China’s ‘One Belt, One Road’ Initiative: Can A Bilaterally-Negotiated ‘Globalization 2.0’ Internalize Human Rights, Labor, and Environmental Standards?
Over the weekend, while the world’s largest economy was focused on internal fallout from the presidential sacking (and subsequent threatening) of the United States’ FBI Director (and amid calls for impeachment of President Trump), China hosted its ‘One Belt, One Road’ Summit, grandly showcasing its US$1 Trillion spending plan for transport and other infrastructure connectivity projects throughout Asia, Africa, and Europe. (See map below of covered countries in the One Belt, One Road initiative covering six east-west or north-south transregional corridors, affecting 4.4 billion people, and around 65 countries. Also available here.)
No other country will be in a position to directly influence regional and/or global development outcomes, with projected greater impact than the United States’ reconstruction assistance to Europe under the Marshall Plan. The irony here is that while the United States under the Trump administration may keep publicly lionizing the virtues of bilateralism in the international economic order by threatening to withdraw from (or when that proves difficult, settling on renegotiating) the terms of multilateral trade (whether under the World Trade Organization or the North American Free Trade Agreement), China is literally leading the path through a bilaterally-negotiated ‘Globalization 2.0’ through its One Belt, One Road Initiative. While much of the technical contours of One Belt, One Road projects remain undisclosed, this post examines some aspects of the rising de facto Chinese global monopoly on bilaterally-negotiated development finance standards and foreign investment governance.
The One Belt, One Road Public-Private Paradigm
The World Economic Forum praised five virtues of the public-private partnership paradigm under the One Belt, One Road initiative: “1) based on a multi stakeholder approach, which is conducive to dialogue, multilateral cooperation, and long-term shared interests; 2) leverages market forces while promoting greater social inclusion and risk resilience; 3) helps prepare economies for the Fourth Industrial Revolution; 4) is based on an ‘open platform’ concept which could enable increasingly dynamic interaction and innovative outcomes; and 5) represents a positive message for resetting the world on a path towards shared value and global harmony.” While these virtues sound enticing, the lack of public transparency or specificity about project terms of reference under the One Belt, One Road’s program scope raises questions on how to truly operationalize an ‘inclusive’ and multi-stakeholder approach, especially since the financing country is of course expected to have more bargaining leverage than the recipient country over the terms of a China-financed infrastructure project. As a Chinese scholar put it in regard to China’s development projects in Africa:
“China’s intention in Africa is benign. Beijing has no intention to colonize the continent, dictate the politics or economy of the local countries or deprive them of development opportunities. On the contrary, China truly sees itself as Africa’s “brother” and hopes to help African countries develop through infrastructure projects. Beijing seeks an approach different from that of the West, one that avoids the “meddling” with the internal affairs of African countries through conditional aid. In the last several years, China has contributed significantly to the economic growth of some of Africa’s poorest nations. China wants to see a prosperous Africa, which is beneficial to China’s interests as well.
However, this does not mean China is being altruistic. Helping Africa is important, but China would not do so if it had nothing to gain. Indeed, China emphasizes that any bilateral relationship has to be mutually beneficial. And China’s investment in Africa does pay itself back in multiple ways economically: development and exploitation of Africa’s natural resources, access to local market, employment opportunities for Chinese labors and service contracts for Chinese companies on infrastructure projects that China funds. When Chinese officials emphasize that China also invests substantially in countries that are not rich in natural resources to defuse international criticisms, they often forget to mention that China also has its eyes on other things that these countries can deliver, such as their support of Beijing’s “one China” policy, of China’s agenda at multilateral forums and of China as a “responsible stakeholder”. While there is nothing wrong with not being altruistic in one’s motives, it should be noted that China is not helping Africa in exchange for nothing.” (Italics added.)
Accountability in Foreign-Financed Infrastructure Projects
Others have argued that domestic labor or social safeguards are not the responsibility of Chinese concession operators and funders, which only makes it all the more imperative for China’s bilateral partners under the One Belt, One Road initiative to themselves act to ensure that international environmental, labor, and social safeguards form part of their domestic regulatory frameworks. In this respect, China’s bilateral partners under the One Belt, One Road initiative have to be mindful of their obligations to regulate business activities in a manner that internalizes human rights as part of the proposed regulatory framework of any public-private partnership project. In particular, under the International Covenant on Economic, Social and Cultural Rights (where significantly, China has been a State party since 2001), it would be relevant for the host country of the One Belt, One Road initiative project, to also consider the current draft General Comment on State Obligations under the ICESCR in the Context of Business Activities, which was recently introduced in the latest session of the Committee on Economic, Social and Cultural Rights in February 2017 by Rapporteurs Olivier de Schutter and Zdzislaw Kedzia:
“The obligation to respect [the International Covenant on Economic, Social and Cultural Rights] is also violated when States Parties facilitate a violation of the Covenant rights by third parties, including business actors. For instance, forced evictions often occur in the context of investment projects, accompanied by the State failure to intervene or provide victims with access to remedies. In a number of cases, States Parties have seized land that is crucial to certain individuals or communities and to their enjoyment of Covenant rights in order to make it available to investors and businesses.
Furthermore, a State failure to adopt and implement effective measures to prevent businesses from violating Covenant rights may constitute a violation of the obligation to respect. Covenant rights may be abused by, for instance, lowering the criteria for approving new medicines or granting exploration and exploitation permits for natural resources without giving due consideration to the potential adverse impacts of such activities on the individual and community’s enjoyment of Covenant rights. The Committee also notes that corruption of public officials often facilitates and enables such failure by States Parties to respect the Covenant rights. In addition, judicial corruption results in impunity for business actors and injustice for victims without access to effective remedies.
The obligation to protect means that States Parties must effectively prevent the infringements of economic, social and cultural rights in the context of business activities, both domestically and, to the extent compatible with international law, extraterritorially. The obligation to protect requires States Parties to adopt legislative, administrative, educational, as well as other appropriate measures, to ensure effective protection against Covenant rights violations linked to business activities. This obligation also requires States Parties to ensure that businesses exercise due diligence in order not to impede the enjoyment of the Covenant rights of those who depend on their business activities or who may be negatively affected by them. As part of this obligation to protect, States Parties must also provide victims of such business abuses with equal and effective access to remedies.
The obligation to protect entails a positive duty to establish clear human rights standards for business actors and regulate relevant activities by adopting legislative and other measures. To this end, States Parties should adopt a legal framework requiring business entities to exercise human rights due diligence in order to identify, prevent, mitigate, as well as to account for the negative impacts caused by their decisions and operations on the enjoyment of Covenant rights. In addition, States Parties should also require businesses, if needed, to adopt human rights based codes of conduct for their management and employees; impose criminal and administrative sanctions and penalties for violations by business of the Covenant rights; enable civil suits by victims of rights violations against perpetrators; revoke business licenses and subsidies, if and to the extent necessary, from repeat offenders; and revise relevant tax codes to deny business exemptions in case of human rights violations and to align business incentives with human rights responsibilities. The obligation to protect also requires States Parties to monitor the impacts of business activities on the enjoyment of economic, social and cultural rights, to regularly review the adequacy of laws and identify and address compliance and information gaps and emerging problems.” [Italics added. Committee on Economic, Social and Cultural Rights, General Comment on State Obligations under the International Covenant on Economic, Social, and Cultural Rights in the Context of Business Activities, paragraphs 15 to 18, E/C.12/60/R.1, 17 October 2016, prepared for the Sixtieth Session of the Committee on February 2017.]
Finally, it bears stressing that the kind of long-term infrastructure projects contemplated in the One Belt, One Road initiative will expectedly carry various kinds of risks – project risks, political risks, credit or currency risks, social risks, among others – and it is important to determine the lines of accountability between China and all the countries participating in the One Belt, One Road initiative, particularly with respect to issues such as project risk sharing; risk-mitigation measures permitted under foreign investment project contracts; host country oversight over the content and implementation of foreign-financed infrastructure projects; political risk insurance; possibilities for shared technology transfers, among others. Many (if not all) of these projects will most likely be covered and/or protected within the terms of China’s (currently 145) bilateral investment treaties with developing countries covered in the One Belt, One Road initiative. In light of recently demonstrated African trade deficits with China; the alleged ‘dark side of Chinese infrastructure’ supposedly due to inefficiencies and other project pathologies; China’s critiqued track record on infrastructure projects in countries such as Venezuela, Sri Lanka, and Myanmar (among a corpus of infrastructure projects deemed to have “destroyed, and not generated, economic value”), it may also be prudent to ask the extent to which there would be any Chinese sovereign control, oversight, influence, or any lasting preferential arrangements for China over these ‘trans-regional corridors’ after infrastructure projects are completed, especially if they stand to strategically alter the terms of the level playing field of foreign market access envisaged under the world trading system. Would the One Belt, One Road initiative be another demonstration of “China’s emerging institutional statecraft“?
It would also be an appropriate time for One Belt, One Road initiative recipient countries to review and revisit the terms of their bilateral and/or regional investment treaties with China, to determine the extent to which their regulatory powers as host States of investment are affected (if at all); to determine their institutional, practical, and legal ability to defend against any possible investor-State claims in the future over the long-term implementation of One Belt, One Road initiative projects; and to evaluate the suitability of their current regulatory environments and institutions to the long-term infrastructure concession and connectivity projects contemplated.
What Kind of Development Will the One Belt, One Road Initiative Create?
The One Belt, One Road Initiative may indeed lead the world towards its “Fourth Industrial Revolution”, but the lack of other truly competitive sources of foreign financing is what ultimately reinforces China’s monopolistic advantage over foreign-financing of infrastructure and connectivity projects. It should also serve as a prudential warning for developing countries, to be vigilant about their own regulatory environments and institutional capacities and to avoid “neocolonialism” achieved through negotiating disparities in bilateral arrangements. Directly internalizing international economic, social, and cultural rights, international labor agreements, and international environmental agreements – (to many of which China is already a State party, see here, here and here) into the long-term domestic regulatory frameworks governing One Belt, One Road projects is one way of redressing the bargaining imbalance for developing countries and ensuring mutual accountability for all global partners in China’s push as a ‘responsible power’ driving ‘Globalization 2.0’ bilaterally through the One Belt, One Road initiative.
In December 2016, China publicly articulated its philosophy, contribution, and practice on the right to development. It is also up to China’s partner countries in its One Belt, One Road initiative to be active investment partners conscious of their duties to ensure the protection of this “inalienable human right [to development] by virtue of which every human person and all peoples are entitled to participate in, contribute to, and enjoy economic, social, cultural and political development, in which all human rights and fundamental freedoms can be fully realized…[which] also implies the full realization of the right of peoples to self-determination, which includes, subject to the relevant provisions of both International Covenants on Human Rights, the exercise of their inalienable right to full sovereignty over all their natural wealth and resources.” (Declaration on the Right to Development, Articles 1.1 and 1.2). Calling for the transparency of One Belt One Road projects, and the internalization of human rights, labor standards, and environmental duties under international law in all projects, is one concrete way for developing country states partnering in the One Belt, One Road initiative to realize the right to development of the 4.4 billion persons that stand to be affected by this global program of development for generations to come.
The Oxford Handbook of International Organizations
The Oxford Handbook of International Organizations Edited by Jacob Katz Cogan, Ian Hurd, and Ian Johnstone
Hardback.
Published: 17 November 2016
1,344 Pages
246x171mm
ISBN: 9780199672202
Virtually every important question of public policy today involves an international organization. From trade to intellectual property to health policy and beyond, governments interact with international organizations in almost everything they do. Increasingly, individual citizens are directly affected by the work of international organizations.
Aimed at academics, students, practitioners, and lawyers, this book gives a comprehensive overview of the world of international organizations today. It emphasizes both the practical aspects of their organization and operation, and the conceptual issues that arise at the junctures between nation-states and international authority, and between law and politics. While the focus is on inter-governmental organizations, the book also encompasses non-governmental organizations and public policy networks.
With essays by the leading scholars and practitioners, the book first considers the main international organizations and the kinds of problems they address. This includes chapters on the organizations that relate to trade, humanitarian aid, peace operations, and more, as well as chapters on the history of international organizations.
The book then looks at the constituent parts and internal functioning of international organizations. This addresses the internal management of the organization, and includes chapters on the distribution of decision-making power within the organizations, the structure of their assemblies, the role of Secretaries-General and other heads, budgets and finance, and other elements of complex bureaucracies at the international level. This book is essential reading for scholars, practitioners, and students alike.
Table of Contents
I. Introduction
1.: International Organizations in World Politics, Jon Pevehouse and Inken von Borzyskowski
2.: International Organizations and International Law, Anne Peters
3.: The Law and Politics of International Organizations, Jeffrey Dunoff II. History
4.: International Organizations, 1865-1945, Madeleine Herren
5.: International Organizations, 1945-Present, B.S. Chimni III. Forms of Organization
6.: Formal Inter-Governmental Organizations, Jan Klabbers
7.: Supranational Organizations, Peter Lindseth
8.: Private Transnational Governance, Walter Mattli IV. Activities of Organizations
9.: Peace Operations, Lise Morjé Howard and Anjali Dayal
10.: Counter-Terrorism and Transnational Crime, James Cockayne
11.: Non-Proliferation and Disarmament, Waheguru Pal Singh Sidhu
12.: Human Rights, Dinah Shelton
13.: Criminal Justice, David J. Scheffer
14.: Humanitarian Action, Thomas G. Weiss
15.: Refugees and Internally Displaced Persons, Gil Loescher
16.: Trade, Joel Trachtman
17.: International Finance, Manuela Moschella
18.: Economic Relations and Integration, Frank Schimmelfennig
19.: Development, David M. Malone and Rohinton P. Medhora
20.: Environment, David A. Wirth
21.: Health, Gian Luca Burci and Andrew Cassels
22.: Labour, Brian Langille
23.: Religion, Helge Arsheim
24.: Democracy Promotion, Ian Johnstone and Michael Snyder
25.: Communications and the Internet, Milton Mueller V. The Functions of International Organizations
26.: Lawmaking, Nigel D. White
27.: Monitoring Processes, Timm Betz and Barbara Koremenos
28.: Sanctions, Jeremy Farrall
29.: Use of Force, Marc Weller
30.: Dispute Settlement, John R. Crook
31.: Information Gathering, Analysis, and Dissemination, Jean-Marc Coicaud and David Le Blanc VI. Relationships of International Organizations with Other Actors
32.: Relationships of International Organizations with Other Actors, Laurence Boisson de Chazournes
33.: Relations with Civil Society, Jan Aart Scholte
34.: Relations with the Private Sector, George Kell VII. Structure and Operations
35.: General Assemblies and Assemblies of States Parties, Margaret P. Karns
36.: Parliaments, Bjørn Høyland
37.: Executive Boards and Councils, Ramses A. Wessel
38.: Executive Heads, Simon Chesterman
39.: Secretariats, Touko Piiparinen
40.: High-Level Panels, Ramesh Thakur
41.: International Adjudicative Bodies, Chiara Giorgetti
42.: Financing and Budgets, Jacob Katz Cogan
43.: Organizational Culture, Stephen C. Nelson and Catherine Weaver VIII. International Institutional Law
44.: Constituent Instruments, Niels Blokker
45.: Membership and Representation, Stephen Mathias and Stadler Trengove
46.: Legal Capacity and Powers, Dan Sarooshi
47.: Assessing the Legality of Decisions, Jan Wouters and Jed Odermatt
48.: Responsibility, Pierre Klein
49.: Privileges and Immunities, August Reinisch
50.: The Law of the International Civil Service, Santiago Villalpando
51.: International Administrative Tribunals, Santiago Villalpando IX. Principles of Governance
52.: Legitimacy, Dominik Zaum
53.: Participation, Patrizia Nanz and Klaus Dingwerth
54.: Accountability, Mathias Koenig-Archibugi
55.: Transparency, Jonas Tallberg
Author Information
Edited by Jacob Katz Cogan, Judge Joseph P. Kinneary Professor of Law, University of Cincinnati College of Law, Ian Hurd, Associate Professor of Political Science, Northwestern University, and Ian Johnstone, Academic Dean and Professor of International Law, Fletcher School of Law and Diplomacy, Tufts University
Jacob Katz Cogan is Professor of Law at the University of Cincinnati College of Law. He previously worked in the Office of the Legal Adviser of the U.S. Department of State, including as attorney-adviser to the Department’s Bureau of International Organization Affairs.
Ian Hurd is Associate Professor of Political Science at Northwestern University.
Ian Johnstone is Professor of International Law at the Fletcher School of Law and Diplomacy, Tufts University. He previously worked in the Executive Office of the Secretary General of the United Nations, as well as the Department of Peacekeeping Operations and Office of Legal Affairs.
Contributors:
Helge Arsheim – University of Oslo
Timm Betz – University of Michigan, Ann Arbor
Niels Blokker – Leiden Law School
Laurence Boisson de Chazournes – University of Geneva
Inken von Borzyskowski – Florida State University
Gian Luca Burci – Graduate Institute of International and Development Studies
Andrew Cassels – Graduate Institute of International and Development Studies
Simon Chesterman – National University of Singapore
B.S. Chimni – Jawaharlal Nehru University, New Delhi
James Cockayne – United Nations University
Jacob Katz Cogan – University of Cincinnati Jean-Marc Coicaud – Rutgers School of Law, Newark
John Crook – George Washington University School of Law
Anjali Dayal – Fordham University
Klaus Dingwerth – University of St. Gallen
Jeffrey Dunoff – Temple University
Jeremy Farrall – Australian National University
Chiara Giorgetti – University of Richmond
Madeleine Herren – University of Basel
Lise Morjé Howard – Georgetown University
Bjørn Høyland – University of Oslo
Ian Hurd – Northwestern University
Ian Johnstone – Tufts University
Margaret P. Karns – University of Dayton
Georg Kell – United Nations
Jan Klabbers – University of Helsinki
Pierre Klein – Free University of Brussels (ULB)
Mathias Koenig-Archibugi – London School of Economics
Barbara Koremenos – University of Michigan, Ann Arbor
Brian Langille – University of Toronto
David Le Blanc – United Nations
Peter Lindseth – University of Connecticut
Gil Loescher – University of Oxford
David M. Malone – United Nations University
Stephen Mathias – United Nations
Walter Mattli – University of Oxford
Rohinton P. Medhora – Centre for International Governance Innovation
Manuela Moschella – Scuola Normale Superiore di Pisa
Milton Mueller – Georgia Institute of Technology
Patrizia Nanz – University of Bremen
Stephen C. Nelson – Northwestern University
Jed Odermatt – University of Leuven
Anne Peters – Max Planck Institute for Comparative Public Law and International Law
Jon Pevehouse – University of Wisconsin-Madison
Touko Piiparinen – University of Helsinki
August Reinisch – University of Vienna
Dan Sarooshi – University of Oxford
David J. Scheffer – Northwestern University
Frank Schimmelfennig – Swiss Federal Institute of Technology (ETH), Zurich
Jan Aart Scholte – University of Gothenburg
Dinah Shelton – George Washington University
Waheguru Pal Singh Sidhu – Brookings Institution
Michael R. Snyder – International Peace Institute
Jonas Tallberg – Stockholm University
Ramesh Thakur – Australian National University
Joel Trachtman – Tufts University
Stadler Trengove – United Nations
Santiago Villalpando – United Nations
Catherine Weaver – University of Texas
Thomas G. Weiss – City University of New York
Marc Weller – University of Cambridge
Ramses A. Wessel – University of Twente
Nigel White – University of Nottingham
David Wirth – Boston College
Jan Wouters – University of Leuven
Dominik Zaum – University of Reading