The Constitutional Basis For Administrative Agencies

The Constitutional Basis For Administrative Agencies Although few things would seem to be more local than trees, an extensive global system of forestry regulation is under construction. Its main architects are not governments or intergovernmental organizations, although they occasionally perform important tasks. Instead, transnational environmental organizations, in concert with a small but growing number of business, labor, social justice, landowner and professional groups, have been the primary designers of emerging global forestry institutions. These groups have established mutually interested alliances that cooperate and compete with each other in complex and shifting ways, and that regularly engage in reciprocal observation, communication, lobbying and policy adjustment with governmental and intergovernmental agencies. The overall system of forestry regulation is thus a multicentered private/public one, which operates in a loosely coordinated and sometimes disjointed fashion. One could therefore also legitimately call it a governance system, since it articulates and adapts guiding norms through a system of shared authority; or it could be called a regime, since it involves multiple institutions operating in terms of common principles, rules, procedures and programs. In order to highlight the principles and rules governing these processes, however, this paper treats the system as one of regulation, and indeed of regulatory law-making. This perspective also seems to be appropriate as an empirical matter, since much of the system is concentrated on the development of general rules and their application to categories of enterprises by specialized officials relying on normative justifications and background threats of sanctions. For the past decade a major institutional focus of this emergent system has been ‘forest certification’, wherein experts certify to a broader public that specific forestry operations meet applicable standards for proper forest management. Were it done by governments, forest certification would readily be seen by legal scholars as administrative licensing or permitting and the larger system of policy-making and implementation as administrative regulation. Because forest certification is more fragmented and decentralized than most government regulation, understanding it requires for shaking simplistic source-oflaw models for understanding administrative law. The grounds for the conflict were laid in two completely different and seemingly unrelated areas: German constitutional law, and EC intervention in the banana market. German constitutional law, due to the high rate of activity of its Constitutional Court (BVerfG), has over the years developed a finely-knit network of fundamental rights granted not only to individuals but also to businesses. The foundations of the German Constitution the Grundgesetz (GG) - are Articles 12, 14 and 19(4); the first protecting the freedom to pursue a trade or business, the second defending the right to property, and the third granting effective protection of fundamental rights before courts of law. There is of course agreement among German constitutional lawyers that these rights are not granted without limits, as is made clear by the GG itself, but any restriction must be made by a formal act of the legislature and must respect their substance according to Article 19(2). These rights are granted not only to individuals but also to legal entities, within the limits laid down by Article 19(3) GG. The borderlines of these rights are of course subject to much debate and sometimes confusion, but German courts have in general been more generous in protecting business rights than have other jurisdictions in the EC. In this short note we cannot go into details of the intricate case-law of the BVerfG. German courts, especially the BVerfG have viewed with some suspicion the increasing encroachment of EC law upon German business. Many German lawyers have regarded this process, especially with respect to agriculture as amounting to 'illegitimate' intervention,. The conflict was first highlighted in the well-known Solange I decision of 29 May 1974 of the BVerfG,2 where the Court criticized the EC Treaty for not having a codified catalogue of fundamental rights. It therefore insisted on retaining power to control not only German implementing legislation, but also EC secondary law itself with regard to the question of whether or not it violated fundamental principles of the German Constitution. This case concerned the freedom to pursue trade by a company which right was, however, not regarded as having been violated by the EC regulation under attack. As is well known, this judgment provoked substantial opposition, especially among Community law scholars, and was partially overruled by the so-called Solange II decision of 22 October 1986.3 It recognized that the Community, especially the case-law of the European Court, had developed its own system of fundamental rights which were 'adequately guaranteed at the present stage'. It further held that 'So long as (in German: solange...) an effective protection is ensured...' (at 265), the defense of fundamental rights against European acts could be entrusted to the European Court. Jurisdiction of the German Constitutional Court would not be exercised and complaints against Community acts on grounds that they violated fundamental rights had to be reviewed by the ECJ and not by German courts. The Global Administrative Law (GAL) project is based on the recognition that the most important recent developments in international law have enhanced its administrative dimension.1 What can be observed today, from the preparation of side agreements to the GATT all the way down to the regulation of foodstuffs in the European Union, is an increase in transnational regulatory cooperation and in joint efforts at implementation. The new world of international law is the world of loosely coupled, but often highly interactive and effective, mutual engagements between and among national and inter national bureaucracies. GAL concerns itself with identifying, where possible, their legal form and with establishing control. Owing to its broad sweep, global administrative law appears to offer a re-description of particularly important parts of international law. It actually draws a picture of international law which has come under the dominating sway of administrative rationality. As the project unfolds, the concept of administrative law is given a more Ameri can twist.3 The focus lies, hence, not so much on individual acts4 but rather on the establishment and exercise of regulatory authority. Rights receive less attention than the organization of good governance. Guarantees of transparency and participation are seen to be regulatory modalities of respecting the interests of stakeholders and affected groups. Consequently, a broad range of phenomena enters the purview of GAL, ranging from administration by formal organizations, such as the World Health Organization, over collective action by transnational networks of national regulatory officials all the way down to private institutions with regulatory functions, such as ISO. The range of phenomena studied involves a departure from the basic analogy which lent plausibility to the project in the first place. In the exemplary case, a legislature delegates regulatory authority to an agency which, after giving notice, scheduling hearings, and pro viding reasons, adopts an implementing regulation. In the international context, a Treaty typically takes the place of legislation, and a general act adopted by an international organization the place of the regulation. Accordingly, acts by the United Nations Security Council, which have increasingly come to be of a more general nature, would derive their authority from the delegation effected by all acceding signatory states of the UN Charter. Soldiering-for-money is not a new phenomenon. The use of mercenaries is recorded in the Bible, in the writings of Machiavelli,6 and in numerous United Nations resolutions condemning their activity in Africa in the 1960s and 1970s. But in the last two decades, military outsourcing has taken a more sophisticated form – with governments entrusting private business entities with essential security and military functions. Such responsibilities, traditionally within the purview of the state, are now being carried out by contractors with only a small measure of oversight on the part of the state. Though the trend of outsourcing military functions to private companies began as early as the 1970s, the new breed of actors that emerged in the 1990s as ‘security companies’ has grown exponentially following 11 September 2001 and with the wars in Afghanistan and Iraq. Today, the number of contractors in Iraq and Afghanistan, for example, exceeds the number of enlisted troops. The largest employers of military contractors have been companies based in the United States and the United Kingdom – such as Blackwater, G4S, Aegis, Erinys, Triple Canopy, and DynCorp.9 The US and UK are also the industry’s most important clients. But states are by no means the companies’ sole source of business. Private contractors also work – and increasingly so – for multinational corporations (such as General Electric)10 and international and non-governmental organizations (such as the UN, the ICRC, and CARE). Just as the resort to the private sector has grown in the last two decades, the range of the services offered by the companies has also expanded dramatically. When working on behalf of states, private security and military companies assume substantial roles alongside the military or even in its place. From guarding government officials in the Persian Gulf to combat training and oil field security in Colombia, it seems that no task is too critical or sensitive for companies to undertake. Indeed, the spectrum of activity performed by private military contractors is as broad as that performed by ordinary soldiers – from cooking, driving, and protecting individuals, locations, and convoys, to training, intelligence gathering, target identification, the operation of complex military systems, and prisoner interrogation. Private military contractors work very closely with the armed forces they support, playing a growing role in the conduct of military operations. Often they are hired to help the military enhance its own capabilities (as in Iraq, Latin America, and the Balkans). Such training may include battlefield planning, military strategy, or run ningattle simulation centres.17 Contractors also provide expertise and know-how needed on the modern battlefield – from logistical support (including communications, intelligence, and aerial surveillance) to the maintenance of sophisticated military equipment.18 One area in which the involvement of private military contractors has been growing is intelligence – raising much criticism.19 For example, contractors post the names of new terrorist suspects onto immigration and law enforcement watch lists, handle clandestine meetings with CIA sources, conduct clearance and security checks, and track high-value targets in Afghanistan.20 Another highly controversial role entrusted to private military contractors has been the supervision and monitoring of other contractors. Globalization and the rise of global governance are transforming the structure of international law, though much of this transformation takes place beneath the sur face of the international legal order and often goes unnoticed. From the perspective of classical, interstate, consent-based international law, global governance may still appear merely as a quantitative increase in international legal instruments, some times coupled with stronger enforcement mechanisms and accompanied by some changes in procedures of treaty-making. Yet central pillars of the international legal order are seen from a classical perspective as increasingly challenged: the distinction between domestic and international law becomes more precarious, soft forms of rule making are ever more widespread, the sovereign equality of states is gradually under mined, and the basis of legitimacy of international law is increasingly in doubt. Global administrative law, the focus of this symposium issue, approaches cognate changes from a particular angle. It starts from the observation that much of global governance can be understood as regulation and administration, and that we are witnessing the emergence of a ‘global administrative space’: a space in which the strict dichotomy between domestic and international has largely broken down, in which administrative functions are performed in often complex interplays between officials and institutions on different levels, and in which regulation may be highly effective despite its predominantly non-binding forms. In practice, the increasing exercise of public power in these structures has given rise to serious concerns about legitimacy and accountability, prompting patterns of responses to those concerns in many areas of global governance. Accountability problems are addressed through greater transparency, through notice-and-comment procedures in rule-making, and through new avenues of judicial and administrative review, in a vast array of disparate areas, such as global banking regulation, Security Council sanctions administration, the international administration of refugees or the domestic regulation of transboundary environmental issues. Global administrative law proposes drawing together these dispersed practices and understand them as part of a common, growing trend towards administrative-law type mechanisms for holding global regulatory governance accountable, and to inquire into the challenges this set of issues poses to both domestic administrative law and international law. The phenomenon of globalization – the term commonly employed to indicate the tendency for trade, investment, services, labour relations and patterns of migration to be increasingly organized on a global scale – has had a major impact on the governmental arrangements of nation-states. Whether or not globalization has weakened the state remains a matter of vigorous debate. There can, however, be no doubt that it has led to the formation of complex governing arrangements at domestic, regional and international levels. The more complicated pattern of governing arrangements that is evolving, especially given the growth of international and regional bodies equipped with a broad range of regulatory powers, has caused some scholars to argue that we are now witnessing the emergence of a new institutional configuration, which might be called ‘global administrative law’. Presently, the defining features of this global administrative law are rather fluid, and while this remains the case many may question whether the rule-making powers or regulatory practices of international organizations possess such authority as to constitute a distinct system of administrative law in its own right. Nevertheless, the issues posed by the growing regulatory powers of international bodies remain important matters of debate and analysis, not least because of the potential for these powers to be used to control the regulatory authority of national governments. This article offers a contribution to this ongoing debate. It does so by promoting the thesis that the regime of international investment arbitration which has been rapidly developing since the 1990s provides not simply a singularly important and under-appreciated manifestation of an evolving sys tem of global administrative law but that, owing to its unique features, it may in fact offer the only exemplar of global administrative law, strictly construed, yet to have emerged. Since the late 1960s, and especially in the 1990s, states have consented to an international regime in which foreign investors (read, multinational enterprises) are granted the ability to make and enforce international claims against states in disputes arising from the state’s regulation of investor assets. The arrangements for pursuing these claims are in certain crucial respects unusual. Four specific features should be highlighted. First, such claims are commonly not subject to customary limitations that apply to individual claims under other types of treaties, including the duty of an individual to exhaust local remedies (the principle of individualization). Secondly, under investment treaties, investors can directly bring claims for damages, awarded as a public law remedy (the damages principle). Thirdly, because investment treaties incorporate the procedural framework and enforcement structure of international commercial arbitration, investors can directly seek enforcement of the awards of arbitration tribunals before the domestic courts of a large number of countries, with limited judicial supervision by domestic courts (the principle of direct enforceability). Finally, investment treaties facilitate forum-shopping by investors, through the selective establishment of holding companies, thus expanding the reach of investment arbitration as an international mechanism of adjudicative review (the forum-shopping principle). The effect of this combination of features, uniquely present in investment arbitration, is to subject the regulatory conduct of states to control through compulsory international adjudication to an unusual extent. And it is precisely because of the potential of these internationally generated adjudicative norms and mechanisms to exert a strong disciplinary influence over domestic administrative program that investment arbitration should be seen to constitute a powerful species of global administrative law. The concept of a global administrative law suggests a number of difficult and controversial questions. Is such a system actually coming into being? If so, do we want it? Should it be left to evolve, as national systems of administrative law have by and large been free to do, to develop on its own, possibly subject to a process of cross fertilization unavoidable in the context of globalization? Alternatively, should conscious efforts be made to stimulate a process of harmonization? Has the time now come for a pro gramme of codification of general principles? If so, should the primary actors be inter national bureaucrats, courts, with the concomitant danger of government by gerontocracy, or even academics, some of whom already actively promote either the internationalization of constitutional law or the constitutionalizing of international law? And is there any material on which to work or, to put this differently, are there universally recognized principles, which could legitimately form the basis for such a project? Finally, what is the proper domain of global administrative law? Is it and should it be operative only in global space, emerging as a species of cosmopolitan law? Should the principles be encouraged, as generally advocated by human rights lawyers, to invade national legal and constitutional space? And, if so, how can they be enforced?