The Luxembourg Space Resources Act and International Law

By Charles Bjork

Asteroid Mining_NASA Public Domain Image.png

Image courtesy of Wikipedia commons.

Among the most intriguing and eagerly anticipated presentations at the 2018 Annual Course of the International Association of Law Libraries was a lecture by Professor Lorenzo Gradoni, a Senior Research Fellow at the Max Planck Institute for Procedural Law, on Luxembourg’s recently enacted Space Resources Act and whether or not it is in conflict with international law governing the use of outer space.  Sadly, Professor Gradoni had to cancel at the last minute, and there was not enough time to locate a replacement speaker.  Paul Mousel, a founding partner of the law firm Arendt & Medernach, who spoke about the practice of law in Luxembourg, was kind enough to provide the conference delegates with some background information that helped to explain how Luxembourg improbably became a pioneer in the field of space law.  Time constraints precluded Mr. Mousel from discussing the new Space Resources Act in detail.  Since the topic is of interest to me, I decided to do some research on my own.  What follows is a summary of the context provided by Mr. Mousel, along with my own findings about the origins of Luxembourg’s Space Resources Act and whether it is compatible or in conflict with the multilateral treaties that govern the use outer space.

Although few people today think of Luxembourg as an industrial powerhouse, it was one of Europe’s largest steel producers from the middle of the 19th century until the last quarter of the twentieth century.  The energy crisis of the 1970s accelerated the decline of Luxembourg’s steel industry.  As it became apparent that most steel production eventually would shift to lower-cost jurisdictions, Luxembourg began looking for ways to diversify its economy.   Banking and financial services offered one path.  The emerging field of satellite-based communications and broadcasting offered another.  The Cold War between the United States and the Soviet Union provided the impetus for the development of artificial satellites.  As with other technologies originally developed for military purposes, it wasn’t long before civilian applications began to emerge.

To better understand how Luxembourg managed to establish itself as a center for the satellite communications industry, some background information on satellite operations will be helpful.  Most communications satellites operate in a geostationary orbit, directly above the Earth’s equator, following in the direction of the Earth’s rotation.  From the ground, a satellite in such an orbit appears to be motionless, occupying a fixed position in the sky.  A ground-based antenna can communicate with the satellite simply by pointing to that fixed position without having to rotate back and forth to track the satellite’s movement.  There are two main limitations on the use of geostationary orbits by communications satellites.  First, only a finite number of satellites can safely operate within the relatively narrow band above the Earth’s equator.  Second, the number of radio frequencies that can be used to communicate with satellites operating within a geostationary orbit also is limited.  These frequencies must be allocated for use on an exclusive basis in order to prevent one satellite operator’s transmissions from interfering with another operator’s transmissions.

The entity responsible for allocating the limited number of orbital positions and radio frequencies available for satellite broadcasting is the International Telecommunications Union (ITU), a specialized agency of the United Nations.  For each of its member states, the ITU set aside a fixed number of geostationary orbital positions, as well as a fixed number of uplink and downlink frequencies for communicating with satellites operating in geostationary orbit.  National telecommunications regulators, such as the Federal Communications Commission in the U.S., may assign these orbital positions and frequencies to public or private entities operating within their respective jurisdictions.  If there are no entities capable of using the orbital positions and frequencies allocated to a particular ITU member state, those positions and frequencies remain available for the use of entities based outside the jurisdiction on a “first come, first served” basis, subject to the oversight of the ITU.

Just as its steel industry was contracting, Luxembourg suddenly found itself in possession of two potentially lucrative assets:  geostationary orbital positions for satellites to occupy and radio frequencies for communicating with the satellites occupying those orbital positions.  As Mr. Mousel explained, Luxembourg’s location on the border between France and Germany makes it ideally situated to transmit satellite broadcasts to most of Europe’s largest television markets.  The only thing Luxembourg needed to take advantage of this opportunity was a domestic satellite operator.  If no domestic satellite operator emerged, Luxembourg risked losing its ITU-allocated orbital positions and radio frequencies to foreign entities willing to claim them.

At that time, in the early to mid 1980s, the only satellite operators in Europe were state-owned broadcasters.  Lacking the resources and technical expertise to develop a state-owned champion of its own, the government of Luxembourg decided to offer seed money to subsidize the establishment of a privately-owned satellite company.  It was approached by Clay T. Whitehead, an American who had worked in the Nixon administration as the first director of the Office of Telecommunications Policy, and who later helped Hughes Aircraft to launch its satellite subsidiary.  In exchange for the seed money, the assignment of the requisite orbital positions and radio frequencies, and the right to broadcast television directly into viewers’ homes, Whitehead agreed to base his new company in the Grand Duchy and allow its government to take a minority stake in the business.  Thus was born Société Européenne des Satellites (SES), Europe’s first privately-owned satellite operator.

Luxembourg’s gamble on SES soon paid off.  In 1988, just three years after it was founded, SES launched its first satellite, the Astra 1A, into geostationary orbit, which enabled it to enlist as clients many of the key players in Europe’s emerging satellite television industry, including the German broadcaster RTL and Rupert Murdoch’s Sky TV.  Thirty years later, SES operates more than 50 geostationary satellites and is among the world’s leading providers of satellite-based video and data connectivity services.  The government of Luxembourg has retained its minority stake in the company.

With the enactment of its Space Resources Act in 2017, Luxembourg hopes to build on its success in the field of satellite communications and establish itself as a center for what many observers anticipate will be the next chapter in the commercial development of outer space: mining.  Long before scientists confirmed that the Moon, certain types of asteroids, and other celestial bodies contain rich deposits of precious metals and minerals, Hollywood screenwriters had envisioned a future in which humans would turn to space to replenish the Earth’s depleted resources.  As private enterprises continue to play a larger role in space exploration, it is only a matter of time before the commercial extraction of resources from outer space moves from the realm of science fiction to reality.

The most valuable space commodity – at least during the initial stages of commercial development – may not be platinum or other precious metals, but ice.  In addition to being melted to provide drinking water for astronauts, ice can be broken down into its component parts, hydrogen and oxygen.  The former can be converted into fuel, while the latter is essential for human respiration.  If ice mined in space can provide a reliable source of drinkable water, breathable air, and fuel, it would no longer be necessary to transport those essential resources from the Earth, making space exploration and long-term human habitation in space more viable and less costly than they are now.  Moreover, if communications satellites can be refueled in mid-orbit with fuel derived from hydrogen locked in space ice, it would dramatically extend their useful lifespans and significantly reduce the amount of hazardous space debris.

Even as technological advances bring space mining closer to reality, investors in companies seeking to extract resources from outer space will be reluctant to move forward without legal clarity on the ownership of such resources.  It was the United States, not Luxembourg, that took the first step in creating a legal framework for the recognition of property rights in space resources.  On November 25, 2015, Congress enacted the Space Resource Exploration and Utilization Act (SREUA) as part of the larger Space Launch Competitiveness Act.  The SREUA defines a “space resource” as any abiotic resource, including water and minerals, in situ in outer space.  It also defines an “asteroid resource” as a space resource found on or within a single asteroid.

Section 51303 of the SREUA states that any U.S. citizen engaged in the commercial recovery of an asteroid resource or a space resource is entitled “to possess, own, transport, use, and sell the asteroid resource or space resource obtained in accordance with applicable law, including the international obligations of the United States.”  The term “U.S. citizen” is defined to include 1) an individual who is a citizen of the U.S.; 2) a business entity organized under the laws of the U.S., or the laws of any U.S. state; or 3) a business entity organized under the laws of a foreign jurisdiction, provided that a controlling interest in the business is held by an individual or entity described in 1) or 2) above.  In other words, the SREUA’s recognition of property rights in resources extracted from outer space applies only to individual American citizens, American-based business entities, and the foreign subsidiaries thereof.

Luxembourg became the second country, and the first in Europe, to establish a legal framework for the ownership of resources extracted from outer space with the passage of its Space Resources Act, which entered into force on August 1, 2017.  Like its American counterpart, the Luxembourg statute explicitly recognizes a property interest in resources extracted from outer space.  However, there are two critical difference that set Luxembourg’s Space Resources Act apart.   First, the Luxembourg statute establishes an accreditation and licensing regime for entities seeking to engage in space mining.  Only entities that have applied for and received a license for their space mining activities may assert an ownership interest in the resources extracted.  Second, the Luxembourg statute does not include a nationality clause.  Any corporation, limited partnership or limited liability company established under Luxembourg law, or any European company with a registered office in Luxembourg, may submit an application for accreditation and licensing.  It doesn’t matter who owns or controls the entity submitting the application.  As long as the entity is established under Luxembourg law, or is a European company with a registered office in Luxembourg, it may submit an application.

Luxembourg has a long history of enacting tax loopholes and less burdensome regulatory regimes to entice multinational enterprises to establish foreign subsidiaries within its borders.  Critics refer to these foreign subsidiaries, created solely for the purpose of tax and regulatory arbitrage, as “letterbox companies.”  The Space Resources Act is meant to lure start-ups, not established multinationals.  It draws its inspiration from the seed money the Grand Duchy provided to launch SES, Europe’s first privately-owned satellite operator.  In fact, even before the Space Resources Act entered into force, the government of Luxembourg established a €200 million Space Fund for making strategic investments in fledgling companies that aspire to be space mining pioneers.  To date, the Space Fund has invested in half a dozen mostly American start-ups, including Seattle-based Planetary Resources and San Jose-based Deep Space Industries.  Once they establish subsidiaries in Luxembourg, these start-ups will be able to apply for space mining licenses under the Space Resources Act.

Are Luxembourg’s Space Resources Act and its American counterpart compatible with the multilateral conventions that govern outer space?  No treaty provision directly addresses the private ownership of space resources.  The most relevant provision is article II of the Outer Space Treaty, which states that “[o]uter space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”  Some scholars have interpreted this provision to preclude the private ownership of resources extracted from outer space.  The more widely accepted view is that article II only prohibits nation states from asserting their sovereignty over celestial bodies and does not prevent private parties from claiming ownership of extracted resources.  Supporters of space mining often make an analogy to deep seabed mining, which is permitted under the Law of the Sea Convention, or to fishing boats operating in international waters, which claim ownership of the fish they catch without asserting a property interest in the ocean.

The ownership of extracted resources is by no means the only legal issue that must be resolved for space mining to become a reality.  Private enterprises will be reluctant to begin prospecting in space unless they are reasonably certain that they will have an exclusive right to extract the resources that they discover.  How will companies assert their right to extract resources from a particular celestial body?  Will there be a space mining registry?  If so, who will administer it?  Will companies need to establish a physical presence on a celestial body before they can assert a mining claim?  How will the scope and duration of such claims be determined if nation states cannot assert sovereignty over celestial bodies?  How will companies prevent competitors from interfering with their mining claims?  Neither the Luxembourg Space Resources Act nor its American counterpart address any of these thorny questions, and it is highly unlikely that such matters can be satisfactorily resolved through domestic legislation.

Recognizing the need for international cooperation, the Hague Institute for Global Justice, an independent think tank, established the Hague Working Group on Space Resources in 2014.   The Working Group consists of a geographically diverse collection of stakeholders, including government agencies, non-governmental organizations, academic institutions, and industry representatives.  Its goal is to identify the building blocks for developing an international framework to govern the use of space resources.  This framework will provide a basis for negotiating a new international legal agreement on space resources or, if that is not feasible, for the development of soft law instruments that will serve the same purpose.  The Working Group completed its initial round of meetings on December 18, 2017, and issued this progress report.  The second round of meetings began in January.  The most recent meeting was held at the end of November.  Appropriately enough, it took place in Luxembourg.

 

Suggestions for further reading:

Atossa Araxia Abrahamian, How a Tax Haven Is Leading the Race to Privatize Space, The Guardian (July 15, 2017), https://www.theguardian.com/news/2017/sep/15/luxembourg-tax-haven-privatise-space.

Chelsey Davis & Mark J. Sundahl, The Hague Working Group on Space Resources:  Creating the Legal Building Blocks for a New Industry, 30 Air & Space L 7 (2017).

Rachel Mitchell, Note, Into the Final Frontier:  The Expanse of Space Commercialization, 83 Mo. L. Rev. 429 (2018).

Jinyuan Su, Legality of Unilateral Exploitation of Space Resources Under International Law, 66 Int’l & Comp. L. Q. 991 (2017).

Space Resources Luxembourg (official government website).

Loi du 20 juillet 2017 sur l’exploration et l’utilisation des ressources de l’espace, 674 Journal Officiel du Grand-Duché de Luxembourg, July 28, 2017, p. 1.

U.S. Space Resource Exploration and Utilization Act, 51 U.S.C. §§51301 et seq.
U.S. Space Launch Competitiveness Act, P.L. 114-90, 129 Stat. 704.

Overview of the China International Commercial Courts

By Evelyn Ma

CaptureThis post attempts to consolidate blog posts relating to the recent establishment of the two new international commercial courts in China (CICC) aimed at facilitating resolution of disputes arising from China’s One Belt One Road or Belt and Road Initiative.  The Supreme People’s Court of China’s “Provisions of the Supreme People’s Court on Several Issues Regarding the Establishment of the International Commercial Court” took effect on July 1, 2018.  The Provisions set out the scope and operation of the two CICCs: one in Xian, and the other in Shenzhen.  The CICC in Shenzhen will focus on “One Belt” disputes arising from infrastructural developments along the coastline of the maritime routes.  The CICC in Xian will address “One Road” disputes arising from projects on land. The new courts will house mediation, arbitration and litigation under the same roof.  They intend to deal primarily with “international commercial cases” where at least one party is a non-Chinese national or resident, or where the dispute has some minimal contact with a foreign country other than China.[1]

For the legal framework creating the two CICC courts, see here.

For an overview of the jurisdiction of the courts, see here, here and here.

For the development and viability of the courts as an alternative forum for international arbitration, see here and here.

For profiles of the judges, see here.

For observations on the functioning of the Expert Committee, see here.

In addition to 18 model (or “typical”) BRI infrastructure cases, the official website includes selections of summaries of additional “typical” arbitration cases involving a non-Chinese party.  One can also search in the cases module of PKUlaw (ChinaLawInfo) for more comprehensive search results of arbitration cases involving a foreign party. However, most do not come with English translations.

[1] Under Article 3 of the Provisions, an “international commercial case” is one which requires at least one of the following: one or both parties are foreign nationals; one or both parties reside outside of China; or the object of suit or legal facts that create, change or terminate the commercial relationship occur or occurred outside of China.

Book Review – Humanizing the Laws of War: The Red Cross and the Development of International Humanitarian Law

By Jessica Pierucci

Robin Geiß, Andreas Zimmermann, & Stefanie Haumer (eds.), Humanizing the Laws of War: The Red Cross and the Development of International Humanitarian Law (Cambridge University Press, 2017). 278 p. Hardcover $110.00.

9781316622186Humanizing the Laws of War is an edited book born from a 150-year celebration of the International Red Cross and Red Crescent Movement in 2013. “The International Red Cross and Red Crescent Movement at 150: Developing and Clarifying International Humanitarian Law,” honored the movement by pulling together international humanitarian law (IHL) scholars and practitioners for a meeting in Berlin. The meeting led to this work memorializing the achievements of the International Committee of the Red Cross (ICRC) and its undeniable impact on IHL during the past 150 years, while also addressing the organization’s shortcomings and outside criticism.

The editors open the book with an introduction focusing on the interaction between the ICRC and the National Red Cross or Red Crescent Society within countries. They note the cognizable advantage to this structure with locals who know and understand the country being able to most effectively implement broader initiatives on the local level. However, the authors note the need for increased cooperation between the organizations to further the worldwide influence of IHL.

Part I discusses the ICRC’s influence on treaty making. In Chapter 1, Robert Heinsch gives an historical account of the development of the Geneva Conventions showing the ICRC’s intimate involvement in drafting the conventions, and thus framing the conversation, noting “[i]t is probably not exaggerated to say that there is no other field of international law in which a non-State entity has had such an impact on the norm-development process as well as on the dynamic interpretation of the respective rules.” (p. 27). Heinsch notes the ICRC has also authored commentaries on the Geneva Conventions and is currently updating those commentaries, further demonstrating the ICRC’s influence as a central authority on interpretation of the conventions. The second chapter furthers the discussion with Michael Bothe detailing the ICRC’s influence on the subsequent protocols to the Geneva Conventions of 1949 while acknowledging the protocols’ shortcomings, notably in nuclear and environmental fields.

Part II looks beyond treaties at the ICRC’s influence on IHL norm development. In Chapter 3, one of the editors of the 2005 Customary International Humanitarian Law study, Jean-Marie Henckaerts, describes the origin and addresses criticism of the study that laid out 161 rules of customary IHL, and is continually updated through additions of relevant state practice in the ICRC’s Customary IHL database. The origin story provides valuable context for understanding this expansive study and I appreciated the author’s direct discussion of criticism since the study’s publication. Chapter 4 similarly provides background and addresses critiques of the ICRC’s Interpretive Guidance on the Notion of Direct Participation in Hostilities under International Humanitarian Law. Robert Cryer discusses the criticisms, but pushes back noting if the critical governments “wish to reject the ICRC’s view, the impetus is now for them to show that they can create (and get broad agreement thereupon) something better.” (p. 138).

Part III turns to the ICRC’s influence on weapons laws and international criminal law (ICL). Chapter 5 discusses the ICRC’s efforts in developing IHL norms and treaties on weapons that are by their nature indiscriminate or cause superfluous injury, such as chemical weapons and cluster munitions. Kathleen Lawand and Isabel Robinson share examples of the ICRC successfully serving as a catalyst for creating weapon-specific laws, but admits the ICRC has not been successful in all circumstances, particularly in the case of nuclear weapons. In Chapter 6, Carsten Stahn discusses the intersections of IHL and ICL, focusing in particular on interaction between the ICRC and international criminal courts and tribunals. Stahn shares how IHL and ICL are not mutually exclusive and further understanding of and development of their relationship could improve both fields.

Part IV, the conclusion, is authored by two of the editors, Robin Geiß and Andreas Zimmermann. They highlight the ICRC’s successes and prominence within IHL while also grappling with its failures. In particular, the authors note the need for a compliance mechanism or other means to increase IHL compliance and discuss barriers impeding compliance initiatives.

This review provides just a glimpse at the fascinating history of the ICRC discussed in the work. The book’s critical lens makes for an enlightening read allowing the reader to gain a broad understanding of the ICRC’s contributions to IHL laws and resources, and the current limitations of IHL and the ICRC. The heavily footnoted chapters allow readers interested in any of the topics covered to look deeper into history or criticism of the ICRC’s influence and IHL. This book would fit well in any library with an IHL collection.

IALL 2018 Recap: Traditional Cultural Expressions and International Intellectual Property Law

By Joan Policastri

Dr. Lily Martinet of the Max Planck Institute in Luxembourg began by giving a brief description of what is included in Traditional Cultural Expression (TCE) and how it intersects with Intellectual Property (IP) Law.  While historically TCE has been associated with copyright law, developments within the United Nations have evolved the concept to meet with ideas from human rights, intellectual property law, and cultural law. Another aspect of this evolution is the sourcing of ideas originating in anthropology that are now being incorporated into law. The documents which have brought these together are The Convention on the Protection and Promotion of the Diversity of Cultural Expression (2005), The United Nations Declaration on the Rights of Indigenous Peoples (2007), and the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore.

While there is no accepted definition of TCE in international law, Dr. Martinet uses this: “tangible and intangible forms in which traditional knowledge and cultures are expressed, communicated or manifested. Examples include traditional music, performances, narratives, names and symbols, designs and architectural forms.”

The Key characteristics of TCE are: 1) cultural content, 2) a collective essence, which can include groups, tribes, nations, or other communities, but not an individual, and 3) intergenerational transmission. Cultural expressions result from the creativity of individuals, groups and societies, and that have cultural content. Cultural content refers to the symbolic meaning, artistic dimension and cultural values that originate from or express cultural identities (Art. 4 of the Convention on Diversity of Cultural Expression).

In order to complete the picture, the diagram below shows the intersection of TCE and Traditional Knowledge. The overlap is Intangible Cultural Heritage.

IPLaw1

Some examples of TCE include the Māori Tā moko patterns, patterns used in Alençon Lace (an example of intergenerational transmission), and Champagne. Other topics raised were the registration of dance moves as cultural expressions, or the series of postures in Bikram Yoga.

Slides provided visual experiences of these expressions, including this example of “Misuse of Traditional Cultural Expressions” of the Tā moko patterns. Ironically, colonial governments once banned tattoo use by the traditional peoples who created them, but now indigenous designs are being exploited by commercial interests.

IPLaw2

The current situation was described as a quagmire and existing legal instruments have rarely been applied in practice. Dr. Martinet gave three reasons why laws need to be elaborated:

1) The misuse/appropriation of the expressions. While there might be an element of public domain, the central issue is that traditional peoples are not consulted prior to the use of their expressions, the benefits of the use are not shared with the originators, and the commercial users do not acknowledge the source(s). These practices lead to unfair and unethical uses.

2) Distortion. The commercial users appropriate the symbol without its meaning, without understanding the values it expresses, and denigrate the expression. Tā moko are not simply designs and true Tā moko are not superficial. Tā moko are about identity and they are carved into the skin.

3) The non-traditional users may claim a right in the expression. For example, a tattoo artist claimed royalties in a design and used the claim against the indigenous people who originated it.

An interesting question was raised concerning what could be considered historical appropriations such as Claude Monet’s use of Japanese style in his painting, “The Japanese Footbridge and the Water Lily Pond” (1899).

The core issue is the Community’s right to protect its cultural expressions; to preserve the dynamic development of cultures. But will the laws stifle freedom of expression? Dr. Martinet believes that finding a good balance is the key.

For more information on Intangible Cultural Heritage, see https://dpc.hypotheses.org/category/the-osmose-program-english-version. It references the Indian Arts and Crafts Act in the United States.

Why Do Some Nations Still Refuse to Recognize Rape as a War Crime?

By Lora Johns

NobelThe 2018 Nobel Peace Prize was bestowed upon two people who have highlighted the viciousness of sexual violence in armed conflict and the importance of ending it. Nadia Murad is a 25-year-old Iraqi victim of gang rape who acts as a U.N. goodwill ambassador on the issue of human trafficking. Denis Mukwege is a 63-year-old Congolese gynecologist who treats rape victims brutalized by militias from Congo, Rwanda, and Uganda.

The Nobel Committee stated that sexual violence is a weapon of war and that “[a] more peaceful world can only be achieved if women and their fundamental rights and security are recognised and protected in war.” Rape destroys communities, spreads terror, humiliates victims, and perpetuates genocide. So why do some nations still ignore that rape is a war crime?

Certainly, the idea is not new; tribunals from the Nuremberg Trials to those in Rwanda and beyond already had explicitly condemned rape and sexual violence. In 2008, U.N. Security Council Resolution 1820 recognized rape during conflicts as a war crime. In 2010, it began a campaign to change the mindset that the strategic use of rape during wartime is inevitable. But while some international courts recognize strategic rape as an act of genocide and ethnic cleansing, not all national courts even deign to recognize that such abhorrent acts are occuring within their countries’ borders. And so the problem remains unsolved.

We cannot ignore the risk of oversimplifying the picture. Women are not the only victims of sexual violence, nor are men the only perpetrators of war crimes. A ‘“male-perpetrator and female-victim paradigm” is ultimately reductive and harmful to people of all genders. U.N. Security Council Resolution 1325 reaffirmed that women must have equal participation and full involvement in all efforts for the maintenance and promotion of peace and security, including decisionmaking in conflict prevention, but that international human rights law must also fully protect the rights of girls and women during and after conflicts. We cannot oversimplify the problem, but the outsize impact of sexual violence on women cannot be ignored, either.

This year’s Nobel Peace Prize winners illustrate that the problem of violence against women in war is far from solved. There are still no systematic efforts to prosecute sexual violence in war zones. But at least the formal recognition of rape as a war crime permits the International Criminal Court to prosecute and convict perpetrators. And through the Nobel Committee, Murad and Mukwege have increased the visibility of the importance of the role that gender plays in international issues of human rights, peace, and security.

ITA-ASIL 2018 Recap: Diversity and Inclusion in International Arbitration Conference

By Rachael Smith

The Diversity and Inclusion in International Arbitration half-day conference presented by the Institute for Transnational Arbitration (ITA) Academic Council, and the American Society of International Law (ASIL) took place on April 4, 2018.  This conference was the first of its kind to examine the legitimacy of international arbitration in the context of the lack of diversity of practitioners selected to participate in international arbitration proceedings.  Does the current selection of practitioners reflect the wide range of regional practices; and do they reflect the pool of practitioners?  If not, what are some practical and actionable steps those who participate can take, in this very specialized field, within the larger field of global commerce?

As noted by the introductory speakers, Abby Cohen Smutny (Chair, ITA Advisory Board, White & Case LLP, Washington, D.C. and Lucinda A. Low (President, ASIL, Steptoe & Johnson LLP, Washington, D.C.), that this conference was taking place was itself an important step, as it moves the discussion of this issue beyond anecdotal concerns.  The approach of this conference was to first have the keynote speaker outline the issues; then to review academic scholarly work on this topic in order to understand why and how the lack of diversity is a problem; and finally, but importantly, develop some practical solutions.

The first question of why diversity is important was addressed by the keynote speaker Lucy F. Reed (Professor and Director, Centre for International Law, National University of Singapore, Singapore).  The answer at its most simple is because the world of international arbitration is global in its application and the world is diverse.  The second question is whether there is diversity; and again, the answer simply put is no.  Alternatively, a more nuanced answer to the same question is not as much as there should be.  To understand the lack of diversity in the larger context, what is the equation that leads to this result of low diversity?

The equation in this case is: caution + habit + bias = low diversity.

“Caution,” in this context, stems from the nature of international arbitration cases.  International arbitration cases are generally of some magnitude in terms of the amounts in controversy potentially at stake, cannot be appealed, and are relatively easily and quickly enforceable.  Parties involved are reasonable in wanting to entrust the arbitral process to those with experience.  Part of the lack of experienced practitioners stems from the history of international arbitration.  Originally the field was not well developed or even seen as a real field due to the view that this field was both very risky and soft (i.e. the law was governed less by the application of law and more by industry practices and commercial considerations–coupled without any surety of success).  There were few who were practicing in this field.  Historically, the pool was small and generally was made up of white, Western men.  This is important, because it leads into the next element in the equation, which is “Habit”.

As matter of habit, one tends to select those they already know and who are a reflection of themselves.  Times have changed for the field of international arbitration.  Bilateral Investment Treaties (BITs) have become more common, and specialized tribunals are not so unheard of (e.g., the Iran-United States Claims Tribunal).  In addition, the number of women who have entered the legal field has changed, yet this fact is not reflected in the selection of arbitrators.  One step that has been taken to address lack of diversity is the Equal Representation in Arbitration (ERA) Pledge.  One of the elements of the ERA pledge is to take an extra five minutes when thinking of that initial list of potential arbitrators – as there are women and non-European practitioners with solid experience, but who may not be as well known and who could be added to the list of names.  Of course, just a name included in a list does not equal diversity.

Another step taken to address lack of diversity being taken by the International Chamber of Commerce (ICC) is to release of all the names of the arbitrators involved in a proceeding, with the identifying information about the case removed.  This is enough information to get an overview of the expertise of those arbitrators involved in the proceedings.  This has resulted in slightly better numbers of women when an institute chooses an arbitrator.  Nonetheless, when a party makes a choice of an arbitrator, women are still underrepresented.  However, the pledge, the five-minute rule, and the release of names are some steps that help remove the issue of habit that is a hindrance without a point.

The last element in the equation is “Bias”.  Biases can be both conscious and unconscious.  Biases stem from what is familiar, especially when it is unconscious, so there is a stronger likelihood of selecting those who are most like oneself.  In international arbitration proceedings, many in the position of making the key choices tend to be white Western men.  Avoiding these biases of selecting those most like oneself requires affirmative research about the pool of arbitrators and public information more readily available about them.

A final point concerns the challenges of the field, as a whole.  There can often be many qualified applicants for few positions.  Newcomers need to know that persistence, patience, and realistic expectations are key to opportunities in this field.  She concluded with the counter equation “Inclusion + Patience + Persistence = Better diversity.”

Next, Conference Commentator, Gonzalo Flores (Deputy Secretary-General, International Centre for Settlement of Investment Disputes (ICSID), Washington, D.C.), started with some history of the lack of women in international arbitration.  Initially there was the lack of women in the field of law, then the lack of discussion of gender issues, and then a lack of transparency of the number of women in international arbitration.  Today, the discussion has expanded to include a combination of issues such as the inclusion of women, newcomers, and non-Anglo/Europeans with solid experience in international arbitration.  One of the steps to address this issue is an example from the International Centre for Settlement of Investment Disputes (ICSID).  ICSID has created a database that allows one to search arbitrators, conciliators, and ad hoc committee members.  ICSID also publishes the statistics of caseloads for each year.  From these reports, it is now easier to track how much the situation is changing.

 

Come back tomorrow for Part II of our recap of the ITA-ASIL Diversity and Inclusion in International Arbitration Conference.

ASIL 2018 Recap: International Law and the Global Governance of Migration

By Rachael Smith

Professor Alexander Aleinikoff  (Zolberg Institute on Migration and Mobility, The New School, New York) started with a brief statement about the progress of the United Nations High Commissioner for Refugees (UNHCR).  He mentioned the seventy years of practice, and billions of dollars spent on resettlement, along with a legal regime for refugees, as signs of progress.  However, what he found troubling was the phenomenon of a “second exile”; that as per established refugee law, the first nation a refugee arrives in is where they must stay.  The legal options for migration to another nation are limited to none, and going back to their country of origin is not a viable option.  While there are legal arguments and policy reasoning for this, these do not address the possible negative impact on both refugees and the nations.  For example, the first country may be ill equipped for resettlement, e.g. Syrian refugees in Turkey.

The UN General Assembly has begun to address this weakness as part of their overall Global Compact on Refugees.  They have drafted for release mid to late this year a way for nations to share the responsibility as one way to address this issue.  Among the possibilities would be special passports that would allow refugees the possibility of travel to resettle.  In addition, there would be something akin to a “full faith and credit” of accepting refugees as part of economic development with other countries, such as in the case of Bilateral Investment Treaties (BITs).  This would balance the questions of national sovereignty in accepting refugees with being a second or third choice for the placement of refugees.  This would also allow those who have jobs and can self-support the ability to travel as a way to encourage self-sufficiency and economic development.  His last point was how this could create a more coherent regional approach to the resettlement of refugees, for not only the European Union nations, but could be used as a model for other Western nations.

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The panel for the “international Law and the Global Governance of Migration” session at the ASIL 2018 Annual Meeting.

Alice Thomas (Refugees International, Washington, DC) discussed how climate change could be both a major factor and one of many factors in migration.  In addition, climate change can be both a slow and a sudden process – for example rising sea levels and small islands or extreme weather that produces floods and landslides. Under the current legal framework, many people affected by climate change are classified as either economic migrants or internally displaced people – but not as refugees.  This has meant the approach has been an event-by-event system (e.g. in the United States the Temporary Protected Status granted to Haitians).  Currently, things are slowly changing but the focus has been more on adapting in place – how can nations help their own citizens stay in place (e.g. support to build homes that can withstand storm surges).

Michelle Leighton of the International Labor Organization (ILO) started her discussion with a description of the current conversation around immigration–that for many nations the general nature has been toxic.  She noted that most of the dialog is one of fear and an “us versus them” as a way to frame the debate.

She went on to say that the immigration debate is at a crossroads.  Nations can choose the path of seeing immigration as a benefit.  One way to do this is to focus on the immigration recruitment process for employment.  This is one way to combat issues like global human trafficking and the exploitation of workers.  This would also allow for better knowledge of the national and international employment recruitment processes.  This could mean better collection of data, along with a better matching of skill sets to the labor market needs.  This system could also foster better cross-border cooperation.  In addition, this could help navigate the sovereignty question by emphasizing that this is voluntary. She ended by noting how this would also create a path to social justice, as this issue is global in nature.  The ILO, with its 187 members, represents an already voluntary legal framework and can work in partnership with the UN.

Jean-Christophe Dumont (World Bank) started with how migration can be framed as part of broader issues of criminal justice and crime control.  The use of coercion and exploitation in the migration process has been linked to organized crime and terrorism– especially as they target the most vulnerable in a community, basically ensuring no reports will be made to a nation’s authorities.

Guest worker programs are one way to combat this issue.  Through them, the focus can expand to both skilled and unskilled labor.  This is important as unskilled labor is less regulated than the skilled labor market, which tends to be more highly regulated.  One current issue is that there is no one centralized institution to help monitor and regulate guest worker programs.  Depending on the nation, the regulatory framework may not even be present for local labor markets.  In addition, the current immigration and labor market debates and discussions are not about protections of workers.

One of the vulnerabilities of workers is the use of debt in the employment recruitment process as a way to exploit workers.  Debtors are vulnerable to a wide range of exploitation–both of themselves and potentially family members (either with them or in their home country).  Debtors are also seen as voluntary in their participation–despite the fact that their debt is of such enormity that it will likely never be paid off.

Jean-Christophe Dumont ended by discussing how the Organisation for Economic Co-operation and Development (OECD) has set trends for countries to co-operate by addressing immigration for the long term.  This would allow for better migration policies as well as innovation-–such as the use of Block Chain as a way to verify the identity of refugees.