The Asean Way and the Rule of Law

8/14/2019 The Asean Way and the Rule of Law

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THE ASEAN WAY AND THE RULE OF LAW

Address by Rodolfo C. Severino, Secretary-General

of the Association of Southeast Asian Nations,

at the International Law Conference

on ASEAN Legal Systems and Regional Integration

sponsored by the Asia-Europe Institute and the Faculty of Law,

University of Malaya

Kuala Lumpur, 3 September 2001

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I wish to thank the Asia-Europe Institute and the Faculty of Law of the

University of Malaya for inviting me to participate in this important conference

on this very interesting subject. Above all, I thank them for organizing the

conference. We in ASEAN have much to learn from Europe on laying the legal

foundations for regional integration and cooperation, and we need the lawyers

of ASEAN to guide us in this.

I believe that it is about time that people looked upon ASEAN in terms of

legal obligations and norms. People are not used to doing so, because ASEAN

has never been associated with international law and treaties. ASEAN has


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always been regarded as a group of sovereign nations operating on the basis of

ad hoc understandings and informal procedures rather than within the

framework of binding agreements arrived at through formal processes.

Indeed, ASEAN has often been contrasted with the European Union in

somewhat facile fashion in those terms. The EU regulates the relationship

between the Union and its members and the cooperative arrangements among

its members largely through agreements with the force of law. ASEAN has been

cooperating through informal understandings that impose no legally binding

obligations.

This is a bit of an oversimplification, of course. It is true to a substantial

extent, although not entirely. Certainly, it was entirely true in ASEANs early

years. ASEANs founding document, the Bangkok Declaration of August 1967,

was a mere declaration of two pages setting forth the ends and means ofASEAN and of Southeast Asian cooperation. The foreign ministers of the five

founding states signed it. It required no ratification. It certainly was no Treaty

of Rome.

The slow, cautious start of ASEAN was understandable. The five

founding members still nursed historic animosities toward and suspicions of one

another. It required remarkable statesmanship and a veritable act of faith on

the part of ASEANs founders to see beyond those animosities and suspicions --

deeply embedded legacies of history -- and articulate and commit themselves

to a shared vision and common aspirations. ASEANs start was, inevitably,

tentative.

With the hindsight of history, we can say that this aspect of the ASEAN


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Way has served Southeast Asia well. By not forcing its incredibly diverse and

mutually suspicious members into legally binding standards, ASEAN has done

the remarkable job of moving its members from animosity to the close

cooperative relationship that they enjoy today, a relationship in which violent

conflict is all but unthinkable. We can say that the ASEAN Way has served

ASEAN well.

Even today, thirty-four years after its founding, ASEAN adheres to the

evolutionary approach, relying largely on patient consensus-building to arrive at

informal understandings or loose agreements. With the recent entry of new

members, ASEAN seems to be, in a way, starting over in terms of having to

delicately manage the legacies of history.

It is not just a matter of history; it is also a matter of culture. Southeast Asians

way of dealing with one another has been through manifestations of goodwilland the slow winning and giving of trust. And the way to arrive at agreements

has been through consultation and consensus mushawara and mufakat

rather than across-the-table negotiations involving bargaining and give-and-

take that result in deals enforceable in a court of law. Let us not exaggerate

this distinction. Much consultation and consensus-building goes into the

making of the European Union, which has, in any case, been itself painstakingly

gradual. Personal chemistry and trust are also important for European

processes. Southeast Asians can and do engage in hard bargaining and

exchanges of concessions. But historical circumstances and culture can provide

at least a partial explanation for ASEANs avoidance, particularly in its early

days, of legally binding agreements.

The First Treaty


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ASEAN did not conclude a legally binding treaty until the first ASEAN

Summit in Bali in 1976 the Treaty of Amity and Cooperation in Southeast Asia

almost nine years after ASEANs founding. The fact that it took nine years for

ASEAN to convene its first summit meeting itself speaks volumes about the

ASEAN Way.

It took another ten years for ASEAN to produce another agreement that

carried some measure of legal obligation. This was the 1977 Preferential

Trading Arrangements. Yet another ten years were to pass before ASEAN was to

conclude, at the third ASEAN Summit in 1987, the Agreement for the Promotion

and Protection of Investments and the agreement on the standstill and rollback

of non-tariff barriers, both of which conferred legal rights and obligations upon

their signatories.

In the intervening period, three industrial cooperation schemes were agreedupon the ASEAN Industrial Projects (1980), the ASEAN Industrial

Complementation (1981), the ASEAN Industrial Joint Ventures (1983) and,

later, the Brand-to-Brand Complementation Scheme (1988). And there were the

1977 ASEAN currency swap arrangement, the 1979 agreement on the food

security reserve, the 1985 agreement on the mutual recognition of drivers

licenses, and the 1986 establishment of the petroleum security reserve.

These were relatively minor agreements of a workaday, practical nature. The

swap arrangement has been revivified and expanded under the 1998 Chiang

Mai Initiative. I suppose the agreement on drivers licenses continues to be

observed. The industrial cooperation agreements have been superseded by the

ASEAN Industrial Cooperation scheme of 1996, which remains active. The food

security and petroleum security arrangements have never been invoked. These

are rather obscure agreements, but they demonstrate the need for binding

instruments if economic cooperation is to have substance and real effect.


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It was the conclusion, at the ASEAN Summit of 1992, of the agreement

on the Common Effective Preferential Tariff for the ASEAN Free Trade Area,

simply known as AFTA, that was to give substance to indeed, we could say,

launched -- the economic integration of ASEAN. The agreement is very much

alive. Its timetable has, in fact, been accelerated, and it is basically on track.

Under this agreement, the first six signatories to the AFTA treaty that is, the

first six members of ASEAN are legally committed to reducing tariffs on their

trade with one another, with a few exceptions, to a range of zero to five percent

by the beginning of 2002 or, in some cases, the beginning of 2003. The newer

members are given a little more time. The tariff reductions are to be carried out

through national legal enactments by each party to the agreement in

accordance with an agreed schedule. More recently, the ASEAN countries

agreed, formally, on an arrangement to govern delays in the inclusion of

products in the AFTA scheme or suspensions of AFTA concessions under very

stringent conditions.

In legally committing ASEANs members to reduce and eventually

remove tariff barriers between them, AFTA is the first substantial step toward

integrating the ASEAN market, integration that ASEAN countries have

recognized as essential for making their production and commercial processes

more efficient, bringing down costs, encouraging investments, and, in general,

strengthening their economic competitiveness. Obviously, the AFTA

commitments have to be legally binding if they are to be credible both to the

member-states themselves and to the business sector.

Extending the Logic

ASEAN has extended this logic beyond trade in goods to the equally


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important realm of trade in services, like transportation, telecommunications,

financial services, construction and tourism. At the summit of December 1995,

ASEAN concluded the Framework Agreement on Services. The agreement is to

be given flesh through sector-by-sector negotiations. The resulting agreements

will be legally binding upon the parties.

At the same summit of 1995, ASEAN entered into an agreement

committing its members to undertake national measures to protect intellectual

property, a move that would address another deterrent to investment as well as

encourage industrial and scientific innovation.

In October 1998, ASEAN decided to allow the freer flow of investments

through the ASEAN Investment Area agreement, under which each country

legally undertakes to open up its industrial sector to investments from other

ASEAN countries and accord national treatment to such investors.

As further measures to facilitate trade and encourage investments, ASEAN

concluded, at the summit of December 1998, framework agreements on mutual

recognition arrangements and goods-in-transit. The framework agreement on

mutual recognition is to be carried out by agreed arrangements on specific

product groups, under which ASEAN countries are obligated to recognize results

of conformity assessments issued by any one of them, such as test reports,

product certifications or registration approvals. Negotiations on such

arrangements are at various stages today. The framework agreement on

goods-in-transit is to be put into effect through nine legally binding protocols,

four of which have already been concluded. Agreements on multi-modal and

inter-state transport are being worked out.


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Meanwhile, in 1996, ASEAN agreed on a mechanism and rules for

settling disputes arising from any of the economic agreements binding the

association.

On the security front, ASEANs leaders signed, at their summit in 1995,

the Southeast Asia Nuclear Weapons-Free Zone treaty legally committing their

states not to develop, manufacture or otherwise acquire, possess or have

control over nuclear weapons, station nuclear weapons within or transport

them through the treatys zone of application, or test or use nuclear weapons.

The ASEAN states are obligated not to allow others to do so (except for port

calls and airfield transit) in their respective territories. They pledged not to

dump nuclear waste in the zone. They also undertook certain obligations

pertaining to the non-proliferation of nuclear weapons and the peaceful uses of

nuclear energy.

Legal Foundations for Integration

Two things are to be noted about the legally binding agreements that

ASEAN has concluded thus far. The first is that they are overwhelmingly

economic in nature. The second is that, since the conclusion of the CEPT/AFTA

agreement in 1992, ASEAN has entered into such agreements with increasing

frequency. This may be an indication of ASEANs growing realization that closer

regional economic integration requires basing it on binding legal foundations if

integration is to be stable, credible and effective. The commitments undertaken

must be clear, firm and enforceable, and those making them cannot lightly back

out of them.

As ASEAN moves into further integration, we can expect an expanded

number of binding undertakings. The e-ASEAN framework agreement, which


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the ASEAN leaders signed in November 2000, may require legally binding

agreements on such things as the authentication of signatures, the use of

electronic documents in business transactions, privacy and confidentiality, and

so on. The further deepening of ASEAN economic integration, involving tariff

nomenclatures, product standards, policy coordination, banking and finance,

transportation and telecommunications, would surely need agreements in these

areas clear and enforceable ones -- and soon.

More broadly and fundamentally, ASEAN countries will have to

harmonize domestic laws and regulations that govern trade and investment.

This is to make sure that the regional market is a level playing field. It is to

ensure that differences in domestic laws and regulations on fair trade,

competition policy, government procurement and product standards are not

used to frustrate the purposes of AFTA and the benefits of an integrated market.

It is to provide the harmonized regional investment regime that investors

increasingly require.

I have a sense that this developing rules-based economic regime will

gradually extend to other areas of ASEAN cooperation. After all, ASEAN is more

than an economic association. Already, a binding, landmark agreement dealing

with the haze that periodically arises from land and forest fires in parts of

ASEAN is nearing completion and may be signed soon. I foresee ASEAN

undertaking legal obligations related to such transnational regional problems as

the marine environment, the preservation of biodiversity, money-laundering,

trafficking in human beings, drug-trafficking and piracy.

I thus envision ASEAN as evolving into a more rules-based association

although, I hope, not excessively so. As the experience of the EU shows,

regional agreements may need national legislation to carry them out. Already,

the CEPT/AFTA agreement, as well as the agreement on intellectual property,


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requires legal enactments by the national governments in order to take effect.

This would help strengthen the national legal systems of the member-states as

well as the rule of law in the region as a whole.

Documents

The Asean Way and the Rule of Law