June 13, 2005

Global Administrative Law

Remarks by Richard Stewart at the conferment of an honorary degree in jurisprudence from the University of Rome, La Sapienza

My talk today concerns globalization - a fit topic in this universal city. The phenomena of globalization have become so pervasive as to be at the same time a cliché and a relentless and transformative challenge to our established modes of thought and social ordering. Today I wish to discuss a particular, but broad-ranging aspect of that challenge - the challenge to regulatory governance and administrative law.

The 19th century witnessed the triumph, in the West and in Japan, of the nation state, which in the 20th century became the regulatory welfare state. States erected a vast administrative apparatus to promote and manage economic growth while simultaneously protecting citizens against the varied insecurities and hazards generated by industrial and commercial markets. The creation of this administrative state raised in a new form the challenge posed by Madison - how to govern the governors?

In order to render these new forms administrative power accountable, states developed or adapted systems of administrative law to achieve the three basic elements of regulatory due process: ensuring that the exercise of administrative power is rule governed, that those regulated have an effective means to defend against unauthorized or arbitrary requirements or liabilities, and that the wider groups of affected interests have a right to have their views regarding wise and equitable policies considered in administrative decisions. Administrative law developed a variety of tools to achieve these goals, including transparency of information and decision making, procedures of consultation and participation, a requirement that administrators give reasons and follow principles that promote non-arbitrary and responsive decisions, and arrangements for review of administrative decisions by courts or other bodies. Different states and regions went about these tasks in somewhat different ways. Thus, one can speak of a French-Italian model of administrative law, a German model, and Scandinavian model, and Anglo-Commonwealth model, a U.S., model. With the rise of supranational regulation in Europe, we are witnessing the development of a new European model of administrative law. This extended and diverse family is, however, united by a common commitment to ensuring administrative accountability through law.

Professor Richard Stewart giving a talk on global administrative law at the University of Rome.

These steps to secure regulatory due process have been a major achievement. But today this achievement faces grave challenge. Globalization is eroding its foundations. During the past 20 years there has been a dramatic shift of regulatory activity from the nation state and even from the EU to a dizzying variety of global regulatory regimes, including international organizations, informal intergovernmental networks, and private or hybrid public-private regulatory bodies, operating in a wide array of economic and social fields. As a result, domestic systems of administrative accountability through law are increasingly being circumvented. Global regimes not subject to these domestic disciplines adopt regulatory norms that are then implemented or otherwise have important impacts at the domestic level. In many cases, these global regulatory decisions also escape accountability through international law mechanisms of state consent through treaties because, are made by administrative bodies that operate below or outside the treaty system. The erosion of these traditional domestic and international accountability mechanisms has been joined by loud criticisms by NGOs, politicians, the media that global regulation has been “captured” by the wealthy and powerful, to the detriment of developing countries, the poor, and labour, environmental and other social interests.

The result is an increasing accountability gap in regulatory governance - a mismatch between the growth of global regulatory regimes and established systems of political and legal accountability -- that has stimulated the development of a new but still embryonic form of global administrative law and practice to help close this gap.

The rise of global administrative law, which breaks down traditional distinctions between administrative law and international law, is the focus of a major research project recently undertaken by New York University in close collaboration with Professor Cassese and other colleagues here at La Sapienza. This project has also enlisted the participation of scholars in England, France, Germany, and a variety of developing countries. We hope to make the study of global administrative law as worldwide as the subject itself. I will summarize what we have learned thus far and our agenda for future inquiry.

Underlying the emergence of global administrative law is the vast increase in transnational regulation to address the consequences of globalized interdependency in such fields as security, trade, investment, development assistance, environmental protection, banking and other forms of financial regulation, law enforcement, telecommunications, intellectual property, labour standards, and cross-border movements of populations including refugees. These consequences can no longer be effectively managed by separate national regulatory and administrative measures. In response, many different systems of transnational regulation or regulatory cooperation have been established by states, international organization, domestic administrative officials, and multinational businesses and NGOs, producing a wide variety of global regulatory regimes. We have classified these regimes in five different categories.

Global Regulatory Regimes
First, formal treaty based regimes and organizations such as the WTO, UN Security Council, International Labour Organization, UN High Commissioner for Refugees, World Bank, IMF, International Atomic Energy Agency, and a wide variety of international environmental regimes including the Montreal and Kyoto Protocols. Increasingly these regimes, which number at least in the hundreds, operate through committees, councils, dispute settlement bodies, boards, and other entities of an administrative character that adopt and oversee the implementation by states of international regulatory norms or, in some cases, enforce regulatory controls directly against individuals.

Professor Sabino Cassese, left, Stewart, and Renato Guarini, president of the University of Rome La Sapienza.

A second type of regime consists of more informal networks of cooperation in domestic regulation among national regulatory officials in specific fields such as financial regulation, international security and anti-terrorism, competition policy, pharmaceuticals, food safety, and many other aspects of product regulation. These arrangements may be multilateral in character, for example the Basle Committee “club” of central bank regulators, or bilateral, in mutual recognition and regulatory equivalence arrangements between domestic officials that regulate internationally traded products and services.

A third category consists of domestic administrative agencies that implement or operate subject to the discipline of global regulatory norms, both substantive and procedural, in fields such as trade regulation, finance, anti-terrorism, environmental protection, including regulatory conditions imposed on developing countries receiving international development and financial assistance. In consequence, these domestic agencies become part of the global regulatory system. For example, the WTO Appellate Body in the Shrimp Turtle case adopted global standards of regulatory due process which U.S. and other domestic regulatory agencies must follow in making decisions that impact international trade.

Fourth are hybrid private-public regulatory regimes involving, variously representatives of business, NGOs, national government, and international organizations. Examples include the International Standards Organization and the Codex Alimentarius for food safety regulation, and various OECD programs of regulatory cooperation.

A fifth category consist of private standard setting, certification, and other regulatory bodies that discharge functions of public significance but have been established by business firms, NGOs, or both. Examples include the Fair Labour Association, the Anti-Doping Agency of the International Sports Federation, and the Forest Stewardship Council.

When we examine practice under these different regimes, which often overlap or combine, it becomes evident that a great deal of global regulation must be understood and analyzed as administrative action: rule-making, administrative adjudication between competing entities, and other forms of regulatory administrative decision and management. These administrative bodies adopt and apply global rules and standards that effectively determine the content of much domestic regulation but without being effectively subject to domestic constitutional and administrative checks on regulatory power. The polyglot, non-hierarchical, and often informal character of global regulation also challenges established legal mechanisms of accountability. A congeries of different actors - international and domestic, public and private - interact in a kaleidoscope of different configurations, together forming a variegated “global administrative space” that resembles nothing so much as a Jackson Pollock painting.

These evolving regulatory structures confront demands for greater accountability. These demands, and the responses to them, are increasingly framed in terms that have an administrative law character. Procedures and principles have been adopted to ensure that many of these global regulatory bodies meet adequate standards of transparency, consultation, participation, decisional rationality, and legality. Some steps have been taken to provide effective review of the rules and decisions that these bodies make. In some cases these mechanisms apply or borrow from domestic systems of administrative law, while in other cases they are largely new constructions. In some cases, domestic courts, parliaments, or executives have imposed administrative law disciplines on global regulatory regimes. In many more cases, global regimes have adopted these disciplines themselves in order to counter criticisms, bolster their legitimacy, and win adherence to their regulatory norms.

Steps to establish regulatory due process for global regulation include tentative initiatives by domestic courts to review Security Council sanctions against individuals accused of financing terrorism; the Inspection Panel set up by the World Bank to ensure its staff's compliance with its internal policies; notice-and-comment procedures adopted by international standard-setters such as the Basle Committee or the OECD; the inclusion of NGOs in regulatory bodies like the Codex Alimentarius Commission; rules about foreign participation in domestic administrative procedures as set out in the Aarhus Convention; and review of domestic administrative procedures and decisions by international panels in the WTO context. The pattern that emerges from these and other, often embryonic uses of administrative law mechanisms is not yet coherent: such mechanisms and principles operate in some areas and not in others, and diverge widely in their forms. Yet the overall picture is of widespread, and growing, commitment to principles of transparency, participation, reasoned decision and review in global regulatory decision making, as well as to tempering but reasoned principles related to protection of security information, commercial confidentiality, and negotiating effectiveness. The growing commonality of these administrative law-type principles and practices is fostering exchanges and mutual learning among practitioners and scholars of the different fields and building a unity between otherwise disparate areas of regulatory governance. We argue that this is a general trend of practice towards a Global Administrative Law.

Global Administrative Law: Principles, Instruments, Limits
We frame five sets of questions essential to the study of Global Administrative Law.
The first is primarily empirical and analytical: it asks what administrative law mechanisms are actually emerging in global regulation, how they differ from one area to another, and how they relate to the different subject areas and structures of global regulatory regimes.
A second set relates to doctrinal issues: it seeks to explore whether and to what extent the mechanisms of global administrative governance reflect legal rules or principles of participation, transparency, review, etc., and how far they reach. Further, what are the sources of any such rules and principles? Can they, for example, be accounted for by received doctrines of the sources of international law?

Thirdly, we emphasize the importance of normative questions about Global Administrative Law. Should its goal be understood, like important aspects of early national administrative law, as securing intra-regime accountability, coherence, and efficacy? Should its objective instead be the protection of rights - the international human rights of individuals, or the legal rights of economic actors, or the rights of states? Or should the goal of global administrative law be to foster global democracy and justice by, for example, promoting representation of and administrative responsiveness to a wide range a of affected social interests and values? How far can administrative law further the support of this goal without democratic political institutions at the global level? Questions about power and bias are also central: are administrative law tools mostly Western concepts and thus reflections of very particular ideas about political orders that are currently being imposed on the less powerful, or do they bear a more universal promise? What can be learned from non-western approaches and experience?

A fourth set of questions concerns the appropriate institutional design of administrative law mechanisms to secure regulatory due process in global regimes. Different models compete: bottom-up mechanisms, centered on checks on global regulation by domestic courts and other institutions, versus top-down mechanisms in which the checks are institutionalized in or by global bodies. To what extent are domestic models of administrative law transferable to global regimes that are often characterized by strong informality, diffuse responsibilities, plural authority structures, powerful private actors, minimal centralized legislative or executive power, and the absence of strong independent courts? Should we look towards elements of domestic administrative law that have emerged outside traditional command-and-control administration, including new approaches relying on network consultation and mutual learning? In answering these questions we must look at administrative law practices and concepts in many different jurisdictions, including developing as well as developed countries and the emerging European administrative law.

Fifth and finally, we most ask questions of positive political theory. What are the factors that lead to (or hinder) the development of administrative law mechanisms in global regulation, and under what conditions are such mechanisms likely or unlikely to be successful? For example, are forms of review most likely to emerge and to be successful in situations of delegation? Who will be the winners and losers from greater application of global administrative law? Will such mechanisms be venues for social movements seeking change or seeking to resist elements of globalization, or will they favor corporate groupings that can afford to take part in complicated administrative proceedings all over the world?

I hope that you will share our view that these are important issues that are not only intellectually exciting and challenging, but of great practical importance to all of us on the planet, whose lives and well being are increasingly shaped and affected by global regulatory decisions. Steps to answer these questions will build the intellectual capital that will help us build fairer, more responsive, and better systems of global regulation and law .