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PART ONE: GLOBALIZATION AND ITS CHALLENGES I. DEFINING GLOBALIZATION “Globalization” is a new expression, originating in the 1960s but bursting into ordinary parlance only in the 1990s. Since 1990, the term has appeared almost 19,000 times in Canadian newspapers. And yet, despite its prevalence, “globalization” is a word without a single, precise meaning. A. The Imprecise Meaning of Globalization Literally defined, globalization is the “act of becoming global”. As such, it suggests a process by which the “local” and “diverse” become the “transnational” and “harmonized”. Government policy-making now almost always involves an alphabet soup of international institutions and agreements. Canada is party to hundreds of treaties, many of which oblige this country to adopt or modify its laws. It is also a member of key multilateral “clubs” – the United Nations, the G8, the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), La Francophonie, the Commonwealth, the Organization of American States, and many others. Globalization is, however, more than a technocratic process of policy and law harmonization. In practice, it is closely associated with economic liberalization: the elimination of inter-state trade barriers and the expansion of international markets. Québec’s Le grand dictionnaire terminologique, for instance, defines globalization as “a process of market integration, resulting from free trade, the expansion of competition and the consequences of information technology and global communication.”1 Colloquially, globalization also includes social and cultural transformation (see textbox on opposite page). In fact, globalization is used to describe the ills of an international system that is, ironically, imperfectly “globalized”. The internationalization of law and governance does not progress at the same pace in every area. Deep economic integration produced by free trade agreements does not guarantee the harmonization of enforceable standards in other areas. In a commonplace complaint reflecting this point, critics single out multinational corporations as, on the one hand, the proponents of globalized, transnational markets, and, on the other, as the willing beneficiaries of incomplete and poorly-enforced systems of transnational human rights, labour and environmental regulation. The Many Faces of Globalization The term “globalization” may be used to describe a vast array of phenomena affecting all domains of human affairs, including: Psychic globalization: a growing collective consciousness of humanity, the planet earth and its ecosystems as a single community with a shared fate; Political globalization: the rise of transnational political regimes in which governments, commercial interests, nongovernmental organizations and other parties establish new norms for global trade, treatment of the environment and human rights; Economic globalization: the global spread of free trade rules and ideology, a spectacular increase in transnational investment and a massive expansion of world trade in goods and services; Societal globalization: massive transnational movements of people and networks of individuals and a huge proliferation of transnational personal interaction in cyberspace; Technological globalization: the instantaneous, worldwide connectivity now provided by information technology, particularly in the industrialized world; Legal globalization: harmonization of national laws, proliferation of international law, the increasing use by commercial actors of international arbitration and of foreign and international law in domestic courts and the global transmission of certain legal norms; Globalization of health and disease: heightened societal vulnerability to rapidly-spreading epidemics like HIV/AIDS, SARS or influenza that cause devastation that respects no borders; Cultural globalization: the growing global domination of American (and to a lesser extent European) entertainment industries and cultural products; Ecological globalization: the emergence and rapid intensification of global environmental degradation, from ozone depletion to climate change to biodiversity loss; Criminal globalization: the emergence of global networks of sex trades, drug trafficking and terrorism, as well as the expansion of international white-collar corporate crime and the rapid spread of Internet crime; Military globalization: the rise of humanitarian intervention, a burgeoning global arms trade, and a “war on terror” fought in a global theatre. S. Clarkson and S. Wood, Governing Beyond Borders: Law for Canadians in an Era of Globalization (Background Paper, Law Commission of Canada, 2005). [unpublished]
B. Globalization as Politics Globalization, then, is not just about harmonizing legal standards, economic practices and cultural understandings across borders. It is also a power struggle over which standards, practices and understandings should be universal. It is, in other words, a very political phenomenon in which proponents of market liberalization are pitted against their antagonists – a shifting alliance of activists in areas such as labour, human rights, the environment, consumer rights and nationalism and organizations collectively labelled “anti-globalization”. In fact, the positions of both the “globalization” proponents and the “anti-globalization” activists betray the insufficiency of the globalization label. Many of those described as anti-globalist contest the virtues of liberalized markets for goods, services and capital. This position puts them at odds with the view that such liberalization necessarily fuels prosperity and progress on many different fronts. At the same time, many “anti-globalization” activists call instead (or in addition) for rigorous enforcement of global human rights, environmental, labour, consumer or other similar standards, a position consistent with a broad definition of legal globalization. Meanwhile, governments in developed countries and many private sector enterprises loudly espouse the virtues of market globalization, but retreat from this position in sensitive areas such as agriculture. Representatives of developing nations demand market access for their agricultural products in the developed world as a quid pro quo for any further liberalization of markets for other goods and services. All governments are wary in varying degrees of other transnational commitments in human rights, environmental, labour and consumer areas, sometimes in good faith and sometimes not. In fact, debates over globalization are less about whether there should be a “global village” and more about what rules should govern it. This has at least two important implications for domestic lawmaking and law reform. II. LEGITIMACY AND ACCOUNTABILITY First, to the extent that globalization is truly a contest over the nature of a global society and not over its existence, the debate raises questions of “legitimacy”. How does one assess the legitimacy of a particular legal standard, economic practice or cultural understanding when, at one and the same time, it is both nominated for global prominence and condemned as wrong-headed?		[…] [G]lobal citizens are people who are informed of issues both domestic and international, which affect people around the world. They are people who believe in social justice, diversity and have respect for others’ beliefs and values. They are also people who are politically active, for they try to take action when it is needed, look for solutions for issues and try to participate in any way they possibly can…a perfect example of people showing their commitment to being global citizens would be the 1999 Seattle protest… Issues like fair trade and who should be making the rules when it comes to trade, either unelected corporate officials or elected officials who represent the people… A great example of people [having their say] in matters that would affect them would be through protest, like in the Seattle protest, or through other means like organizing walk outs, sit-ins, petitions addressed to the local government… or most importantly through elections… Eza Hamid, Grade 12, David and Mary Thomson Collegiate Institute, Scarborough, ON
A. Defining Legitimacy Legitimacy attaches to a given outcome when, by reason of law or custom, the result is viewed as valid, or at least justifiable. Yet law and custom vary from place to place and time to time, creating different views on legitimacy. This is a peril cured at least in part by a focus on procedure. So long as common views on the legitimacy of a procedure exist, outcomes from this procedure are defensible. Within a democratic society, procedures themselves are accorded legitimacy when they meet democratic expectations; that is, when the electorate as a whole has at least an indirect role in governance. In Canada, we often describe democratic governance as based on three branches of government: the legislature, the executive and the judiciary. The long legacy of constitutional development in both this country and in the United Kingdom ensures that the traditionally most important decisions – such things as law and taxation – are publicly debated by the people’s representatives, assembled in legislative bodies and subject to periodic renewal through elections. In a modern, liberal democracy, it is expected that elected representatives of the people will exercise the authority of the state or oversee the activities of those who do. This democratic imprimatur guarantees the decisions of government legitimacy, if not always an enthusiastic reception. Legitimate decision-making, in turn, requires transparency, participation, accountability, effectiveness and coherence. Democratic governance involves rules and processes to ensure adherence to these principles by those with decision-making powers in a democratic society. Where democratic accountability or the other principles are perceived to be missing, questions of legitimacy are often raised. In modern Canada, post-Canadian Charter of Rights and Freedoms, the role of courts in governance has expanded enormously, prompting repeated objections from some politicians and commentators. Repeated complaints have also been raised about a “democratic deficit” in the federal system: a sidelining of Parliament fuelled by the expansion of executive government. At its practical pinnacle, this executive includes a small number of elected politicians, assembled as the Cabinet. Many of these ministers, according to some critics, see Parliament as a minor obstacle to be overcome in governance rather than the central forum of democratic accountability. According to these critics, the result of both of these phenomena is to reduce the power of an elected House of Commons in favour of an unelected judiciary and an unduly autonomous executive branch.		Organs of Democratic Governance in Canada The Supreme Court of Canada has observed, “[o]ur democratic government consists of several branches: the Crown, as represented by the Governor General and the provincial counterparts of that office; the legislative body; the executive; and the courts” (New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), [1993] 1 S.C.R. 319 at 389). The Crown and the executive are often lumped together, producing three branches: the executive, the legislature and the judiciary. While the separation of powers between these branches is not strict in Canada, each does have its own (idealized) function: “[i]n broad terms, the role of the judiciary is … to interpret and apply the law; the role of the legislature is to decide upon and enunciate policy; the role of the executive is to administer and implement that policy” (Fraser v. P.S.S.R.B., [1985] 2 S.C.R. 455 at 469–70).
B. Globalization, Legitimacy and Accountability Globalization affects democratic accountability, potentially exacerbating concerns about the legitimacy of government decision-making. 1. The Democratic Deficit in International Organizations First, the very manner in which intergovernmental organizations function raises concerns about democratic accountability. These institutions often conduct their activities insulated from real scrutiny by a broader public. Likewise, except in rare circumstances – such as the negotiations of the treaties governing the International Criminal Court or the ban on landmines – international treaty-making, for many, is an obscure process. Negotiations are typically held behind closed doors, and treaties are usually concluded by the negotiating states without any real public process. It is also of note that some international standards or decisions are made by private sector entities. Classic examples include industry or corporate codes of conduct governing production standards or ethical behaviour, and private international commercial arbitration to settle international contractual disputes between private parties. As with their domestic counterparts, questions of legitimacy are raised by these dispute resolutions and standard-setting practices: when does a private international standard or dispute become so important in scope or implication that it should attract broader public participation? Governments around the world have accepted the standards put forward by non-governmental organizations such as the International Organization for Standardization (ISO) as the appropriate international standards for goods or services. With these in place, governments do not have to engage in the complex process of creating their own standards, and need not develop the requisite expertise. On the other hand, the widespread, albeit voluntary, adoption of these standards by markets may occur with little input from governments. 2. Executive Branch Dominance in International Law- Making and “Locking-In” Policy Directions Through International Commitments Second, in international law-making, the executive branches of state governments play a greater role than the other branches. Legislative bodies usually exercise little control over international policy-making. The impact of this truncated democratic process is most controversial when international obligations entered into by the executive compel states to apply policies that would otherwise be carefully scrutinized by Parliaments, citizens or even successive executives. Outright repudiation of existing international agreements may be expensive to both the economy and to the credibility of countries like Canada. International agreements may, therefore, lock in the decisions of past executives, constraining states to a given policy course, and making it nearly impossible for new governments to alter paths and embark on new policy directions. For reasons like these, the WTO and free trade agreements in particular are frequently criticized as constraining the “sovereignty” of their members – the freedom to choose a given policy path. Critics complain that the bodies created by these accords are non-transparent and unaccountable organizations that impose a narrow trade perspective on domestic law-making.		[Intergovernmental organizations] themselves are considered ‘undemocratic’ since they operate with little transparency or public and parliamentary scrutiny. They are seen as being governed by an elite group of national officials who are instructed by their respective executives, and by international secretariats whose staffs at times act independently of the top [intergovernmental organization] management. E. Stein, “International Integration and Democracy: No Love at First Sight” (2001) 95 AJIL 489 at 490.
3. A Hypothetical Example Consider the following hypothetical example, involving standardsetting by an international organization. The United Nations Security Council is the most powerful organ of the United Nations. It is empowered to make binding international legal orders in the exercise of its peace and security powers under Chapter VII of the Charter of the United Nations – the treaty establishing the UN. The Security Council has 15 members, five of whom are permanent; the balance sit on the Council for two years before being replaced by other states. Canada occasionally holds one of these rotating seats. In the wake of the terrorist attacks of September 11, 2001, the Security Council exercised its Chapter VII authority, and called on all states to criminalize terrorism in their domestic laws. (This call is not hypothetical: it is known as Resolution 1373). But imagine that in 2007, after another terrorism event, the Security Council issues Resolution 1779 requiring all states to introduce rules in their domestic laws allowing victims to sue terrorists for compensation for terrorist acts. The Counter-Terrorism Committee of the Security Council then prepares a list of terrorists and of acts it considers terrorist events for which compensation may be sought. There is no prior consultation with interested parties, nor even any real notice of the resolution’s imminent passage. Canada is a member of the Security Council at the time Resolution 1779 is issued, and is represented there by its ambassador to the United Nations. The latter is a diplomat responding to instructions from the Department of Foreign Affairs, and ultimately the federal Cabinet. Civil lawsuits allowing the collection of damages are a provincial responsibility under Canada’s Constitution. Because of concerns about the implications of the resolution under Canadian constitutional law, Canada abstains from voting. Nevertheless, under the Charter of the United Nations, the resolution is binding on Canada. The federal government therefore moves quickly, notifying the provinces of the existence of the Security Council resolution and requesting that each province enact law that permits anti-terrorism lawsuits. Several provinces balk. They are reluctant to tie a right to compensation to a list of terrorists and terrorist acts kept by the Security Council, a political, international body that lacks basic guarantees of due process. Concerned that Canada is now not in compliance with the resolution, the federal government decides to circumvent provincial resistance by issuing a regulation under the United Nations Act2, a brief federal statute empowering the federal executive to implement Security Council resolutions into Canadian law. This regulation creates a civil cause of action for terrorism in Canada’s federal court. The provinces’ objections to this step are rejected. Meanwhile, there is no need to seek a blessing from the federal Parliament, and it is not consulted. Because the regulation implements a mandatory Security Council resolution, prior public consultation is perfunctory. This scenario is not far-fetched. In the last several years, the federal government has responded to Security Council resolutions using regulations under the United Nations Act without any recourse to Parliament. These actions did not raise the federal/provincial constitutional issues that arose in the example. Nevertheless, domestic enactment of potent law by executive fiat at the behest of an international body clearly raises concerns of democratic legitimacy. III. SOVEREIGNTY, JURISDICTION AND UNEVEN ACCESS TO JUST OUTCOMES The second implication of globalization for domestic law and lawmaking stems from its unevenness. As Canada’s Foreign Affairs Minister observed in 2002, international law is to law what Swiss cheese is to cheese: cheese, but full of holes.3 If the process of international law-making and globalization is imperfect, proceeding rapidly in some areas and slowly or not at all in others, globalization leaves in its wake eddies and cross-currents creating significant governance issues and legal quandaries. As states globalize in the economic area, dismantling at least some trade barriers and codifying standards that facilitate certain types of international commerce, other areas remain more closely guarded by state sovereignty. A. The Tension Between Sovereignty and Justice Sovereignty in its purest form means autonomy from foreign constraints. In modern times, it is an unrealized concept in almost every area. It is true, however, that states are freer on some matters than in others. In some areas, there are no truly global, shared standards. In other areas, even where international law exists, adherence is haphazard. Binding international dispute settlement, for instance, is a key component of the WTO regime. It is less common in international environmental, labour or human rights law. In underdeveloped areas of international law, globalized, transnational constituencies exist. Webbed together by the communications revolution, these players – civil society groups and their grassroots partners – and at times governments themselves, turn increasingly to domestic legal instruments in an effort to convert social justice and foreign policy objectives into justiciable norms and rights. Put another way, at the same time that globalization prompts shared trans-boundary standards, it induces the intervention of domestic legal systems to plug holes in those areas neglected by globalization. The result is a confusing patchwork of both transnationalized and domestic law and justice, a legal system that is quasi-globalized. By way of illustration, consider the following hypothetical example.		International trade policy is increasingly intersecting with domestic social and economic policy. While individual nations used to have complete sovereignty over policies related to intellectual property, services and telecommunications, for example, international agreements are setting new boundaries for those nations that sign trade agreements. Legislators and voters are frequently frustrated when options for solutions to domestic challenges are met with lawsuits based on these international agreements. This is especially so in cases where they feel they have had little input or choice in developing the international agreement. P. Torsney, “The World Trade Organization and Parliamentarians” (2003) 26:3 Canadian Parliamentary Review 12 at 12.
B. A Hypothetical Example A mine tailings dam operated by a Canadian company in Manzo fails, prompting an enormous toxic spill that flows downriver into neighbouring Domur. In response, the Manzoan government immediately orders the closure of the mine and freezes the company’s Manzoan assets in anticipation of these monies being used to finance the clean-up. It then assigns ownership of the mine to a Manzoan entrepreneur with strong ties to the government. Meanwhile, the Domurian government arrests two of the company’s employees who had travelled downriver to monitor the spill, charging them under Domurian law with illicit entry into the country. These employees are mistreated while awaiting trial and are released only after the forceful intervention of the Canadian embassy. In the aftermath of these events, the Domurian villagers downstream of the spill seek compensation. No international tribunal exists with jurisdiction to hear their complaint. The villagers choose to bring a lawsuit against the Canadian company in Canada for the injuries suffered from the spill. The Canadian court declines jurisdiction, indicating that, as the accident occurred in Manzo and the injury in Domur, the courts of Manzo or Domur are best suited to hear the case. The plaintiffs bring the case in Domurian court. The lawsuit is promptly dismissed. The villagers accuse the Canadian company of bribing government and judicial officials. These concerns are communicated to Canadian authorities by international environmental groups. In response, the Canadian government mounts an investigation of the company, as required by an international treaty on bribery of foreign public officials. Because of the difficulty in proving the bribery allegations, the government ultimately declines to prosecute. Distressed by this outcome, Canadian civil society groups clamour for a more effective response to the environmental catastrophe from the Canadian government. The government notes that it has no domestic laws allowing it to regulate the affairs of Canadian companies operating overseas. Instead, it refers the groups to the Canadian “Contact Point” for the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Corporations. The OECD Guidelines are a non-binding code of conduct promising ethical and environmentally-sound behaviour by companies. The Canadian Contact Point is a civil servant in International Trade Canada whose role is to facilitate dialogue between companies and complainants. Because the company refuses to cooperate in the mine spill case, nothing comes of the process. At about the same time, the two company employees wronged by the Domurian government seek compensation for the injuries received while they were imprisoned. Their lawsuit goes nowhere in Domur itself. In response, they bring suit against Domur in a Canadian court. The Canadian court promptly dismisses the matter, noting that under both international and Canadian law, a foreign sovereign state is strictly immune to such lawsuits in Canadian courts. At the urging of the employees and their families, the Canadian government considers bringing Domur to the International Court of Justice (ICJ) – the institution empowered to hear disputes between states. However, the Canadian government quickly concludes that Domur has not accepted the “compulsory” jurisdiction of the ICJ to hear any dispute about its conduct. The Canadian government does not pursue the case. The two employees turn to the United Nations Human Rights Committee, established by the International Covenant on Civil and Political Rights. Domur is one of the countries that has acceded to the protocol to this treaty, allowing the Committee to hear complaints about violations from individuals. The Committee finds in favour of the employees, and issues a “view” calling on Domur to compensate the two Canadians. The Domurian government ignores this request. Meanwhile, the Canadian company brings a complaint under Chapter 11 of the North American Free Trade Agreement (NAFTA), an international treaty of which Canada and Manzo are both members. It alleges that the Manzoan actions in response to the tailings spill violated the minimum standard of treatment owed to it as a Canadian investor in Manzo and also constituted expropriation. The company wins the case, on the strength of the Manzoan government’s apparently underhanded transfer of ownership to the entrepreneur. Manzo pays damages to the company. C. Central Issues The facts are obviously imaginary, but this scenario illustrates the real jurisdictional complications associated with globalization, and the uneven justice available to those involved in and implicated by, transnational activities. Different actors in this hypothetical scenario are entitled to different remedies in different international and national venues that vary in potency. In both the hypothetical situation and in reality, there are clear instances where rights exist and wrongs are committed, but the quasi-globalized legal system provides no enforceable remedy, whether domestic, foreign or international. IV. IMPLICATIONS FOR LAW REFORM The Law Commission of Canada is not charged with assessing the substantive merits of Canadian foreign policy. Nor is it resolving debates that lie at the core of the globalization issue, including those over the impacts on global development, social equity, and the environment. But, the Commission is mandated to review the law of Canada and its effects, and to propose improvements, modernization and reforms that ensure a more just legal system. As this introduction has urged, Canadian laws and the Canadian legal system do not operate in isolation. Globalization presents both new challenges and new opportunities for Canadian laws and law-making. For this reason, the Commission has embarked on a study of globalization as it affects the effectiveness and legitimacy of the Canadian legal system. The remainder of this discussion paper expands on this introduction by dividing the implications of globalization for law reform into two broad classes. These are: Law-Making, Legitimacy and Accountability. Legal globalization affects the relationship between Canada’s three branches of government, most notably Parliament and the executive. The international law-making process is driven by the executive; it lacks formal mechanisms for input from interested parties, including parliamentarians and members of the public. Federal executive branch dominance in the area also has implications for Canadian federalism; a system in which domestic law-making is divided between federal and sub-federal levels of government. This section discusses the following questions: Who, in Canada, is involved in the creation of international law? How is this international law received into the fabric of Canadian law? What implications do these issues have for questions of legitimacy and democratic accountability in Canada? Sovereignty, Jurisdiction and Uneven Access to Just Outcomes. Legal globalization proceeds at different rates in different areas. In some areas, there is a robust system of international law, readily observed by states. In other areas, international law and international enforcement are lacking, putting pressure on domestic legal systems to offer remedies for wrongs committed internationally. This section discusses the following questions: What are the challenges raised by a global system in which law has evolved faster in some areas than others? How has Canadian domestic law responded? Are there new tensions between sovereignty and justice?		The lack of international and domestic legal obligation on TNCs [transnational corporations] and the lack of international legal obligation on states to regulate the extraterritorial activities of corporate nationals result in a regulatory void or ‘governance gap’. The outcome is that corporations that operate outside of their national jurisdictions may commit, aid or abet, or be complicit in violations of international human rights or humanitarian law with impunity. G. Gagnon, A. Macklin and P. Simons, Deconstructing Engagement, Public Law Research Paper No. 04-07 (University of Toronto, January 2003) at 12, online: http://www.law.utoronto.ca/documents/ Mackin/DeconstructingEngagement.pdf