The Charles N. Brower Lecture on International Dispute Resolution was given at 4:30 p.m., Thursday, April 9. The speaker was Professor W. Michael Reisman of Yale Law School.
CANUTE CONFRONTS THE TIDE: STATES VS. TRIBUNALS AND THE EVOLUTION OF THE MINIMUM STANDARD IN CUSTOMARY INTERNATIONAL LAW
By W. Michael Reisman *
One discontent with international investment law seems to be shared by both capital-importing and capital-exporting states: that investment tribunals exceed their proper limits in applying the so-called Fair and Equitable Treatment Standard, or FET. I submit:
first, that FET's vitality is a function of the type of rule it is;
second, that the diminished capacity of states to control FET's arbitral evolution is a consequence of the democratization of the contemporary customary international law process; and
third, that state efforts to confine the exercise of arbitrators' judgment in each application of FET, especially by trying to anchor it to the international minimum standard (the MST), are as futile as King Canute's attempt to control the tides.
But to make my case, allow me to begin with two excurses. The first is from the realm of legal theory and has to do with the types of rule formulations to which lawmakers resort, and the second is a comment on the nature of contemporary customary international law as it affects rules such as FET and the MST.
First, the rules: when lawmakers set out to enact policy into law, they have at their disposal two species of "rules." One species of rules transfers to the ultimate rule- applier the most limited exercise of discretion. Scholars, from John Austin on, have coined various terms for rules of this type. I propose to call them "verification rules," because their most salient characteristic is that they authorize those charged with applying them to do nothing more than verify compliance with an explicit metric. A mundane example might be that the swinging door to a washroom in a workplace must be no more than five inches from the floor. A momentous example is that an ICBM is to be fired by the officer in the silo only upon receiving a coded signal from the president of the United States.
Verification rules are binary, "either-or rules." Beyond that binary information, the factual and normative universe to which the person charged with applying the rules may turn is strictly confined to a few explicit variables, none of which includes general evaluative concepts such as fairness, equity, justice, minimum order, efficiency, or even common sense.
What we may call "evaluation rules," by contrast, do not contain a binary metric. Instead, they establish a goal that is expressed at some level of generality. For example, Article 39 of the United Nations Charter is an evaluation rule:
The Security Council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security. Realizing the goal of Article 39 requires its appliers (in this instance permanent representatives in the Security Council) to take account of a range of variables and to exercise judgment as to their contribution, in varying, idiosyncratic contexts, to realizing the goal that has been specified. Both evaluation and verification rules involve judgment, but that judgment is very different in terms of scope and methodology--evaluation rules import contextual as well as textual methodologies.
The legislator's use of verification rules generally increases as one descends the application ladder; resort to evaluation rules generally increases as one ascends the hierarchy. By that, I do not mean to suggest that verification rules are reserved for trivial or second-order policy issues. To the contrary--they may deal with matters of the gravest consequence. Consider, for example, rules that treat capital punishment. The prohibition of capital punishment, as found in Protocol 13 of the European Convention on Human Rights, (1) is a quintessential verification rule. Protocol 13 states in Article 1, under the chapeau "Abolition of the Death Penalty," that: "The death penalty shall be abolished. No one shall be condemned to such penalty or executed." Article 2 states that: "No derogation from the provisions of this Protocol shall be made under Article 15 of the Convention." To irrevocably nail down the absolute character of the prohibition, Article 3 states that: "No reservation may be made under Article 57 of the Convention in respect of the provisions of this Protocol."
Compare Protocol 13 to the Eighth Amendment of the U.S. Constitution: "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." The Eighth Amendment is an evaluation rule, inasmuch as it requires whoever is applying it to determine whether the death penalty is a cruel and unusual punishment.
In selecting a verification rule as the vehicle for their policy, legislators wish to drastically reduce, if not entirely exclude, the exercise of discretion by those downstream, who will be applying it. That wish notwithstanding, law is dialectical and parties in adversarial proceedings often try to force appliers to introduce evaluation considerations into an erstwhile verification rule. Thus, a judge in a state party to the European Convention on Human Rights or a judge on the European Court of Justice might be pressed to determine whether Protocol 13 prohibits "targeted killing" in a program authorized by the Security Council in a resolution under UN Charter Chapter VII.
The opposite may occur with evaluation rules. In a judicial system of stare decisis, evaluation rules may take on verification characteristics, if the unequivocal judgments of the highest court or a jurisprudence constante of other courts so decides. Thus, to stay with our capital punishment example, the Eighth Amendment's prohibition of cruel and unusual punishment might seem to have become an absolute prohibition of capital punishment, were the Supreme Court to unambiguously so decide--but only as long as the social, economic, technological, moral, and ethical variables at the time of each new judgment persist. The point is that it is in the nature of the linguistic structure of an evaluation rule that it retains the potential for reevaluation--even if the rule seems to have morphed in successive applications, into what is then taken as a verification rule, it always remains open to reconsideration in terms of other variables, including popular morality and ethics. In a system like international investment law, which purports to lack stare decisis, the application of evaluation rules, especially those whose variables reference popular moral or ethical conceptions, can always change or evolve.
State officials, when concluding treaties or (in uncoordinated but parallel action) shaping customary international law, are engaged in lawmaking. Depending on their specific policy objectives and their implementation scenarios, they will find both verification and evaluation rules useful. Both customary international law's minimum standard of treatment, or "MST," and the obligation to afford fair and equitable treatment--terms whose contents overlap, if they have not become congruent--are evaluation rules. Because each instance of application of evaluation rules such as FET and MST re-instantiates them in different contexts, they can scarcely avoid evolving, a fortiori, as social, economic, technological, moral, and ethical variables change.
This leads to my second excursus: a consideration of some features of contemporary customary international law and their consequences for certain evaluation rules and for the tribunals applying them and for the states in the dock before them.
Hans Kelsen explained that law--"nomos"--can be viewed in both "nomo-static" and "nomo-dynamic" terms. His distinction sets in relief the curiously contradictory ways in which international lawyers look at customary international law. Nomo- dynamically, customary international law is a video of an ongoing, informal, and unorganized process of consuetudo and desuetudo, of formation, confirmation, transformation, and termination of shared expectations and demands about the right ways of doing things. Nomo-statically, customary international law is one still frame of that video, a snapshot of those expectations and demands that were established in that informal and unorganized process of law formation. The snapshot redacts those expectations and demands as rules. But the resulting (and, to the positivist-inclined jurist, reassuring) nomo-static codex of customary international law begins to blur, in part, and change, in part, the moment it is redacted, thanks to the nomo- dynamic process of customary international law. As a result, juridical depictions of customary law tend to be double-exposures.
Viewed nomo-statically, the substance of contemporary customary international law, at any moment, is a reticulate network of authoritative expectations and demands about what constitutes right behavior, expressed in the form of verification and evaluation rules. In its nomo-dynamic representation, those normative expectations are produced, sustained and adjusted in the myriad interactions of politically relevant international actors. With all due respect to the important work of the International Law Commission (ILC) on customary international law, I use the words "politically relevant international actors" rather than "states." It should occasion no surprise that an inter-state organ like the ILC, whose members are selected by governments and whose work is prepared for approval by governments, continues to depict the makers of customary international law exclusively as the governments of states. However, many categories of non-state actors in the...