In traditional terms, law is interpreted as an objective framework, governing societal relations on the basis of norms, values and principles that establish a predictable environment. Reflected through this conventional prism, law should be seen as closely linked to the sovereign state, relying on its administrative system for legislation, adjudication and enforcement. However, the premise that law is objective and closely related to the state is anything but self-evident. Indeed, the development of global law may leave little or no role for the state to play, as suggested by Teubner (3), while a multitude of actors, whether administrative structures or corporations, can be seen as constructing a ‘semiautonomous legal regime’ that “mimics” and absorbs even the most ‘official’ institutions of governmental law’ (Edelman & Suchman 943). Hence, law as such is not undermined or suppressed by the strength of non-state actors. Paradoxically, its importance is reinforced by the interplay of the divergent interests of organizations that ultimately converge on their reticence to abide by a top-down formulation of legality and illegality.
Whether lex mercatoria or international commercial arbitration, law constantly interacts with political and economic power, but it nonetheless manages to extend beyond the purview of the state. Teubner sees this as a paradox – lex mercatoria is in fact ‘contract without law’, claiming legitimate existence outside the nation-state (Teubner 11). He suggests that it acquires a legal dimension through the enunciation of a ‘binary code’ which defines the legal/illegal opposition through discursive practice. Thus, global law may avoid the constraints imposed by the traditional mechanisms of authority and control of nation-states. It does so by transferring contracting and arbitration from the public to the private sphere. Dezalay and Garth refer to the increased role of organizations, as opposed to states, in constructing legitimacy as ‘internalization’ which they define as ‘the opening of breaches in national spaces’ (Dezalay & Garth 316). In this sense, there is a move away from a ‘rule of law’ based system, which, albeit shaped by power struggles among those who are intent on defining and interpreting the norms, entails a traditional arrangement in which the state lays the rules and sets up a system of adjudication and enforcement. On the other hand, the global law, with its strong ‘private’ element, stands for a ‘rules of the game’ system which draws its legitimacy on established practices, but it is also constantly developed with the active participation of the litigants in a ‘communicative process’ (Teubner 21).
As law is ‘internalized’, processes such as alternative dispute resolution and international contract arbitration, which often have a direct impact on particular social groups, and on society as a whole, are set firmly outside state control. While this may lead to efficiency, there would be little guarantee that norms and practices which cater for the public well-being will not be subsumed to the private interests of powerful stakeholders. However, it can be also argued that nation-states have frequently abused their monopoly over legislation and enforcement - thus a greater diffusion of legal prerogatives may serve as a check on their power. Edelman and Suchman argue that as organizations internalize law they are also affected by the legal environment and adopt ‘public normative commitments and public cognitive frameworks’ without the explicit threat of formal legal sanctions (Edelman & Suchman 981). Nevertheless, the gradual rationalization of law, and the introduction of rational management into the legal process, does contain the threat of the consolidation of power and control into the hands of non-accountable elites.
The internalization of law by organization is the pinnacle of private influence on public process. As discussed by Edelman and Suchman, organizations have gone beyond attempting to secure the benefits of being ‘repeat players’ – by hiring expertise and developing strategies of coping with recurrent legal problems – and have instead taken over the functions of the state in the legal sphere (Edelman & Suchman 943). As strong private actors have weaved their invisible web of influence, they have often relied on unholy alliances with various entities. For example, the American law firms established the ascendancy of their practices and legal traditions in the field of international commercial arbitration by working extensively with the Arab oil-exporting countries which would have hardly been conceived as their natural allies (Dezalay & Garth 73-77). Teubner argues that the center of global economic law is ‘created by its peripheries’ and remains dependent on them (Teubner 12). It is structured by continuous transactions in a diverse and highly interconnected global economic order. However, it is also characterized by a dominant discourse and emphasis on business values – transparency, rationalization and competition (Dezalay & Garth 48) – which replace concerns of equity and traditional moral interpretations of right and wrong.
If law is internalized by private actors that operate globally, and the definition of norms and their application is carried in insulation from social debates and civil pressures, would then the state and politics be gradually phased out and replaced by a global law based on maximizing the efficiency of economic transactions? The withering away of the state is rejected by Dezalay and Garth who point out that ‘modern trade battles are played in the terrain of the state and lawmaking’ (Dezalay & Garth 314). While supranational entities, such as the UN, the WTO and the ECJ, play an increasing role in the resolution of commercial disputes, they operate in conjunction with governments and subscribe to the international system which, as it presently stands, is composed of nation-states. Moreover, organizations may be gaining increasing ability to ‘manage, transform, and even supplant external societal rules’ (Edelman & Suchman 976) but they would derive little utility from taking over the role of governments in more fields than their immediate interest would call for. States, while holding the legitimate power to extract taxes, are also bound by their obligation to provide public goods and offset negative externalities arising from market processes. Should they fail to do so, there is the imminent threat of disruption of the public order, chaos and violence.
Even though corporate actors often profit from war and conflict in third world countries, they ultimately depend on a secure environment at home which allows predictability and continuity for their activities. In this sense, they depend on the nation-state’s mantle of legitimacy over the regularization of social, political and economic relations, while retaining their ability to pursue their interests by transferring certain legal competences from the public to the private sphere. Thus, as suggested by Dezalay and Garth (316), the ‘international legal field should not be seen simplistically as a putting aside or a negation of the national dimension.’
The national and international, public and private, are continuously involved in the development of global law. An interpretation of the international legal field as a ‘virtual space for battles’ (Dezalay&Garth 316) may attest to the dynamism and power realignments that underscore global law and the uncertainty of outcomes in the absence of an overarching hierarchical structure. While practices such as international contract arbitration are predicated on western, in fact American, values and principles, global law is not immune to the complications arising from local contexts. It is continuously affected by the realities of time and space, being subject to the redefinition of rules and their different interpretation depending on the particular situation. Thus, while the rules of organizations may ‘tend to prevail’ when law is internalized (Edelman & Suchman 982), the binary definition of legality and illegality can not be set in place by unequivocal forceful imposition. The power of global law, and its universal applicability, depends on the participation of different stakeholders and their willingness to play by the rules. However, it can be suggested that a global transformation of values and normative dispositions, constituting a move towards western rationality and efficiency as espoused by TNCs and their cohorts of lawyers, is already underway. It might be an over-simplification to interpret the internationalization of law as a unidirectional development, a top-down imposition of pre-conceived solutions that would enable powerful stakeholders to maximize their gains by defining ground norms and rendering into practice their own versions of legality. Strong interests are clearly in place, and corporations hold the means to exert influence and internalize law, but states, societies, temporal, spatial and cultural contexts are likely to continue to generate a dynamism which diversifies possible outcomes and prevents the consolidation of a hegemonic imposition of legality and illegality.
Works Cited
Dezalay, Yves and Bryant G. Garth. Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order. Chicago: Chicago University Press, 1996.
Edelman, L. and M. Suchman. ‘When “Haves” Hold Court: Speculations on the Organizational Internalization of Law.’ Law and Society Review, 1999, vol. 33, 4, 941-991.
Teubner, G. ‘ “Global Bukowina”: Legal Pluralism in the World Society’, in G. Teubner (ed.) Global Law Without a State. Dartmouth: Ashgate, 1997.
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