Leadership and character

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:

"On the other hand, Confucius goes on to relate, the following are things no leader should do: 'Cruelty — leaving the people in their native ignorance, yet punishing their wrongdoing with death. Oppression — requiring the immediate completion of tasks imposed without previous warning. Ruthlessness — giving vague orders, and then insisting on punctual fulfillment. Peddling husbandry --stinginess in conferring the proper rewards on deserving men.'

Confucius must have worked here in the Philippines. Wannabes usually fall into a similar pattern: the up-at-dawn workout buff, the intense participant and note taker in meetings, the swagger in corridors with the ever-present sheaf of papers, the always-late-for-the-next-meeting demeanor, the propensity to play favorites to sycophants, 'elitista' in the shallow 'sosyal' sense of the word, and the stealing of credit due to others. However, the most common similarity is that wannabes never get anything done or are never known for being good at anything whatsoever, be it in a technical area or some other field. All that activity with nothing to show for it, compounded by high staff turnover, low employee morale, and minimal profits. Obviously, guys like that haven’t read The No-Asshole Rule, or Nudge by Thaler and Sunstein."

Trade disputes: asymmetry and policy mechanism

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:

"The analogy necessarily made with regard to the settlement of trade disputes rests on certain levels, whether it be on the formative, normative, or substantive sense. The toolbox analogy is commonly employed, particularly when defining the settlement of disputes as an allocation of certain rights between State parties to the dispute.

Nevertheless, the analogy, while presenting in a certain sense the diversity of available mechanisms within which such rights, liabilities, and obligations are to be recognized, all of which it must be considered still fall within the parameters and restrictions laid down by general conceptions of what we consider to be sovereignty in its internal and external sense."

Cars, plans, and bailouts

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:

"However, the biggest difficulty I have with the bailout is that it serves as a horrendous justification for underperforming companies in poor countries like the Philippines. If the US auto bailout is given, watch out for our own local industries to ask for their own handouts from an already admittedly cash-starved government. And the problem with any government support here is the lack of monitoring systems involved, i.e., where will the money actually go? This is not the time to transfer taxes paid by poorer Filipinos and put them in the hands of wealthy but mediocre company owners.

The better thing to do is not to save the companies and just let them ride it out on their own. Either they innovate, improve, or go bankrupt. Definitely we have to care for the workers that will be displaced but not the wealthy that have mismanaged and let their companies go uncompetitive."

Economics and national interest

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpt:

"I am a believer in liberalized trade and open economies. I believe in the benefit it brings to our people. I believe that we are a better country because of globalization and trade. However, the DoF actions exemplify exactly how erroneous, how wrong, our participation is in the global economy. For the system to work, no country should play the FOOL and each country should strive to protect its own interests, its own sovereign national interest. Our government’s duty is not to watch out for WTO compliance, that’s the job of other countries. If they say we’re not WTO compliant they have the burden of proving it. Our own government should not be acting as lawyers for other countries (although I must say that the lack of competent international lawyers may also have a hand in the present system or government mentality which obviously needs improving). The other countries, such as the US and France, will not be offended if we do this. In fact they’ll respect us even more because they themselves are always acting for their own country’s interests. Let us care for our own, our fellow Filipinos, because nobody else will."

The MOA and of good intentions

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld.

It is said that the road to hell is paved with good intentions. In the Philippines, it’s not only paved, it’s furnished, lighted, and gilded with it. A good example is the Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on Peace. It’s unbelievable how such an agreement could have been entered into by the government, considering its provisions’ sheer disregard for the interests of the Republic. This article will not dwell on the Constitutional process aspects of the MOA and instead focus on the international law issues. Peace is, of course, always something to be desired but if there is one thing that we Filipinos should know by now is that peace at any price always ends up costing way too high.

The MOA essentially begins with acknowledgments from the government of the Bangsamoro rights. Then it goes on to identify the Bangsamoro as the natives, Muslim or not, of Mindanao, including Palawan and Sulu at the time of colonization, their descendants, whether mixed or of full blood, and their spouses. The MOA then designates the territory of the Bangsamoro as the land – as well as waters, airspace, and atmospheric space – embracing the Mindanao-Sulu-Palawan geographic region. The Bangsamoro Juridical Entity is mandated to have jurisdiction over those areas, including “territorial waters”, as well as the use of resources. Finally, the BJE is free to enter into any economic cooperation and trade relations with foreign countries, establish trade missions in other countries, and enter into environmental treaties.

With that, our government almost got away with allowing a group of people to dismember our Republic and to have another State carved out away from us. For as the Supreme Court rightly caught on, the government incredibly gave the MILF all the requisites of a State as provided under the 1933 Montevideo Convention: people, territory, government, and the capacity to enter into relations with other States. How anybody could miss this point, specially those negotiating on behalf of the interests of our Republic, is beyond me.

That this is not accidental is shown by the fact that our government also conceded to the BJE the application of the status of “associative State”, which the Supreme Court again (thank God) rightly caught as being wholly inappropriate because such concept indicates the existence of an entity that is on its way of being a separate State. A State, it must be emphasized, that will get portions of OUR territory, OUR resources, and OUR people.

That this was deliberate is shown from the fact that our own government insisted in applying the concept of self-determination to the Moros, contrary to the clear and overwhelming declaration by international law that ethnic, religious, or cultural groups have no rights of self-determination. Again, the Supreme Court was quick to point out this quite obvious fact of which only our government seems oblivious to.

Granted, there is the UN General Assembly Resolution 61/295 which allowed indigenous people the right to “internal” self-determination, which is more limited in scope, allowing merely for their economic, social, and cultural development (along with a certain degree of autonomy) but a far cry from allowing them independent status or statehood. It must be emphasized that this Resolution was signed September of last year, with 143 countries voting in favor (the Philippines included), and Australia, Canada, New Zealand, and the US against. This is a brazen act of incredible negligence to protect the interests of our Republic. There were ongoing negotiations at that time with the Moros and our government thought nothing about signing a Resolution that essentially agreed to a point demanded by them? Eh ano ngayon kung 142 countries pumirma doon? We had the option of not signing it, considering the ongoing negotiations with the MILF. Porque may international agreement pirma agad tayo para makisama lang sa ibang bansa? Ano ba talaga trabaho nila, magpasikat sa cocktail parties sa diplomatic circuit at magpakitang gilas sa Ingles, o ilaban ang kapakanan ng bayan?

The problem is that international law works in a manner quite different from that of a local or “municipal law”. If our government interprets international law in a certain way, that interpretation is binding to a certain degree on it. For the government to interpret international law in a manner conceding statehood to the Moros is an ignominy. To conduct the negotiations substantially from the perspective of international law and not Philippine law (the Constitution wasn’t even mentioned in the MOA) is unbelievable. Even though the Supreme Court did render the MOA unconstitutional, nevertheless, this government just made it tremendously more difficult to negotiate in the future with the MILF in a manner that will protect our Republic’s interests.

Our officials have one duty, particularly in matters of international law and relations: uphold Philippine interests. If they can’t grasp that, they don’t deserve – they are a shame to – their office.

Defending the free market

... is the topic of my latest Trade Tripper column in this Friday-Saturday issue of BusinessWorld. Excerpts:

"Not many people now are willing to defend the free market and even those I thought who would come out in its defense (as they were such vocal advocates in better times) are all suddenly silent. If they won’t defend it, then I will: the free market is the best system we have and we should ensure that we do not revert to a protectionist, closed economy mind-set.

To judge the global free market as defective and should be done away with it due to the events happening in Wall Street is as illogical as saying that the Catholic religion should be terminated because of a few pedophile priests. As Churchill would say, democracy may not be perfect, but it’s the best that we have. And the free market system is the best that we have, with no alternative able to credibly assert itself even in these troubled times."

Cuisine that reigns supreme

. . . is the topic of my latest Trade Tripper column in this Friday-Saturday issue. Excerpt:

"There are also statements that Filipino food is too salty or too fatty or too whatever. These conveniently ignore the fact that China must have one of the highest diabetes or heart disease rates, the French have cirrhosis, or the Americans have an obesity problem, and that Filipinos are still among the happiest people in the world.

I can’t even understand the giggly adoration some of our countrymen have on foreign cuisine. Soufflé? It’s airy mamon. Pot au feu? It’s beef nilaga. Ratatoulie is pinakbet. A daube is kaldereta and thom yan is sinigang and Hainanese chicken rice is tinola. Obviously there are differences, but food is food and the variations come due to the use of locally available ingredients. It must be noted that Filipino food generally doesn’t resort to heavy spices or sauces for the simple reason that, unlike other countries, our ingredients come fresh and doesn’t need any flavor disguises. After all, the initial value of spices and smoking and sauces was to hide the taste of food that had already gone a bit bad. We had no need for such trickery because we’ve always had relatively an abundant and readily available supply of food."

Of the GRP-MILF MOA

The news most discussed right now, of course, is of the GRP-MILF Memorandum of Agreement on Ancestral Domain. The essential purpose of the MOA is the amendment of the Organic Act establishing the Autonomous Region in Muslim Mindanao. The main problem with this agreement, like the JPEPA, is the secrecy within which it was negotiated. As with anything unknown or unfamiliar, it has spawned numerous fears ranging from loss of national territory to speculations that it may be used to extend certain term limits. This article will focus on international law principles, particularly those relating to the proposed expansion of territory for the Bangsamoro entity that hopefully could be of some use in framing within the proper context the inevitable (but welcome) public debate on the matter.

In this regard, note must be made of the preambular words of our constitution (“conserve and develop our national patrimony”), which is then to be read within the context of the definition of national territory found in Article I. Article XII, Section 2, is also relevant in that “with the exception of agricultural lands, all other natural resources shall not be alienated” but with the exception that “Congress may provide for the applicability of customary laws governing property rights or relations in determining the ownership and extent of ancestral domain.”

The thrust of all the foregoing is to maintain stability and unity of the Filipino way of life, be it Muslim or Christian, and this includes maintaining the integrity of our national territory. In this context, note that the presidential oath contains the mandate to preserve and defend the Constitution and execute our laws. The significance of all this is highlighted by the fact that a violation of any of the foregoing could be considered an impeachable offense.

Another thing that must be emphasized, particularly when read in the context of news that flags of independence have been waived by the MILF, is that there IS NO JUSTIFICATION UNDER INTERNATIONAL LAW FOR THE CREATION OF A SEPARATE LEGAL ENTITY. What is really disturbing here is the impression circulated by some parties that the right to “self-determination” could serve as the basis for creating (or eventually creating) such a separate entity and that by doing so we are being a “good international citizen” complying with “modern interpretations” of international law. This is complete crap. If a separate Moro republic is created, it is simply because we allowed it and recognized it for some inexplicable reason. There is simply no international law that requires or compels the Philippines to agree to a separate entity carved from its national territory.

Incidentally, due to the nature of international law, I urge everybody to take care in the use of words and avoid terms like “war” (admittedly an outmoded concept), “armed conflict”, “rebellion”, “belligerency”, and “self-determination”, or employ any action (like giving the appearance of State to State discussions) that even hints at the possibility that the situation in the South is more than a mere internal or domestic matter for which only domestic laws are applicable and the constitution is paramount.

In any event, as I wrote previously, the right to self-determination applies only with regard to colonial peoples. It is essentially a right against colonialism and foreign military occupation. IT DOES NOT GIVE LICENSE TO SECESSSION. It is well worth reiterating, again and again if need be, that the right to self-determination does not allow a minority group to secede and become an independent State.

This right to self-determination could be found in the United Nations Charter, the two 1966 Covenants of Human Rights, several General Assembly Resolutions, such as GAR 2625, as well as GAR 1514 of 1960 (or The Declaration on the Granting of Independence to Colonial Territories and Peoples). It must be emphasized that the latter Resolution pointedly states: “Any attempt aimed at the partial or total disruption of the national unity and the territorial integrity of a country is incompatible with the purposes and principles of the Charter of the United Nations.” Indeed, insofar as cultural, religious or ethnic minorities are concerned, no general rights under the ambit of self-determination are actually applicable to them. International law justly recognizes (even if our government doesn’t) that the demands of political stability and territorial integrity of States are simply too important.

The maintenance, therefore, of the Philippine’s territorial integrity takes priority over any right, whether it be collective or individual, including those claimed under self-determination. As succinctly put by former UN Secretary General U Thant: “The United Nations has never accepted and does not accept and I do not believe it will ever accept the principle of secession of a part of a Member State.”

We have to remember that so many of our forefathers sacrificed their lives just so that every inch of this land will be ours. Everybody wants peace but for the Philippines in this instance the price is just too high to pay.

ASEAN and its existence

One of the more interesting reads I had in the past few days was a paper that dwelt with the question on whether ASEAN actually exists. This is not as banal as it sounds. One of the popular myths that still prevail is that the GATT (or the General Agreement on Tariffs and Trade) was an organization. It wasn’t and it’s not. The World Trade Organization is indeed that. As provided by the Marrakesh Agreement Establishing the WTO, the “WTO shall have legal personality, and shall be accorded by each of its Members such legal capacity as may be necessary for the exercise of its functions.”
In short, the WTO is an organization, with a personality separate and distinct from its members, while the GATT is not. The latter is a mere treaty and the give-away to this is that the so-called “members” of the GATT were never referred to as such but rather as “contracting parties”.
As far as the ASEAN is concerned, the doubts as to its existence as a legal entity are certainly there. The paper (to be presented in final form at the Asian Law Institute conference in Singapore 22-23 May 2008, with final publication anticipated in the Singapore Yearbook of International Law), by Simon Chesterman of the New York University School of Law Singapore Programme, quotes our very own Rodolfo Severino, former Secretary-General of ASEAN, as saying that ASEAN “is not and was not meant to be a supranational entity acting independently of its members.” He is again later quoted confirming this in more direct terms when he declares that ASEAN lacks “juridical personality or legal standing under international law.”

Indeed, the position that “ASEAN was intended to be a kind of social community, rather than a legal community” is bolstered by the fact that the ASEAN Charter, adopted in 2007 although not yet in effect, has a provision stating that “ASEAN, as an intergovernmental organisation, is hereby conferred legal personality.”

What is the importance of determining whether the ASEAN does have legal personality? To be blunt: a lot. The treaty making powers of an international organization, it’s capacity to own property, to sue or be sued, to have diplomatic representation, along with all the general and implied powers of any international organization, as well as recognition to it and it’s legal status under municipal law, all stem from the fact of an international organization’s possession of international legal personality. The question regarding an international organization’s status under municipal law is actually a complex and contentious issue within international law circles. Our own Supreme Court has touched on the matter on various occasions, most notably in the case of the World Health Organization vs. Aquino (48 SCRA 242) and Holy See vs. Rosario (238 SCRA 524), although the direct issue on those cases was the availability of the right to diplomatic immunity.

ASEAN was “founded” on 8 August 1967 with the signing of the ASEAN Declaration. Those with a bent towards mysticism will note that for some reason the number “5” figures widely for ASEAN. The Declaration has 5 preambular paragraphs and 5 operative paragraphs, with 5 original parties to it: Philippines, Indonesia, Malaysia, Singapore, and Thailand. Former President Fidel V. Ramos’ father, then Foreign Affairs Secretary Narciso Ramos, represented the Philippines in that Declaration. On the other hand, the ASEAN Secretariat was established only in 1976 and is based in Indonesia. Just to give you a sense of how small the WTO Secretariat is (and debunking the myth that it is a super organization dictating to the world’s economy), the ASEAN Secretariat has around 200 personnel while the WTO Secretariat has around only 600. ASEAN has 10 members, the WTO has 152.

In any event, Professor Chesterman does concede, for a host of international law principles and jurisprudential reasons, that the ASEAN has legal existence and I leave it to his paper to explain itself as it does so obviously more competently than my 800 word column. Nevertheless, I also do agree with the point raised by Professor Chesterman that more important to the question as to whether the ASEAN does exist is whether ASEAN actually matters.

I, narrowing the discussion to Philippine interests’, would also like to point out that while calls for an ASEAN charter and acceleration to achieve an ASEAN community could all be good, we do have to ponder one essential fact: what may be good for ASEAN may not necessarily be good for the Philippines. Note that the three countries most enthusiastic for greater integration (i.e., Malaysia, Thailand, and Singapore) have one thing in common: strong economies that keep getting stronger. The Philippines is not in that league, yet. In the end, by allowing ourselves to join in the ASEAN integration hoopla we may, in the end, be just used in preparing a feast that only others could enjoy.

Sovereignty, the Philippines, and the WTO

(lecture given at the Ateneo in 2005)

There is this comment commonly known to all and that is that “all politics is local” . A seeming corollary to this is the comment made by Professor John Jackson that “all economics is international”. It is in these two statements - specifically on what they imply - that a lot of the tension has arisen with regard to the development of “jurisprudence” on international economic law and the present developments in the multilateral trading system.

This tension is essentially distilled into one word and that is: sovereignty. It is this word, this concept, by which the present rules on international trade are most shaped, by which jurisprudence struggles with, and by which the World Trade Organization is in the shape that it is in right now.

The interesting thing about this concept is that it has all been written off by international legal scholars as a mere “nuisance”. Just the other day I have heard - again - a comment by an eminent legal personality that sovereignty is not the thing that it once was, so far removed is it from the original 17th century Westphalian concept of the same.

That may all be well and good but when you see the developments happening in all the other parts of the globe that you see that the comments and observations of intellectuals, as is sometimes the case, registers a disconnect with what happens in the real world. Thus, you see France trying to block the entry of foreign players into its domestic business environment, the EC doing the same to a number of American firms, all under the guise of security or upholding of competition policy laws. While not discussing the merits of the said grounds the fact still remains that foreign investment and trade is being hampered. If one still does not see the possibility of a strong reliance on the concept of sovereignty, as pushed by an increased nationalism, on the part of nations, particularly the developed countries, one only has to look at Chinese and Vietnamese shoes intended to be exported to Europe to get the point.

So, the fact still remains that, far from being an “eroded” concept, sovereignty is still strongly relied upon by politicians, activists, lawyers, and government officials of individual States. The problem here is that, what exactly is sovereignty that so many are relying on? When you listen to our elected representatives, trade activists, musicians and artists, pundits, and even your law professors, what exactly is this concept of sovereignty?

The fact is that the concept of sovereignty is highly ambiguous and this is essentially why there is this tension between international trade and domestic laws, between national rights and the multilateral trading system. If there is a indeed a defined concept of sovereignty then that definition - as experience would show and this lecture seeks to discuss - would most probably be only in the mind, with only the most tenuous link to reality.

Thus, unless this thing, this “sovereignty”, is resolved, there would only be continuing problems in the multilateral trading system, from implementation of the rules to the carrying out of an effective dispute settlement system.

We discuss and elaborate on all these points in order:

A. Ambiguity of sovereignty in Philippine law

Every law student has memorized in his or her head the definition of sovereignty as written in the textbooks. Thus, Justice Isagani Cruz writes in his political law that sovereignty is the “supreme and uncontrollable power inherent in a State by which that State is governed”. According to Justice Cruz, there are two kinds of sovereignty: legal and political,

“Legal sovereignty is the authority which has the power to issue final commands whereas political sovereignty is the power behind the legal sovereign, or the sum total of the influences that operate upon it. In our country, Congress is the legal sovereign, while the different sectors that mold public opinion make up the political sovereign.

Sovereignty may also be internal or external. Internal sovereignty refers to the power of the State to control its domestic affairs. External sovereignty, which is the power of the State to direct its relations with other States, is also known as independence.

Sovereignty is permanent, exclusive, comprehensive, absolute, indivisible, inalienable, and imprescriptible.”

Dean Mariano F. Magsalin, Jr., in his book, discusses sovereignty as follows:

“Sovereignty: The supreme power of the State to command and enforce obedience, the power to which all interests are practically subjected and all will subordinate. It is also defined as freedom from outside control in the conduct of internal and external affairs.

Dual Aspect. Internal sovereignty is the supremacy of a person or body of persons in a State over the individuals or association of individuals within the area of its jurisdiction. External sovereignty is the absolute independence of one State as a whole with reference to other States.

Kinds. Legal sovereignty is the possession of unlimited power or authority that by law involves the power to issue final commands. Political sovereignty is the sum total of all the influences in a State which lie behind the law. It is also described as the power of the people.

Characteristics.

Permanence. Sovereignty continues to exist without interruption as long as the State itself exists.

Exclusiveness. There can be but one supreme power in the State legally entitled to the obedience of the inhabitants.

Comprehensiveness. Sovereign power extends over all persons, associations, and things within territorial limits.

Inalienability. The State cannot cede away any of its essential elements without self-destruction.

Imprescriptibility. The powers of the State cannot be lost as a consequence of its non-assertion or non-exercise through a period of time.

Unity. The power cannot be divided without producing another State.

Those definitions, concepts, and enumerations of characteristics and attributes are all pretty well and good for the law student to study and memorize, in preparation for exams (most particularly the Bar exam), and in essence such are the intentions anyway of the authors. However, in practice, the said definitions do nothing by way of guidance.

Going back again to the definition of sovereignty: “supreme and uncontrollable power inherent in a State by which that State is governed”. The words, while high sounding and majestic, as befits the concept they are supposed to define, are hard to actually put down in the messy world of reality.

Sovereignty is supreme? Supreme as to whom? Definitely not as against other States. Supreme over the people? What then of the concept called the political sovereign? Even then, as our one of two important Supreme Court case on sovereignty shows, the same is not supreme and could be bargained away as is necessary. It is “uncontrollable”. What does uncontrollable mean? How in practice can this uncontrollability be illustrated? Even then, our Supreme Court cases show a sovereignty that is manageable not uncontrollable.

We leave the third clause and focus on the fourth first: “by which that State is governed”. This does not make sense. The State is not governed by sovereignty, sovereignty is an attribute of the State. If not, then this would be contrary to the concept of the legal sovereign and of internal sovereignty.

Again leaving the third clause and moving first to the attributes of sovereignty, one can see that again the same leaves no cause for guidance. The attributes were culled from the Supreme Court case of Laurel vs. Misa, by which it is enumerated as follows: permanent, exclusive, comprehensive, absolute, indivisible, inalienable, and imprescriptible.

Perhaps no discussion is possible on the attribute of permanent and exclusive. Note, however, that with the concept of pacta sunt servanda, exclusivity is a little bit mitigated because if the State itself is obligated to comply with its international obligations then indirectly so does it citizens. With regard to the attribute of comprehensive (“sovereign power extends over all persons, associations, and things within territorial limits”) this isn’t exactly accurate as persons or organizations granted State immunity (as differentiated from diplomatic immunity or immunity from the jurisdiction of local courts) are not exactly under the sovereign powers of a State. As to the “absolute” attribute and “indivisible”, what do they exactly mean? They have not been defined either by jurisprudence or by that of legal commentators. If “indivisible” would such have a bearing if our republic becomes a federal society? What, in practice, could be mean? It is interesting to note that in Tanada vs. Angara , the Supreme Court uses the following words: “By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their State power in exchange for greater benefits granted by or derived from a convention or pact.” And it continues: “[As illustrated by numerous existing treaties of which the Philippines is a party to], the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting States in granting the same privilege and immunities to the Philippines, its officials and its citizens.” Of “inalienable”, what is the extent of this “inalienability” as can be seen vis-à-vis the case of Tanada?

We go now to the third clause and this is most interesting: “inherent in a State”. This presupposes that sovereignty is that which is necessary to be there in order for a State to be considered as such. So we go now to a discussion on what is a State.

“States”, as defined by Cruz: is a group of people, living together in a fixed territory, organized for political ends under an independent government, and capable of entering into international relations with other states.

The following is what the definition of a State is as enunciated by the Supreme Court: “A community of persons, more or less numerous, permanently occupying a definite portion of territory, independent of external control, and possessing a government to which a great body of inhabitants render habitual obedience.”

The foregoing definitions, presumably, were culled from the provisions of Article 1 of the 1933 Montevideo Convention on Rights and Duties of States: “the state as a person of international law should possess the following qualifications: permanent population, defined territory, government, and capacity to enter into relations with other states”.

Two things: the Montevideo Convention didn’t exactly define what a State is, it merely described what are the attributes that a State should have. Secondly, the Montevideo Convention has traditionally been accepted as reflecting generally the requirements of statehood under customary international law

For our purposes this evening, we will not discuss the other three attributes (people, territory, government) and, instead, focus on the fourth: the capacity to enter into relations with other States. This is not exactly the concept of sovereignty. What this fourth requirement actually denotes is an attribute of independence. In order to conduct relations with other states, a State must be legally independent from the authority of any other State.

The concept of sovereignty is different from the concept of independence. This much alone is admitted by the writings of two of our legal experts. Justice Cruz goes on in his International Law that:

“Independence has been described as the external aspect or manifestation of sovereignty, that is, the power of the State to direct its own external affairs without interference or dictation from other States. The degree of its freedom in this regard determines the status of the State as an international person.”

Father Bernas goes on to define as sovereignty in the following sense:

“Sovereignty means independence from outside control. The Montevideo Convention expresses this in positive terms as including the ‘capacity to enter into relations with other States’. This latter element of sovereignty, however, is dependent on recognition.”

So note must be made that Cruz says that “independence has been described as the external aspect or manifestation of sovereignty”. Bernas, elaborating on his first sentence, states that “capacity to enter into relations with other States”, is an “element of sovereignty”.

The point is, independence is different from the concept of sovereignty. Sovereignty is not the “capacity to enter into relations with other States”. Taking the foregoing with the above dissection of the accepted local definitions of sovereignty and its Supreme Court enunciated attributes, do we really have any practicable workable idea of what sovereignty is? The seemingly inescapable conclusion is: none.

We move our discussion to how sovereignty is explored by international law writers working either in foreign jurisdictions or in the international arena.

B. Sovereignty as an international law concept

Notably, the intellectual origins of international law run concurrently with the development of sovereignty. Two leading figures were Hugo Grotius and Gentillus, both theologians by training. Their thesis simply was that international law was municipal law writ large. However, note that boundaries of nations do not move as the boundaries of private estates do. The doctrine of equality of States was introduced into the theory of international law by the naturalist writers. Thus:

“By nature all nations are equal the one to the other. For nations are considered as individual free persons living in a state of nature. Therefore, since by nature all men are equal, all nations too are by nature equal the one to the other.”

This doctrine sees equality despite differences in size, power, wealth, etc. See Art. 2(1) of UNC: the organization is based on the principle of the sovereign equality of all its members.

Due to the problems of the concept of equality, the better view however is to equate equality with independence. The following are the legal consequences of sovereign equality:

Prima facie jurisdiction over a territory and the population living there
States have a duty of non-intervention in the area of exclusive jurisdiction of other states

- No state can claim jurisdiction over another
- The courts of one state cannot question official acts of another state taking effect within the latter’s jurisdiction
- Municipal courts will not exercise jurisdiction over a foreign sovereign in his public capacity

Jurisdiction of international tribunals depend on the consent of parties

- In the Eastern Carelia Case of 1923 , PCIJ ruled: it is well established in international law that no state can, without its consent, be compelled to submit its disputes with other states either to mediation or to arbitration or to any kind of pacific settlement

- Finally, note that international law has no concept of stare decisis

As to the concept of domestic jurisdiction, it is the principle that certain matters are within the exclusive competence of States and are not subject to international obligations (i.e. granting of nationality, treatment of nationals). Thus, as provided for under the UNC, Article 2, paragraph 7: “Nothing contained in the present Charter shall authorize the United Nations to intervene in matters which are essentially within the domestic jurisdiction of any State or shall require the Members to submit such matters to settlement under the present Charter; but this principle shall not prejudice the application of enforcement measures under Chapter VII.”

In practice, however, Art. 2(7) has been given a narrow interpretation, UN organs taking the position that if a matter is contrary to principles and purposes or peace and security, UN may override domestic jurisdiction considerations. “The corollary of the independence and equality of States is the duty on the part of States to refrain from intervention in the internal or external affairs of other States. x x x The general position is that the ‘reserved domain’ is the domain of State activities where the jurisdiction of the State is not bound by international law: the extent of this domain depends on international law and varies according to development.” “The relativity of the concept of the reserved domain is illustrated by the rule that a State cannot plead provisions of its own law or deficiencies in that law in answer to a claim against it for an alleged breach of its obligations under international law.” This limitation of the concept of domestic jurisdiction is also well illustrated by the power of a State to impose customs tariffs, which is presumably a purely domestic concern but nevertheless is regulated as well by international law.

Going back to sovereignty, there seems to be a consistent lack of unanimity even as to international law commentators in other jurisdictions as to what sovereignty is. Thus, for Glahn, sovereignty is the “ability to regulate its internal affairs without outside interference or control.” This, however, is very much suspiciously akin to the concept of independence, which, as we’ve seen, is an element of sovereignty.

Shaw focuses instead on the Montevideo Convention, particularly the phrase “capacity to enter into relations with other States”. For Shaw the “essence of such capacity is independence. This is crucial to Statehood and amounts to a conclusion of law in the light of particular circumstances. It is a formal statement that the State is subject to no other sovereignty and is unaffected either by factual dependence upon other States or submission to the rules of international law.” This is seconded by Harris: “When the Montevideo Convention refers to ‘capacity to enter into relations with other States’ as a requirement of statehood it is referring to independence.” This refers to “factual, as well as legal, independence from other States.”

Nevertheless, Shaw makes several important points: “The capacity to enter into relations with other States is an aspect of the existence of the entity in question as well as an indication of the importance attached to recognition by other countries. It is capacity not limited to sovereign nations, since both international organizations and non-independent States can enter into legal relations with other entities under the rules of international law. But it is essential for a sovereign State to be able to create such legal relations with other units as it sees fit. Where this is not present, the entity cannot be an independent State.” From this statement alone, one can see that capacity to enter into relations, independence, and sovereignty are three distinct concepts.

Now Brownlie approaches the discussion in another way: “Another perspective is provided by the notion of sovereignty as discretionary power within areas delimited by law. x x x Yet in all these cases the exercise of the power is conditioned by the law.” “In application of rules or in case of an absence of rules, the presumption is that States have legal competence or is one of incompetence. In the Lotus case, the Court decided the issue of jurisdiction on the basis that ‘restrictions upon the independence of States cannot be presumed’. However, there is no general rule, and in judicial practice issues are approached empirically.” Nevertheless, again, this seems to blur distinctions between independence and sovereignty and, this time around, talking as he does of “discretionary power within areas delimited by law”, of jurisdiction. He does interestingly point out that “in all these cases the exercise of the power is conditioned by the law.” The point here is that, whether he was actually talking of jurisdiction or of sovereignty, the implications are large, more so if he was indeed talking of the latter, talking as he does of the supremacy of international law (which is unacceptable in the domestic sphere).

This blurring between sovereignty and jurisdiction can also be seen in the following, by comparing Brownlie’s two paragraphs quoted immediately below:

“Sovereignty is also used to describe the legal competence which states have in general, to refer to a particular function of this competence, or to provide a rationale for a particular aspect of the competence. Thus, jurisdiction, including legislative competence over national territory, may be referred in the terms ‘sovereignty’ or sovereign rights’.

“Jurisdiction refers to particular aspects of the general legal competence of States often referred to as ‘sovereignty’. Jurisdiction is an aspect of sovereignty and refers to judicial, legislative, and administrative competence.”

Finally, you have John H. Jackson, who is, presumably from his writings, not that big a fan of sovereignty. For him, sovereignty is essentially a question of “power allocation”, although he does mention a legal commentator who calls it “organized hypocrisy”. In any event, he cites in one article the following types of sovereignty: “Domestic sovereignty [is the] organization of public authority within a State and to the level of effective control exercised by those holding authority; interdependent sovereignty [refers to the] ability of public authorities to control trans-border movement; international legal sovereignty [is the] mutual recognition of States or other entities; Westphalian sovereignty [is the] exclusion of external actors from domestic authority configurations.” However, Jackson does make a crucial point which is in a way a peripheral theme of this lecture and that is there seems to be no inherent or definite understanding of what sovereignty is and that the same seems to be dependent on custom and on the practice of each individual State.

If that were so, then the concept of sovereignty as understood here, is as good as any and thus it is to this concept, whatever it is, that we return.

C. Sovereignty, Tanada vs. Angara, and the WTO

Tanada vs. Angara was filed in 1994, heard in 1996, and in 1997 - or three years after the case was filed and two years after the WTO came into being – it was finally decided.

We will not discuss the details of the case and instead focus on the matters relevant to this lecture. Relevant is the contention by the Petitioners that our entry into the WTO violates Article II, Section 19 of the Constitution, which reads:

“The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.”

Also Article XII:

“Section 10. x x x The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.”

“Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”

I’m surprised they didn’t make reference to Section 13: “The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”

While the petitioners didn’t refer to Article III.1 of the GATT , which I think was relevant, they did make reference to the TRIMS:
“Article 2 - National Treatment and Quantitative Restrictions
1. Without prejudice to other rights and obligations under GATT 1994, no Member shall apply any TRIM that is inconsistent with the provisions of Article III or Article XI of GATT 1994.
2. An illustrative list of TRIMs that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994 and the obligation of general elimination of quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 is contained in the Annex to this Agreement.”

Most crucially, the petitioners made reference to Article XVI.4 of the Marrakesh Agreement Establishing the World Trade Organization:

“Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.”

Thus, in Tanada: “It is petitioners’ position that the foregoing ‘national treatment’ and ‘parity provisions’ of the WTO Agreement ‘place nationals and products of member countries on the same footing as Filipinos and local products,” in contravention of the ‘Filipino First’ policy of the Constitution.”

The Supreme Court, nevertheless, ruled against the petitioner:

“… while sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world.”

“By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their State power in exchange for greater benefits granted by or derived from a convention or pact. After all, States, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their otherwise absolute rights.”

“[As illustrated by numerous existing treaties of which the Philippines is a party to], the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting States in granting the same privilege and immunities to the Philippines, its officials and its citizens.”

This ruling is not without logic and it’s reasoning in fact is supported by international law literature. Thus, Brownlie states that: “The institutional aspects of organizations of States result in an actual, as opposed to a formal, qualification of the principle of sovereign equality. x x x Of course it can be said that on joining the organization each member consented in advance to the institutional aspects, and thus in a formal way the principle that obligations can only arise from the consent of States and the principle of sovereign equality are satisfied.”

Furthermore, international trade law commentators Trebilcock and Howse indeed agrees that: “All international treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or trade, constrain domestic political sovereignty through the assumption of external obligations. x x x … trade treaties that structure relations by reference to durable, well-defined substantive norms and objective dispute resolution procedures reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some form of legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade liberalization.”

The Catholic Church’s doctrine, enunciated in Number 435 of the Compendium of the Social Doctrine of the Church, seems to be in agreement with the reasoning in Tanada vs. Angara: “National sovereignty is not, however, absolute. Nations can freely renounce the exercise of some of their rights in view of a common goal, in the awareness that they form a ‘family of nations’ where mutual trust, support and respect must prevail.”

In terms of logic and reasoning, there is indeed nothing much one can say with which the Supreme Court met the concerns of the petitioners, at least those which we pointed out and leaving others to another time. However, it is the philosophical implications of the Supreme Court’s ruling that is of interest to us here and bears worth further examination.

Essentially, what the Supreme Court laid bare in the case of Tanada is a concept of “sovereignty” that is seemingly in keeping with the concept as apparently understood by international law commentators, albeit with its ambiguities, that at the same time is seemingly different from the concept of an absolute, indivisible, inalienable sovereignty, a sovereignty that is supreme and uncontrollable that had been the hallmark of previous or traditional national understanding of sovereignty.

In his annotation to the Tanada case in the SCRA, Jorge Coquia stated that: “It is obvious that the term “sovereignty” has now lost the meaning attributed to it in the past centuries. States may still be described as ‘sovereign States’ but their sovereignty is under the law to which they have bound themselves by the UN Charter. It is sovereignty in the fields of national law or domestic jurisdiction that lie outside the newer areas controlled by international law.”

This reading of the concept of sovereignty obviously jives with the reading of sovereignty by the Supreme Court in Tanada. Inasmuch as the judiciary and apparently the greater body of the legal academe is in agreement with this present understanding of sovereignty, the question that remains is whether perhaps such understanding is shared by the greater Philippine community.

D. Conclusion

“The erosion of the concept of ‘sovereignty’ in international affairs has been much commented on. Perhaps in no context more than international economic affairs has this erosion actually occurred.” Thus so says John Jackson, thus so says the Philippine Supreme Court. That statement seems to have been proven most true in the Philippines with the ruling in Tanada. Having said that, a cursory survey of the statements and declarations of other members of the body politic, from politicians and trade activists, NGOs and members of the general academe, the concept of sovereignty is still invoked with passion and resolute reliance.

The reason being is the undeniable ambiguity that the concept of sovereignty has. Whether it is ambiguity in the Philippine context or in the greater realm of international law study (by which our present legal understanding of sovereignty seems to be anchored on), sovereignty is still - in a workable, practicable, categorical sense - undefined.

This concern is furthered by the fact that there is a seeming acceptance, even favor, to this continued ambiguity. For bureaucrats because of the available policy space it creates, to activists and legal practitioners because of the wide parameters within which to shape advocacies, to politicians because its vagueness lends itself easily to rhetoric.

So what are the implications for the situation that we are currently in? For the WTO, the implication is a continued danger for the multilateral trading system. Member countries will continue to pull and tug at the provisions and the rulings of the DSB in a manner that may eventually derail the WTO both as a negotiating forum and as a venue for justiciable disputes. The probability has been forwarded that the WTO as a negotiating forum could be rendered naught but with its DSB still in full form. This I believe needs to be further examined because if the WTO as a negotiating forum is rendered meaningless, the lack of new trade rules that will reflect present trade realities will eventually render the WTO dispute settlement system futile. Now, some suggested remedies for this admittedly dire (perhaps) scenario are a) for the realm of public international law to find a solution to this definitional conundrum of sovereignty, b) for the WTO Members to come to an agreement that will circumvent this conundrum, or c) for the WTO Members to voluntarily desist from giving in to “sovereignty arguments”. All three remedies are highly difficult to achieve, particularly the last two for the reasons stated above.

For the Philippines the implication would be the continuation of the status quo, which is both a bane and a boon. Taking the positive side first, the ambiguity allows the Philippines a wide policy space within which to interpret the economic provisions of the Constitution and at the same time within which to formulate trade policy. On the minus side, the ruling in Tanada does paint the Philippines in a legal corner. For having conceded to a mitigated power of sovereignty and, if the writings of Coquia are of influence (which they are), a narrower scope of sovereignty (to mere domestic jurisdiction - which it must be remembered is narrowly getting construed by international law), then the Philippines may have just given itself a weaker legal justification for an aggressive trade policy if it so decides in the future. On a wider view, the lack of a determined compass within which to guide ambiguities in our trade future would certainly have to be engaged sooner or later.

I think I shall stop here.

A Filipino above all

(written in 2005)

“Florentino P. Feliciano is a towering scholar in international law.”

So begins Michael Reisman’s essay A Judge’s Judge: Justice Florentino P. Feliciano’s Philosophy of the Judicial Function. In a profession where verbal precision is a virtue, the label placed on Justice Feliciano is laserlike in its application. In the inherently difficult field of public international law, Feliciano stood out. In the incredible complexity of international economic law, it is his intellectual stamp that permeates.

In Cambridge where geniuses abound, his arrival for a lecture on WTO jurisprudence gave everybody cause for excitement. In a place where Jennings, Higgins, Crawford, and Hawking mingle casually among students, he was heralded. And he is a fellow Filipino.

I once asked a question regarding the relationship of sovereignty and WTO rules during a talk he was presiding. He gave, on the spot, an analysis on the nature of sovereignty of utter precision and sophisticated nuance that is so sadly lacking in present day legal discussions.

International economic law, of which the WTO is its main engine, requires analysis of a depth and accuracy almost beyond the reach of most other branches of law and it is Justice Feliciano’s contributions that can be considered as the primary framework for its present existence.

He was born in 1928, graduating in law from the University of the Philippines, later earning from Yale his Masteral and Doctorate Degrees. As a private practitioner, he worked on corporate law, intellectual property rights, banking, insurance services, shipping, telecommunications, and international commercial arbitration.

His work in the ICSID is highly respected, as well as his work with the International Chamber of Commerce, Asian Development Bank Administrative Tribunal, and the World Bank Administrative Tribunal.

He taught in UP and at Yale, co-authoring (while in the latter) several writings with Myres McDougal. He also became a member of the Institut de Droit International and lectured at The Hague Academy of International Law. This is on top of his many scholarly published works on international law.

Justice Feliciano then joined the Supreme Court, serving as Associate Justice from 1986-1995. He would also chair the commission investigating the Oakwood mutiny.

However, it is his six year stint as member or Chair of the Appellate Body of the WTO that he would be most remembered.

From that post, he would pen the most significant decisions to date from that body, from the oft-quoted Shrimp-Turtle case (relating to trade, the environment, and State sovereignty), the US Foreign Sales Corporation tax case (which resulted in the biggest ever WTO permitted retaliation valued at US$4 billion), and a ruling on duties of imported steel which allowed the filing of amicus curiae briefs by NGOs and private individuals (other than WTO State members).

His attitude and work philosophy also serves as a useful guide for any aspiring lawyer, specially for any lawyer wishing to work on international economic law.

As related by Riesman, Justice Feliciano gave four characteristics required of a judge: humility, learnedness, sensitivity to social values in the law, and personal morality and integrity.

These characteristics, however, are applicable for any lawyer and the first is something truly necessary in today’s globally competitive legal practice.

Humility was described not only as the willingness to look all sides of the issue but also as “a clear understanding not only of his own personal limitations but also of the limitations of professional competence and of the judicial process itself … [coming to] realize that he has neither the commission nor the competence to solve all the problems of the nation and that there are other ‘workers in the vineyard’”.

Considering the multidisciplinary nature of international economic law, such words elegantly serve as a reminder of the demands of the field.

It is a sign of the level of reverence given to Justice Feliciano that a book, entitled “Law in the Service of Human Dignity: Essays in Honour of Florentino Feliciano”, was recently released (by who else but Cambridge?).

The book is a collection of essays from noted academics, international jurists, and respected international law practitioners. The collection contains “insights regarding the jurisprudence of world trade law, the changing landscape of investment arbitration, and other vital topics in international adjudication … [and will] be of special interest to World Trade Organization analysts as the contributors include six current or former members, as well as several leading trade law commentators.”

Among the authors are Michael Reisman, Rosalyn Higgins (of the International Court of Justice), James Bacchus, John Jackson (one of the acknowledged fathers of international economic law), and Mitsuo Matsushita.

Thankfully, a Filipino, Leo Palma of the WTO Law Advisory Centre, was among those invited to write and he contributed an essay on the participation of developing countries in WTO dispute settlement.

In a highly intricate and complex field, Justice Feliciano serves as an inspiring reminder of where clarity of thought, precision, attention to detail, and dedication can bring the Filipino.