannot replace the lost vote of the community

in affairs essential to its wellbeing. Participation with no vote positions the public in an

inherently inferior position”23

as compared to direct participation as democracy requires. Therefore “the celebration of even the

most sophisticated accountability mechanisms should not conceal the fact that they remain

secondary to the primary urge of individuals to be the ones that take their futures in their own

hands.”24

As we shall see throughout these discussions, promoting accountability and

participation in global decision-making responds to democratic deficits in many ways, but

“though the individual is not left out of the constitution, she is relegated to pleading her case to

the arbiters of her destiny, without being able to be among those who decide.”25

In this sense, the

struggle to ensure accountability and representation in global governance bodies is extremely

important, but it cannot promise a full cure for the democratic losses that globalization entails.

22

On this see NICO KRISCH, BEYOND CONSTITUTIONALISM (2010); Karl-Heinz Ladeur, The Emergence of Global

Administrative Law and Transnational Regulation, 3 TRANSNATIONAL LEGAL THEORY 243 (2012); Mattias Kumm,

The Cosmopolitan Turn in Constitutionalism: On the Relationship between

Constitutionalism in and beyond the State, in RULING THE WORLD: INTERNATIONAL LAW, GLOBAL GOVERNANCE,

CONSTITUTIONALISM 258 (Jeffrey Dunoff & Joel Trachtman, eds., 2009). 23

Doreen Lustig & Eyal Benvenisti, The Multinational Corporation as 'The Good Despot': The Democratic Costs of

Privatization in Global Settings, 15 THEORETICAL INQUIRIES IN LAW 125 (2014) [hereinafter Lustig &

Benvenisti, The Good Despot]. 24

See Id. Id. 25

See Id.

9

Chapter 2

The Emergence of Global Governance and the Corresponding Need to Regulate it

State authorities increasingly delegate more and more regulatory discretion to various forms of

public and private, formal and informal institutions. Willingly or unwillingly, sovereigns

surrender their monopoly on regulatory power – what formerly defined the notion of sovereignty

– to actors whose reach defies political boundaries. Global governance now addresses almost all

areas of public and private life, from the disarmament of weapons of mass destruction to setting

food safety standards. These global bodies govern through formal norms (international or

domestic), informal standards and private contracts. They thereby shape the rights, interests and

expectations of diverse stakeholders across political boundaries. The aim of this chapter is to lay

out the basis for the study of the law that regulates global governance bodies by exploring the

types of global governance institutions and the purposes that they serve, as well as the challenges

that they pose to democratic principles of the rule of law and the protection of individual and

collective rights. Such an inquiry is required for understanding the function and the promise of

legal and institutional arrangements for regulating global governance.

As will soon become clear, the study of global governance institutions proposes a descriptive

thesis and a normative thesis. The descriptive thesis suggests that there is an ongoing process of

de-formalization of global governance, from formal intergovernmental organizations through

informal intergovernmental networks and public-private partnerships to private standard-setting

practices. The normative thesis holds that the rise of informality increases and intensifies

accountability problems. The regulation of global governance therefore needs to respond to the

combined effects of the growth in size and diversity of public regulators and their increasingly

informal modus operandi.

2.1 The Evolution of Diverse Forms of Global Governance

10

This section discusses the evolution of the technology of global governance.26

There are many

ways to present the typology of the various institutions (according to function, timeline, etc.).

Because our aim is to understand whether and if so how law can rein in these global regulators,

and because the available legal technology distinguishes between public and private bodies, as

well as between formal and informal procedures, it makes sense to offer a typology along these

lines.27

Several examples of the different types of institutions will be offered to concretize the

regulatory challenges each type poses. This typology begins with formal intergovernmental

international organizations (IGOs), which are also the first global institutions to have been

established. It then moves incrementally along the public/private axis, which is roughly also a

hard/soft law axis, and explores “the flight from IGOs” towards informal governmental

networks, public/private initiatives, and finally private bodies. A more specific form of global

governance is the direct exercise of public authority over individuals, such as in refugee camps

and in territories subject to UN peacekeeping forces. Ultimately, this section describes an

emerging governmental trend of unilateral global governance.

2.1.1 International Governmental Organizations (IGOs)

The first type of global bodies to emerge were the treaty-based International Governmental

Organizations (IGOs), characterized by José Alvarez as “[i]ntergovernmental entities established

by treaty, usually composed of permanent secretariats, plenary assemblies involving all member

states, and executive organs with more limited participation.”28

The International Law

Commission, in its Draft Articles on Responsibility of International Organisations, adds that

IGOs possess their own international legal personality.29

26

On international organization as "technology" see Michael W. Reisman, The Quest for World Order and Human

Dignity in the Twenty-First Century: Constitutive Process and Individual Commitment, in 351 COLLECTED

COURSES OF THE HAGUE ACADEMY OF INTERNATIONAL LAW, 234 (2012). 27

See also Benedict Kingsbury, Nico Krisch & Richard B. Stewart, The Emergence of Global Administrative Law,

68 L. & CONTEMP. PROBS. 15 (2005) [hereinafter Kingsbury, Krisch & Stewart, Emergence]. 28

José É. Alvarez, International Organizations: Then and Now, 100 AM. J. INT'L L. 324, 324 (2006). 29

Draft Articles on Responsibility of International Organizations, Int’l Law Comm’n, 63rd

Sess., June 6, 2011.

Article 2(a) defines an "International Organization" as "an organization established by a treaty or other instrument

governed by international law and possessing its own international legal personality. International organizations

may include as members, in addition to States, other entities."

11

Probably the first IGO is the Central Commission for Rhine Navigation, established in 1804.30

This was a ground-breaking undertaking, inspired by the French Revolution and its

determination to end a system of privilege, remove barriers to commerce and ensure free

navigation on the Rhine. The Treaty of 15 October 1804 between the French Empire and the

Holy Roman Empire abolished the dozens of tolls and other restrictions on transit that cities and

princes (the so-called “robber barons”)31

situated along the river had levied on goods and vessels

in transit. The treaty instituted a single toll levied by a joint administration controlled by the

French government and by the arch-chancellor of the German Empire. This first IGO had the

authority to use the proceeds of the toll to improve navigability and the state of the towpaths, as

well as to settle disputes with the various cities and princes along the river for having lost their

right to impose levies and other barriers to commerce. In 1815, the Final Act of the Congress of

Vienna added more specific authorization to the Central Commission to ensure freedom of

navigation in the Rhine and its main tributaries and facilitate levy collection.32

One should not

underestimate the challenges faced by this novel institution: it had to confront angry cities and

princes who had just lost a major source of revenue, respond to private complaints concerning

implementation, employ a judicial system along the river and inspectors to ensure the uniform

application of the toll, and invest in improving navigability along the river.33

In other words, the

Rhine’s Central Commission had to address and remove barriers to trade generated by domestic

commercial interest groups, of the type that still resonate today at the WTO and other global

fora, and it did so with no less determination and success.

The second IGO in time, the European Danube Commission (1856), had to confront another

archetypal challenge to global cooperation: the taming of a powerful actor. Founded at the end of

the Crimean War by the Paris peace treaty of 1856, this Commission was aimed primarily at

30

Dale S. Collinson, The Rhine Regime in Transition - Relations Between the European Communities and the

Central Commission for Rhine Navigation, 72 COLUM. L. REV. 485 (1972). For a general overview and analysis see

J.P. CHAMBERLAIN, THE REGIME OF THE INTERNATIONAL RIVERS: DANUBE AND RHINE 147-87 (1923); For more

resources, see the Commission website, CENTRAL COMMISSION FOR THE NAVIGATION OF THE RHINE,

http://www.ccr-zkr.org/11010200-en.html (last visited Feb. 5, 2014). 31

On these “robber barons” as a classical problem of “anti-commons,” see MICHAEL HELLER, THE GRIDLOCK

ECONOMY 3 (2010). 32

Appendix 16 B of 24 March 1815. See Collinson, supra note 30, at 488; For excerpts of the text of the Appendix,

see http://www.ccr-zkr.org/files/histoireCCNR/02_annexe-16-b-du-24-mars-1815.pdf . 33

Collinson, supra note 30, at 487-89; Chamberlain, supra note 30, at 178-87.

12

Russia, which by its acts and omissions had hindered commerce on the Danube to prevent

competition with its own port in Odessa.34

The Commission was authorized to

“remove the impediments, of whatever nature they may be, which still prevent the application

to the Danube of the arrangements of the Treaty of Vienna; … [to] order and cause to be

executed the necessary Works throughout the whole course of the River; and … [to] see to

maintaining the Mouths of the Danube and the neighboring parts of the Sea in a navigable

state.”35

The first example of a global coordination organization is the International Telegraphic Union

(ITU). The ITU (later renamed the International Telecommunication Union) was established by

the Paris Telegraph Conference of 1865, at which twenty nations agreed to set uniform tariff

rates for telegrams (based on the French gold franc) and to divide the charges among them. In

addition, experts representing the respective nations adopted rules on technical administrative

details. As in the Rhine Commission case, here too the implementation of the convention

encountered “[m]any difficulties of local opposition [which] had to be overcome before an

agreement could be reached.”36

A subsequent conference in 1868 set up a headquarters with a

secretariat, the Bureau of the Union.37

At the time of emerging multinational treaties, only states

were regarded as potential parties, and therefore Great Britain, whose telegraphic services were

still in private hands, was not invited to join.38

The Universal Postal Union (UPU) was established in 1874 by the Bern Postal Convention,

signed by 22 attending nations in September 1874.39

According to the UPU, the convention

“succeeded in unifying a confusing international maze of postal services and regulations into a

single postal territory for the reciprocal exchange of letters. The barriers and frontiers that had

impeded the free flow and growth of international mail had finally been pulled down.”40

34

Edward Krehbiel, The European Commission of the Danube: An Experiment in International Administration, 33

POL. SCI. Q. 38, 39-40 (1918). 35

Article XVII of the Peace of Paris, cited in id., at 44. 36

PAUL S. REINSCH, PUBLIC INTERNATIONAL UNIONS, THEIR WORK AND ORGANIZATION 16 (1911) [hereinafter

Reinsch, Public]. 37

Id. at 15-20; see also DISCOVER ITU'S HISTORY, http://www.itu.int/en/history/Pages/DiscoverITUsHistory.aspx

(last visited Feb. 5, 2014), for the history of the ITU. 38

International Telecommunication Union, 1865-1965: A Hundred Years of International Cooperation, 7 (1965)

available at http://www.itu.int/dms_pub/itu-s/oth/02/0b/s020b0000094e19pdfe.pdf. 39

See Reinsch, Public, supra note 36, at 21-28; see also the UPU’s website at, http://www.upu.int/en/the-

upu/history/about-history.html (last visited Feb. 5, 2014). 40

See The UPU, “about history”, http://www.upu.int/en/the-upu/history/about-history.html (last visited Feb. 5,

2014).

13

Moving beyond commerce, the first example of international cooperation in the field of health

is the “International Sanitary Bureau” (later renamed the Pan-American Health Organization, or

PAHO), established in Washington DC in 1902 by the “First General International Sanitary

Convention of the American Republics.”41

Its primary objective was, and still is, to “strengthen

national and local health systems and improve health outcomes for all people in the Americas”42

by promoting and coordinating efforts of the member states to combat disease, lengthen life, and

promote the physical and mental health of their people.43

The first global cooperation in the field

of health is the Rome Agreement Establishing the Office International d’Hygiene Publique, on 9

December 1907.44

The Office was responsible for the administration of international sanitary

conventions, the collection and dissemination of information of general public health

importance, as well as “the service of epidemiological intelligence.”45

Probably the first global IGO by which state parties undertook to accept obligations vis-à-vis

their respective citizens is the International Labour Organisation (ILO). By the turn of the

twentieth century it was recognized that the international regulation of labor was crucial. One of

the first theoreticians of IGOs, Paul S. Reinsch, noted in 1909 that

labor itself is an international force. Scarcely any nation at the present time provides from

its own population all the labor forces of which it is in need. More or less permanent

migrations of laborers from country to country take place at all times. The supply of labor

therefore is international in scope and calls for international control.46

In 1919, the growing internal pressure to accommodate workers and ban sweatshops47

and the

“fear of European states ‘going Bolshy’”48

added urgency to the establishment of the ILO. This

41

See Reinsch, Public, supra note 36, at 60; See also PAHO, Key Facts About PAHO,

http://www.paho.org/hq/index.php?option=com_content&view=article&id=92&Itemid=177&lang=en (last visited

Feb. 5, 2014). 42

For the PAHO fields of operation, see PAHO, Key Facts About PAHO, supra note 41. 43

See UNESCO archive at http://www.unesco.org/archives/sio/Eng/presentation_print.php?idOrg=1028 (last visited

Feb. 5, 2014). 44

See Reinsch, Public, supra note 36, at 58; NEVILLE M. GOODMAN, INTERNATIONAL HEALTH ORGANISATIONS AND

THEIR WORK (2nd

ed. 1971); David P. Fidler, From International Sanitary Conventions to Global Health Security:

the New International Health Regulations, 4 CHINESE J. INT'L L. 325, 328 (2005); Anne-Emanuelle Birn, The Stages

of International (global) Health: Histories of Success or Successes of History?, 4 GLOBAL PUB. HEALTH 50 (2009). 45

See WHO archive at http://www.who.int/archives/fonds_collections/bytitle/fonds_1/en/ (last visited Feb. 5, 2014). 46

Paul S. Reinsch, International Administrative Law and National Sovereignty, 3 AM. J. INT'L L. 1, 4 (1909)

[hereinafter Reinsch, International]. 47

Grainne de Burca, Robert O. Keohane, & Charles Sabel, New Modes of Pluralist Global Governance, 45 N.Y.U.

J. INT'L L. & POL. 723, 775 (2013).

14

was the first IGO to include domestic stakeholders – representatives of employers and public

unions – in its formal decision-making and implementation processes. According to Ostrower,

by 1930 the ILO had built a reputation for accomplishment and innovation that dwarfed the

reputation of the [league of Nations]. This does not mean that the ILO was always

successful in translating recommendations into law or dramatically improved the

conditions of labor throughout the world. Nevertheless, it set clear and reasonable

standards that served the interests of both employers and employees in member countries.49

The League of Nations, founded after WWI, was the first multitasked IGO.50

It was designed

to deal not only with keeping the postwar peace,51

but also to take charge of governing other

postwar arrangements, including the monitoring of the Mandate system52

and the minority

treaties.53

As Mazower notes, because the full assembly met once a year, “for the rest of the time,

the League’s civil servants were free to take the initiative.”54

The secretariat, even though it

comprised of less than 650 personnel at the peak of its power, “was far more powerful and

diverse” than any predecessor, and clearly demonstrated the logic of mission creep, turning the

League into “the umbrella organization and promoter of many of the international associations

that had been formed before the First World War,” 55

as well as taking up new initiatives such as

assisting refugees.56

In 1920 the League’s Council established the Joint Economic and Financial Committee, a

provisional organization, formally set up in 1923 as the Economic and Financial Organisation

48

MARK MAZOWER, GOVERNING THE WORLD: THE HISTORY OF AN IDEA, 152 (2012); ANTONY EVELYN ALCOCK,

HISTORY OF THE INTERNATIONAL LABOUR ORGANISATION (1971). 49

GARY B. OSTROWER, THE LEAGUE OF NATIONS: FROM 1919-1929 108 (1996). 50

On the League see most recently PATRICIA CLAVIN, SECURING THE WORLD ECONOMY: THE REINVENTION OF THE

LEAGUE OF NATIONS, 1920-1946 (2013). For a review of the literature on the League, see Susan Pedersen, Back to

the League of Nations, AM. HIST. REV. 1091 (2007) [hereinafter Pedersen, Back]. 51

On this function, see David Kennedy, The Move to Institutions, 8 CARDOZO L. REV. 841 (1986-1987). 52

Giulio Diena, Les Mandates Internationaux, 5 RECUEIL DES COURS 211 (1924/IV); Henri Rolin, La Pratique des

Mandates Internationaux, 19 RECUEIL DES COURS 493 (1927/IV); Norman Bentwich, Le Systeme des Mandats, 29

RECUEIL DES COURS 115 (1929/IV). But this authority was severely curtailed by the mandatory powers, see

Pedersen, Back, supra note 50, at 1104-05. See also Susan Pedersen, Samoa on the World Stage: Petitions and

Peoples Before the Mandates Commission of the League of Nations, 40 J. IMPERIAL & COMMONWEALTH HIST. 231

(2012) [hereinafter Pedersen, Samoa] (arguing that petitions to the Mandates Commission “rarely offered petitioners

redress; instead, they made visible the assumptions about racial and civilisational hierarchies, and the realities of

power, on which the system was based”). 53

For a literature review, see Pedersen, Back, supra note 50 at 1099-1103. 54

MAZOWER, supra note 48, at 144-145. 55

Id., at 144, 149; Ernest Mahaim, L’Organisation Permanente du Travail, 4 RECUEIL DES COURS 65 (1924/III). 56

OSTROWER, supra note 49, at 96-98.

15

(EFO),57

“the world’s first inter-governmental organisation dedicated to promoting economic

and monetary co-operation.”58

Here too, the secretariat of the EFO managed to “develop its own

policy agenda for the promotion of international cooperation that sometimes ran counter to the

interests of its major national sponsors.”59

The U.S. became heavily involved in the EFO

operations, despite its being a nonmember of the League, and informally managed to shape its

policy agenda.

As opposed to the League’s tendency to expand its scope and tools, and perhaps in a reaction

to that very phenomenon of mission creep, the post-WWII IGOs reflect more the logic of

fragmentation of responsibilities rather than their accumulation in one or few IGOs. The United

Nations was assigned competences in a set of specific areas, whereas trade and financing

development were the province of other, unrelated, IGOs. As George Downs and I pointed out in

an analysis of the phenomenon of fragmentation,60

Western powers at that time wanted to

insulate key regulatory institutions, particularly economic ones, from the influence of other

states, from the newly created United Nations, and from potential cross-contamination from

other policy spheres.61

They selectively employed fragmentation from the outset to prevent the

Economic and Social Council (ECOSOC) from competing with the Security Council for

dominance and fostering the integration of security and economic policy. The great powers did

nothing to facilitate the UN Charter’s requirement that all of the various specialized agencies

such as the International Monetary Fund, the International Labour Organisation, and the

Universal Postal Union were to be “brought into relationship” with the UN and coordinated

through the ECOSOC. Instead, they chose to preside passively over a growing overlap and

confusion among the UN’s growing number of newly created bodies.62

Paul Kennedy noted that

the

57

Patricia Clavin & Wilhelm Jens, Transnationalism and the League of Nations: Understanding the Work of Its

Economic and Financial Organisation, 14 CONTEMP. EUR. HIST. 465 (2005). 58

Id., at 465-66. 59

Id., at 467. 60

Eyal Benvenisti & George W. Downs, The Empire’s New Clothes: Political Economy and the Fragmentation of

International Law, 60 STAN. L. REV. 595 (2007) [hereinafter Benvenisti & Downs, Empire]. 61

See PAUL KENNEDY, THE PARLIAMENT OF MAN: THE PAST, PRESENT, AND FUTURE OF THE UNITED NATIONS 113-

42 (2006). 62

The weighted voting in the IMF and the permanent membership of the world’s five largest economies in the

World Bank ensured great power dominance of economic policymaking as effectively as the Security Council

ensured it in the security sphere. See id., at 114-15.

16

“burst of international legislating, regulating, standard setting, and agency creating [at the

UN]… was making the structures of the world organization ever more elaborate and

overlapping, though rarely providing resources for increases in staff, unless a rich country

showed a particular desire to support a new body… greater demands were also being placed

upon the home civil services of all member states to provide data, collect statistics, write

reports, and monitor treaty legislation. The poorest and most war-torn countries could not

possibly meet these demands.”63

Since then the phenomenon of fragmentation continues to grow exponentially as powerful

states seek not only to ensure that IGOs remain subservient to their interests,64

but also to avoid

broad, integrative agreements whenever possible and opt for a large number of narrow

agreements that are functionally defined, avoid the creation of a bureaucracy or judiciary with

significant, independent policymaking authority, and circumscribe such authority when its

creation is unavoidable. More recently, and for similar reasons, they have been seeking and

developing informal and private initiatives that further meet their fragmentation goals.65

It is to

these alternative modes of global governance that we now turn.

2.1.2 The Flight from IGOs

Recent assessments of “stagnation” in international lawmaking66

or the “decay of state consent”

to international obligations67

reflect not only the preference for informal agreements and other

“soft law” instruments among state and non-state actors operating in the global sphere, but also

their growing preference for informal international or transnational institutions.68

The reference

to such norms and institutions as “soft” is rather misleading: informal IGOs, or InGOs, regulate

not only the policies of those within the network, but also, and in many cases primarily, they

affect third parties, usually weaker states and individuals. Moreover, the informality is designed

63

See PAUL KENNEDY, supra note 61, at 155. 64

See Reisman, Quest, supra note 26, at 236 (referring to these powers as “jealously insist[ing] on the power

to select the managerial level of the organizations and … to replicate their own values”). 65

On the political economy of fragmentation, see Benvenisti & Downs, Empire, supra note 60. 66

Joost Pauwelyn, Ramses A. Wessel & Jan Wouters, When Structures Become Shackles: Stagnation and Dynamics

in International Lawmaking, EUR. J. INT. L. (forthcoming, 2014) [hereinafter Pauwelyn et al, Structures]. 67

Nico Krisch, The Decay of Consent: International Law in an Age of Global Public Goods, 108 AM. J. INT’L L. 1

(forthcoming, 2014) [hereinafter Krisch, Decay]. 68

Benvenisti & Downs, Empire, Supra note 60, at 617-19. Eyal Benvenisti, "Coalitions of the Willing" and the

Evolution of Informal International Law [hereinafter Benvenisti, Coalitions of the Willing], in COALITIONS OF THE

WILLING - AVANTGARDE OR THREAT? 1 (Christian. Calliess, Georg Nolte & Tobias Stoll eds., 2008).

17

inter alia to preclude those third parties from participating in the workings of these InGOs. These

informal institutions have a few key commonalities. They are formed by a group of states

pursuing common aims but wishing to retain authority rather than relegate it to international

bureaucracies with firm structures. They are not based on legally binding treaties, but rather on

intergovernmental coordination. Information about compliance is gathered and assessed directly

by the parties, and then shared and discussed among them.

The phenomenon of intergovernmental coordination of policies was analyzed already in

1974,69

and received more attention as it became more ubiquitous and assumed greater

economic, political and even military import.70

The preference for such informal institutions has

since been made explicit by leading countries. In 2000 all German federal ministries were

instructed to avoid using formal international legal instruments to cement their agreements with

foreign parties. The directive stipulated that negotiators should explore alternatives to formal

international undertakings before they commit to such.71

In 2006, the National Security Strategy

of the United States stressed that one of its three priorities in working with its allies was the

“Establish[ment of] results-oriented partnerships.”72

The document states that

69

Robert O. Keohane & Joseph S. Nye, Transgovernmental Relations and International Organisations, 27 WORLD

POL. 39 (1974). See also Felicity Vabulas & Duncan Snidal, Organization without Delegation: Informal

Intergovernmental Organizations (IIGOs) and the Spectrum of Intergovernmental Arrangements, 8 REV. INT’L

ORGS. 193 (2013). 70

See generally INFORMAL INTERNATIONAL LAWMAKING (Joost Pauwelyn, Ramses Wessel, & Jan Wouters eds.,

2013) [hereinafter Pauwelyn et al., IN-LAW]. ANNE-MARIE SLAUGHTER, A NEW WORLD ORDER (2004). Kal

Raustiala analyzed inter-governmental coordination in the spheres of securities regulation, competition and

environment: Kal Raustiala, The Architecture of International Cooperation: Transgovernmental Networks and the

Future of International Law, 43 VA. J. INT'L L. 1 (2002). See also David Zaring, Informal Procedure, Hard and Soft,

in International Administration, 5 CHI. J. INT'L L. 547 (2005). 71

See § 72 Gemeinsame Geschäftsordnung der Bundesministerien of 2000: (1) “Vor der Ausarbeitung und dem

Abschluss völkerrechtlicher übereinkünfte (Staatsverträge, übereinkommen, Regierungsabkommen,

Ressortabkommen, Noten- und Briefwechsel) hat das federführende Bundesministerium stets zu prüfen, ob eine

völkervertragliche Regelung unabweisbar ist oder ob der verfolgte Zweck auch mit anderen Mitteln erreicht werden

kann, insbesondere auch mit Absprachen unterhalb der Schwelle einer völkerrechtlichen übereinkunft.” (Collective

standing order for all federal ministries of 2000: "Before the planning and the conclusion of international agreements

(international treaties, agreements, interministerial or interagency agreements, notes and exchanges of letters) the

responsible federal ministry must always inquire whether the conclusion of the international undertaking is indeed

required, or whether the same goal may also be attained through other means, especially through understandings

which are below the threshold of an international agreement") (I thank Armin von Bogdandy for this reference).

Bundesregierung, Gemeinsame Geschäftsordnung der Bundesministerien

http://www.bmi.bund.de/cae/servlet/contentblob/139852/publicationFile/55730/ggo.pdf. 72

US White House, "National Security Strategy", 46 (March 2006), available at http://georgewbush-

whitehouse.archives.gov/nsc/nss/2006/ (last visited Feb. 5, 2014).

18

“[t]hese partnerships emphasize international cooperation, not international bureaucracy.

They rely on voluntary adherence rather than binding treaties. They are oriented towards

action and results rather than legislation or rule-making.”73

The same document also extols the so-called “coalitions of the willing,” suggesting that

“[e]xisting international institutions have a role to play, but in many cases coalitions of the

willing may be able to respond more quickly and creatively, at least in the short term.”74

President Obama’s 2010 U.S. National Security Strategy referred to the “shortcomings of

international institutions that were developed to deal with the challenges of an earlier time” and

undertook “to spur and harness a new diversity of instruments, alliances, and institutions.”75

Bureaucrats in other relatively strong and affluent nations have betrayed similar expectations,

though stopping short of issuing formal directives. In 2011 the Canadian government expressed

its preference that “if a matter is of a routine or technical nature, or appears to fall entirely within

the existing mandate and responsibility of a department or agency, and if it does not contain

substantive matter which should be legally binding in public international law, it is often

preferable to deal with the matter through the use of a non-legally binding instrument.”76

Anthony Aust, a former legal adviser at the British Foreign Office, reported in 2000 that

“[b]ecause the use of MOUs is now so wide-spread, some government officials may see the

MOU as the more usual form, a treaty being used only when it cannot be avoided. The very word

‘treaty’ may conjure up the fearsome formalities of diplomacy.”77

Although the policies of InGOs are not binding on the parties themselves, informally they

modify the rights and obligations of other actors as well. Often, the rules they produce do not

belong to vague and hortatory declarations, but instead are not only quite specific, but enforced

through all sorts of non-legal but quite effective economic and other sanctions.

73

Id. This new term – partnerships – was absent in the 2002 NSS statement. It connotes something more stable than

the older term “coalitions of the willing” (which appears only once, in reference to the Tsunami aid) and less than a

formal institution. As in: "To confront the threat of a possible pandemic, the Administration took the lead in creating

the International Partnership on Avian and Pandemic Influenza, a new global partnership of states committed to

effective surveillance and preparedness that will help to detect and respond quickly to any outbreaks of the disease."

Id., at 48. 74

Id., at 48. 75

U.S. White House, National Security Strategy, 3, 46 (May. 2010), available at

http://www.whitehouse.gov/sites/default/files/rss_viewer/national_security_strategy.pdf. 76

Canada Treaty Information, ‘Policy on Tabling of Treaties in Parliament’, Annex C (2011), available at

http://www.treaty-accord.gc.ca/procedures.aspx (last visited Feb. 5, 2014). 77

ANTHONY AUST, MODERN TREATY LAW AND PRACTICE 26 (2000).

19

This growing preference for informality has led to the design of several modes of

organization. This section provides a typology of such informal bodies and offers a few

examples.

(a) Governmental InGOs

Informal intergovernmental coordination, also known as “intergovernmental networks,”78

are

nonbinding understandings that states have increasingly chosen to adopt.79

They can be based

simply on each government’s discretionary power under its domestic law. Such discretion

enables the recurring coordination of policies. The bureaucrats do not exceed their powers under

national laws because these laws allow them to exercise discretion. From the national law’s

perspective, the bureaucrats are not bound by the international agreement. They retain the

authority to change their minds as they deem fit, at any time in the future.80

Antitrust measures, central banks’ policies, or environmental protection plans can be

coordinated by national agencies applying their authority under their respective domestic laws.

The coordination can be designed to allocate regulatory competences between governments, such

as, in the area of antitrust regulation, or to share responsibilities in collective efforts, for example

in preventing the proliferation of weapons of mass destruction, or in providing assistance to third

countries.

The preference for InGOs stems from states’ wish to avoid formalities that drain their

discretion. There are three main reasons why domestic executive control is compromised by

internationalization. First, by signing treaties, executives have to engage the respective

legislatures when they wish to ratify or modify an agreement and, of course, the legislatures will

seek to have their own impact on the outcome. Perhaps even more threatening to the national

executives is the loss of authority to international organs, either to an international bureaucracy

or, much worse for them, to an international adjudicative body.

78

Slaughter, supra note 70. 79

Oscar Schachter, The Twilight Existence of Nonbinding International Agreements, 71 AM. J. INT'L L. 296 (1977).

Kal Raustiala, Form and Substance in International Agreements, 99 AM. J. INT'L L. 581 (2005). 80

For a more critical view of the authority of domestic regulators to engage with foreign peers, from the perspective

of German law, see Christoph Möllers, Transnationale Behördenkooperation, 65 ZaöRV (Heidelberg J. Intl L.) 351

(2005).

20

Third, formal institutions provide some opportunities for weaker members to reduce the

power disparities between themselves and the stronger members.81

Moreover, the institutions’

organs – bureaucrats and adjudicators – often strive to level the playing field between stronger

and weaker parties. 82

Informalization obstructs such initiatives.

Below are some examples of such informal executive cooperation.

Antitrust: Several InGOs exist in the area of antitrust. 83

National antitrust regulators, and the

regulators of the European Commission, insist on coordinating their activities through informal

bilateral or multilateral coordination, rather than through a WTO-like international institution.

Diverging national policies in this sphere, require regulators to harmonize their activities through

informal consultations in informal venues such as the U.S./EU Merger Working Group, the

Competition Law Committee, the Global Competition Forum of the Organization for Economic

Co-operation and Development (OECD), and the International Competition Network (ICN).84

The various antitrust regulators face conflicts because they operate under national regulations

that seek to promote different goals and yield different outcomes. For example, in 2001, the

Antitrust Division of the U.S. Department of Justice approved a merger between G.E. and

Honeywell (two U.S. aviation companies) while the European Commission prohibited the

merger, finding it incompatible with its policies.85

A more famous recent example is Microsoft,

which survived proceedings in the U.S. only to face regulatory action by the European

81

Benvenisti & Downs, Empire, supra note 60. 82

Joseph H. H. Weiler, The Rule of Lawyers and the Ethos of Diplomats: Reflections on the Internal

and External Legitimacy of WTO Dispute Settlement, 7 (Jean Monnet, Working Paper No. 9, 2000). For examples in

the trade area, see the WTO panel ruling in favor of Antigua and against the U.S.: ICTSD, WTO Panel Rules in

Favour of Antigua, Barbuda in Gambling Dispute, 8(39) BRIDGES WKLY TRADE NEWS DIG. (Nov. 17, 2004),

available at http://ictsd.org/i/news/bridgesweekly/6014/ (last visited Feb. 7, 2014); Christina L. Davis, Do WTO

Rules Create a Level Playing Field for Developing Countries? (2003), (paper presented at the 2003 Annual Meeting

of the American Political Science Association) available at

http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf (giving examples where the

WTO dispute resolution rules helped to level the playing field for developing countries). 83

See Krisch, Decay, supra note 67; Michal S. Gal, Regional Competition Law Agreements: An Important Step for

Antitrust Enforcement, 60 U. TORONTO L. J. 239 (2010); Eleanor M. Fox, International Antitrust and the Doha

Dome, 43 VA. J. INT'L L. 911 (2003) [hereinafter Fox, Doha Dome]; Andrew T. Guzman, International Antitrust and

the WTO: The Lesson from Intellectual Property, 43 VA. J. INT'L L. 933 (2003); Eleanor M. Fox, Mergers in Global

Markets: GE/Honeywell and the Future of Merger Control, 23 U. PA. J. INT'L ECON. L. 457 (2002) [hereinafter Fox,

Global Markets]. 84

Slaughter, supra note 70, at 174-5; Fox, Doha Dome, supra note 83. See also International Competition Network,

Recommended Practices for Merger Notification Procedures and memoranda on recommended practices and

guiding principles, available at http://www.internationalcompetitionnetwork.org/uploads/library/doc324.pdf. 85

Fox, Global Markets, supra note 83.

21

authorities. In the aftermath of such incidents, regulators have been trying to coordinate their

activities more closely. They refuse to consider more formal commitments, including the setting

up of international institutions.86

The ICN website, for example, states that

“The ICN provides competition authorities with a specialized yet informal venue for

maintaining regular contacts and addressing practical competition concerns. This allows for a

dynamic dialogue that serves to build consensus and convergence towards sound competition

policy principles across the global antitrust community.” 87

As Elinor Fox points out, in their antitrust coordination, the U.S. and the EU manage to keep

out the developing countries.88

Given the fact that antitrust regulators care only about the impact

on their domestic markets, such coalitions do not close the gap that exposes developing countries

to uncompetitive practices. As Fox observes, “Many of these nations either do not have an

antitrust law, or they have an antitrust law that is not given serious regard by their polity, or they

simply do not have the resources to enforce the law. Particularly, they do not have the resources

and credible deterrence power to control the anticompetitive acts of multinational corporations.

In other words, they are easy targets.” 89

Nonproliferation of WMD: The precursors of this type of informal institutions were formed

during the 1970s and 1980s by governments that wished to prevent the proliferation of WMD.

The Zangger Committee was formed confidentially in 1971 by suppliers or potential suppliers of

nuclear material and equipment. Its task was to set standards for the implementation of Article

86

As Elinor Fox recounts, id., at 463-464: “in the aftermath of the decision [on the GE/Honeywell deal], both sides

softened their rhetoric. The United States continued to maintain that the Antitrust Division analyzed the merger in

the only right way. European officials defended their analysis within the U.S. paradigm, apparently preferring to join

the issue on grounds of economics rather than on grounds of the wider European view of ‘harm to competition.’ …

Officials on both sides of the ocean vowed to work more closely together on the harmonization of competition law,

and reaffirmed their view that closer cooperation would avert inconsistent outcomes in the future.” 87

See ICN, About, http://www.internationalcompetitionnetwork.org/about.aspx (last visited Feb. 5, 2014) 88

Fox, Doha Dome, supra note 83. 89

Id., at 922: “Global mergers may have harmful effects in nations that constitute separate markets and lack the

power to protect themselves. This is particularly true for developing countries, whose voices are not heard and who

must live with whatever the industrialized countries decide is good for them. In Mannesmann/Italimpianti, Italian

and German makers of specialized pipes for oil drilling operations suitable only for developing countries merged to

form a monopoly. China was the principal buyer of this stage of technology. Unusually, Italy conditioned merger

clearance on the firms' acceptance of licensing obligations that could ease China's monopoly problem (if potential

producers in Europe should seek a license). More typically, Germany declined to enforce the German law, allowing

the merger because the German market – like the Italian market – was not hurt. While Italy's conditions on this

proposed merger benefited China in this case, another China cannot count on any protection at all. It may become

more, rather than less, common that multinational mergers impact developing nations with no voice.”

22

III(2) of the Treaty on the Non-Proliferation of Nuclear Weapons.90

A parallel forum has been

the “London Group” set up in 1974 in reaction to the 1974 Indian nuclear detonation. Idle after

1977, the “London Group” regrouped in 1992 as the Nuclear Suppliers Group, after the Iraqi

success in developing a clandestine nuclear weapons program was acknowledged.91

The

Australia Group was established at the initiative of the Australian government in 1985 in reaction

to the use of chemical weapons in the Iran-Iraq war. Its purpose was to contain the spread of

chemical and later also biological weapons.92

The Missile Technology Control Regime

(established in 1988) and the Wassenaar Arrangement (established in 1995) focus on the

nonproliferation of missile technology and of conventional and dual use weapons, respectively.93

Combating Terrorism: The then G-7, itself the framework of a nonbinding but quite effective

institution, issued in its fourth annual summit (1978) a coordinated policy to combat airplane

hijacking. According to the Bonn Declaration on Terrorism of 1978, the G-7 would react in cases

where a country (including any third country) refused to extradite or prosecute hijackers of

civilian aircraft or did not return the hijacked aircraft by ceasing flights to that country and

halting incoming flights from that country or from any country by the airlines of the country

concerned.94

The commitments under the Bonn Declaration have been implemented in a number

of cases,95

have been strengthened since, but never became legally binding.96

Financial Regulation: The efforts to bolster domestic and global capital markets took shape as a

plethora of InGOs designed to address discrete aspects. Among the key bodies are the Basel

90

ZANGGER COMMITTEE, http://www.fas.org/nuke/control/zangger/ (last visited Mar. 18, 2014). The Zangger

Committee, out of the closet since 1990, is still active, consisting of 35 members who are capable of supplying

nuclear items under regulation. On this committee, see Fritz Schmidt, Report, NPT Export Controls and the Zangger

Committee, 7 NONPROLIFERATION REV. 136 (2000), available at http://cns.miis.edu/npr/pdfs/73schmi.pdf. 91

See Schmidt, supra note 90, at 138. 92

See the AUSTRALIA GROUP, http://www.australiagroup.net/ (last visited Feb. 5, 2014). 93

On the MTCR, see MTCR, http://www.mtcr.info/english/index.html (last visited Feb. 5, 2014). On the Wassenaar

Arrangement, see WASSENAAR ARRANGEMENT, http://www.wassenaar.org/ (last visited Feb. 5, 2014), in particular

its “Guidelines and Procedures”, available at http://www.wassenaar.org/guidelines/guidelines.doc. For an analysis

of the effective enforcement of the MTCR policies by the U.S. on China, see Anastasia A. Angelova, Compelling

Compliance with International Regimes: China and the Missile Technology Control Regime, 38 COLUM. J.

TRANSNAT'L L. 419 (1999). 94

See James J. Busuttil, The Bonn Declaration on International Terrorism: A Non-Binding International Agreement

on Aircraft Hijacking, 31 INT’L & COMP. L.Q. 474 (1982). 95

See id. 96

See the G-7 Statement on Terrorism of June 9, 1987, U.S., Department of State, Bulletin, No. 2125 (August 1987),

available at http://www.g7.utoronto.ca/summit/1987venice/terrorism.html (last visited Mar. 7, 2014).

23

Committee on Banking Supervision (BCBS), the International Organization of Securities

Commissioners (IOSCO), and the International Association of Insurance Supervisors (IAIS).97

This diffuse architecture, each addressing a single financial aspect, and “often drawing on US

and British practices,”98

was regarded as at least partially responsible for the failure to see “the

big picture” and thereby contributing to the financial crisis of 2008. This led to the creation of

yet another InGO, the Financial Stability Board (FSB) in 2009.99

To get a sense of how these InGOs operate, I will briefly discuss two narrowly focused

institutions and then refer to the more general FSB.

The Basel Committee on Banking Supervision (“Basel Committee” or BCBS)100

was

established in 1974 as a “horizontal” InGO based on informal agreements between independent

or quasi-independent national agencies, one which does not make formal binding decisions. For

most of its existence, membership of the Committee has been heavily restricted: from its

inception until 2009, only twelve countries sent the heads of their central banks and banking

regulatory agencies. It took the global financial crisis of 2008 and the subsequent expansion of

the G8 to the G20 to enlarge the membership of the BCBS.101

The Basel Committee coordinates or facilitates information-sharing among national

regulators, drafts guidelines and best practices, or sets (legally nonbinding) international

standards.102

The Committee carries out an important function in the internationalization of

banking standards. The standards it develops are not legally binding. However, due to a number

of institutional and market incentives, the Basel standards are implemented worldwide – not only

by the Committee members, but also by many other states. Although the “Basel II” framework

that the BCBS adopted in 2004 “left substantial discretion to national regulators on many aspects

97

See CHRIS BRUMMER, SOFT LAW AND THE GLOBAL FINANCIAL SYSTEM: RULE MAKING IN THE 21ST

CENTURY

(2012). For a more specific discussion of several of these InGOs and further reading, see the various entries in

GLOBAL ADMINISTRATIVE LAW: THE CASEBOOK (Sabino Cassese et al. eds., 3rd

ed. 2012) [hereinafter, GAL

CASEBOOK]. 98

Eric Helleiner, What Role for the New Financial Stability Board? The Politics of International Standards after the

Crisis, 1 GLOBAL POL’Y 282, 282 (2010). 99

Brummer, supra note 97, at 73. 100

Mario Savino & Maurizia De Bellis, An Unaccountable Transgovernmental Branch? The Basel Committee, in

GAL CASEBOOK, supra note 97, at 243. Other bodies which share the same features are, for example, supervisors,

the G-10 committees. Id., at 243. See also Michael S. Barr & Geoffrey P. Miller, Global Administrative Law: The

View from Basel, 17 EUR. J. INT’L L. 15, (2006). 101

Id. 102

Id.

24

of its implementation,”103

the European Council incorporated it practically unchanged,104

as did

the Canadian banking regulator (because it was not a treaty, it did not need Parliament’s

approval).105

In the U.S., however, the implementation of Basel II encountered domestic

resistance that led to the intervention of the U.S. Congress in approving the administrative rule

that implemented the rules with modifications.106

The Financial Action Task Force (FATF)107

was created in 1989 by the G-7 to overcome the

reluctance of individual states to unilaterally carry the collective burden of combatting money

laundering. In 2001, the FATF added the “fight against terrorist financing” to its agenda.

Through its formal institutions and procedures, the FATF has issued forty recommendations that

set best practices standards with regard to anti-money laundering and nine Special

Recommendations on terrorist financing.108

Since the establishment of the FATF, the number of participating states has increased from

the original sixteen to thirty-six members (thirty-four states and two regional organizations) and

a growing number of states and international organizations participate as observers. Although the

FATF’s formal membership isn’t comprehensive, in practice its standards have almost universal

impact. As the FATF declares in its standards from 2012, “[t]he FATF Recommendations were

revised a second time in 2003, and these, together with the Special Recommendations, have been

endorsed by over 180 countries, and are universally recognised as the international standard for

anti-money laundering and countering the financing of terrorism."109

The FATF meets on a regular basis several times a year. The decision-making process is ruled

by the principle of consensus. Therefore, all participants have to work actively to reach an

agreement on the specific issues. The meetings are a forum for law enforcement and regulatory

experts from participating countries to discuss new developments in money laundering

103

Pierre-Hugues Verdier, US Implementation of Basel II: Lessons for Informal International Lawmaking, in

Pauwelyn et al., IN-LAW, supra note 70, at 437, 437. 104

Id. at 14. 105

Canadian banking regulator in the Office of the Superintendent of Financial Institutions. See Verdier, supra note

103. 106

Risk-Based Capital Standards: Advanced Capital Adequacy Framework – Basel II, 72 FED. REG. 69288 (Dec. 7,

2007), available at http://www.gpo.gov/fdsys/pkg/FR-2007-12-07/pdf/07-5729.pdf. See Verdier, supra note 103. 107

On the FATF, see Brummer, supra note 97, at 85-86; Krisch, Decay, supra note 67, at 30-31; Benvenisti,

Coalitions of the Willing, supra note 68, at 5-8. See also the official website at FATF, About Us, http://www.fatf-

gafi.org/pages/aboutus/ (last visited, Feb. 6, 2014). 108

FATF, INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM

& PROLIFERATION, THE FATF RECOMMENDATIONS, 4-7 (2012), available at http://www.fatf-

gafi.org/media/fatf/documents/recommendations/pdfs/FATF_Recommendations.pdf. 109

Id., at 7.

25

techniques and terrorist financing, including prevailing methods, emerging threats and effective

countermeasures.

Despite their formal “softness,” the FATF standards are extremely effective, benefiting from

the member states’ economic power and their control of the UN Security Council, the World

Bank, and the IMF, who all have urged other states to comply with the “recommendations.”110

In

addition, the FATF has a monitoring and compliance control mechanism that is divided into two

categories. The first applies to participating states and the second addresses non-participating

countries within the so-called Non-Cooperative Countries and Territories Initiative.

With regard to participating states, the primary instruments for monitoring the implementation

of the forty recommendations are self-assessment and mutual evaluation procedures. As for other

states, the “Non-Cooperative Countries and Territories Initiative” (NCCT Initiative) reviews

their anti-money laundering legislation and publishes a list of those that in its view have critical

deficiencies in their anti-money laundering systems, and recommends that financial institutions

pay special attention to financial transactions with persons and entities from those named

countries. If a listed state fails to comply with the recommended improvements or is unwilling or

unable to comply, the FATF recommends to its members to “condition, restrict, target or even

prohibit financial transactions with such jurisdictions” as the “ultimate recourse.” 111

The Financial Stability Board (FSB) was established in April 2009 by the G20 as the

successor to the Financial Stability Forum (FSF). The FSF was set up by the G-7 in the aftermath

of the Mexican crisis of 1994 and the international financial crisis of 1997-98, based on the

observation that those crises “had stemmed largely from poor supervisory and regulatory

practices in developing countries.”112

Despite this observation, the FSF did not include

representatives of developing countries, and this in turn made them reluctant to implement the

FSF policies. This opposition left the G7 with market pressure only as an effectively weak

compliance mechanism.113

In contrast, the FSB enjoys a broader mandate to promote global

financial stability, and has a much broader membership, including some developing countries

(although voting rights reflect the relative size of the parties’ economies).114

Moreover, and more

110

Krisch, Decay, supra note 67, at 31. 111

See FATF Report on Non-Cooperative Countries and Territories, ¶ 54 (Feb. 14, 2000), available at

http://www.fatf-gafi.org/media/fatf/documents/reports/Initial%20Report%20on%20NCCTs%2002_2000.pdf. 112

Helleiner, supra note 98, at 282. 113

Id., at 283-4. 114

Id., at 284, 286.

26

importantly, the FSB reflects a serious effort by state executives to regain control over the global

financial markets.115

The FSB seeks to strengthen the effectiveness of financial regulation by national and

international financial institutions in order to address vulnerabilities and to develop and

implement strong regulatory, supervisory and other policies in the interest of financial stability in

global markets. The FSB coordinates at the international level the work of national financial

authorities and international standard-setting bodies and promotes the implementation of

effective regulatory, supervisory and other financial sector policies. Here too, “softness” is only

formal. As Chris Brummer observed, “although the FSB has limited formal rulemaking

authority, it has become an increasingly important de facto source of broad standards.”116

(b) Public/Private Institutions

Public/Private Institutions (PPIs) are joint ventures of government and private actors. They set up

institutions based in domestic private law, such as private firms and associations. Most examples

of PPIs are in the sphere of health regulation, more specifically, in the context of regulating the

production of drugs.117

Although one could speculate why specifically in this area governments

seek to partner with the pharmaceutical industry – whether the initiative to create institutions

actually comes from the big pharmaceutical companies that are seeking to enhance their market

share even further – there are also counterexamples where governments set up PPIs to reduce the

high prices for drugs and make them accessible to communities in need. This section describes

one PPI that is more prone to “Big Pharma’s” influence, and others who are more independent.

The International Conference on the Harmonization of Technical Requirements for

Registration of Pharmaceuticals for Human Use (ICH) is a public/private institution designated

to harmonize technical requirements for ensuring the quality, efficacy and safety of drugs. Set up

in 1991, the two types of actors involved are drug regulatory authorities of the U.S., EU, and

Japan and associations of domestic R&D pharmaceutical companies from these same three

115

Stavros Gadinis, The Financial Stability Board: The New Politics of International Financial Regulation, 48

TEXAS INT’L L. J. 157 (2013). 116

Brummer, supra note 97, at 74; Helleiner, supra note 98, at 286. 117

One PPI that is not related to the health sector is the Kimberley Process for the Certification of Rough Diamonds

developed in response to the armed conflicts raging in Angola and Sierra Leone, where diamonds were used to

finance the war. See THE KIMBERLEY PROCESS (KP) http://www.kimberleyprocess.com/en (last visited Feb. 6,

2014).

27

parties.118

The ICH has issued guidelines which have become de facto global standards, adopted

by its members as well as by companies and countries beyond the ICH regions.

As Ayelet Berman has noted, although the ICH develops its guidelines through consultations

within each of the three entities, this decision-making process has drawn much criticism both

from within, by those who worry about regulatory capture at the expense of the general

population, and from without, by those concerned about unattainable or unaffordable standards

for drug production in developing countries.119

In response to such criticisms, the ICH opened its

doors to civil society, states and regional organizations as observers, and in 2012 it even

modified its decision-making rules, adding more countries and organizations as observers,

removing the veto power and equal participation rights of the pharmaceutical industry, and

increasing transparency.120

It remains to be seen whether such measures will alleviate those

concerns.

The Global Fund to Fight AIDS, Tuberculosis and Malaria121

seeks, through a public-private

partnership, to mitigate the impact caused by these diseases in countries in need. This initiative

was inspired by the G8 summit in 2000 that called for a new approach to fighting these diseases

and by the subsequent summit of African leaders in 2001. A transitional working group

consisting of nearly forty representatives of developing countries, donor countries, NGOs, the

private sector, and the UN developed the structure of the fund. The structure also reflects an

attempt at least at formal parity: the foundation board, the main organ of the Fund, consists of

seven representatives from donor states, seven from developing countries, and five members

represent civil society organizations and the private sector. Each of these groups determines its

own process for selecting its representatives, who are then formally appointed by the Foundation

Board. Its work is evaluated by a Technical Review Panel (whose members, however, are

appointed by the Board).

118

Ayelet Berman, The Role of Domestic Administrative Law in the Accountability of IN-LAW: The Case of the ICH

[hereinafter Berman, ICH], in Pauwelyn et al., IN-LAW, supra note 70, at 468; Ayelet Berman, Public-Private

Harmonization Networks: The Case of the International Conference on Harmonization (ICH) [hereinafter Berman,

Harmonization], in GAL CASEBOOK, supra note 97, at 228. See id., at 228 for more examples of PPIs in the drug

regulation sphere. 119

Berman, Harmonization, supra note 118, at 231. 120

Pauwelyn et al, Structures, supra note 66, at 26. 121

THE GLOBAL FUND, http://www.theglobalfund.org/en/ (last visited Feb. 6, 2014); Fabio Di Cristina, Between

Vertical and Horizontal Financing: The Global Fund and the Global Aid System, in GAL CASEBOOK, supra note 97,

at 210.

28

The disbursement of funds is based on proposals prepared by a country coordinating

mechanism, which is a country-level partnership with representatives from the public and private

sectors (including governments, multilateral or bilateral agencies, nongovernmental

organizations, academic institutions, private businesses, and people afflicted by those diseases).

After a positive review process the Secretariat and the principal recipients negotiate and sign the

grant agreement. The agreement must be consistent with international law, especially with the

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) as it is understood

by the WHO’s Doha Ministerial Declaration.

Despite its PPI status, the Global Fund obtained immunity for its officials so as to shield them

(and itself) from legal challenges in the countries in which they operate. It did so by signing

agreements with the US, Switzerland and IGOs that gave them cover.122

In this manner, the

Global Fund shows the way for other PPIs how to insulate themselves from substantive and

procedural legal accountability.

UNITAID is a PPI created in 2006 at the initiative of Brazil, Chile, France, Norway and the

UK, joined by a few other countries, whose mission is also to fight AIDS, malaria, and

tuberculosis in developing countries.123

Their efforts are financed by contributions by public and

private actors, including by a so called “international air-ticket solidarity levy” imposed on

travelers using the international airports of 11 participating states. This organization has no

formal standing under domestic or international law. Its Secretariat is “hosted” by the World

Health Organization in Geneva.124

Its governance and operation structure is based on an

Executive Board which represents both the founding countries and the countries and civil society

networks of the populations suffering from the diseases and additional actors.

(c) Private Institutions

When standards are set and enforced by private actors or by NGOs, governments are not

implicated directly and may deny responsibility. This is despite the fact that the turn to private

122

Dan Sarooshi, International Organizations: Personality, Immunities, Responsibility, and Remedies, in MESURES

DE RÉPARATION ET RESPONSABILITÉ À RAISON DES ACTES DES ORGANISATIONS

INTERNATIONALES/REMEDIES AND RESPONSIBILITY FOR THE ACTIONS OF INTERNATIONAL ORGANIZATIONS 13-15

(Dan Sarooshi ed., forthcoming 2014), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2398558

(last visited Mar. 13, 2014). 123

UNITAID, http://www.unitaid.eu/en/ (last visited Feb. 6, 2014). 124

Id.

29

standard-setting often involves Governments yielding to pressure by interest groups that prefer

private institutions (PIs) that they control rather than being subjected to formal regulation.125

Private institutions do not issue formal laws, and when acting in foreign countries monitoring

for compliance of local actors they do not have to seek permission from the host state. Theirs are

the “softest” norms possible, softly enforced.126

But PIs actually possess means to set and

enforce standards that are binding de facto due to the market share of the PI members. The PIs

do not seek formally binding norms, because they do not need legal formality to make their

standards widely effective. Often PIs operate in areas where governments have been reluctant to

act, or have simply preferred to let private actors perform such tasks. Private initiatives have

emerged to set and monitor standards for a variety of transnational activities, ranging from letters

of credit and insurance to the facilitation of transnational trade, safety, including food safety

standards, accounting standards. They have even bypassed local governments to set employment

conditions in developing countries. In short, these PIs engulf many if not most areas of human

activity and interests that in developed countries are supplied or at least supervised by public

authorities, furthering the fragmented nature of the global regulatory space.

Without aiming to provide a full list, this section will examine a sample of the variety of PI

activities, seeking to understand their modes of operation and the issues that these raise from the

perspective of public law. The section will focus on PIs in the areas of financial market

regulation, environmental protection and resource management, labor, and food standards. The

struggle over governing the internet – involving the U.S. government, the PI it set up (ICANN,

the Internet Corporation for Assigned Names and Numbers), and other countries' effort to get the

ITU involved – is too complex to be dealt in this context.127

Reports at the time of writing

125

For example, Mattli and Büthe document the pressures exerted on the IASB chairman by powerful donors who

threatened to withdraw their financial support “if the IASB failed to show greater sensitivity to their policy

preferences.” TIM BÜTHE & WALTER MATTLI, THE NEW GLOBAL RULERS: THE PRIVATIZATION OF REGULATION IN

THE WORLD ECONOMY 254 (2011). In light of the post-Enron decision in the U.S. to make the funding for the

American Financial Accounting Standards Board (FASB) involuntary, the voluntary funding of IASB reflects the

continuing pressure of private interests. 126

For a general survey and analysis, see TRANSNATIONAL LEGAL ORDERING AND STATE CHANGE (Gregory C.

Shaffer ed., 2012); THE CHALLENGE OF TRANSNATIONAL PRIVATE REGULATION: CONCEPTUAL AND

CONSTITUTIONAL DEBATES (Colin Scott, Fabrizio Cafaggi & Linda Senden eds., 2011). 127

On this issue see Kim G. von Arx, ICANN – Now And Then: ICANN’S Rerform Aand Its Problems, 7 DUKE L. &

TECH. REV. 30 (2003), available at http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1077&context=dltr.;

Jonathan Weinberg, ICANN and the Problem of Legitimacy, 50 DUKE L. J. 187, 213 (2000); Cinzia Carmosino, The

World Intellectual Property Organization (WIPO), GAL CASEBOOK, supra note 97, at 135; Bruno Carotti and

Lorenzo Casini, A Hybrid Public-Private Regime: The Internet Corporation for Assigned Names and Numbers

(ICANN) and the Governance of the Internet, in GAL CASEBOOK, supra note 97, at 186.

30

indicate that the U.S. is willing to concede authority to a more inclusive regime as long as it

remains private.128

Issues concerning the global regulation of sports will be mentioned in

subsequent chapters.129

Financial Markets: The International Accounting Standards Board (IASB), created in 2000, sets

global accounting standards. It succeeded a much weaker International Accounting Standards

Committee (IASC), that operated from 1973 until 2001.130

Led by accountants, the IASB sets the

International Financial Reporting Standards (IFRS) that are aimed at harmonizing accounting

standards all over the world.131

A series of reforms in its constitution were designed to reduce the

influence of special interests. The IFRS has become the global standard after the EU, the U.S.

and about one hundred other nations accepted it. However, in an obvious show of no confidence

by national regulators, after the 2008 financial crisis, a new Monitoring Board was established to

further insulate the institution from capture by private interests. This Board includes

representatives of public actors: the EU Commission, the American Securities and Exchange

Commission (SEC), the Japan Financial Services Agency, as well as two representatives of

IOSCO. This Board is responsible for the appointment of the IASB decision-makers (the

“Trustees”) and reviewing their performance. This enhancement of public accountability is

obviously only partial, and therefore must raise concerns for diverse stakeholders.

Several standard-setting PIs affect financial transactions. These include the International

Union of Credit and Investment Insurers (the so-called Berne Union) which codifies technical

rules that circumscribe the nature and scope of members’ export credit insurance policies,132

and

128

Edward Wyatt, U.S. to Cede Its Oversight of Addresses on Internet, N.Y. TIMES, Mar. 14, 2014,

http://www.nytimes.com/2014/03/15/technology/us-to-give-up-role-in-internet-domain-names.html?_r=0 (last

visited Mar. 18, 2014). 129

For general overview and analysis see Lorenzo Casini, Sports Law: A Global Legal Order? (2012), available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2079857. 130

On the IASB, see Büthe & Mattli, supra note 125, at 61-122; Brummer, supra note 97, at 80-83; Maurizia De

Bellis, The Public Accountability of a Global Private Regulator: the IFRS Foundation’s Ongoing Constitution

Review, the IASB and the Monitoring Board, in GAL CASEBOOK, supra note 97, at 31. 131

See IFRS, About the IFRS Foundation and the IASB,

http://www.ifrs.org/The-organisation/Pages/IFRS-Foundation-and-the-IASB.aspx (last visited Feb. 6, 2014). (last

visited Feb. 6, 2014). 132

Janet Koven Levit, A Bottom-Up Approach to International Lawmaking: The Tale of Three Trade Finance

Instruments, 30 YALE J. INT'L L. 125, 147 et seq. (2005).

31

the Uniform Customs and Practice for Documentary Credits which sets transnational rules that

commercial banks uniformly follow in their letter-of-credit practices.133

The most established and comprehensive standard-setting organization is, of course, the

International Organization for Standardization (ISO), a nongovernmental organization comprised

of safety standard-setting bodies and organizations. Established in 1947, it harmonizes and sets

standards for facilitating global trade in goods and services. Its membership consists of national

representatives. Although initially these were private actors, because in most developing

countries the national standardization bodies are public bodies, the composition of the ISO is

mixed, with some members affiliated with governments, other members with roots in the private

sector, and still other members who are industry associations. Although seemingly technical, in

setting standards, this body often needs to balance the interests of several stakeholders, and thus

it has engaged in governance.134

In this context too, the standards have no legal force, but states

incorporate them into domestic law, and as “best practices” they impact states’ external

obligations, as in the area of restrictions on trade.

Finally, credit rating agencies (CRAs) are private companies that rate the creditworthiness of

companies and even states. Three of these companies – Moody’s, Standard & Poor’s and Fitch

Ratings – dominate the market, and their impact on global markets is significant. Recent crises

have demonstrated the weaknesses of the market’s reliance on their rankings, and this led

national governments acting jointly and severally to regulate the CRAs’ activities.135

Environmental Protection and Resource Management: The Marine Stewardship Council (MSC)

was established 1n 1996 as a nonprofit NGO by the World Wide Fund (WWF) and Unilever, at

the time the world’s largest frozen fish buyer and processor.136

In an effort to combat

overfishing, the MSC issues Sustainable Fishery Certifications to marine fisheries. Because there

is a steadily increasing demand for such certificates in markets in the developed world, hundreds

133

Id., at 137-139. 134

Büthe & Mattli, supra note 125, at 128-186; Eran Shamir-Borer, Legitimacy without Authority in Global

Standardization Governance: The Case of the International Organization for Standardization (ISO), in GAL

CASEBOOK, supra note 971, at 162; Levit, supra note 132. 135

Eleonora Cavalier, Regulating the Raters: Toward Convergence in the Discipline of Credit Ratings, in GAL

CASEBOOK, supra note 971, at 23; Mauro Bussani, Credit Rating Agencies’ Accountability: Short Notes on a Global

Issue, 10 GLOBAL JURIST 2 (2010). 136

Stefano Ponte, Greener than Thou: The Political Economy of Fish Ecolabeling and Its Local Manifestations in

South Africa, 36 WORLD DEV. 159 (2008).

32

of fisheries have sought and received accreditation,137

and the MSC has become the main

certifier of wild-catch fisheries.138

The voluntary certification process involves assessments that

are performed by accredited for-profit consultancies acting as assessors. These assessors are

monitored by Accreditation Services International, a German company.

The certification process drew much criticism for missing its sustainability goals and for the

skewed treatment of fisheries. Concerns have been raised about the lack of impartiality of the

assessors who are paid by the fisheries who seek the certifications.139

Researchers argued that

“the certification system creates a potential financial conflict of interest, because certifiers that

leniently interpret existing criteria might expect to receive more work and profit from ongoing

annual audits.”140

Others pointed out that because the certification process is costly and requires

technical knowledge, it effectively functions as a barrier to entry for small and developing

country fisheries.141

The critics further noted in 2010 that none of the MSC’s 13 board members

was from the developing world, and a better representation from the developing world could

have improved its ability to pursue its mission in an impartial way.142

The Forest Stewardship Council (FSC) was founded in 1993 as a nonprofit private

organization by some 130 participants from 26 countries after the Earth Summit of 1992 failed to

produce a binding inter-state agreement on a forestry management regime, and in response to

demands by consumers who were skeptical about claims by wood retailers of environmental

responsibility.143

The FSC sets standards for “environmentally appropriate” forest management

and evaluates third-party auditing firms, granting them the right to conduct forest audits and

137

Anastasia Telesetsky, The Marine Stewardship Council Sustainable Fishery Standards: Private Governance

responding to Public Governance, in GAL CASEBOOK, supra note 97, at 205. 138

Ponte, supra note 136. 139

Stephen Tully, Access to Justice Within the Sustainable Development Self-Governance Model (ESRC Centre for

Analysis of Risk and Regulation, Discussion Paper no. 21, 2004), available at

http://eprints.lse.ac.uk/36056/1/Disspaper21.pdf. 140

Jennifer Jacquet, Daniel Pauly, David Ainley, Sidney Holt, Paul Dayton & Jeremy Jackson, Seafood Stewardship

in Crisis, 467 NATURE 28, 28 (2010). 141

Simon R. Bush, Hilde Toonen, Peter Oosterveer & Arthur P.J. Mol, The ‘Devils Triangle’ of MSC Certification:

Balancing Credibility, Accessibility and Continuous Improvement, 37 MARINE POL’Y

288 (2013). 142

Jacquet et al., supra note 140. 143

Dan Klooster, Environmental Certification of Forests: The Evolution of Environmental Governance in a

Commodity Network, 21 J. RURAL STUD. 403, 406 (2005); Burca et al, supra note 47, at 734; Axel Marx, Emilie

Bécault & Jan Wouters, Private Standards in Forestry. Assessing the Legitimacy and Effectiveness of the Forest

Stewardship Council, in PRIVATE STANDARDS AND GLOBAL GOVERNANCE, ECONOMIC, LEGAL AND POLITICAL

PERSPECTIVES 60 (Axel Marx, Miet Maertens, Johan Swinnen & Jan Wouters, eds., 2012).

33

grant certification.144

The FSC regime has been effective, and contributed to improving the

production processes. But it came at a price. Because certification is costly, it adversely affected

small-scale and community forestry.145

Moreover, big retailers, like Home Depot and IKEA,

impose the costs of the certification processes on their suppliers.146

Finally, the role of environmental rating agencies should be mentioned. These private bodies

examine firms’ past environmental performance and their management plans and investments

that purport to enhance future environmental performance. Expectedly, these PIs are themselves

criticized for having accountability deficits.147

Labor Standards: The Fair Labor Association (FLA) is a private nonprofit based in the U.S.,

founded in 1997 by the Apparel Industry Partnership (AIP) which had been initiated by the

Clinton administration to protect workers in developing countries. The FLA was and still is a

multi-stakeholder coalition of apparel and footwear companies, human rights groups, labor and

religious organizations, and consumer advocates.148

It developed a code of conduct that reflects

international labor standards,149

and it monitors compliance with the code by the affiliated

industries that signed up for it. FLA-accredited monitoring organizations and individual auditors

randomly visit approximately five percent of facilities supplying affiliated companies each year.

It publishes the assessment on its website as tracking charts,150

and engages the companies in a

review and remediation process. The auditors can access where state officials cannot: the private

character of the operation is not regarded as public enforcement that could raise issues of

sovereignty and the jurisdiction to prescribe or to enforce.

The Ethical Trading Initiative (ETI) was formed in 1998 by UK trade union representatives of

the Trade Union Congress, the International Textile Garment and Leather Workers’ Federation,

144

Klooster, supra note 143, at 407-408. 145

Id., at 412. 146

Id., at 414-415. 147

See, e.g., Chatterji et al., How Well Do Social Ratings Actually Measure Corporate Social Responsibility?, 18 J.

ECON. & MGMT STRATEGY 125 (2009); Steven Scalet & Thomas Kelly, CSR Rating Agencies: What is Their Global

Impact?, 94 J. BUS. ETHICS 69 (2010). For a typology of global governance bodies in the environmental sphere see

Issachar Rosen-Zvi, Climate Change Governance: Mapping the Terrain, 2011 CARBON & CLIMATE L. REV. 234. 148

Axel Marx, Limits to non-state market regulation: A qualitative comparative analysis of the international sport

footwear industry and the Fair Labor Association, 2 REG. & GOVERNANCE 253, 254 (2008). See also Kate

MacDonald, Fair Labor Association, in THE HANDBOOK OF TRANSNATIONAL GOVERNANCE: INSTITUTIONS AND

INNOVATIONS 243 (Thomas Hale & David Held, eds., 2011). See generally RICHARD M. LOCKE, THE PROMISE AND

LIMITS OF PRIVATE POWER: PROMOTING LABOR STANDARDS IN A GLOBAL ECONOMY (2013). 149

FLA, Labor Standard, http://www.fairlabor.org/our-work/labor-standards (last visited Feb. 7, 2014). 150

FLA, Tracking Charts, http://www.fairlabor.org/transparency/tracking-charts (last visited Feb. 7, 2014).

34

the International Confederation of Free Trade Unions, and NGOs.151

UK supermarkets have

participated in the initiative since its inception152

and currently all but one of the major British

supermarkets are part of the initiative.153

The ETI developed a code of conduct covering

employment conditions among companies, unions and NGOs, on the basis of ILO core

conventions and UN human rights standards. Since it is a UK initiative, its ultimate goal is to

ensure that workers producing for the UK market meet international labor standards.

The Accord on Fire and Building Safety in Bangladesh154

was reached in 2013 by over 100

apparel corporations from 19 countries in Europe, North America, Asia and Australia, two global

trade unions, and numerous Bangladeshi unions. The Accord commits to a goal of ensuring safe

and sustainable working conditions in Bangladeshi garment factories and to establishing a fire

and building safety program for a period of 5 years. The final push for the initiative came with

the collapse of a garment factory building in Bangladesh which killed 1,100 workers in April

2013. This accord demonstrates the realization that monitoring employment conditions is not

enough. It is also necessary to address remediation efforts and build local capacity by conducting

training programs on fire and building safety. The participating companies commit to

contributing funding for these activities in proportion to the annual volume of each company’s

garment production in Bangladesh relative to the respective annual volumes of garment

production of the other signatory companies, subject to a maximum contribution of $500,000 per

year for each year of the term of the agreement.

Food Safety Standards: In response to the food crises of the mid-1990s, several retailer chains

have sidestepped national regulators and formed coalitions to ensure the safety of the food they

sell and to address various social and environmental aspects of food production.155

These private

151

For a list of these and many others PIs, see Doris Fuchs, Agni Kalfagianni & Tetty Havinga, Actors in Private

Food Governance: the Legitimacy of Retail Standards and Multistakeholder Initiatives with Civil Society

Participation, 28 AGRIC. & HUM. VALUES 353 (2009). 152

Stephanie Barrientos & Sally Smith, Do Workers Benefit from Ethical Trade? Assessing Codes of Labour

Practice in Global Production Systems, 28 THIRD WORLD Q. 713 (2007). 153

See Ethical Trading Initiative, Our Members, http://www.ethicaltrade.org/about-eti/our-members (last visited

Mar. 7, 2014). 154

For the Accord, see Accord on Fire and Building Safety in Bangladesh (May. 13, 2013), available at

http://laborrights.org/sites/default/files/publications-and-

resources/Accord_on_Fire_and_Building_Safety_in_Bangladesh_2013-05-13.pdf. 155

For a comprehensive treatment, see Sanderijn Duquet & Dylan Geraets, Food Safety Standards and Informal

International Lawmaking, in Pauwelyn et al., IN-LAW, supra note 70, at 395; Yoshiko Naiki, The Dynamics of

35

initiatives, which began in Europe and now include consumers in most developed economies,

include primarily the Global Partnership for Good Agricultural Practice (GlobalG.A.P.) (since

1997; known as EurepGap until 2007), whose standards are de facto mandatory throughout the

developed world and hence also binding on those who export to those countries. Additional PIs

in this area include the British Retail Consortium Global Standard for Food Safety (BRC) (since

1998), the Global Food Safety Initiative (GFSI) (2000), and the International Food Standard

(IFS) (2002).

These standards for food safety affect producers and exporters to those retailers. Without

compliance with these standards, the chances of gaining access to those markets are limited. The

problem is that standards like those of GlobalG.A.P. “cement the buyer-driven dominance of the

global horticultural value chain.”156

Producers and exporters in developing countries bear the

burden of standards imposed on them by their consumers in the North. According to Lind and

Pedersen, this “entails investments and ongoing support from the exporters to the smallholders,

while the European buyers experience an easier trade and no increased risk or workload.”157

Not

only does the outcome operate as a typical market entry barrier,158

imposing several obstacles to

market participation on smallholders in developing countries,159

but also the standard-setting

process within these consumer-driven PIs provides little space for outside stakeholders to weigh

in on the outcomes.160

Developing countries, which turned to the WTO to complain about what

they argued were indirect violations of developed countries’ trade obligations, were confronted

Private Food Safety Standards: A Case Study on the Regulatory Diffusion of GlobalG.A.P., 63 INT’L & COMP. L.Q.

137 (2014); Fuchs et al., supra note 151. 156

ANNE LIND & MADS PEDERSEN, IMPACTS OF THE GLOBALGAP STANDARD 90 (2011). On the adverse effects to

the poor in the developing world as a result of the concentration of buying power of Northern food supply chains,

see United Nations Conference on Trade and Development, N.Y.C & Geneva, 2007, Challenges and Opportunities

Arising from Private Standards on Food Safety and Environment for Exporters of Fresh Fruit and Vegetables in

Asia: Experiences of Malaysia,Thailand and Viet Nam, U.N. Doc. UNCTAD/DITC/TED/2007/6 (2007). See also

Aravind R. Ganesh, The Right to Food and Buyer Power, 11 GERMAN L.J. 1190 (2010). 157

Lind & Pedersen, supra note 156, at 90. 158

For an analysis of the barriers, see Morten Broberg, European Food Safety Regulation and the Developing

Countries: Regulatory problems and possibilities (DIIS Working Paper No. 2009:09, 2009), available at

http://subweb.diis.dk/graphics/Publications/WP2009/WP2009-09_European_Food_Safety_Regulation_web2.pdf. 159

See Toby Carroll & Darryl S.L. Jarvis, Special Issue: Market Building in Asia: Standards Setting, Policy

Diffusion, and the Globalization of Market Norms, 6(2) J. ASIAN PUB. POL’Y. 117 (2013) (offering several case

studies). 160

Nicolas Hachez & Jan Wouters, A Glimpse at the Democratic Legitimacy of Private Standards: Assessing the

Public Accountability of GlobalG.A.P., 14 J. INT’L ECON. L. 667 (2011); Fuchs et al., supra note 151. On the lack of

sensitivity of the GlobalG.A.P. standards to the local context and to the need to preserve diversity, see Naiki, supra

note 155.

36

with the EU’s response that as private initiatives reflecting consumers’ preferences,

GlobalG.A.P. and other private standards were not covered by WTO law.161

2.2 Direct Administration over People and Territory

Beginning with the intervention in Somalia in December 1992, the UN Security Council has

acted under Chapter VII to authorize the nonconsensual administration of territories of member

states in internal or international post-conflict situations. The preferred policy remained to rely

formally on domestic institutions, as was the case, for example, in Cambodia (1991),162

Haiti

(1994),163

and Bosnia (1995),164

but when such indigenous institutions were not available or

judged untrustworthy, the Security Council assigned responsibility to the foreign forces in

control of the area, as in the case of Somalia (1992), or it assumed direct control over the

territory, as in the cases of Kosovo (UNMIK, 1999) and East Timor (UNTAET, 1999).165

A

different type of direct governance over individuals is the administration of refugee camps166

and

the determination of refugee status (RSD) by the United Nations High Commissioner for

Refugees (UNHCR).167

161

Naiki, supra note 155, at 138-39; Gretchen H. Stanton & Christiane Wolff, Private voluntary standards and the

World Trade Organization Committee on Sanitary and Phytosanitary Measures, in STANDARD BEARERS –

HORTICULTURAL EXPORTS AND PRIVATE STANDARDS IN AFRICA 6 (Adeline Borot de Battisti, James MacGregor &

Andrew Graffham, eds., 2009). 162

See MICHAEL W. DOYLE, UN PEACEKEEPING IN CAMBODIA: UNT4C’S CIVIL MANDATE (1995); Steven R.

Ratner, The Cambodia Settlement Agreements, 87 AM. J. INT’L L. 1 (1993). 163

S.C. Res. 940, ¶ 4, U.N. Doc. S/RES/940 (July 31, 1994), available at http://daccess-dds-

ny.un.org/doc/UNDOC/GEN/N94/312/22/PDF/N9431222.pdf?OpenElement. 164

S.C. Res. 1031, ¶ 20, U.N. Doc. S/RES/1031 (Dec. 15, 1995), available at http://daccess-dds-

ny.un.org/doc/UNDOC/GEN/N95/405/26/PDF/N9540526.pdf?OpenElement. 165

For reviews of these interventions, see EYAL BENVENISTI, THE INTERNATIONAL LAW OF OCCUPATION, Chapter

10 (2nd

ed. 2012) [hereinafter Benvenisti, Occupation]; GUGLIELMO VERDIRAME, THE UN AND HUMAN RIGHTS:

WHO GUARDS THE GUARDIANS 244-69 (2011); ERIC DE BRABANDERE, POST-CONFLICT ADMINISTRATIONS IN

INTERNATIONAL LAW: INTERNATIONAL TERRITORIAL ADMINISTRATION, TRANSITIONAL AUTHORITY AND FOREIGN

OCCUPATION IN THEORY AND PRACTICE (2009); GREGORY H. FOX, HUMANITARIAN OCCUPATION (2008); CARSTEN

STAHN, THE LAW AND PRACTICE OF INTERNATIONAL TERRITORIAL ADMINISTRATION: VERSAILLES TO IRAQ AND

BEYOND (2008); RALPH WILDE, INTERNATIONAL TERRITORIAL ADMINISTRATION: HOW TRUSTEESHIP AND THE

CIVILIZING MISSION NEVER WENT AWAY (2008); BERNHARD KNOLL, THE LEGAL STATUS OF TERRITORIES SUBJECT

TO ADMINISTRATION BY INTERNATIONAL ORGANISATIONS (2008); JANE STROMSETH, DAVID WIPPMAN, & ROSA

BROOKS, CAN MIGHT MAKE RIGHTS?: BUILDING THE RULE OF LAW AFTER MILITARY INTERVENTIONS (2006); SIMON

CHESTERMAN, YOU, THE PEOPLE: THE UNITED NATIONS, TRANSITIONAL ADMINISTRATION, AND STATE-BUILDING

(2004). 166

Verdirame, supra note 165, at 270-94; UN High Commissioner for Refugees (UNHCR), The Administration of

Justice in Refugee Camps: A Study of Practice, U.N. Doc. PPLA/2006/01 (Mar. 2006), available at

http://www.refworld.org/docid/4417f9a24.html (last visited Feb. 7, 2014). 167

Emma Dunlop, A Globalized Administrative Procedure: UNHCR’s Determination of Refugee Status and its

Procedural Standards, in GAL CASEBOOK, supra note 97, at 84; Verdirame, supra note 165, at 294-98.

37

What characterized these types of direct administration was a general lack of commitment to

abiding by the same standards of accountability that these UN bodies expect from others. Emma

Dunlop noted that

“Although the Procedural Standards [that the UNHCR adopted] establish transparent

guidelines for UNHCR officers that conduct mandate [Refugee Status Determination (RSD)],

they diverge in significant respects from the standards UNHCR expects States to meet in their

national RSD assessments. NGOs and commentators have questioned the due process

afforded to applicants and the adequacy of review procedures under this regime.”168

In Kosovo, UNMIK did not offer any effective mechanism for administrative review of its

policies or of their implementation except for a narrow window of opportunity in late 2009,

toward the end of its mission.169

After UNMIK begrudgingly submitted reports to the UN

Human Rights Committee (HRC) and the UN Committee on Economic Social and Cultural

Rights (CESCR), it received sharp rebukes. Many commentators lamented the culture of

unaccountability of the UNMIK regime, in particular the absence of a clear commitment to

universal standards of human rights, the lack of reliable checks and balances, and of effective

means of review of UNMIK policies and practices.170

UNMIK’s immunity from public accountability was not only harmful to the Kosovar

population, but also nurtured an internal culture of corruption. In 2013 the UN Secretary General

filed an appeal against a judgment of the United Nations Dispute Tribunal (UNDT) in a case

concerning a “whistleblower” who had reported the complicity of senior UNMIK officials in a

kickback scheme related to a controversial proposed power plant in Kosovo. In retaliation the

informer was detained, his home and person searched, his post was abolished and he was

subjected to criminal and administrative investigations. The UNDT criticized the “wholly

unacceptable treatment in breach of his right to due process.”171

In subsequent proceedings it

found that

168

Dunlop, supra note 167, at 84. 169

See infra Chapter 6 text to notes 61-73; Benvenisti, Occupation, supra note 165, at Chapter 10; Stahn, supra note

165, at 21. 170

See infra Chapter 6 text to notes 68-69; Benvenisti, Occupation, supra note 165, at Chapter 10. 171

Wasserstrom v. Secretary-General of the United Nations, Case No. UNDT/NY/2009/044/JAB/2008/087,

Judgment U.N. Dispute Trib. No. UNDT/2012/092, at ¶ 46 (June 21, 2012), available at

http://www.un.org/en/oaj/files/undt/judgments/undt-2012-092.pdf.

38

“the [UN’s] conduct of the proceedings in deliberately and persistently refusing, without good

cause, to abide by the Orders of the Tribunal and not granting access to the … investigation

report constituted a manifest abuse of proceedings”

and awarded the informer compensation.172

Instead of endorsing the decision, the Secretary

General appealed against it.

This experience belies the belief that UN administrators would be impartial and effective and

that regulating them would therefore be unnecessary and even overburdening.

2.3 Unilateral Global Governance

In 2013 Chief Justice Roberts of the U.S. Supreme Court invoked an observation made by his

predecessor Joseph Story in 1822 that “No Nation has ever yet pretended to be the custos morum

[guardians of morals] of the whole world.”173

He was seriously outdated. Increasingly, the U.S.,

and later also the EU, have begun to impose their standards on foreign activities even if those

activities have only remote indirect impact on their own interests. Examples include the

imposition by the United States of sanctions on all actors, public and private, including foreign

ones, who do not comply with the U.S.’s rules on illegal trafficking in humans;174

the imposition

by the U.S. of trade restrictions on all those engaged in the harvest of shrimp or the catch of tuna

to protect endangered species around the world;175

the demand by the U.S. Food and Drug

Administration (FDA) that all non-U.S. clinical drug trials comply with FDA regulations;176

the

U.S. Securities and Exchange Commission (SEC) rule that requires companies to disclose

whether any “conflict minerals” were used in their products;177

the extension of U.S. anti-bribery

legislation to the global arena;178

the imposition by the European Union of an obligation on any

172

Id., ¶ 43. 173

Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 12, 133 S.Ct. 1659 at 1668 (2013) [hereinafter Kiobel], citing

U.S. v. The La Jeune Eugenie, 26 F. Cas. 832, 847 (No. 15,551) (CC. Mass. 1822). 174

See Janie A. Chuang, The United States as Global Sheriff: Using Unilateral Sanctions to Combat Human

Trafficking, 27 MICH. J. INT'L L. 437 (2006). 175

Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products,

WT/DS58/AB/R (Oct. 12, 1998) (Shrimp/Turtle). Appellate Body Report, United States – Measures Concerning the

Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R (May 16, 2012) (Tuna/Dolphin II). 176

Abdullahi v. Pfizer, Inc., 562 F.3d 163, 182-183 (2nd

Cir. 2009). 177

National Association of Manufacturers et al. v. Securities and Exchange Commission, D.D.C. No. 13-cv-635

(2013), available at https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2013cv0635-37 (last visited Feb. 8,

2014). 178

Securities and Exchange Commission, Final Rule on Disclosure of Payments by Resource Extraction Issuers, 17

C.F.R. § 240 & 249 (2012) (A rule pursuant to Section 1504 of the Dodd-Frank Wall Street Reform and Consumer

39

oil tanker visiting a port within the EU area, irrespective of their flag, to have a double-hull

design;179

the introduction of stringent data protection standards that have effects on third

countries;180

or, most recently, the demand that non-EU air carriers landing in EU territory take

part in the EU carbon emissions scheme, which would apply also to those segments flown

outside the EU airspace.181

One could add to this list also the rendering by individual countries of

global law enforcement services by extending their courts’ jurisdiction to foreign events. While

the U.S. Alien Torts Statute, which served for decades as the paradigmatic example for universal

jurisdiction in civil cases, was ultimately restricted by the U.S. Supreme Court in 2013,182

this

option remains open in several European countries.183

Although most of these acts were

prescribed by developed countries, there are also similar acts by the developing South.184

What is common to these and other unilateral regulatory efforts of this type is their aim: the

unilateral attempt to prevent or remedy collective action failures that produce global public

“bads.”185

A key characteristic of this type of unilateral global governance, which may be called

“legislation for humanity,”186

is the net burdens that it imposes on domestic producers and

consumers in addition to the equivalent burdens it imposes on foreigners.187

Unlike the unilateral

Protection Act relating to disclosure of payments by resource extraction issuers to a foreign government or the

Federal Government for the purpose of the commercial development of oil, natural gas, or minerals). 179

Reg. 1726/2003 of the European Parliament and of the Council of 22 July 2003 amending Reg. 417/2002 on the

accelerated phasing-in of double-hull or equivalent design requirements for single-hull oil tankers, 2003 O.J. (L

249/1). 180

Michael D. Birnhack, The EU Data Protection Directive: An Engine of a Global Regime, 24 COMPUTER L. &

SECURITY REP. 508 (2008) (the measure allows sharing data with a third country only if the third country ensures an

adequate level of data protection). 181

In Case C‑366/10, Air Transp. Ass’n of Am. v. Sec’y of State for Energy & Climate Change (Dec. 21, 2011) (not

yet reported). For analysis and criticism, see Andrea Gattini, Between Splendid Isolation and Tentative Imperialism:

The EU’s Extension of its Emission Trading Scheme to International Aviation and the ECJ's Judgment in the ATA

Case, 61 INT’L & COMP. L.Q. 977, 982 (2012). 182

Kiobel, supra note 148 (interpreting 28 U.S.C. § 1350). 183

Caroline Kaeb & David Scheffer, The Paradox of Kiobel in Europe, 107 AM. J. INT’L L 852 (2013). 184

Chile issued conservation measures for the swordfish migratory stocks in the South Pacific, see Marcos A.

Orellana, The Swordfish Dispute between the EU and Chile at the ITLOS and the WTO, 71 NORDIC J. INT'L L. 55

(2002). 185

This last emphasis on global public bads excludes legislation that extends extraterritorially but is designed to

prevent adverse effects on the domestic jurisdiction rather than respond to global collective action failures. For

example, antitrust laws (F. Hoffmann-La Roche Ltd. v. Empagran S.A., 124 S. Ct. 2359 (2004) and security

exchange regulations (Morrison v. National Australia Bank 130 S.Ct. 2869 (2010)) are not “legislation for

humanity.” Therefore U.S. courts rightly have refused to apply them to events not related to the U.S. 186

See Eyal Benvenisti, Legislating For Humanity: May States Compel Foreigners to Promote Global Welfare?

[hereinafter Benvenisti, Humanity], in INTERNATIONAL LAW-MAKING, ESSAYS IN HONOUR OF JAN KLABBERS 3

(Rain Liivoja & Jarna Petman, eds., 2014). 187

There is also the rarer possibility that the unilateral measure burdens only one’s own nationals and state agencies.

See, for example, Environmental Defense Fund v. Massey, 986 F.2d 528 (D.C. Cir., 1993) (environmental impact

assessment required under U.S. law applied to a scientific station of a U.S. Federal Agency in Antarctica, which the

40

extension of the continental shelf or an exclusive economic zone, which may be motivated by

global welfare concerns but also carry benefits to the regulating state, the above examples do not

offer exclusive benefits for the regulating state. Instead, they level the playing field by

demanding that competitors abide by the same or equivalent constraints.188

States that regulate public goods unilaterally do so not out of purely altruistic motives. They

have a strong self-interest in preventing human trafficking into their borders or in reducing

global warming, and they are willing to bear the associated economic and other burdens. At the

same time, however, they wish to ensure two related goals: that the measures imposed are

effective, and that the associated economic burdens are limited. To achieve both ends, they aim

to regulate also the activities of foreign actors worldwide: the more stakeholders follow suit, the

more successful the regulation will be; similarly, if foreign competitors also comply with the

regulation, the economic burden will be shared rather than borne only by the regulating state.189

But the obvious problems remain: powerful states set high standards that may limit competition

and be oblivious to local demands and constraints of stakeholders in other parts of the globe.

2.4 The Functions of Law in Regulating Global Governance

2.4.1 The Need for Regulating the Global Regulators

As the above survey has illustrated, global governance bodies perform all functions of

government and thereby cover most aspects of human activity. They shape our lives and our

choices; they limit or ensure our freedoms. This signifies a crucial shift in our understanding of

what global governance bodies are for. While initially they were required to resolve inter-state

coordination or cooperation problems (the Telegraphic Union of 1865, or the 1804 Rhine

Commission, respectively), and later were used also to facilitate inter-state conflict prevention

and resolution (the League of Nations, the United Nations), they have become indispensable to

ensure the quality of the air we breathe, the water we drink, the food we consume, our means of

court regards as a “global common”), but this type of legislation does not raise the problems discussed here.

Compare Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (the Defenders of Wildlife had no standing to sue the

U.S. Secretary of the Interior for not complying with procedural obligations under the Endangered Species Act of

1973 when aiding the construction of dams in Egypt and Sri Lanka). 188

For a typology of unilateral measures in the environmental sphere, see Richard Bilder, The Role of Unilateral

State Action in Preventing International Environmental Injury, 14 VAND. J. TRANSNAT’L L. 51 (1981). On this

general problem, see also Daniel Bodansky, What’s So Bad about Unilateral Action to Protect the Environment?, 11

EUR. J. INT’L L. 339 (2000), and Laurence Boisson de Chazournes, Unilateralism and Environmental Protection:

Issues of Perception and Reality of Issues, 11 EUR. J. INT’L L. 315 (2000). 189

For a justification of this unilateral exercise, see Benvenisti, Humanity, supra note 681.

41

communication with others, our working conditions and the political and economic rights that we

(and others) enjoy.

But this impressive picture has a darker side as well. Initially, global governance bodies were

regarded as a venue where state parties could bridge their gaps through ongoing negotiations that

benefit from better information and enforcement mechanisms and the buildup of mutual trust. As

explained by Keohane,

“The effectiveness of international institutions lies in the establishment of frameworks for

exchange of information, mutual monitoring, and frequent interaction. Such a forum

encourages the development of stable mutual expectations regarding the future behavior of

co-parties and reduces both bargaining costs and uncertainty with regard to the value of

proposed transactions.”190

This observation is in many instances accurate; there are no alternatives to many of these

bodies.191

But the diversified and fragmented landscape of global governance, the underlying

logic of fragmentation, and its consequences outlined above suggest that global governance

ensures the political or economic domination of a handful of state parties or private companies

and limits the opportunities of others to compete and take part in shaping the rules.192

Ultimately,

one cannot ignore George Stigler’s critical observation that regulation is often sought by the

regulated because it serves them primarily and adversely affects their competitors.193

There is therefore no reason to maintain a romantic view about global governance bodies in

whatever shape or form.194

But there is no reason to be negative about them either. Just as

domestic governance is indispensable, so is global governance. The challenge that remains is

how to tame power, level the institutional playing field and ensure that all affected interests are

adequately represented or at least taken into account. This was the task of domestic

190

See ROBERT O. KEOHANE, AFTER HEGEMONY: COOPERATION AND DISCORD IN THE WORLD POLITICAL ECONOMY

85-98 (1984). See also ELINOR OSTROM, GOVERNING THE COMMONS: THE EVOLUTION OF INSTITUTIONS FOR

COLLECTIVE ACTION, Chapter 6 (1990). 191

This is true especially for managing shared natural resources. See EYAL BENVENISTI, SHARING TRANSBOUNDARY

RESOURCES INTERNATIONAL LAW AND OPTIMAL RESOURCE USE (2002). 192

See Benvenisti & Downs, Empire, supra note 60. See also Nico Krisch, International Law in Times of

Hegemony: Unequal Power and the Shaping of the International Legal Order, 16 EUR. J. INT’L L. 369 (2005). 193

George J. Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3 (1971). 194

See Jan Klabbers, The Life and Times of the Law of International Organizations, 70 NORDIC J. INT'L L. 287, 288

(2001) [hereinafter Klabbers, Life] (“Traditionally, international organizations were heralded as the harbingers of

international happiness”).

42

administrative law – to counter domestic power – and it is now the task of the law that regulates

global governance.

2.4.2 A Brief Note on Terminology and Focus

The urge to tame the power of global governance bodies is relatively recent. It was certainly not

shared by the first observers of the emerging phenomenon. They reflected on the nature and

content of the norms created by IGOs, a field that attracted much interest at the time, which was

termed “international administrative law.”195

Later on, as international organizations started to

flourish and exert power, observers began to study who they are and what they do. This

emerging discipline gained the title of “the law of international organizations” or, perhaps more

comprehensively, “international institutional law,”196

or a combination thereof.197

It is only in recent years that we’ve arrived at the third phase of the legal treatment of IGOs.

With the growing realization that IGOs are not necessarily “wonderful”198

and that they ought to

be controlled and limited by a law whose sources may be beyond the founding treaties of these

organizations, scholars began to elaborate the contours of “global administrative law,”199

the law

of “international public authority,” 200

or, again, “international administrative law.”201

Despite

some criticism of the term global administrative law,202

I find it sufficiently broad to encompass

all the phenomena of global regulation – public, private or mixed – that warrant disciplining

through law. Because global administrative law itself breaks the traditional boundaries between

195

Reinsch, International, supra note 46, at 5; Paul Négulesco, Principes du Droit International Administratif, 51

RECUEIL DES COURS 579 (1935). 196

Jan Klabbers, The Paradox of International Institutional Law, 5 INT'L ORG. L. REV. 151 (2008) [hereinafter,

Klabbers, Paradox]. Kingsbury, Krisch & Stewart, Emergence, supra note 27, at 27-28; See also Daniel G. Partan,

International Administrative Law, 75 AM. J. INT'L L. 639 (1981) (using the term for the branch of law that examines

what international orgnizations do and how). 197

CHITTHARANJAN FELIX AMERASINGHE, PRINCIPLES OF THE INSTITUTIONAL LAW OF INTERNATIONAL

ORGANIZATIONS (2nd

ed. 2005). 198

Klabbers, Life, supra note 194, at 288. 199

Kingsbury, Krisch & Stewart, Emergence, supra note 27, at 28; SABINO CASSESE, GLOBAL ADMINISTRATIVE

LAW: AN INTRODUCTION 36 et seq. (2005), available at http://www.iilj.org/gal/documents/Cassesepaper.pdf;

Giacinto della Cananea, Beyond the State: The Europeanization and Globalization of Procedural Administrative

Law, 9 EUR. PUB. L. 563, 565-566 (2003). 200

Armin von Bogdandy, General Principles of International Public Authority: Sketching a Research Field, 9

GERMAN L.J. 1909 (2008). 201

INTERNATIONALES VERWALTUNGSRECHT (Christoph Möllers, Andreas Voßkuhle & Christian Walter, eds., 2007);

Eberhard Schmidt-Aßmann, The Internationalization of Administrative Relations as a Challenge for Administrative

Law Scholarship, 9 GERMAN L.J. 2061 (2008). 202

See Schmidt-Aßmann, supra note 201, at 2063-64 (suggesting that “the (over)extension into the global sphere

shifts the focus too quickly away from the (relatively speaking) more readily comprehensible factual constellations;

therewith, certain experiences and potential solutions remain unutilized”).

43

public and private, and is ready to consider private law tools to monitor and limit public powers

also when they are informally and indirectly exercised by a private body, it opens up our legal

horizons to assessing the different ways by which law can constrain power.

2.4.3 How is Global Administrative Law Being Created and Shaped?

The evolution of any administrative law is fraught with struggles between those who seek

regulation, the (sometimes reluctant) regulators, the regulated, and affected third parties. To a

large extent this is a Sisyphean exercise. By providing procedural transparency and voice to

affected groups, and by setting up review mechanisms, administrative law inevitably produces

new discretionary powers in turn, in an ongoing “cat and mouse” game between principals and

agents.203

As Martin Shapiro explains, administrative law is “an endless game of catch-up in

which previously granted discretions are brought under rules, even as new discretions are

granted, and no discretion granted is ever completely and finally reduced to rules.”204

That

Sisyphean exercise is even more complex in the global arena where governance is fragmented,

wears different shapes and colors, and is seemingly devoid of an underlying constitutional order,

a legislator and a court; where sophisticated legal structures are designed and built to create

havens of unfettered discretion.

Given this bleak background, why should lawyers be hopeful about the ability of law to

develop and to effectively constrain global regulators and regulated and provide some protection

to the diffuse general public?

There are three responses to this question. First is the self-interest to avoid agency problems.

Administrative law is a discipline that structures the decision-making process in an effort to

avoid misguided or corrupt outcomes. The principals – the designers of each administrative

agency – want to control the outcome by designing procedures that limit the autonomy of the

agents who run that agency or of other principals with which they share power. Often if not

always, the internal balance of power within the different branches of government is reflected in

the administrative norms that constrain the discretion of the various decision-makers.205

This

203

Eyal Benvenisti, The Interplay Between Actors As a Determinant of the Evolution of Administrative Law in

International Institutions, 68 L. & CONTEMP. PROBS. 319 (2005) [hereinafter, Benvenisti, Interplay]. 204

Martin Shapiro, The Institutionalization of European Administrative Space, 1, 5 (Center for Culture, Org. & Pol.,

Working Paper No. 2000-09, 2000), available at http://www.irle.berkeley.edu/culture/papers/Shapiro.pdf. 205

Benvenisti, Interplay, supra note 203, at 306-10. For this in the domestic U.S. context, see Matthew D.

McCubbins, Roger C. Noll & Barry R. Weingast, Administrative Procedures as Instruments of Political Control, 3

44

observation would suggest that at least in those organizations where there are internal conflicts of

interest among actors (principals and agents, competition among principals, or both), a robust

internal system of checks and balances will emerge, reflecting the power-relations among the

parties.206

The second motivation for global bodies to accept legal constraints may emanate from the

domestic sphere. Sometimes global governance bodies need to accept the legal constraints that

are imposed domestically on powerful state parties. The U.S. Congress insisted that the U.S.

administration curtail World Bank loans to countries that abuse human rights,207

and insisted on

establishing the World Bank Inspection Panel.208

The U.S. Food and Drug Administration

opened its notice-and-comment procedure to all affected parties, even foreigners, before

meetings of the ICH, thereby providing outsiders with an opportunity to voice their concerns and

influence ICH guidelines.209

The U.S. Environmental Protection Agency invited the public to

participate in its deliberations concerning the development and implementation of the Montreal

Protocol.210

As Chapter 6 elaborates, external and indirect judicial review, by national and (to a

lesser extent) international courts, is another disciplining factor.

Third, the principals need to allay public concerns about the governing agency, and ensure

that the agency’s policies are accepted as sufficiently legitimate to merit compliance.211

The

more the general public is concerned about the operation of an agency, the more concessions will

be made to please it. As global governance bodies proliferate their accountability issues

increasingly attract attention and different modalities are compared, there is a greater likelihood

that expectations as to how global governance should operate will become standardized. In this

sense, the scholarly exploration of what global administrative law is and what it can achieve is

J.L. ECON. & ORG. 243 (1987); see also McNollgast, The Political Origins of the Administrative Procedure Act, 15

J.L. ECON. & ORG. 180 (1999). 206

This in itself is not necessarily a problematic outcome: an array of norms allows for experimentation with

alternative norms and flexibility to accommodate diverse stakeholders: Carol Harlow, Global Administrative Law:

The Quest for Principles and Values, 17 EUR. J. INT’L L. 187 (2006). 207

Kristina Daugirdas, Congress Underestimated: The Case of the World Bank, 107 AM. J. INT’L L. 517 (2013). 208

Id.; see also Ian A. Bowles & Cyril F. Kormos, Environmental Reform at the World Bank: The Role of the U.S.

Congress, 35 VA. J. INT’L L. 777, 832-33 (1995). 209

Berman, ICH, supra note 118, at 494-96. 210

Elspeth Faiman Hans, The Montreal Protocol in U.S. Domestic Law: A “Bottom Up” Approach to the

Development of Global Administrative Law, 45 N.Y.U. J. INT'L L. & POL. 827 (2013). 211

ROGER COTTERRELL, THE SOCIOLOGY OF LAW: AN INTRODUCTION 169-171 (2nd

ed. 1992); Gerald Frug, The

Ideology of Bureaucracy in American Law, 97 HARV. L. REV 1277, 1334 (1984). See also Tom Ginsburg,

Dismantling the “Developmental State”? Administrative Procedure Reform in Japan and Korea, 49 AM. J. COMP. L.

585, 597 (2001) (suggesting that the motivation for the enactment of the Korean Administrative Appeals Act of

1984 was President Chun Doo Hwan’s attempt to gain legitimacy for his government).

45

not only a scholarly endeavor, but is likely to facilitate real change in the way global governance

functions.

2.4.4 The Functions of Global Administrative Law Theory

Given the “endless game of catch-up in which previously granted discretions are brought under

rules even as new discretions are granted,” and the fragmented nature of global governance due

to which every governance body is an island unto itself, with its unique rules and discretions, the

task of global administrative law theorists is twofold.

The first, perhaps intuitive, mission is to identify the risks of failure in global governance and

seek appropriate responses to them. The intuitions for this are built on the existing concerns with

domestic agencies, which can serve as analytical defaults: If domestic agents must comply with

specific norms that ensure accountability and inclusion, why should international or transnational

bodies be exempted? Thus public law scholars committed to democratic decision-making ask

questions such as:

Does the UN Security Council have authority to establish international criminal

tribunals?212

To freeze assets of suspected terrorists?213

Does the International Monetary Fund have an obligation to give fair hearing to an

employee before dismissing her?214

Does the World Bank have an obligation to give fair hearing to individuals who are

affected by a development project conducted by a government with a loan provided by

the World Bank?215

Does the International Olympic Committee have an obligation to respect the privacy and

freedoms of athletes?216

212

Prosecutor v. Tadic, Case No. IT-94-1-AR72, Decision on Defence Motion for Interlocutory Appeal on

Jurisdiction (Int’l Crim. Trib. for the Former Yugoslavia Oct. 2, 1995),

http://www.icty.org/x/cases/tadic/acdec/en/51002.htm (last visited Feb. 9, 2014) (the International Criminal Tribunal

for Yugoslavia reviewing whether the UN Security Council had the authority to establish the tribunal). See also

infra Chapter 3, text to note 25. 213

Joined Cases C-402/05 P & C-415/05 P, Kadi & Al Barakaat v. Council of the European Union, ¶ 334, 2008

E.C.R.I-6351. 214

Ms. "EE” v. Int’l Monetary Fund, judgment No. 2010-4, ¶¶ 143-199 (Admin. Trib. of Int’l Monetary Fund,

2010), available at http://www.imf.org/external/imfat/pdf/j2010_4.pdf. 215

Mariarita Circi, The World Bank Inspection Panel: The Indian Mumbai Urban Transport Project Case, in GAL

CASEBOOK, supra note 97, at 100. On the Mumbai Project case see infra Chapter 4, text to notes 77-79, and infra

Chapter 5, text to notes 52-53.

46

There are plenty of convincing reasons why the answer to all of the above questions is a

resounding “yes”: global governance bodies must be accountable to and adequately represent all

affected stakeholders and otherwise mitigate the democracy losses suffered due to the move from

the domestic to the transnational or international arenas. Such procedural requirements are

necessary, even though not sufficient, to ensure effective global governance that is attuned to

justice concerns and to the protection of individual rights and legitimate interests. Administrative

law, as Shapiro noted, will never produce “perfect institutionalization because a perfect set of

rules will never yield perfect justice,”217

but it should continuously strive to reach that goal.

But these teleological reasons fail to convince international lawyers who insist that

international law is still based on state consent. The cacophony of global governance bodies

operate within a system that for some lacks an underlying grundnorm that demands

accountability from them. Even the founders of the global administrative law approach admit

that “[t]he formal sources of global administrative law include the classical sources of public

international law—treaties, custom, and general principles—but it is unlikely that these sources

are sufficient to account for the origins and authority of the normative practice already existing

in the field.”218

This, then, is the second mission of global administrative law theorists – to

develop “a plausible theory of obligation” that applies to global governance bodies across the

board, be they IGOs, InGOs and PPIs of various types, or PIs. This is the task undertaken in

Chapter 3.

216

See, infra Chapter 4,text to footnotes 87 – 91, 97 – 99, Infra Chapter 6, text to footnotes, 79 - 81, and see Lorenzo

Casini & Giulia Mannucci, Hybrid Public-Private Bodies within Global Private Regimes: The World Anti-Doping

Agency (WADA), in GAL CASEBOOK, supra note 97, at 194, 197-200. 217

Shapiro, supra note 204, at 5. On the link between procedure and just outcomes, see supra Chapter 1 text to notes

19-22. 218

Kingsbury, Krisch & Stewart, Emergence, supra note 27, at 29, and see also Klabbers, Paradox, supra note 196,

at 166 (noting “the absence of a plausible theory of obligation”).