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Are Tradable Carbon Emissions Credits Investments? Characterization and Ramifications Under International Investment Law

Lisa Bennett

Implementation of carbon emissions trading schemes such as the European Union’s Emissions Trading Scheme requires consideration of how to properly characterize the newly-created emissions credits under various domestic and international law frameworks. Notably absent from the literature on emissions trading is an analysis of whether emissions credits can be characterized as investments, thereby implicating international investment law protections against expropriation and discrimination and giving rise to guarantees of fair and equitable treatment. This Note analyzes the International Centre for Settlement of Investment Disputes’s objective definition of “investment” as well as treaty-specific definitions of “investment” and concludes that carbon credits are properly considered investments. Next, the Note considers the types of investor claims that could be brought against host states if carbon credits are treated as investments. Because of the potential costs to host states in defending against such claims, states’ willingness to adopt carbon trading schemes may be chilled. This risk of regulatory chill, coupled with the global importance of national measures to combat climate change, counsels in favor of limiting the scope of rights afforded to investors. This Note therefore concludes by setting out a range of proposals for enacting such limits.

The Law of Neutrality and the Conflict with Al Qaeda

Tess Bridgeman

Many aspects of the United States’s armed conflict with al Qaeda and associated forces have been intensely debated by legal scholars and policymakers, yet one important question has thus far been almost completely ignored: Where, if at all, does the law of neutrality fit into the legal framework governing the conduct of this armed conflict? I argue that neutrality is one of several principles that ensure the completeness of the modern law of armed conflict (LOAC) framework. Neutrality is particularly important in achieving geographic completeness of the legal regime. The 1949 Geneva Conventions (GCs) that form the bedrock of our LOAC framework were written against the background understanding that neutrality would operate wherever GC protections did not apply. In sharp contrast to most wars, the geographic distinction between belligerent and neutral territory is highly unstable in the conflict with al Qaeda. Ironically, at the point in modern warfare when the law of neutrality may be most important, it is being ignored.

The Obama administration has begun to apply analogous provisions of the LOAC rules developed in inter-state wars to its current conflicts—a recognition that this conflict, like all others, should be waged according to a complete legal regime. To date, however, the United States has not recognized the role of neutrality in its conflict
with al Qaeda. This Note begins to fill that gap. While arguing that the law of neutrality is more important in this conflict than many others due to the conflict’s global nature, this Note concludes that recognizing neutrality will only be a partial solution. Neutrality instructs, however, that the LOAC rules themselves may be applicable almost globally because of the asymmetrical nature of the conflict. I argue that the central purpose of recognizing neutrality in our current conflicts is to avoid selectively applying parts of a comprehensive legal system, thereby leaving legal black holes in which some individuals have no protection. What matters most is that the intended fundamental feature of the LOAC regime—its completeness—is not abandoned each time a new form of conflict is recognized.

The Trial of Alberto Fujimori: Navigating the Show Trial Dilemma in Pursuit of Transitional Justice

Christina T. Prusak

Alberto Fujimori is the first democratically elected leader to be tried and convicted of human rights violations in the domestic courts of his own country. As satisfaction with foregoing prosecution and granting amnesty in exchange for more peaceful democratic transition has fallen increasingly out of favor, Fujimori’s trial comes at an opportune time to reevaluate the role of criminal trials in national reconciliation and transitional justice. In this Note, I argue that Fujimori’s human rights trial demonstrates that head-of-state trials, particularly domestic ones, can valuably contribute to larger transitional justice projects, despite their inherent limitations and challenges. Situating my analysis within the transitional justice and show trial literature, I analyze both procedurally and substantively how effectively Fujimori’s human rights trial has navigated its “constitutive paradox,” or tension between strict adherence to the rule of law and the extrajudicial objective of delivering a coherent moral message, inherent in transitional criminal proceedings. I conclude that the trial demonstrates that courts can effectively navigate these paradoxes, even in the midst of institutional weakness and societal cleavages. Moreover, I suggest that domestic tribunals may be particularly well suited to navigate the constitutive paradox of transitional trials.

Global Institutional Choice

Frederick J. Lee

The world faces collective action problems that are global in nature and scope, rendering nation-states unable to achieve desired goods individually. Issues such as global climate change and systemic financial risk create externalities that impel the existence and intervention of a world government to avoid suboptimal market equilibria, free-riding, and moral hazards. I submit the European Union’s principle of subsidiarity as an organic, legitimizing framework for global governance that both compels and cabins a world government. Subsidiarity optimizes social welfare by enabling a world government to achieve desired goods that nation-states would be otherwise unable to obtain individually because of collective action problems. But subsidiarity also limits a world government through a presumption in favor of local regulation as a matter of national autonomy and efficiency. The efficiency concern also enables subsidiarity to be an expansive principle for global governance because it accommodates both public and private forms of collective action. Public forms of collective action include public regulations, treaties between nations, and public institutions like the World Trade Organization. Private forms of collective action include free-market Coasian bargaining between private parties and the efforts of private international institutions like Greenpeace. Because subsidiarity accounts for these diverse institutions in a large and complex world, it is an ideal balancing principle for global institutional choice.

The New Poor at Our Gates: Global Justice Implications for International Trade and Tax Law

Ilan Benshalom

This Article explains why international trade and tax arrangements should advance global wealth redistribution in a world of enhanced economic integration. Despite the indisputable importance of global poverty and inequality, contemporary political philosophy stagnates in the attempt to determine whether distributive justice obligations should extend beyond the political framework of the nation-state. This results from the difficulty of reconciling liberal impartiality with notions of state sovereignty and accountability. This Article offers an alternative approach that bypasses the controversy of the current debate. It argues that international trade creates “relational-distributive” duties when domestic parties engage in transactions with foreign parties that suffer from an endowed vulnerability, such as the extreme poverty prevalent in the developing world. These relational duties differ from “traditional” distributive justice claims because they rely on actual economic relationships rather than hypothetical social-contract scenarios. In a competitive market, however, private parties cannot address these relational-distributive duties by themselves because doing so would put them at a competitive disadvantage. This Article therefore argues that the only collective action solution to this systemic problem in the current geopolitical setting is the transfer of wealth among states.

This Article then suggests some policy implications of this normative analysis in the field of international tax law. It points out that the allocation of taxing rights is a form of wealth allocation that divides globalization’s revenue proceeds among nations. As such, tax allocation arrangements should help “correct” international trade relationships that fail to meet relational-distributive standards. This discussion stresses a point frequently neglected in both the tax and political philosophy literature: Real-world attempts to promote a more just distribution of global wealth could benefit greatly from the integration of distributive considerations and tax allocation arrangements.

Neither Constitution nor Contract: Understanding the WTO by Examining the Legal Limits on Contracting Out Through Regional Trade Agreements

Joanna Langille

This Note seeks to describe the legal system of the World Trade Organization
(WTO) by analyzing the extent to which countries that are members of the WTO
can contract out of WTO obligations. The current literature on the WTO provides
two primary models through which we can understand the WTO’s legal regime: a
constitutional model and a contractual model. The constitutional model sees the
WTO as a legal system that cannot be easily varied by individual WTO members
because WTO commitments are made to all members. Alternatively, the contractual
model describes WTO obligations as easily variable by subsets of members, since
WTO commitments are made only on a bilateral (country-to-country) basis. This
Note addresses that debate by looking at the ability of WTO members to contract
out of WTO obligations through bilateral and regional trade agreements, whereby
two or more members define the trade rules governing their relationship outside of
the WTO legal regime. WTO law governing regional trade agreements reveals that,
on the one hand, member states cannot contract out of all WTO obligations; certain
core obligations cannot be varied. However, there remains significant scope for
contracting out through regional trade agreements on most subjects. Therefore,
both the constitutional and contractual models are insufficient and do not accurately
describe the nature of WTO obligations.

Catalyzing National Judicial Capacity: The ICC’s First Crimes Against Humanity Outside Armed Conflict

Carey Shenkman

This Note joins two previously parallel tracks of scholarship regarding the International Criminal Court (ICC). The first track studies the ICC’s authority to prosecute certain crimes that do not have links to armed conflict. This power means that the ICC could have jurisdiction over repression of mass civil uprisings of the type occurring in the Arab Spring. The second branch of scholarship concerns “complementarity,” or the principle of ICC deference to national prosecutions, and how that practice pressures reform in national judiciaries. This Note argues, at their intersection, that the prosecution of cases outside armed conflict by the ICC further encourages national judicial reform by mobilizing civil society groups. I call this “capacity catalyzing.” Because states wish to retain control over national prosecutions that may infringe upon their sovereignty, especially in the prosecution of cases outside armed conflict, these cases create an incentive for states to avert ICC prosecution by trying the cases themselves. I demonstrate this through two recent ICC cases that occurred outside armed conflict. In Kenya in 2007, pro-government forces and criminal organizations perpetrated killings against civilians during post-election violence. In Libya in 2011, anti-government protests snowballed over two weeks before civil war began. The ICC only focused on these crimes in its initial warrant. When crimes against humanity were allegedly committed, armed conflict did not exist in either country. The ICC’s involvement in these cases has encouraged national judicial reform.

Sinking Islands? Formulating a Realistic Solution to Climate Change Displacement

Sheila C. McAnaney

Forced migration from climate change has been a hot topic in academia and the media for almost two decades, partly because it puts a human face on the otherwise science heavy issue of climate change. Academics have put forward a number of international solutions for resettling displaced persons and financially supporting them and their host countries. However, these proposals often fail to account for the nature and scope of likely migration and the political realities of the international community. This Note adds to the literature by developing a framework for assessing the responsiveness and viability of any proposed solution to gaps in protection for climate displaced persons. It develops five principles based on a realistic examination of the nature and scope of climate displacement and the political realities of the climate regime, and it then evaluates leading academic proposals against those principles to discover which elements are the most efficient and realistic. Finally, this Note concludes by suggesting one possible nontreaty proposal that meets all five principles and fills existing gaps in protection.

The Forgotten History of Foreign Official Immunity

Chimène I. Keitner

The immunity of foreign officials from legal proceedings in U.S. courts has drawn significant attention from scholars, advocates, and judges in the wake of the Supreme Court’s decision in Samantar v. Yousuf, which held that foreign official immunity is governed by the common law rather than the Foreign Sovereign Immunities Act (FSIA). The common law of foreign official immunity, which the Samantar Court did not define, operates at the intersection of international and domestic law, and it implicates the constitutional separation of powers between the executive and judicial branches. Conflicting visions of the substance and process of common law immunity have already emerged following the Samantar opinion and will continue to compete until the Supreme Court revisits this issue in a future case. At stake is not only the ability of suits to proceed against foreign officials, but also the relationship between the executive branch and the judiciary in matters affecting foreign affairs.

The original research into eighteenth-century practices presented in this Article yields two important observations. First, claims that defendants acted in their official capacities did not automatically bar adjudication on the merits: Foreign officials who were neither diplomatic officials nor heads of state were on the same “footing” as “every other foreigner” with respect to their “suability.” Second, the Executive believed that it did not have constitutional authority to instruct courts to dismiss private suits on immunity grounds. Although twenty-first century advocates might make policy arguments for blanket immunity or absolute executive discretion, such choices are not consistent with—let alone compelled by—the eighteenth-century practices and understandings recovered here.

U.S. Agency Independence and the Global Democracy Deficit

Paul E. Hubble

Critics have accused transnational regulatory networks (TRNs) such as the Basel Committee on Banking Supervision of being undemocratic, but they rarely step back and ask if democracy is the right criterion for evaluating regulatory networks. Such critics often point to the seemingly robust checks of domestic administrative law and argue that similar mechanisms should constrain TRNs. However, the Federal Reserve Board of Governors, a significant banking regulator in the United States, is not democratic. Using the Federal Reserve Board as a case study, this Note challenges critics’ claims that there is such a wide gulf between domestic and global procedures.